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Exhibit 10.1
[EXECUTION COPY]
$1,100,000,000
FIVE-YEAR CREDIT AGREEMENT
DATED AS OF SEPTEMBER 24, 1997
AMONG
SAFECO CORPORATION,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
AS AGENT,
MELLON BANK, N.A.
AS DOCUMENTATION AGENT,
THE CHASE MANHATTAN BANK,
AS SYNDICATION AGENT,
THE CO-AGENTS AND LEAD
MANAGERS PARTY THERETO,
AND
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
ARRANGED BY
BANCAMERICA SECURITIES, INC.
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TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS....................................................................1
1.01 Certain Defined Terms....................................................1
1.02 Other Interpretive Provisions...........................................16
1.03 Accounting Principles...................................................17
ARTICLE II
THE CREDITS...................................................................17
2.01 Amounts and Terms of Commitments........................................17
2.02 Notes; Loan Accounts....................................................17
2.03 Procedure for Borrowing.................................................18
2.04 The Swing Line Loans....................................................18
2.05 Procedure for Swing Line Loans..........................................19
2.06 Conversion and Continuation Elections for Borrowings....................20
2.07 Voluntary Termination or Reduction of Commitments.......................21
2.08 Optional Prepayments....................................................22
2.09 Repayment...............................................................22
2.10 Interest................................................................22
2.11 Fees ...................................................................23
(a) Underwriting, Agency Fees......................................23
(b) Facility Fees..................................................23
2.12 Computation of Fees and Interest........................................23
2.13 Payments by the Company.................................................24
2.14 Payments by the Banks to the Agent......................................24
2.15 Sharing of Payments, Etc................................................25
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY........................................25
3.01 Taxes...................................................................25
3.02 Illegality..............................................................26
3.03 Increased Costs and Reduction of Return.................................27
3.04 Funding Losses..........................................................27
3.05 Inability to Determine Rates............................................28
3.06 Certificates of Banks...................................................28
3.07 Substitution of Banks...................................................28
3.08 Survival................................................................29
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Section Page
ARTICLE IV
CONDITIONS PRECEDENT..........................................................29
4.01 Conditions of Loan Availability.........................................29
(a) Credit Agreement and Notes.................................29
(b) Resolutions; Incumbency....................................29
(c) Organization Documents; Good Standing......................29
(d) Legal Opinions.............................................29
(e) Payment of Fees............................................30
(f) Certificate................................................30
(g) Approvals..................................................30
(h) Other Documents............................................30
4.02 Conditions to All Loans.................................................30
(a) Notice of Borrowing........................................30
(b) Continuation of Representations and Warranties.............30
(c) No Existing Default........................................30
ARTICLE V
REPRESENTATIONS AND WARRANTIES................................................31
5.01 Corporate Existence and Power...........................................31
5.02 Corporate Authorization; No Contravention...............................31
5.03 Governmental Authorization..............................................31
5.04 Binding Effect..........................................................31
5.05 Litigation..............................................................32
5.06 No Default..............................................................32
5.07 ERISA Compliance........................................................32
5.08 Use of Proceeds; Margin Regulations.....................................33
5.09 Title to Properties.....................................................33
5.10 Taxes...................................................................33
5.11 Financial Condition.....................................................33
5.12 Environmental Matters...................................................34
5.13 Regulated Entities......................................................34
5.14 Subsidiaries............................................................34
5.15 Insurance...............................................................34
5.16 Licenses.................................................................34
5.17 Employee Matters.........................................................34
5.18 Full Disclosure.........................................................34
ARTICLE VI
AFFIRMATIVE COVENANTS.........................................................35
6.01 Financial Statements....................................................35
6.02 Certificates; Other Information.........................................35
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Section Page
6.03 Notices.................................................................36
6.04 Preservation of Corporate Existence, Etc................................37
6.05 Maintenance of Property.................................................38
6.06 Insurance...............................................................38
6.07 Payment of Obligations..................................................38
6.08 Compliance with Laws....................................................38
6.09 Compliance with ERISA...................................................38
6.10 Inspection of Property and Books and Records............................38
6.11 Use of Proceeds.........................................................39
6.12 Shareholders' Equity....................................................39
ARTICLE VII
NEGATIVE COVENANTS............................................................39
7.01 Limitation on Liens.....................................................39
7.02 Disposition of Assets...................................................40
7.03 Consolidations and Mergers..............................................41
7.04 Limitation on Indebtedness..............................................41
7.05 Use of Proceeds.........................................................41
7.06 ERISA...................................................................42
7.07 Accounting Changes......................................................42
ARTICLE VIII
EVENTS OF DEFAULT.............................................................42
8.01 Event of Default........................................................42
(a) Non-Payment................................................42
(b) Representation or Warranty.................................42
(c) Specific Defaults..........................................42
(d) Other Defaults.............................................42
(e) Cross-Default..............................................42
(f) Insolvency; Voluntary Proceedings..........................43
(g) Involuntary Proceedings....................................43
(h) ERISA......................................................43
(i) Monetary Judgments.........................................43
(j) Non-Monetary Judgments.....................................44
(k) Change of Control..........................................44
(l) Loss of Licenses...........................................44
8.02 Remedies................................................................44
8.03 Rights Not Exclusive....................................................45
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Section Page
ARTICLE IX
THE AGENT.....................................................................45
9.01 Appointment and Authorization; "Agent"..................................45
9.02 Delegation of Duties....................................................45
9.03 Liability of Agent......................................................45
9.04 Reliance by Agent.......................................................46
9.05 Notice of Default.......................................................46
9.06 Credit Decision.........................................................46
9.07 Indemnification of Agent................................................47
9.08 Agent in Individual Capacity............................................47
9.09 Successor Agent.........................................................47
9.10 Withholding Tax.........................................................48
9.11 Documentation Agent; Syndication Agent; Co-Agents; Lead Managers........49
ARTICLE X
MISCELLANEOUS.................................................................49
10.01 Amendments and Waivers.................................................49
10.02 Notices................................................................50
10.03 No Waiver; Cumulative Remedies.........................................51
10.04 Costs and Expenses.....................................................51
10.05 Company Indemnification................................................51
10.06 Payments Set Aside.....................................................52
10.07 Successors and Assigns.................................................52
10.08 Assignments, Participations, etc.......................................52
10.09 Confidentiality........................................................53
10.10 Set-off................................................................54
10.11 Notification of Addresses, Lending Offices, Etc........................54
10.12 Counterparts...........................................................54
10.13 Severability...........................................................54
10.14 No Third Parties Benefited.............................................54
10.15 Governing Law and Jurisdiction.........................................55
10.16 Waiver of Jury Trial...................................................55
10.17 Entire Agreement.......................................................55
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SCHEDULES
Schedule 2.01 Commitments
Schedule 10.02 Lending Offices; Addresses for Notices
EXHIBITS
Exhibit A Form of Compliance Certificate
Exhibit B Form of Notice of Borrowing
Exhibit C Form of Notice of Conversion/Continuation
Exhibit D Form of Swing Line Note
Exhibit E Form of Promissory Note
Exhibit F Form of Assignment and Acceptance
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FIVE-YEAR CREDIT AGREEMENT
This FIVE-YEAR CREDIT AGREEMENT is entered into as of September 24,
1997, among SAFECO Corporation, a Washington corporation (the "Company"), the
several financial institutions from time to time party to this Agreement
(collectively, the "Banks"; individually, a "Bank"), Bank of America National
Trust and Savings Association, as agent for the Banks and as Swing Line Bank,
Mellon Bank, N.A., as documentation agent for the Banks (the "Documentation
Agent"), The Chase Manhattan Bank, as syndication agent for the Banks (the
"Syndication Agent"), and the parties identified on the signature pages hereto
as Co-Agents and Lead Managers, in such capacities.
WHEREAS, the Company intends to acquire all of the issued and
outstanding capital stock of American States Financial Corporation ("ASFC")
through the merger of ASFC Acquisition Co., a Wholly-Owned Subsidiary of the
Company ("Acquisition Sub"), with and into AFSC (the "Merger") pursuant to the
terms and conditions set forth in the Merger Agreement;
WHEREAS, in connection with the Merger, the Company will repay in full
certain Indebtedness owed by ASFC to Lincoln National Corporation;
WHEREAS, the Company will finance the Merger and the repayment of such
Indebtedness in part through the issuance of commercial paper and certain other
securities;
WHEREAS, in connection with the Merger, the Company has requested the
Banks to make certain credit facilities available to it, to provide a backup for
commercial paper issued by the Company from time to time and for other general
corporate purposes; and
WHEREAS, the Agent, the Documentation Agent, the Syndication Agent, the
Co-Agents, the Lead Managers, the Banks and the Swing Line Bank are willing to
extend the credit facility provided for herein upon the terms and subject to the
conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.01 Certain Defined Terms. The following terms have the following
meanings:
"Acquisition" means any transaction or series of related
transactions for the purpose of or resulting, directly or indirectly,
in (a) the acquisition of all or substantially all of the assets of a
Person, or of any business or division of a Person, (b) the acquisition
of in excess of 50% of the capital stock, partnership interests,
membership interests or equity of any Person, or otherwise causing any
Person to become a Subsidiary, or (c) a merger or
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consolidation or any other combination with another Person (other than
a Person that is a Subsidiary) provided that the Company or the
Subsidiary is the surviving entity.
"Acquisition Sub" has the meaning specified in the Recitals to
this Agreement.
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person. A Person shall be deemed to control
another Person if the controlling Person possesses, directly or
indirectly, the power to direct or cause the direction of the
management and policies of the other Person, whether through the
ownership of voting securities, membership interests, by contract, or
otherwise.
"Agent" means BofA in its capacity as agent for the Banks
hereunder, and any successor agent appointed under Section 9.09.
"Agent-Related Persons" means BofA and any successor agent
appointed under Section 9.09, together with their respective Affiliates
(including, in the case of BofA, the Arranger), and the officers,
directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.
"Agent's Payment Office" means the address for payments set
forth on Schedule 10.02 or such other address as the Agent may from
time to time specify.
"Agreement" means this Credit Agreement.
"Annual Statement" means the annual statutory financial
statement of any Insurance Subsidiary required to be filed with the
insurance commissioner (or similar authority) of its jurisdiction of
incorporation, which statement shall be in the form required by such
Insurance Subsidiary's jurisdiction of incorporation or, if no specific
form is so required, in the form of financial statements permitted by
such insurance commissioner (or such similar authority) to be used for
filing annual statutory financial statements and shall contain the type
of information permitted by such insurance commissioner (or such
similar authority) to be disclosed therein, together with all exhibits
or schedules filed therewith.
"Applicable Facility Fee" means the applicable percentage set
forth below based upon the Level then in existence:
Level Applicable Facility Fee
I 6.0 basis points
II 6.5 basis points
III 7.0 basis points
IV 8.0 basis points
V 10.0 basis points
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The Applicable Facility Fee shall be adjusted, as applicable, upon each
change in the rating of the Company's senior unsecured long-term
Indebtedness, effective as of the date of such change. At any time at
which S&P's rating of the Company's senior unsecured long-term
Indebtedness differs from Xxxxx'x rating thereof by more than one level
(including each modifier as a separate level), then the Applicable
Facility Fee shall be determined by reference to the rating which is
one level below the higher of the two ratings.
"Applicable Offshore Rate Margin" means on any date the
applicable percentage set forth below based upon the Level then in
existence:
Level Applicable Offshore Rate Margin
I 12.5 basis points
II 13.5 basis points
III 15.5 basis points
IV 17.0 basis points
V 25.0 basis points
The Applicable Offshore Rate Margin shall be adjusted, as applicable,
upon each change in the rating of the Company's senior unsecured
long-term Indebtedness, effective as of the date of such change. At any
time at which S&P's rating of the Company's senior unsecured long-term
Indebtedness differs from Xxxxx'x rating thereof by more than one level
(including each modifier as a separate level), then the Applicable
Offshore Rate Margin shall be determined by reference to the rating
which is one level below the higher of the two ratings.
"Arranger" means BancAmerica Securities, Inc., a Delaware
corporation.
"ASFC" has the meaning specified in the Recitals to this
Agreement.
"Assignee" has the meaning specified in subsection 10.08(a).
"Assignment and Acceptance" has the meaning specified in
subsection 10.08(a).
"Attorney Costs" means and includes all fees and disbursements
of any law firm or other external counsel, the allocated cost of
internal legal services and all disbursements of internal counsel.
"Bank" has the meaning specified in the introductory clause
hereto.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of
1978 (11 U.S.C. Section 101, et seq.).
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"Base Rate" means, for any day, the higher of: (a) 0.50% per
annum above the latest Federal Funds Rate; and (b) the rate of interest
in effect for such day as publicly announced from time to time by BofA
in San Francisco, California, as its "reference rate." (The "reference
rate" is a rate set by BofA based upon various factors including BofA's
costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which
may be priced at, above, or below such announced rate.)
Any change in the reference rate announced by BofA shall take
effect at the opening of business on the day specified in the public
announcement of such change.
"Base Rate Loan" means a Loan that bears interest based on the
Base Rate.
"BofA" means Bank of America National Trust and Savings
Association, a national banking association.
"Borrowing" means a borrowing hereunder consisting of Loans of
the same Type made to the Company on the same day by the Banks ratably
according to their respective Pro Rata Shares under Article II, and, in
the case of Offshore Rate Loans, having the same Interest Period. A
Swing Line Loan shall not constitute a Borrowing.
"Borrowing Date" means any date on which a Borrowing occurs
under Section 2.03.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in Chicago, New York City or San
Francisco are authorized or required by law to close and, if the
applicable Business Day relates to any Offshore Rate Loan, means such a
day on which dealings are carried on in the applicable offshore dollar
interbank market.
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any
other law, rule or regulation, whether or not having the force of law,
in each case, regarding capital adequacy of any bank or of any
corporation controlling a bank.
"Change of Control" means (a) any acquisition by any Person,
or two or more Persons acting in concert, including without limitation
any acquisition effected by means of any transaction contemplated by
Section 7.03, of beneficial ownership (within the meaning of Rule 13d-3
of the Securities and Exchange Commission under the Exchange Act) of
20% or more of the outstanding shares of voting stock of the Company or
(b) during any period of 25 consecutive calendar months, commencing on
the date of this Agreement, the ceasing of those individuals (the
"Continuing Directors") who (i) were directors of the Company on
the first day of each such period or (ii) subsequently became directors
of the Company and whose actual election or initial nomination for
election subsequent to that date was approved by a majority of the
Continuing Directors then on the board of directors of the Company, to
constitute a majority of the board of directors of the Company.
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"Closing Date" means the date on which all conditions
precedent set forth in Section 4.01 are satisfied or waived by all
Banks (or, in the case of subsection 4.01(e), waived by the Person
entitled to receive such payment).
"Code" means the Internal Revenue Code of 1986, and
regulations promulgated thereunder.
"Commitment", as to each Bank, has the meaning specified in
Section 2.01.
"Company" has the meaning specified in the introduction to
this Agreement.
"Compliance Certificate" means a certificate substantially in
the form of Exhibit A.
"Contractual Obligation" means, as to any Person, any
provision of any security issued by such Person or of any agreement,
undertaking, contract, indenture, mortgage, deed of trust or other
instrument, document or agreement to which such Person is a party or by
which it or any of its property is bound.
"Conversion/Continuation Date" means any date on which, under
Section 2.06, the Company (a) converts Loans of one Type to another
Type, or (b) continues as Loans of the same Type, but with a new
Interest Period, Loans having Interest Periods expiring on such date.
"Costs and Expenses" has the meaning specified in Section
10.05.
"Default" means any event or circumstance which, with the
giving of notice, the lapse of time, or both, would (if not cured or
otherwise remedied during such time) constitute an Event of Default.
"Documentation Agent" has the meaning specified in the
introduction to this Agreement.
"Dollars", "dollars" and "$" each mean lawful money of the
United States.
"Eligible Assignee" means (a) a commercial bank organized
under the laws of the United States, or any state thereof, and having a
combined capital and surplus of at least $500,000,000; (b) a commercial
bank organized under the laws of any other country which is a member of
the Organization for Economic Cooperation and Development (the "OECD"),
or a political subdivision of any such country, and having a combined
capital and surplus of at least $500,000,000, provided that such bank
is acting through a branch or agency located in the United States; and
(c) a Person that is primarily engaged in the business of commercial
banking and that is (i) a Subsidiary of a Bank, (ii) a Subsidiary of a
Person of which a Bank is a Subsidiary, or (iii) a Person of which a
Bank is a Subsidiary.
"Environmental Laws" means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any
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Governmental Authorities, in each case relating to environmental,
health, safety and land use matters.
"ERISA" means the Employee Retirement Income Security Act of
1974, and regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Company within the meaning
of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of
the Code for purposes of provisions relating to Section 412 of the
Code).
"ERISA Event" means (a) a Reportable Event with respect to a
Pension Plan; (b) a withdrawal by the Company or any ERISA Affiliate
from a Pension Plan subject to Section 4063 of ERISA during a plan year
in which it was a substantial employer (as defined in Section
4001(a)(2) of ERISA) or a cessation of operations which is treated as
such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by the Company or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Section 4041 or
4041A of ERISA, or the commencement of proceedings by the PBGC to
terminate a Pension Plan or Multiemployer Plan; (e) an event or
condition which might reasonably be expected to constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan or Multiemployer Plan; or
(f) the imposition of any liability under Title IV of ERISA, other than
PBGC premiums due but not delinquent under Section 4007 of ERISA, upon
the Company or any ERISA Affiliate.
"Eurodollar Reserve Percentage" has the meaning specified in
the definition of "Offshore Rate".
"Event of Default" means any of the events or circumstances
specified in Section 8.01.
"Exchange Act" means the Securities Exchange Act of 1934 and
the regulations promulgated thereunder.
"FDIC" means the Federal Deposit Insurance Corporation, and
any Governmental Authority succeeding to any of its principal
functions.
"Federal Funds Rate" means, for any day, the rate set forth in
the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Bank of New
York (including any such successor, "H.15(519)") on the preceding
Business Day opposite the caption "Federal Funds (Effective)"; or, if
for any relevant day such rate is not so published on any such
preceding Business Day, the rate for such day will be the arithmetic
mean as determined by the Agent of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m. (New York City
time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Agent.
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"Fee Letter" has the meaning specified in subsection 2.11(a).
"FRB" means the Board of Governors of the Federal Reserve
System, and any Governmental Authority succeeding to any of its
principal functions.
"Further Taxes" means any and all present or future taxes,
levies, assessments, imposts, duties, deductions, fees, withholdings or
similar charges (including, without limitation, net income taxes and
franchise taxes), and all liabilities with respect thereto, imposed by
any jurisdiction on account of amounts payable or paid pursuant to
Section 3.01.
"GAAP" means generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date
of determination.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any central bank (or
similar monetary or regulatory authority) thereof, any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, and any
corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing, including any
board of insurance, insurance department or insurance commissioner.
"Guaranty Obligation" means, as to any Person, any direct or
indirect liability of that Person, whether or not contingent, with or
without recourse, with respect to any Indebtedness, lease, dividend,
letter of credit or other obligation (the "primary obligations") of
another Person (the "primary obligor"), including any obligation of
that Person (a) to purchase, repurchase or otherwise acquire such
primary obligations or any security therefor, (b) to advance or provide
funds for the payment or discharge of any such primary obligation, or
to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet
item, level of income or financial condition of the primary obligor,
(c) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary
obligation, or (d) otherwise to assure or hold harmless the holder of
any such primary obligation against loss in respect thereof, but
excluding, in each case, any obligation of any Insurance Subsidiary to
pay any amount owing under any insurance policy or contract or Surety
Instrument issued by such Person in the ordinary course of business.
The amount of any Guaranty Obligations shall be deemed equal to the
stated or determinable amount of the primary obligation in respect of
which such Guaranty Obligation is made or, if not stated or if
indeterminable, the maximum reasonably anticipated liability in respect
thereof.
"Indebtedness" of any Person means, without duplication, (a)
all indebtedness for borrowed money; (b) all obligations issued,
undertaken or assumed as the deferred purchase price of property or
services (other than trade payables entered into in the ordinary course
of business on ordinary terms); (c) all non-contingent reimbursement or
payment obligations
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with respect to Surety Instruments; (d) all obligations evidenced by
notes, bonds, debentures or similar instruments, including obligations
so evidenced incurred in connection with the acquisition of property,
assets or businesses; (e) all indebtedness created or arising under any
conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to property acquired by the
Person (even though the rights and remedies of the seller or bank under
such agreement in the event of default are limited to repossession or
sale of such property); (f) all obligations with respect to capital
leases; (g) all indebtedness referred to in clauses (a) through (f)
above secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien
upon or in property (including accounts and contracts rights) owned by
such Person, even though such Person has not assumed or become liable
for the payment of such Indebtedness; and (h) all Guaranty Obligations
in respect of indebtedness or obligations of others of the kinds
referred to in clauses (a) through (g) above. "Indebtedness" shall not
include amounts owing under insurance policies or contracts or Surety
Instruments issued by Insurance Subsidiaries in the ordinary course of
business. For all purposes of this Agreement, the Indebtedness of any
Person shall include all recourse Indebtedness of any partnership or
joint venture in which such Person is a general partner or a joint
venturer.
"Indemnified Liabilities" has the meaning specified in Section
10.05.
"Indemnified Person" has the meaning specified in Section
10.05.
"Independent Auditor" has the meaning specified in subsection
6.01(a).
"Insolvency Proceeding" means, with respect to any Person, (a)
any case, action or proceeding with respect to such Person before any
court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, conservation, rehabilitation,
receivership, dissolution, winding-up or relief of debtors, or (b) any
general assignment for the benefit of creditors, composition,
marshalling of assets for creditors, or other, similar arrangement in
respect of its creditors generally or any substantial portion of its
creditors, in any case, undertaken under U.S. Federal, state or foreign
law, including the Bankruptcy Code.
"Insurance Subsidiary" means any Subsidiary which is engaged
in the business of underwriting insurance products.
"Interest Payment Date" means, as to any Offshore Rate Loan,
the last day of each Interest Period applicable to such Loan and, as to
any Base Rate Loan, the last Business Day of each calendar quarter;
provided, however, that if any Interest Period for an Offshore Rate
Loan exceeds three months, the date that falls three months after the
beginning of such Interest Period and after each Interest Payment Date
thereafter is also an Interest Payment Date.
"Interest Period" means, as to any Offshore Rate Loan, the
period commencing on the Borrowing Date of such Loan or on the
Conversion/Continuation Date on which the Loan is converted into or
continued as an Offshore Rate Loan, and ending on the date one, two,
three or six months (or, if consented to by each Bank, nine or twelve
months) thereafter
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as selected by the Company in its Notice of Borrowing or Notice of
Conversion/Continuation;
provided, that:
(i) if any Interest Period would otherwise end on a
day that is not a Business Day, that Interest Period shall be
extended to the following Business Day unless the result of
such extension would be to carry such Interest Period into
another calendar month, in which event such Interest Period
shall end on the preceding Business Day;
(ii) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest
Period; and
(iii) no Interest Period for any Loan shall extend
beyond the Termination Date.
"IRS" means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the Code.
"Lending Office" means, as to any Bank, the office or offices
of such Bank specified as its "Lending Office" or "Domestic Lending
Office" or "Offshore Lending Office", as the case may be, on Schedule
10.02, or such other office or offices as such Bank may from time to
time notify the Company and the Agent.
"Level" means, and includes, Xxxxx X, Xxxxx XX, Xxxxx XXX,
Xxxxx XX and Level V, whichever is in effect at the relevant time.
"Level I" shall exist at any time the Company's senior
unsecured long-term Indebtedness is rated at least AA- by S&P or at
least Aa3 by Moody's.
"Level II" shall exist at any time (a) the Company's senior
unsecured long-term Indebtedness is rated at least A+ by S&P or at
least A1 by Moody's and (b) Level I does not exist.
"Level III" shall exist at any time (a) the Company's senior
unsecured long-term Indebtedness is rated at least A by S&P or at least
A2 by Moody's and (b) Levels I and II do not exist.
"Level IV" shall exist at any time (a) the Company's senior
unsecured long-term Indebtedness is rated at least A- by S&P or at
least A3 by Moody's and (b) Levels I, II and III do not exist.
"Level V" shall exist at any time (a) the Company's senior
unsecured long-term Indebtedness is unrated by both S&P and Moody's or
(b) Levels I, II, III and IV do not exist.
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"License" means any license, certificate of authority, permit
or other authorization which is required to be obtained from any
Governmental Authority in connection with the operation, ownership or
transaction of insurance business.
"Lien" means any security interest, mortgage, deed of trust,
pledge, hypothecation, assignment, charge or deposit arrangement,
encumbrance, lien (statutory or other) or preferential arrangement of
any kind or nature whatsoever in respect of any property (including
those created by, arising under or evidenced by any conditional sale or
other title retention agreement, the interest of a lessor under a
capital lease, any financing lease having substantially the same
economic effect as any of the foregoing, or the filing of any financing
statement naming the owner of the asset to which such lien relates as
debtor, under the Uniform Commercial Code or any comparable law) and
any contingent or other agreement to provide any of the foregoing, but
not including the interest of a lessor under an operating lease.
"Loan" means an extension of credit (including a Swing Line
Loan) by a Bank to the Company under Article II, and may be a Base Rate
Loan or an Offshore Rate Loan (each, a "Type" of Loan).
"Loan Documents" means this Agreement, any Notes, the Fee
Letter and all other documents executed and delivered by the Company to
the Agent or any Bank in connection herewith.
"Margin Stock" means "margin stock" as such term is defined in
Regulation G, T, U or X of the FRB.
"Material Adverse Effect" means (a) a material adverse change
in, or a material adverse effect upon, the operations, business,
properties, condition (financial or otherwise) of the Company or the
Company and its Subsidiaries taken as a whole; (b) a material
impairment of the ability of the Company to perform under any Loan
Document and to avoid any Event of Default; or (c) a material adverse
effect upon the legality, validity, binding effect or enforceability
against the Company of any Loan Document.
"Material Insurance Subsidiary" means any Insurance Subsidiary
which is a Material Subsidiary.
"Material Subsidiary" means, at any time, any Subsidiary
having at such time either (a) total (gross) revenues for the preceding
four fiscal quarter period in excess of 10% of the total (gross)
revenues of the Company and its Subsidiaries for such period or (b) a
shareholder's equity, as of the last day of the preceding fiscal
quarter, having a book value in excess of 10% of Shareholders' Equity,
in each case, based upon the Company's most recent annual or quarterly
financial statements delivered to the Agent under Section 6.01.
"Merger" has the meaning specified in the Recitals to this
Agreement.
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"Merger Agreement" means that certain Agreement and Plan of
Merger dated as of June 6, 1997 among ASFC, the Company and Acquisition
Sub, as amended, supplemented or modified from time to time.
"Moody's" means Xxxxx'x Investors Service, Inc., together with
any Person succeeding thereto by merger, consolidation or acquisition
of all or substantially all of its assets, including substantially all
of its business of rating securities.
"Multiemployer Plan" means a "multiemployer plan", within the
meaning of Section 4001(a)(3) of ERISA, to which the Company or any
ERISA Affiliate makes, is making, or is obligated to make contributions
or, during the preceding three calendar years, has made, or been
obligated to make, contributions.
"NAIC" means the National Association of Insurance
Commissioners or any successor thereto, or in absence of the National
Association of Insurance Commissioners or such successor, any other
association, agency or other organization performing advisory,
coordination or other like functions among insurance departments,
insurance commissioners and similar Governmental Authorities of the
various states of the United States toward the promotion of uniformity
in the practices of such Governmental Authorities.
"Net Income" means, for any computation period, with respect
to the Company on a consolidated basis with its Subsidiaries,
cumulative net income earned during such period as determined in
accordance with GAAP; provided, that "Net Income" shall exclude the
effect of any extraordinary or other nonrecurring gain outside the
ordinary course of business.
"Note" has the meaning specified in Section 2.02.
"Notice of Borrowing" means a notice in substantially the form
of Exhibit B.
"Notice of Conversion/Continuation" means a notice in
substantially the form of Exhibit C.
"Obligations" means all advances, debts, liabilities,
obligations, covenants and duties arising under any Loan Document owing
by the Company to any Bank, the Agent, or any Indemnified Person,
whether direct or indirect (including those acquired by assignment),
absolute or contingent, due or to become due, now existing or hereafter
arising.
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"Offshore Rate" means, for any Interest Period, with respect
to Offshore Rate Loans comprising part of the same Borrowing, the rate
of interest per annum (rounded upward to the next 1/16th of 1%)
determined by the Agent as follows:
Offshore Rate = LIBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means for any day for
any Interest Period the maximum reserve percentage (expressed
as a decimal, rounded upward to the next 1/100th of 1%) in
effect on such day (whether or not applicable to any Bank)
under regulations issued from time to time by the FRB for
determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement)
with respect to Eurocurrency funding (currently referred to as
"Eurocurrency liabilities"); and
"LIBOR" means the rate of interest per annum
determined by the Agent to be the arithmetic mean (rounded
upward to the next 1/16th of 1%) of the rates of interest per
annum notified to the Agent by each Reference Bank as the rate
of interest at which dollar deposits in the approximate amount
of the amount of the Loan to be made or continued as, or
converted into, an Offshore Rate Loan by such Reference Bank
and having a maturity comparable to such Interest Period would
be offered to major banks in the London interbank market at
their request at approximately 11:00 a.m. (London time) two
Business Days prior to the commencement of such Interest
Period; provided, that if each Reference Bank fails to supply
quotations of rates to the Agent as contemplated hereby, then
"LIBOR" shall mean the rate of interest per annum for a
deposit in dollars for a period having a maturity comparable
to such Interest Period which appears on Telerate Page 3750 as
of 11:00 a.m. (London time) two Business Days prior to the
commencement of such Interest Period.
The Offshore Rate shall be adjusted automatically as
to all Offshore Rate Loans then outstanding as of the
effective date of any change in the Eurodollar Reserve
Percentage.
"Offshore Rate Loan" means any Loan that bears
interest based on the Offshore Rate.
"Organization Documents" means, for any corporation, the
certificate or articles of incorporation, the bylaws, any certificate
of determination or instrument relating to the rights of preferred
shareholders of such corporation, any shareholder rights agreement, and
all applicable resolutions of the board of directors (or any committee
thereof) of such corporation.
"Originator" has the meaning specified in subsection 10.08(d).
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"Other Taxes" means any present or future stamp, court or
documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or from the
execution, delivery, performance, enforcement or registration of, or
otherwise with respect to, this Agreement or any other Loan Documents.
"Participant" has the meaning specified in subsection
10.08(d).
"PBGC" means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal functions
under ERISA.
"Pension Plan" means a pension plan (as defined in Section
3(2) of ERISA) subject to Title IV of ERISA which the Company or any
ERISA Affiliate sponsors, maintains, or to which it makes, is making,
or is obligated to make contributions, or in the case of a multiple
employer plan (as described in Section 4064(a) of ERISA) has made
contributions at any time during the immediately preceding five (5)
plan years.
"Permitted Liens" has the meaning specified in Section 7.01.
"Person" means an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture or Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section
3(3) of ERISA) which the Company sponsors or maintains or to which the
Company makes, is making, or is obligated to make contributions and
includes any Pension Plan.
"Pro Rata Share" means, as to any Bank (a) at any time at
which the Commitments remain outstanding, the percentage equivalent
(expressed as a decimal, rounded to the ninth decimal place) at such
time of such Bank's Commitment divided by the combined Commitments of
all Banks, and (b) after the termination of the Commitments, the
percentage equivalent (expressed as a decimal, rounded to the ninth
decimal place) at such time of the principal amount of such Bank's
outstanding Loans (other than Swing Line Loans) divided by the
aggregate principal amount of the outstanding Loans (other than Swing
Line Loans) of all the Banks.
"Quarterly Statement" means the quarterly statutory financial
statement of any Insurance Subsidiary required to be filed with the
insurance commissioner (or similar authority) of its jurisdiction of
incorporation or, if no specific form is so required, in the form of
financial statements permitted by such insurance commissioner (or such
similar authority) to be used for filing quarterly statutory financial
statements and shall contain the type of financial information
permitted by such insurance commissioner (or such similar authority) to
be disclosed therein, together with all exhibits or schedules filed
therewith.
"Reference Banks" means BofA, The Chase Manhattan Bank and
Mellon Bank, N.A.
"Replacement Bank" has the meaning specified in Section 3.08.
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"Reportable Event" means any of the events set forth in
Section 4043(c) of ERISA or the regulations thereunder, other than any
such event for which the 30-day notice requirement under ERISA has been
waived in regulations issued by the PBGC.
"Required Banks" means at any time Banks then holding at least
51% of the then aggregate unpaid principal amount of the Loans, or, if
no such principal amount is then outstanding, Banks then having at
least 51% of the aggregate amount of the Commitments.
"Requirement of Law" means, as to any Person, any law
(statutory or common), treaty, rule or regulation or determination of
an arbitrator or of a Governmental Authority, in each case applicable
to or binding upon the Person or any of its property or to which the
Person or any of its property is subject.
"Responsible Officer" means the chief executive officer, chief
operating officer, chief financial officer or treasurer of the Company,
or any other officer having substantially the same authority and
responsibility.
"S&P" means Standard & Poor's Ratings Group, a division of
XxXxxx-Xxxx, Inc., together with any Person succeeding thereto by
merger, consolidation or acquisition of all or substantially all of its
assets, including substantially all of its business of rating
securities.
"SAP" means, with respect to any Insurance Subsidiary, the
statutory accounting practices prescribed or permitted by the insurance
commissioner (or other similar authority) in the jurisdiction of such
Person for the preparation of annual statements and other financial
reports by insurance companies of the same type as such Person, which
are applicable to the circumstances as of the date of determination.
"SEC" means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.
"Shareholders' Equity" means the aggregate shareholders'
equity of the Company determined in accordance with GAAP, but excluding
the effect of any adjustment under Statement of Financial Accounting
Standards No. 115.
"Subsidiary" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other business
entity of which more than 50% of the voting stock, membership interests
or other equity interests (in the case of Persons other than
corporations), is owned or controlled directly or indirectly by the
Person, or one or more of the Subsidiaries of the Person, or a
combination thereof. Unless the context otherwise clearly requires,
references herein to a "Subsidiary" refer to a Subsidiary of the
Company.
"Surety Instruments" means all letters of credit (including
standby and commercial), banker's acceptances, bank guaranties,
shipside bonds, surety bonds and similar instruments.
"Swap Contract" means any agreement, whether or not in
writing, relating to any transaction that is a rate swap, basis swap,
forward rate transaction, commodity swap, commodity option, equity or
equity index swap or option, bond, note or xxxx option, interest
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rate option, forward foreign exchange transaction, cap, collar or floor
transaction, currency swap, cross-currency rate swap, swaption,
currency option or any other, similar transaction (including any option
to enter into any of the foregoing) or any combination of the
foregoing, and, unless the context otherwise clearly requires, any
master agreement relating to or governing any or all of the foregoing.
"Swap Termination Value" means, in respect of any one or more
Swap Contracts, after taking into account the effect of any legally
enforceable netting agreement relating to such Swap Contracts, (a) for
any date on or after the date such Swap Contracts have been closed out
and termination value(s) determined in accordance therewith, such
termination value(s), and (b) for any date prior to the date referenced
in clause (a) the amount(s) determined as the xxxx-to-market value(s)
for such Swap Contracts, as determined by the Company based upon one or
more mid-market or other readily available quotations provided by any
recognized dealer in such Swap Contracts (which may include any Bank).
"Swing Line Commitment" means at any time, the obligation of
the Swing Line Bank to make Swing Line Loans pursuant to Section 2.04.
"Swing Line Bank" means BofA, in its capacity as provider of
the Swing Line Loans.
"Swing Line Loan" means a Loan made by the Swing Line Bank.
"Swing Line Note" means a promissory note in substantially the
form of Exhibit D.
"Swing Line Rate" means 0.50% per annum above the latest
Federal Funds Rate.
"Syndication Agent" has the meaning specified in the
introduction to this Agreement.
"Taxes" means any and all present or future taxes, levies,
assessments, imposts, duties, deductions, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the
case of each Bank and the Agent, respectively, taxes imposed on or
measured by its net income by the jurisdiction (or any political
subdivision thereof) under the laws of which such Bank or the Agent, as
the case may be, is organized or maintains a lending office.
"Termination Date" means September 24, 2002.
"Type" has the meaning specified in the definition of "Loan."
"Unfunded Pension Liability" means the excess of a Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the
current value of that Plan's assets, determined in accordance with the
assumptions used for funding the Pension Plan pursuant to Section 412
of the Code for the applicable plan year.
"United States" and "U.S." each means the United States of
America.
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"Wholly-Owned Subsidiary" means any corporation in which
(other than directors' qualifying shares required by law) 100% of the
capital stock of each class having ordinary voting power, and 100% of
the capital stock of every other class, in each case (or, in the case
of Persons other than corporations, membership interests or other
equity interests), at the time as of which any determination is being
made, is owned, beneficially and of record, by the Company, or by one
or more of the other Wholly-Owned Subsidiaries, or both.
1.02 Other Interpretive Provisions. (a) The meanings of defined terms
are equally applicable to the singular and plural forms of the defined terms.
(b) The words "hereof", "herein", "hereunder" and similar
words refer to this Agreement as a whole and not to any particular provision of
this Agreement; and subsection, Section, Schedule and Exhibit references are to
this Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(ii) The term "including" is not limiting and means
"including without limitation."
(iii) In the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and
including"; the words "to" and "until" each mean "to but excluding",
and the word "through" means "to and including."
(d) Unless otherwise expressly provided herein, (i) references
to agreements (including this Agreement) and other contractual instruments shall
be deemed to include all subsequent amendments and other modifications thereto,
but only to the extent such amendments and other modifications are not
prohibited by the terms of any Loan Document, and (ii) references to any statute
or regulation are to be construed as including all statutory and regulatory
provisions consolidating, amending, replacing, supplementing or interpreting the
statute or regulation.
(e) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
(f) This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms. Unless otherwise expressly
provided, any reference to any action of the Agent or the Banks by way of
consent, approval or waiver shall be deemed modified by the phrase "in its/their
sole and reasonable discretion."
(g) This Agreement and the other Loan Documents are the result
of negotiations among and have been reviewed by counsel to the Agent, the
Company and the other parties, and are the products of all parties. Accordingly,
they shall not be construed against the Banks or the Agent merely because of the
Agent's or Banks' involvement in their preparation.
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1.03 Accounting Principles. (a) Unless the context otherwise clearly
requires, all accounting terms not expressly defined herein shall be construed,
and all financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied.
(b) References herein to "fiscal year" and "fiscal quarter"
refer to such fiscal periods of the Company.
(c) References hereto in particular columns, lines or sections
of any Person's Annual Statement shall be deemed, where appropriate, to be
references to the corresponding column, line or section of such Person's
Quarterly Statement, or if no such corresponding column, line or section exists
or if any report form changes, then to the corresponding item referenced
thereby. In the event the columns, lines or sections of the Annual Statement
referenced herein are changed or renumbered, all such references shall be deemed
references to such column, line or section as so renumbered or changed.
ARTICLE II
THE CREDITS
2.01 Amounts and Terms of Commitments. Each Bank severally agrees, on
the terms and conditions set forth herein, to make loans to the Company from
time to time on any Business Day during the period from the Closing Date to the
Termination Date, in an aggregate amount not to exceed at any time outstanding
the amount set forth on Schedule 2.01 (such amount, as the same may be reduced
under Section 2.07 or as a result of one or more assignments under Section
10.08, the Bank's "Commitment"); provided, however, that, after giving effect to
any Borrowing, the aggregate principal amount of all outstanding Loans,
including Swing Line Loans, shall not at any time exceed the combined
Commitments. Within the limits of each Bank's Commitment, and subject to the
other terms and conditions hereof, the Company may borrow under this Section
2.01, prepay under Section 2.08 and reborrow under this Section 2.01.
2.02 Notes; Loan Accounts. (a) The Loans made by each Bank shall be
evidenced by one or more loan accounts or records maintained by such Bank in the
ordinary course of business. The loan accounts or records maintained by the
Agent and each Bank shall be presumptive evidence of the amount of the Loans
made by the Banks to the Company and the interest and payments thereon. Any
failure so to record or any error in doing so shall not, however, limit or
otherwise affect the obligation of the Company hereunder to pay any amount owing
with respect to the Loans.
(b) The Company shall issue to each Bank a note in the form of
Exhibit E (a "Note") to evidence such Bank's Loans (or, in the case of Swing
Line Loans, in the form of Exhibit D). Each Bank may, instead of or in addition
to maintaining a loan account, endorse on the schedules annexed to its Note the
date, amount and maturity of each Loan made by it and the amount of each payment
of principal made by the Company with respect thereto. Each such Bank is
irrevocably authorized by the Company to endorse its Note(s) or Swing Line
Notes, as applicable, and each Bank's record shall be conclusive absent manifest
error; provided, however, that the failure of a Bank to make, or an error in
making, a notation thereon with respect to any Loan shall not limit
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or otherwise affect the obligations of the Company hereunder or under any such
Note or Swing Line Note to such Bank.
2.03 Procedure for Borrowing. (a) Each Borrowing shall be made upon the
Company's irrevocable written notice delivered to the Agent in the form of a
Notice of Borrowing (which notice must be received by the Agent prior to (i)
10:00 a.m. (Pacific time) three Business Days prior to the requested Borrowing
Date, in the case of Offshore Rate Loans, and (ii) 9:00 a.m. (Pacific time) on
the requested Borrowing Date, in the case of Base Rate Loans), signed by two
Responsible Officers and specifying:
(A) the amount of the Borrowing, which shall
be (i) in an aggregate minimum amount of $1,000,000 or any
multiple of $100,000 in excess thereof for Base Rate Loans and
(ii) in an aggregate amount of $10,000,000 or in multiples of
$1,000,000 in excess thereof for Offshore Rate Loans;
(B) the requested Borrowing Date, which
shall be a Business Day;
(C) the Type of Loans comprising the
Borrowing; and
(D) the duration of the Interest Period
applicable to such Loans included in such notice. If the
Notice of Borrowing fails to specify the duration of the
Interest Period for any Borrowing comprised of Offshore Rate
Loans, such Interest Period shall be one month.
(b) The Agent will promptly notify each Bank of its receipt of
any Notice of Borrowing and of the amount of such Bank's Pro Rata Share of that
Borrowing.
(c) Each Bank will make the amount of its Pro Rata Share of
each Borrowing available to the Agent for the account of the Company at the
Agent's Payment Office by 11:00 a.m. Pacific time) on the Borrowing Date
requested by the Company in funds immediately available to the Agent. The
proceeds of all such Loans will then be made available to the Company by the
Agent at such office by wire transfer of such proceeds to such account as the
Company may designate in writing in like funds as received by the Agent.
(d) After giving effect to any Borrowing, unless the Agent
shall otherwise consent, there may not be more than ten (10) different Interest
Periods in effect in respect of all Loans together then outstanding.
2.04 The Swing Line Loans. Subject to the terms and conditions hereof,
the Swing Line Bank agrees to make Swing Line Loans to the Company from time to
time prior to the Termination Date in an aggregate principal amount at any one
time outstanding not to exceed $25,000,000; provided that, after giving effect
to any such Swing Line Loan, the aggregate principal amount of all outstanding
Loans at such time would not exceed the combined Commitments at such time. Prior
to the Termination Date, the Company may use the Swing Line Commitment by
borrowing, prepaying the Swing Line Loans in whole or in part, and reborrowing,
all in accordance with the terms and conditions hereof. All Swing Line Loans
shall bear interest at the Swing Line Rate and shall not be entitled to be
converted into Loans that bear interest at any other rate.
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2.05 Procedure for Swing Line Loans. (a) The Company may borrow under
the Swing Line Commitment on any Business Day until the Termination Date;
provided that the Company shall give the Swing Line Bank irrevocable written
notice signed by two Responsible Officers (which notice must be received by the
Swing Line Bank prior to 11:00 a.m. (Pacific time)) with a copy to the Agent
specifying the amount of the requested Swing Line Loan, which shall be in a
minimum amount of $1,000,000 or a whole multiple of $100,000 in excess thereof.
The proceeds of the Swing Line Loan will be made available by the Swing Line
Bank to the Company in immediately available funds at the office of the Swing
Line Bank by 1:00 p.m. (Pacific time) on the date of such notice. The Company
may at any time and from time to time, prepay the Swing Line Loans, in whole or
in part, without premium or penalty, by notifying the Swing Line Bank prior to
11:00 a.m. (Pacific time) on any Business Day of the date and amount of
prepayment with a copy to the Agent. If any such notice is given, the amount
specified in such notice shall be due and payable on the date specified therein.
Partial prepayments shall be in an aggregate principal amount of $1,000,000 or a
whole multiple of $100,000 in excess thereof.
(b) If any Swing Line Loan shall remain outstanding at 11:00
a.m. (Pacific time) on the fifth Business Day following the date of such Swing
Line Loan and if by such time on such fifth Business Day the Agent shall have
received neither (i) a Notice of Borrowing delivered by the Company pursuant to
Section 2.03 requesting that Loans be made pursuant to Section 2.01 on the
immediately succeeding Business Day in an amount at least equal to the principal
amount of such Swing Line Loan nor (ii) any other notice satisfactory to the
Agent indicating the Company's intent to repay such Swing Line Loan on or before
the immediately succeeding Business Day with funds obtained from other sources,
then on such Business Day the Swing Line Bank shall (and on any Business Day the
Swing Line Bank in its sole discretion may), on behalf of the Company (which
hereby irrevocably directs the Swing Line Bank to act on its behalf) request the
Agent to notify each Bank to make a Base Rate Loan in an amount equal to such
Bank's Pro Rata Share of (A) in the case of such a request which is required to
be made, the amount of the relevant Swing Line Loan and (B) in the case of such
a discretionary request, the aggregate principal amount of the Swing Line Loans
outstanding on the date such notice is given; provided, that the Company may
request, at the end of such five Business Day period, that any outstanding Swing
Line Loan be extended for additional periods of up to five Business Days each,
so long as the conditions specified in Section 4.02 would be satisfied at the
beginning of each such additional period, treating each such extension as if it
were the making of a new Loan. Unless any of the events described in subsection
8.01(e) or (f) shall have occurred with respect to the Company (in which event
the procedures of paragraph (d) of this Section 2.05 shall apply) each Bank
shall make the proceeds of its Loan available to the Agent for the account of
the Swing Line Bank at the Agent's Payment Office in funds immediately available
prior to 9:00 a.m. (Pacific time) on the Business Day next succeeding the date
such notice is given. The proceeds of such Loans shall be immediately applied to
repay the outstanding Swing Line Loans. Effective on the day such Loans are
made, the portion of the Swing Line Loans so paid shall no longer be outstanding
as Swing Line Loans and shall no longer be due under the Swing Line Note. The
Company shall pay to the Swing Line Bank, promptly following the Swing Line
Bank's demand, the amount of its outstanding Swing Line Loans to the extent
amounts received from the Banks are not sufficient to repay in full such
outstanding Swing Line Loans.
(c) Notwithstanding anything herein to the contrary, the Swing
Line Bank (i) shall not be obligated to make any Swing Line Loan if the
conditions set forth in Article IV have not been satisfied and (ii) shall not
make any requested Swing Line Loan if, prior to 11:00 a.m. (Pacific time)
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on the date of such requested Swing Line Loan, it has received a written notice
from the Agent or any Bank directing it not to make further Swing Line Loans
because one or more of the conditions specified in Article IV are not then
satisfied.
(d) If prior to the making of a Loan required to be made by
subsection 2.05(b) an Event of Default described in subsection 8.01(e) or
8.01(f) shall have occurred and be continuing with respect to the Company, each
Bank will, on the date such Loan was to have been made pursuant to the notice
described in subsection 2.05(b), purchase an undivided participating interest in
the outstanding Swing Line Loans in an amount equal to its Pro Rata Share of the
aggregate principal amount of Swing Line Loans then outstanding. Each Bank will
immediately transfer to the Agent for the benefit of the Swing Line Bank, in
immediately available funds, the amount of its participation.
(e) Whenever, at any time after a Bank has purchased a
participating interest in a Swing Line Loan, the Swing Line Bank receives any
payment on account thereof, the Swing Line Bank will distribute to the Agent for
delivery to each Bank its participating interest in such amount (appropriately
adjusted, in the case of interest payments, to reflect the period of time during
which such Bank's participating interest was outstanding and funded); provided,
however, that in the event that such payment received by the Swing Line Bank is
required to be returned, such Bank will return to the Agent for delivery to the
Swing Line Bank any portion thereof previously distributed by the Swing Line
Bank to it.
(f) Each Bank's obligation to make the Loans referred to in
subsection 2.05(b) and to purchase participating interests pursuant to
subsection 2.05(d) shall be absolute and unconditional and shall not be affected
by any circumstance, including, without limitation, (i) any set-off,
counterclaim, recoupment, defense or other right which such Bank or the Company
may have against the Swing Line Bank, the Company or any other Person for any
reason whatsoever, (ii) the occurrence or continuance of a Default or an Event
of Default, (iii) any adverse change in the condition (financial or otherwise)
of the Company, (iv) any breach of this Agreement or any other Loan Document by
the Company, any Subsidiary or any other Bank, or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
2.06 Conversion and Continuation Elections for Borrowings. (a) The
Company may, upon irrevocable written notice to the Agent in accordance with
subsection 2.06(b):
(i) elect, as of any Business Day, in the case of
Base Rate Loans, or as of the last day of the applicable Interest
Period, in the case of Offshore Rate Loans, to convert any such Loans
(or any part thereof in an amount not less than $1,000,000, or that is
in an integral multiple of $100,000 in excess thereof) into Loans of
any other Type; or
(ii) elect, as of the last day of the applicable
Interest Period, to continue any Loans having Interest Periods expiring
on such day (or any part thereof in an amount not less than $1,000,000,
or that is in an integral multiple of $100,000 in excess thereof);
provided, that if at any time the aggregate amount of Offshore Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $10,000,000, such Offshore Rate Loans may, upon
written notice by the Company delivered to the
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Agent and the Swing Line Bank concurrent with its notice of prepayment and
compliance with Section 2.05, be converted into Swing Line Loans, or, in the
absence of such a conversion, shall automatically convert into Base Rate Loans,
and on and after such date the right of the Company to continue such Loans as,
and convert such Loans into, Offshore Rate Loans shall terminate.
(b) The Company shall deliver a written Notice of
Conversion/Continuation (which notice must be received by the Agent not later
than (i) 10:00 a.m. (Pacific time) three Business Days in advance of the
Conversion/Continuation Date, if the Loans are to be converted into or continued
as Offshore Rate Loans and (ii) 9:00 a.m. (Pacific time) on the Conversion/
Continuation Date, if the Loans are to be converted into Base Rate Loans) signed
by two Responsible Officers and specifying:
(A) the proposed Conversion/Continuation
Date;
(B) the aggregate amount of Loans to be
converted or continued;
(C) the Type of Loans resulting from the
proposed conversion or continuation; and
(D) in the case of conversions into Offshore
Rate Loans, the duration of the requested Interest Period.
(c) Subject to the following sentence, if by 10:00 a.m.
(Pacific time) on the third Business Day prior to the expiration of any Interest
Period applicable to Offshore Rate Loans, then the Company has failed to select
a new Interest Period to be applicable to such Offshore Rate Loans, the Company
shall be deemed to have elected to convert such Offshore Rate Loans into
Offshore Rate Loans with an Interest Period of one month effective as of the
expiration date of such Interest Period. If upon the expiration of any Interest
Period applicable to Offshore Rate Loans, any Default or Event of Default then
exists, the Company shall be deemed to have elected to convert such Offshore
Rate Loans into Base Rate Loans effective as of the expiration date of such
Interest Period.
(d) The Agent will promptly notify each Bank of its receipt of
a Notice of Conversion/Continuation, or, if no timely notice is provided by the
Company, the Agent will promptly notify each Bank of the details of any
automatic conversion. All conversions and continuations shall be made ratably
according to the respective outstanding principal amounts of the Loans with
respect to which the notice was given held by each Bank.
(e) Unless the Required Banks otherwise consent, during the
existence of a Default or Event of Default, the Company may not elect to have a
Loan converted into or continued as an Offshore Rate Loan.
(f) After giving effect to any conversion or continuation of
Loans, unless the Agent shall otherwise consent, there may not be more than ten
(10) different Interest Periods in effect in respect of all Loans together then
outstanding.
2.07 Voluntary Termination or Reduction of Commitments. (a) The Company
may, upon not less than three (3) Business Days' prior notice to the Agent,
terminate the Commitments, or
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permanently reduce the Commitments by an aggregate minimum amount of $10,000,000
or any multiple of $1,000,000 in excess thereof; unless, after giving effect
thereto and to any prepayments of Loans made on the effective date thereof, the
then-outstanding principal amount of the Loans would exceed the amount of the
combined Commitments then in effect. Once reduced in accordance with this
Section 2.07, the Commitments may not be increased. Any reduction of the
Commitments shall be applied to each Bank according to its Pro Rata Share. All
facility fees relating to the reduced Commitments which accrued to, but not
including the effective date of any reduction or termination of Commitments,
shall be paid on the last business day of the calendar quarter in which such
reduction or termination took place.
(b) At no time shall the Swing Line Commitment exceed the
combined Commitments, and any reduction of the combined Commitments which
reduces the combined Commitments below the then-current amount of the Swing Line
Commitment shall result in an automatic corresponding reduction of the Swing
Line Commitment to the amount of the combined Commitments, as so reduced,
without any action on the part of the Swing Line Bank. At no time shall the
Swing Line Commitment exceed the Commitment of the Swing Line Bank, and any
reduction of the combined Commitments which reduces the Commitment of the Swing
Line Bank below the then-current amount of the Swing Line Commitment shall
result in an automatic corresponding reduction of the Swing Line Commitment to
the amount of the Commitment of the Swing Line Bank, as so reduced, without any
action on the part of the Swing Line Bank.
2.08 Optional Prepayments. Subject to Section 3.04, the Company may, at
any time or from time to time, upon not less than three (3) Business Days'
irrevocable notice to the Agent, in respect of Offshore Rate Loans, and in
respect of Base Rate Loans (other than Swing Line Loans), by not later than 9:00
a.m. (Pacific time) on the prepayment date, ratably prepay Loans in whole or in
part, in minimum amounts of $1,000,000 or any multiple of $100,000 in excess
thereof. Such notice of prepayment shall specify the date and amount of such
prepayment and the Type(s) of Loans to be prepaid. The Agent will promptly
notify each Bank of its receipt of any such notice, and of such Bank's Pro Rata
Share of such prepayment. If such notice is given by the Company, the Company
shall make such prepayment and the payment amount specified in such notice shall
be due and payable on the date specified therein, together, in the case of
Offshore Rate Loans, with accrued interest to each such date on the amount
prepaid and any amounts required pursuant to Section 2.06.
2.09 Repayment. The Company shall repay to the Banks on the Termination
Date the aggregate the principal amount of Loans outstanding on such date.
2.10 Interest. (a) Each Loan shall bear interest on the outstanding
principal amount thereof from the applicable Borrowing Date at a rate per annum
equal to the Offshore Rate plus the Applicable Offshore Rate Margin or the Base
Rate, as the case may be (and subject to the Company's right to convert to other
Types of Loans under Section 2.06).
(b) Interest on each Loan shall be paid in arrears on each
Interest Payment Date. Interest shall also be paid on the date of any prepayment
of Offshore Rate Loans under Section 2.08 for the portion of the Loans so
prepaid and upon payment (including prepayment) in full thereof and, during the
existence of any Event of Default, interest shall be paid on demand of the Agent
at the request or with the consent of the Required Banks.
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(c) Notwithstanding subsection (a) of this Section 2.10, if any
amount of principal of any Loan is not paid in full when due or any amount of
interest on any Loan or any other amount payable hereunder or under any other
Loan Document is not paid in full within 5 days of the date when due, in each
case whether at stated maturity, by acceleration, demand or otherwise, the
Company agrees to pay interest on such unpaid principal or other amount, from
the date such amount becomes due until the date such amount is paid in full, and
after as well as before any entry of judgment thereon to the extent permitted by
law, payable on demand, at a fluctuating rate per annum equal to the Base Rate
plus 2.0%.
(d) Anything herein to the contrary notwithstanding, the
obligations of the Company to any Bank hereunder shall be subject to the
limitation that payments of interest shall not be required for any period for
which interest is computed hereunder, to the extent (but only to the extent)
that contracting for or receiving such payment by such Bank would be contrary to
the provisions of any law applicable to such Bank limiting the highest rate of
interest that may be lawfully contracted for, charged or received by such Bank,
and in such event the Company shall pay such Bank interest at the highest rate
permitted by applicable law.
2.11 Fees. (a) Underwriting, Agency Fees. The Company shall pay an
underwriting fee to BofA for BofA's own account, and shall pay an agency fee to
the Agent for the Agent's own account, as required by the letter agreement ("Fee
Letter") between the Company and the Arranger and Agent dated May 30, 1997.
(b) Facility Fees. The Company shall pay to the Agent for the
account of each Bank a facility fee on the amount of such Bank's Commitment,
computed on a quarterly basis in arrears on the last Business Day of each
calendar quarter, equal to the Applicable Facility Fee times the average daily
Commitments for that quarter as calculated by the Agent. Such facility fee shall
accrue from the Closing Date to the Termination Date and shall be due and
payable quarterly in arrears on the last Business Day of each calendar quarter
commencing on December 31, 1997 through the Termination Date, with the final
payment to be made on the Termination Date. The facility fees provided in this
subsection shall accrue at all times after the above-mentioned commencement
date, including at any time during which one or more conditions in Article IV
are not met.
2.12 Computation of Fees and Interest. (a) All computations of interest
for Base Rate Loans when the Base Rate is determined by BofA's "reference rate"
shall be made on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed. All other computations of fees and interest shall be made
on the basis of a 360-day year and actual days elapsed (which results in more
interest being paid than if computed on the basis of a 365-day year). Interest
and fees shall accrue during each period during which interest or such fees are
computed from the first day thereof to the last day thereof.
(b) Each determination of an interest rate by the Agent shall be
conclusive and binding on the Company and the Banks in the absence of manifest
error. The Agent will, at the request of the Company or any Bank, deliver to the
Company or the Bank, as the case may be, a statement showing the quotations used
by the Agent in determining any interest rate and the resulting interest rate.
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(c) If any Reference Bank's Commitment terminates (other than on
termination of all the Commitments), or for any reason whatsoever the Reference
Bank ceases to be a Bank hereunder, that Reference Bank shall thereupon cease to
be a Reference Bank, and the Offshore Rate shall be determined on the basis of
the rates as notified by the remaining Reference Banks.
(d) Each Reference Bank shall use its best efforts to furnish
quotations of rates to the Agent as contemplated hereby. If any of the Reference
Banks fails to supply such rates to the Agent upon its request, the rate of
interest shall be determined on the basis of the quotations of the remaining
Reference Bank(s).
2.13 Payments by the Company. (a) All payments to be made by the Company
shall be made without set-off, recoupment or counterclaim. Except as otherwise
expressly provided herein, all payments by the Company shall be made to the
Agent for the account of the Banks at the Agent's Payment Office, and shall be
made in dollars and in immediately available funds, no later than 11:00 a.m.
(Pacific time) on the date specified herein. The Agent will promptly distribute
to each Bank its Pro Rata Share (or other applicable share as expressly provided
herein) of such payment in like funds as received. Any payment received by the
Agent later than 2:00 p.m. (Pacific time) shall be deemed to have been received
on the following Business Day and any applicable interest or fee shall continue
to accrue.
(b) Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day other than a
Business Day, such payment shall be made on the following Business Day, and such
extension of time shall in such case be included in the computation of interest
or fees, as the case may be.
(c) Unless the Agent receives notice from the Company prior to
the date on which any payment is due to the Banks that the Company will not make
such payment in full as and when required, the Agent may assume that the Company
has made such payment in full to the Agent on such date in immediately available
funds and the Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Bank on such due date an amount equal to the
amount then due such Bank. If and to the extent the Company has not made such
payment in full to the Agent, each Bank shall repay to the Agent on demand such
amount distributed to such Bank, together with interest thereon at the Federal
Funds Rate for each day from the date such amount is distributed to such Bank
until the date repaid.
2.14 Payments by the Banks to the Agent. (a) Unless the Agent receives
notice from a Bank on or prior to the Closing Date or, with respect to any
Borrowing after the Closing Date, at least one Business Day prior to the date of
such Borrowing, that such Bank will not make available as and when required
hereunder to the Agent for the account of the Company the amount of that Bank's
Pro Rata Share of the Borrowing, the Agent may assume that each Bank has made
such amount available to the Agent in immediately available funds on the
Borrowing Date and the Agent may (but shall not be so required), in reliance
upon such assumption, make available to the Company on such date a corresponding
amount. If and to the extent any Bank shall not have made its full amount
available to the Agent in immediately available funds and the Agent in such
circumstances has made available to the Company such amount, that Bank shall on
the Business Day following such Borrowing Date make such amount available to the
Agent, together with interest at the Federal Funds Rate for each day during such
period. A notice of the Agent submitted to any Bank with respect to amounts
owing
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under this subsection (a) shall be conclusive, absent manifest error. If such
amount is so made available, such payment to the Agent shall constitute such
Bank's Loan on the date of Borrowing for all purposes of this Agreement. If such
amount is not made available to the Agent on the Business Day following the
Borrowing Date, the Agent will notify the Company of such failure to fund and,
upon demand by the Agent, the Company shall pay such amount to the Agent for the
Agent's account, together with interest thereon for each day elapsed since the
date of such Borrowing, at a rate per annum equal to the interest rate
applicable at the time to the Loans comprising such Borrowing.
(b) The failure of any Bank to make any Loan on any Borrowing
Date shall not relieve any other Bank of any obligation hereunder to make a Loan
on such Borrowing Date, but no Bank shall be responsible for the failure of any
other Bank to make the Loan to be made by such other Bank on any Borrowing Date.
2.15 Sharing of Payments, Etc. If, other than as expressly provided
elsewhere herein, any Bank shall obtain on account of the Loans made by it any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) in excess of its ratable share (or other share
contemplated hereunder), such Bank shall immediately (a) notify the Agent of
such fact, and (b) purchase from the other Banks such participations in the
Loans made by them as shall be necessary to cause such purchasing Bank to share
the excess payment pro rata with each of them; provided, however, that if all or
any portion of such excess payment is thereafter recovered from the purchasing
Bank, such purchase shall to that extent be rescinded and each other Bank shall
repay to the purchasing Bank the purchase price paid therefor, together with an
amount equal to such paying Bank's ratable share (according to the proportion of
(i) the amount of such paying Bank's required repayment to (ii) the total amount
so recovered from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so recovered. The
Company agrees that any Bank so purchasing a participation from another Bank
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off, but subject to Section 10.10) with respect to
such participation as fully as if such Bank were the direct creditor of the
Company in the amount of such participation. The Agent will keep records (which
shall be conclusive and binding in the absence of manifest error) of
participations purchased under this Section 2.15 and will in each case notify
the Banks following any such purchases or repayments.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes. (a) Any and all payments by the Company to any Bank or the
Agent under this Agreement and any other Loan Document shall be made free and
clear of, and without deduction or withholding for, any Taxes. In addition, the
Company shall pay all Other Taxes.
(b) If the Company shall be required by law to deduct or
withhold any Taxes, Other Taxes or Further Taxes from or in respect of any sum
payable hereunder to any Bank or the Agent, then:
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(i) the sum payable shall be increased as
necessary so that, after making all required deductions and
withholdings (including deductions and withholdings applicable to
additional sums payable under this Section 3.01), such Bank or the
Agent, as the case may be, receives and retains an amount equal to the
sum it would have received and retained had no such deductions or
withholdings been made;
(ii) the Company shall make such deductions and
withholdings;
(iii) the Company shall pay the full amount
deducted or withheld to the relevant taxing authority or other
authority in accordance with applicable law; and
(iv) the Company shall also pay to each Bank or the
Agent, at the time interest is paid, Further Taxes in the amount that
the respective Bank or the Agent specifies as necessary to preserve the
after-tax yield the Bank or the Agent would have received if such
Taxes, Other Taxes or Further Taxes had not been imposed.
(c) The Company agrees to indemnify and hold harmless each Bank
and the Agent for the full amount of Taxes, Other Taxes, and Further Taxes in
the amount that the respective Bank or the Agent specifies as necessary to
preserve the after-tax yield the Bank or the Agent would have received if such
Taxes, Other Taxes or Further Taxes had not been imposed, and any liability
(including penalties, interest, additions to tax and expenses) arising therefrom
or with respect thereto, whether or not such Taxes, Other Taxes or Further Taxes
were correctly or legally asserted. Payment under this indemnification shall be
made within 30 days after the date the Bank or the Agent makes written demand
therefor.
(d) Within 30 days after the date of any payment by the Company
of Taxes, Other Taxes or Further Taxes, the Company shall furnish to each Bank
or the Agent the original or a certified copy of a receipt evidencing payment
thereof, or other evidence of payment satisfactory to such Bank or the Agent.
(e) If the Company is required to pay any amount to any Bank
pursuant to subsection (b) or (c) of this Section 3.01, then such Bank shall use
reasonable efforts (consistent with legal and regulatory restrictions) to change
the jurisdiction of its Lending Office so as to eliminate any such additional
payment by the Company which may thereafter accrue, if such change, in the sole
judgment of such Bank, is not otherwise disadvantageous to such Bank.
3.02 Illegality. (a) If any Bank determines that the introduction of any
Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has asserted
that it is unlawful, for any Bank or its applicable Lending Office to make
Offshore Rate Loans, then, on notice thereof by the Bank to the Company through
the Agent, any obligation of that Bank to make Offshore Rate Loans shall be
suspended until the Bank notifies the Agent and the Company that the
circumstances giving rise to such determination no longer exist.
(b) If a Bank determines that it is unlawful for such Bank to
maintain any Offshore Rate Loan, the Company shall, upon its receipt of notice
of such fact and demand from such Bank (with a copy to the Agent), prepay in
full such Offshore Rate Loans of that Bank then
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outstanding, together with interest accrued thereon and amounts required under
Section 3.04, either on the last day of the Interest Period thereof, if the Bank
may lawfully continue to maintain such Offshore Rate Loans to such day, or
immediately, if the Bank may not lawfully continue to maintain such Offshore
Rate Loan. If the Company is required to so prepay any Offshore Rate Loan, then
concurrently with such prepayment, the Company may, at its discretion, borrow
from the affected Bank, in the amount of such prepayment, a Base Rate Loan.
(c) If the obligation of any Bank to make or maintain Offshore
Rate Loans has been so terminated or suspended, the Company may elect, by giving
notice to the Bank through the Agent, that all Loans which would otherwise be
made by the Bank as Offshore Rate Loans shall be instead Base Rate Loans.
(d) Before giving any notice to the Agent under this Section
3.02, the affected Bank shall designate a different Lending Office with respect
to its Offshore Rate Loans if such designation will avoid the need for giving
such notice or making such demand and will not, in the judgment of the Bank, be
illegal or otherwise disadvantageous to the Bank.
3.03 Increased Costs and Reduction of Return. (a) If any Bank determines
that, due to either (i) the introduction of or any change (other than any change
by way of imposition of or increase in reserve requirements included in the
calculation of the Offshore Rate or in respect of the assessment rate payable by
any Bank to the FDIC for insuring U.S. deposits) in or in the interpretation of
any law or regulation or (ii) the compliance by that Bank with any guideline or
request from any central bank or other Governmental Authority (whether or not
having the force of law), there shall be any increase in the cost to such Bank
of agreeing to make or making, funding or maintaining any Offshore Rate Loans,
then the Company shall be liable for, and shall from time to time, upon demand
(with a copy of such demand to be sent to the Agent), pay to the Agent for the
account of such Bank, additional amounts as are sufficient to compensate such
Bank for such increased costs.
(b) If any Bank shall have determined that (i) the introduction
of any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy
Regulation, (iii) any change in the interpretation or administration of any
Capital Adequacy Regulation by any central bank or other Governmental Authority
charged with the interpretation or administration thereof, or (iv) compliance by
the Bank (or its Lending Office) or any corporation controlling the Bank with
any Capital Adequacy Regulation, affects or would affect the amount of capital
required or expected to be maintained by the Bank or any corporation controlling
the Bank and (taking into consideration such Bank's or such corporation's
policies with respect to capital adequacy and such Bank's desired return on
capital) determines that the amount of such capital is increased as a
consequence of its Commitment, loans, credits or obligations under this
Agreement, then, upon demand of such Bank to the Company through the Agent, the
Company shall pay to the Bank, from time to time as specified by the Bank,
additional amounts sufficient to compensate the Bank for such increase.
3.04 Funding Losses. The Company shall reimburse each Bank and hold each
Bank harmless from any loss or expense which the Bank may sustain or incur as a
consequence of:
(a) the failure of the Company to make on a timely
basis any payment of principal of any Offshore Rate Loan;
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(b) the failure of the Company to borrow, continue or convert a
Loan after the Company has given (or is deemed to have given) a Notice of
Borrowing or a Notice of Conversion/ Continuation;
(c) the failure of the Company to make any prepayment of any
Loan in accordance with any notice delivered under Section 2.08;
(d) the prepayment (including pursuant to Section 2.08) or other
payment (including after acceleration thereof) of an Offshore Rate Loan on a day
that is not the last day of the relevant Interest Period; or
(e) the automatic conversion under the proviso to Section
2.06(a) of any Offshore Rate Loan to a Base Rate Loan on a day that is not the
last day of the relevant Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Offshore Rate Loans or from fees payable
to terminate the deposits from which such funds were obtained. For purposes of
calculating amounts payable by the Company to the Banks under this Section 3.04
and under subsection 3.03(a), each Offshore Rate Loan made by a Bank (and each
related reserve, special deposit or similar requirement) shall be conclusively
deemed to have been funded at the LIBOR used in determining the Offshore Rate
for such Offshore Rate Loan by a matching deposit or other borrowing in the
interbank eurodollar market for a comparable amount and for a comparable period,
whether or not such Offshore Rate Loan is in fact so funded.
3.05 Inability to Determine Rates. If the Agent determines that for any
reason adequate and reasonable means do not exist for determining the Offshore
Rate for any requested Interest Period with respect to a proposed Offshore Rate
Loan, or that the Offshore Rate applicable pursuant to subsection 2.10 for any
requested Interest Period with respect to a proposed Offshore Rate Loan does not
adequately and fairly reflect the cost to the Banks of funding such Loan, the
Agent will promptly so notify the Company and each Bank. Thereafter, the
obligation of the Banks to make or maintain Offshore Rate Loans, as the case may
be, hereunder shall be suspended until the Agent revokes such notice in writing.
Upon receipt of such notice, the Company may revoke any Notice of Borrowing or
Notice of Conversion/Continuation then submitted by it. If the Company does not
revoke such Notice, the Banks shall make, convert or continue the Loans, as
proposed by the Company, in the amount specified in the applicable notice
submitted by the Company, but such Loans shall be made, converted or continued
as Base Rate Loans instead of Offshore Rate Loans.
3.06 Certificates of Banks. Any Bank claiming reimbursement or
compensation under this Article III shall deliver to the Company (with a copy to
the Agent) a certificate setting forth in reasonable detail the amount payable
to the Bank hereunder and such certificate shall be conclusive and binding on
the Company in the absence of manifest error.
3.07 Substitution of Banks. Upon the receipt by the Company from any
Bank (an "Affected Bank") of a claim for compensation under Section 3.03, of
notice that it cannot make Offshore Rate Loans under Section 3.02, or of a claim
for Taxes or Further Taxes under Section 3.01, then the Agent, at the Company's
direction, may: (i) request the Affected Bank to use its best efforts to obtain
a replacement bank or financial institution satisfactory to the Company to
acquire and assume all or a ratable part of all of such Affected Bank's Loans
and Commitment (a "Replacement Bank"); (ii) request one more of the other Banks
to acquire and assume
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all or part of such Affected Bank's Loans and Commitment; or (iii) designate a
Replacement Bank. Any such designation of a Replacement Bank under clause (i) or
(iii) shall be subject to the prior written consent of the Agent (which consent
shall not be unreasonably withheld).
3.08 Survival. The agreements and obligations of the Company in this
Article III shall survive the termination of this Agreement and the payment of
all other Obligations for a period of one year.
ARTICLE IV
CONDITIONS PRECEDENT
4.01 Conditions of Loan Availability. The obligation of each Bank to
make its initial Loan hereunder is subject to the condition that the Agent shall
have received on or before the date of this Agreement all of the following, in
form and substance satisfactory to the Agent and each Bank, and in sufficient
copies for each Bank:
(a) Credit Agreement and Notes. This Agreement, the
Notes and the Swing Line Note executed by each party thereto;
(b) Resolutions; Incumbency.
(i) Copies of the resolutions of the board of
directors of the Company authorizing the transactions contemplated
hereby, certified as of the Closing Date by the Secretary or an
Assistant Secretary of the Company; and
(ii) A certificate of the Secretary or Assistant
Secretary of the Company certifying the names and true signatures of
the officers of the Company authorized to execute, deliver and perform,
as applicable, this Agreement, and all other Loan Documents to be
delivered by it hereunder;
(c) Organization Documents; Good Standing. Each of the
following documents:
(i) the articles or certificate of incorporation
and the bylaws of the Company as in effect on the Closing Date,
certified as of the Closing Date by the Secretary or Assistant
Secretary of the Company;
(ii) a good standing certificate for the Company
from the Secretary of State (or similar, applicable Governmental
Authority) of its state of incorporation as of a recent date; and
(iii) a compliance certificate for each Material
Insurance Subsidiary from the department of insurance of its
jurisdiction of domicile.
(d) Legal Opinions. An opinion of counsel to the Company and
addressed to the Agent and the Banks, in form and substance acceptable to the
Agent.
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(e) Payment of Fees. Evidence of payment by the Company of all
accrued and unpaid fees, costs and expenses related to this Agreement to the
extent then due and payable on the Closing Date, together with reasonable
Attorney Costs of BofA to the extent invoiced prior to or on the Closing Date,
plus such additional amounts of reasonable Attorney Costs as shall constitute
BofA's reasonable estimate of Attorney Costs incurred or to be incurred by it
through the closing proceedings (provided that such estimate shall not
thereafter preclude final settling of accounts between the Company and BofA);
including any such costs, fees and expenses arising under or referenced in
Sections 2.11 and 10.04;
(f) Certificate. A certificate signed by a Responsible Officer,
dated as of the Closing Date, stating that:
(i) the representations and warranties contained
in Article V are true and correct on and as of such date, as though
made on and as of such date;
(ii) no Default or Event of Default exists or would
result from the making of any Loan hereunder; and
(iii) no event or circumstance has occurred since
December 31, 1996 that has resulted or could reasonably be expected to
result in a Material Adverse Effect.
(g) Approvals. Evidence of the receipt by the Company of all
required approvals of the transactions contemplated hereby and by the other Loan
Documents from each applicable Governmental Authority; and
(h) Other Documents. Such other approvals, opinions, documents
or materials as the Agent or any Bank may reasonably request.
4.02 Conditions to All Loans. The obligation of each Bank to make any
Loan to be made by it (including its initial Loan) is subject to the
satisfaction of the following conditions precedent on the relevant Borrowing
Date:
(a) Notice of Borrowing. The Agent shall have received (with, in
the case of the initial Loan only, a copy for each Bank) a Notice of Borrowing;
(b) Continuation of Representations and Warranties. The
representations and warranties in Article V shall be true and correct on and as
of such Borrowing Date with the same effect as if made on and as of such
Borrowing Date (except to the extent such representations and warranties
expressly refer to an earlier date, in which case they shall be true and correct
as of such earlier date); and
(c) No Existing Default. No Default or Event of Default shall
exist or shall result from such Loan or the related Borrowing.
Each Notice of Borrowing submitted by the Company hereunder shall constitute a
representation and warranty by the Company hereunder, as of the date of each
such notice and as of each Borrowing Date, that the conditions in this Section
4.02 are satisfied.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent and each Bank that,
both before and after giving effect to the consummation of the transactions
contemplated by the Loan Documents:
5.01 Corporate Existence and Power. The Company and each of its Material
Subsidiaries:
(a) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation;
(b) has the power and authority and all governmental licenses,
authorizations, consents and approvals to own its assets, carry on its business
and to execute, deliver, and perform its obligations under the Loan Documents;
(c) is duly qualified as a foreign insurer or corporation, as
applicable, and is licensed and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification or license; and
(d) is in compliance with all Requirements of Law;
except, in each case referred to in clause (c) or clause (d), to the extent that
the failure to do so could not reasonably be expected to have a Material Adverse
Effect.
5.02 Corporate Authorization; No Contravention. The execution, delivery
and performance by the Company of this Agreement and each other Loan Document
have been duly authorized by all necessary corporate action, and do not and will
not:
(a) contravene the terms of any of the Company's Organization
Documents;
(b) conflict with or result in any breach or contravention of,
or the creation of any Lien under, any document evidencing any Contractual
Obligation to which the Company is a party or any order, injunction, writ or
decree of any Governmental Authority to which the Company or its property is
subject; or
(c) violate any Requirement of Law.
5.03 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, the Company of
this Agreement or any other Loan Document.
5.04 Binding Effect. This Agreement and the other Loan Documents to
which the Company is a party constitute the legal, valid and binding obligations
of the Company to the extent it is a party thereto, enforceable against the
Company in accordance with their respective terms, except as
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enforceability may be limited by applicable bankruptcy, insolvency, or similar
laws affecting the enforcement of creditors' rights generally or by equitable
principles relating to enforceability.
5.05 Litigation.
(a) As of the Closing Date, there are no actions, suits,
proceedings, claims or disputes pending, or to the best knowledge of the
Company, threatened or contemplated, at law, in equity, in arbitration or before
any Governmental Authority, against the Company or its Subsidiaries or any of
their respective properties as to which there exists a substantial likelihood of
an adverse determination, which determination could reasonably be expected to
have a Material Adverse Effect.
(b) There are no actions, suits, proceedings, claims or disputes
pending, or to the best knowledge of the Company, threatened or contemplated, at
law, in equity, in arbitration or before any Governmental Authority, against the
Company or its Subsidiaries or any of their respective properties, the effect of
which could reasonably be expected to (i) materially impair the ability of the
Company to perform under this Agreement or any other Loan Document or any of the
transactions contemplated hereby or thereby, or (ii) have a material adverse
effect upon the legality, validity, binding effect or enforceability against the
Company of this Agreement or any other Loan Document. No injunction, writ,
temporary restraining order or any order of any nature has been issued by any
court or other Governmental Authority purporting to enjoin or restrain the
execution, delivery or performance of this Agreement or any other Loan Document,
or directing that the transactions provided for herein or therein not be
consummated as herein or therein provided.
5.06 No Default. No Default or Event of Default exists or would result
from the incurring of any Obligations by the Company. As of the Closing Date,
neither the Company nor any Material Subsidiary is in default under or with
respect to any Contractual Obligation in any respect which, individually or
together with all such defaults, could reasonably be expected to have a Material
Adverse Effect, or that would, if such default had occurred after the Closing
Date, create an Event of Default under subsection 8.01(e).
5.07 ERISA Compliance.
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state law. Each
Plan which is intended to qualify under Section 401(a) of the Code has received
a favorable determination letter from the IRS and to the best knowledge of the
Company, nothing has occurred which would cause the loss of such qualification.
(b) There are no pending or, to the best knowledge of the
Company, threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan which has resulted or could reasonably be
expected to result in a Material Adverse Effect. There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan which has resulted or could reasonably be expected to result in a
Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to
occur which has resulted or could reasonably be expected to result in a Material
Adverse Effect; (ii) no Pension Plan has any Unfunded Pension Liability which
has resulted or could reasonably be expected to
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result in a Material Adverse Effect; (iii) neither the Company nor any ERISA
Affiliate has incurred, or reasonably expects to incur, any liability under
Title IV of ERISA with respect to any Pension Plan (other than premiums due and
not delinquent under Section 4007 of ERISA) which has resulted or could
reasonably be expected to result in a Material Adverse Effect; (iv) neither the
Company nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Section 4201 or
4243 of ERISA with respect to a Multiemployer Plan which has resulted or could
reasonably be expected to result in a Material Adverse Effect; and (v) neither
the Company nor any ERISA Affiliate has engaged in a transaction that could be
subject to Section 4069 or 4212(c) of ERISA which has resulted or could
reasonably be expected to result in a Material Adverse Effect.
5.08 Use of Proceeds; Margin Regulations. The proceeds of the Loans have
been used solely for the purposes set forth in and permitted by Section 6.11 and
Section 7.05.
5.09 Title to Properties. The Company and each Material Subsidiary have
good record title to, or valid leasehold interests in, all real property
necessary or used in the ordinary conduct of their respective businesses, except
for such defects in title as could not, individually or in the aggregate, have a
Material Adverse Effect. As of the Closing Date, the property of the Company and
its Material Subsidiaries is subject to no Liens, other than Permitted Liens.
5.10 Taxes. The Company and its Subsidiaries have filed all Federal and
other material tax returns and reports required to be filed, and have paid all
Federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their properties, income or assets
otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided in
accordance with SAP or GAAP, as applicable. There is no proposed tax assessment
against the Company or any Subsidiary that could, if made, reasonably be
expected to have a Material Adverse Effect.
5.11 Financial Condition. Each of (a) the audited consolidated financial
statements of the Company and its Subsidiaries dated December 31, 1996, and the
related consolidated statements of income, shareholders' equity and cash flows
for the fiscal year ended on that date, (b) the unaudited consolidated financial
statements of the Company and its Subsidiaries dated June 30, 1997 and the
related consolidated statements of income, shareholders' equity and cash flows
for the period ended on that date, (c) the December 31, 1996 Annual Statement of
each Material Insurance Subsidiary and (d) the June 30, 1997 Quarterly Statement
of each Material Insurance Subsidiary:
(i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein, subject, in the case of such
unaudited financial statements, to ordinary, good faith year end audit
adjustments;
(ii) fairly present the financial condition of the
Company and its Subsidiaries as of the date thereof and results of
operations for the period covered thereby; and
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(iii) show all material indebtedness and other
liabilities, direct or contingent, of the Company and its consolidated
Subsidiaries as of the date thereof, including liabilities for taxes,
material commitments and Contingent Obligations.
5.12 Environmental Matters. To the Company's knowledge, the Company and
its Subsidiaries have complied with all Environmental Laws except for any
noncompliance therewith which could not reasonably be expected to have a
Material Adverse Effect.
5.13 Regulated Entities. Neither the Company nor any Person controlling
the Company is an "Investment Company" within the meaning of the Investment
Company Act of 1940. The Company is not subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the Interstate
Commerce Act, any state public utilities code, or any other Federal or state
statute or regulation limiting its ability to incur Indebtedness.
5.14 Subsidiaries. As of the Closing Date, the Company has no Material
Subsidiaries other than SAFECO Insurance Company of America, General Insurance
Company of America and SAFECO Life Insurance Company.
5.15 Insurance. The properties of the Company and its Material
Subsidiaries are insured with financially sound and reputable insurance
companies not Affiliates of the Company, in such amounts, with such deductibles
and covering such risks as are customarily carried by companies of similar size,
engaged in similar businesses and owning similar properties in localities where
the Company or such Material Subsidiary operates.
5.16 Licenses. No License, the loss of which could reasonably be
expected to have a Material Adverse Effect, is the subject of a proceeding for
suspension or revocation. To the Company's knowledge, there is no sustainable
basis for such suspension or revocation, and no such suspension or revocation
has been threatened by any Governmental Authority.
5.17 Employee Matters. As of the Closing Date, there are no strikes,
work stoppages, election or decertification petitions or proceedings, unfair
labor charges, equal employment opportunity proceedings, wage payment or
material unemployment compensation proceedings, material workers' compensation
proceedings or other material labor/employee related controversies pending or,
to the knowledge of the Company, threatened between the Company or any of its
Subsidiaries and any of their respective employees, other than employee
grievances which could not in the aggregate reasonably be expected to have a
Material Adverse Effect.
5.18 Full Disclosure. None of the representations or warranties made by
the Company in the Loan Documents as of the date such representations and
warranties are made or deemed made, and none of the statements contained in any
exhibit, report, statement or certificate furnished by or on behalf of the
Company or any Subsidiary in connection with the Loan Documents (including the
offering and disclosure materials delivered by or on behalf of the Company to
the Banks prior to the Closing Date), contains, when taken as a whole, any
untrue statement of a material fact or omits any material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading in any material respect
as of the time when made or delivered.
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ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Bank shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, unless the Required Banks
waive compliance in writing:
6.01 Financial Statements. The Company shall deliver to the Agent with
sufficient copies for each Bank (except for deliveries pursuant to subsection
6.01(d) as to which only one copy shall be provided):
(a) as soon as available, but not later than 90 days after the
end of each fiscal year, a copy of the audited consolidated balance sheet of the
Company and its Subsidiaries as at the end of such year and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for such year, setting forth in each case in comparative form the figures
for the previous fiscal year, and accompanied by the opinion of Ernst & Young
LLP or another nationally-recognized independent public accounting firm
("Independent Auditor") which report shall state that such consolidated
financial statements present fairly the financial position for the periods
indicated in conformity with GAAP applied on a basis consistent with prior
years. Such opinion shall not be qualified or limited because of a restricted or
limited examination by the Independent Auditor of any material portion of the
Company's or any Subsidiary's records;
(b) as soon as available, but not later than 45 days after the
end of each of the first three fiscal quarters of each fiscal year, a copy of
the unaudited consolidated balance sheet of the Company and its Subsidiaries as
of the end of such quarter and the related consolidated statements of income,
shareholders' equity and cash flows for the period commencing on the first day
and ending on the last day of such quarter, and certified by a Responsible
Officer as fairly presenting, in accordance with GAAP (subject to ordinary, good
faith year-end audit adjustments), the financial position and the results of
operations of the Company and the Subsidiaries;
(c) Upon the earlier of (i) 15 days after the regulatory filing
date or (ii) 75 days after the close of each fiscal year of each Material
Insurance Subsidiary, copies of the unaudited Annual Statement of such Material
Insurance Subsidiary, certified by the secretary or treasurer of such Material
Insurance Subsidiary, all such statements to be prepared in accordance with SAP
consistently applied throughout the periods reflected therein and, if required
by the applicable Governmental Authority, audited and certified by independent
certified public accountants of recognized national standing; and
(d) Upon the earlier of (i) 10 days after the regulatory filing
date or (ii) 60 days after the close of each of the first three (3) fiscal
quarters of each fiscal year of each Material Insurance Subsidiary, copies of
the Quarterly Statement of each of the Material Insurance Subsidiaries,
certified by the secretary or treasurer of such Material Insurance Subsidiary,
all such statements to be prepared in accordance with SAP consistently applied
through the period reflected herein.
6.02 Certificates; Other Information. The Company shall furnish to the
Agent, with sufficient copies for each Bank:
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(a) concurrently with the delivery of the financial statements
referred to in subsections 6.01(a) and (b), a Compliance Certificate executed by
a Responsible Officer;
(b) promptly, copies of all financial statements and reports
that the Company sends to its shareholders and copies of all financial
statements and regular, periodic or special reports (including Forms 10K, 10Q
and 8K) that the Company or any Subsidiary may make to, or file with, the SEC,
other than such financial statements or reports relating to the SAFECO mutual
funds;
(c) promptly and in any event within two days after learning
thereof, notification of any changes after the date hereof in the rating given
by S&P or Xxxxx'x in respect of the Company's senior unsecured Indebtedness; and
(d) promptly, such additional information regarding the
business, financial or corporate affairs of the Company or any Subsidiary as the
Agent, at the request of any Bank, may from time to time reasonably request.
6.03 Notices. The Company shall promptly notify the Agent:
(a) (i) of the occurrence of any Default or Event of Default and
(ii) of the occurrence or existence of any event or circumstance that could
reasonably foreseeably, based on the facts and circumstances then existing and
known to the Company, become a Default or Event of Default;
(b) of any matter that has resulted or could reasonably be
expected to result in a Material Adverse Effect, including (i) any breach or
non-performance of, or any default under, a Contractual Obligation of the
Company or any Subsidiary; (ii) any dispute, litigation, investigation,
proceeding or suspension between the Company or any Subsidiary and any
Governmental Authority; or (iii) the commencement of, or any material
development in, any litigation or proceeding affecting the Company or any
Subsidiary, including pursuant to any applicable Environmental Laws, in each
case to the extent that it has resulted or could reasonably be expected to
result in a Material Adverse Effect;
(c) of the occurrence of any of the following events affecting
the Company or any ERISA Affiliate (but in no event more than 10 days after such
event) and deliver to the Agent and each Bank a copy of any notice with respect
to such event that is filed with a Governmental Authority and any notice
delivered by a Governmental Authority to the Company or any ERISA Affiliate with
respect to such event:
(i) an ERISA Event; or
(ii) an increase in the Unfunded Pension
Liabilities of any Pension Plan that would cause the Unfunded Pension
Liabilities of all Pension Plans to have increased by more than
$50,000,000 in the aggregate after the Closing Date.
(d) of any material change in accounting policies or financial
reporting practices by the Company or any of its Material Subsidiaries;
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(e) the receipt of any notice from any Governmental Authority of
the expiration without renewal, revocation or suspension of, or the institution
of any proceedings to revoke or suspend, any License now or hereafter held by
any Insurance Subsidiary which is required to conduct insurance business in
compliance with all applicable laws and regulations and the expiration,
revocation or suspension of which could reasonably be expected to have a
Material Adverse Effect;
(f) the receipt of any notice from any Governmental Authority of
the institution of any disciplinary proceedings against or in respect of any
Insurance Subsidiary, or the issuance of any order, the taking of any action or
any request for an extraordinary audit for cause by any Governmental Authority
which, if adversely determined, could reasonably be expected to have a Material
Adverse Effect; or
(g) any judicial or administrative order limiting or controlling
the insurance business of any Insurance Subsidiary (and not the insurance
industry generally) which has been issued or adopted and which has had, or which
could reasonably be expected to have, a Material Adverse Effect.
Each notice under this Section shall be accompanied by a written
statement by a Responsible Officer setting forth details of the occurrence
referred to therein, and stating what action the Company or any affected
Subsidiary proposes to take with respect thereto and at what time. Each notice
under subsection 6.03(a) shall describe with particularity any and all clauses
or provisions of this Agreement or other Loan Document that have been (or
reasonably foreseeably will be) breached or violated.
6.04 Preservation of Corporate Existence, Etc. The Company shall, and
shall cause each Material Subsidiary to:
(a) preserve and maintain in full force and effect its corporate
existence and, to the extent applicable, good standing under the laws of its
state or jurisdiction of incorporation;
(b) preserve and maintain in full force and effect all
governmental rights, privileges, qualifications, permits, licenses and
franchises necessary in the normal conduct of its business except in connection
with transactions permitted by Section 7.03 and sales of assets permitted by
Section 7.02, the non-preservation of which could reasonably be expected to have
a Material Adverse Effect;
(c) use reasonable efforts, in the ordinary course of business,
to preserve its business organization and goodwill, the non-preservation of
which could reasonably be expected to have a Material Adverse Effect; and
(d) carry on and conduct its business only in substantially the
same fields of enterprise as it is presently conducted.
No Material Insurance Subsidiary shall change its state of domicile without the
prior written consent of the Required Banks, which consent shall not
unreasonably be withheld.
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6.05 Maintenance of Property. The Company shall maintain, and shall
cause each Material Subsidiary to maintain, and preserve all its property which
is used or useful in its business in good working order and condition, ordinary
wear and tear excepted, except as permitted by Section 7.02.
6.06 Insurance. The Company shall maintain, and shall cause each
Material Subsidiary to maintain, with financially sound and reputable
independent insurers, insurance with respect to its properties and business
against loss or damage of the kinds customarily insured against by Persons
engaged in the same or similar business, of such types and in such amounts as
are customarily carried under similar circumstances by such other Persons.
6.07 Payment of Obligations. The Company shall, and shall cause each
Material Subsidiary to, pay and discharge as the same shall become due and
payable, all their respective material obligations and liabilities, including:
(a) all material tax liabilities, assessments and governmental
charges or levies upon it or its material properties or assets, unless the same
are being contested in good faith by appropriate proceedings and adequate
reserves in accordance with GAAP or SAP, as applicable, are being maintained by
the Company or such Subsidiary;
(b) all lawful claims which, if unpaid, would by law become a
Lien upon its property, unless the same is being contested in good faith by
appropriate proceedings and adequate reserves in accordance with GAAP or SAP, as
applicable, are being maintained; and
(c) all material indebtedness, as and when due and payable, but
subject to any subordination provisions contained in any instrument or agreement
evidencing such Indebtedness.
6.08 Compliance with Laws. The Company shall comply, and shall cause
each Subsidiary to comply, in all material respects with all Requirements of Law
of any Governmental Authority having jurisdiction over it or its business
(including the Federal Fair Labor Standards Act and all applicable Environmental
Laws), the noncompliance with which could reasonably be expected to have a
Material Adverse Effect, except such as may be contested in good faith or as to
which a bona fide dispute may exist.
6.09 Compliance with ERISA. The Company shall, and shall cause each of
its ERISA Affiliates to: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law; (b) cause each Plan which is qualified under Section 401(a) of the
Code to maintain such qualification; and (c) make all required contributions to
any Plan subject to Section 412 of the Code.
6.10 Inspection of Property and Books and Records. The Company shall
maintain and shall cause each Subsidiary to maintain proper books of record and
account, in which full, true and correct entries in conformity with GAAP or SAP,
as applicable, consistently applied shall be made of all financial transactions
and matters involving the assets and business of the Company and such
Subsidiary. The Company shall permit, and shall cause each Material Subsidiary
to permit, representatives and independent contractors of the Agent or any Bank
to visit and inspect any of their respective properties, to examine their
respective corporate, financial and operating records, and make copies thereof
or abstracts therefrom, and to discuss their respective affairs, finances and
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accounts with their respective directors, officers, and independent public
accountants, all at such reasonable times during normal business hours and as
often as may be reasonably desired, upon reasonable advance notice to the
Company, with such inspections to be conducted at the expense of the Company
while an Event of Default has occurred and is continuing.
6.11 Use of Proceeds. The Company shall use the proceeds of the Loans
for general corporate purposes not in contravention of any Requirement of Law or
of any Loan Document.
6.12 Shareholders' Equity. The Company shall at all times after the date
hereof maintain a minimum Shareholders' Equity at least equal to (a)
$3,462,500,000, plus (b) 50% of the Company's positive consolidated Net Income,
if any, for each fiscal quarter ending after December 31, 1997 and on or prior
to the date of determination, plus (c) 25% of the net cash proceeds received by
the Company from the issuance of equity securities after the date of this
Agreement. For the purposes of this Section 6.12, any debt securities issued by
the Company or any Subsidiary which are treated as equity securities by S&P (or
portion thereof) shall also be treated as such in determining Shareholders'
Equity.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Bank shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, unless the Required Banks
waive compliance in writing:
7.01 Limitation on Liens. The Company shall not, and shall not suffer or
permit any Subsidiary to, directly or indirectly, make, create, incur, assume or
suffer to exist any Lien upon or with respect to any part of its property,
whether now owned or hereafter acquired, other than the following ("Permitted
Liens"):
(a) Liens existing on property of the Company or any Subsidiary
(other than SAFECO Properties, Inc. and SAFECO Credit Company Inc.) on the
Closing Date securing Indebtedness with an aggregate principal amount not to
exceed $10,000,000 outstanding on such date;
(b) any Lien created under any Loan Document;
(c) Liens for taxes, fees, assessments or other governmental
charges which are not delinquent or remain payable without penalty, or to the
extent that non-payment thereof is permitted by Section 6.07; provided, that no
notice of lien has been filed or recorded under the Code;
(d) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other similar Liens arising in the ordinary course
of business which are not delinquent or remain payable without penalty or which
are being contested in good faith and by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of the property
subject thereto;
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(e) Liens (other than any Lien imposed by ERISA) consisting of
pledges or deposits required in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other social security
legislation;
(f) Liens on the property of the Company or any Subsidiary
securing (i) the non-delinquent performance of bids, trade contracts (other than
for borrowed money), leases, statutory obligations, (ii) contingent obligations
on surety and appeal bonds, and (iii) other non-delinquent obligations of a like
nature; in each case, incurred in the ordinary course of business, provided all
such Liens in the aggregate could not (even if enforced) reasonably be expected
to cause a Material Adverse Effect;
(g) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto or interfere
with the ordinary conduct of the businesses of the Company and its Subsidiaries;
(h) Liens arising solely by virtue of any statutory or common
law provision relating to banker's liens, rights of set-off or similar rights
and remedies as to deposit accounts or other funds maintained with a creditor
depository institution; provided, that (i) such deposit account is not a
dedicated cash collateral account and is not subject to restrictions against
access by the Company in excess of those set forth by regulations promulgated by
the FRB, and (ii) such deposit account is not intended by the Company or any
Subsidiary to provide collateral to the depository institution;
(i) Liens consisting of deposits made by any Insurance
Subsidiary with the insurance regulatory authority in its jurisdiction of
domicile or other statutory Liens or Liens or claims imposed or required by
applicable insurance law or regulation against the assets of any Insurance
Subsidiary, in each case in favor of all policyholders of such Insurance
Subsidiary and in the ordinary course of such Insurance Subsidiary's business;
(j) Liens securing obligations of SAFECO Properties, Inc. and
SAFECO Credit Company Inc. and their Subsidiaries incurred in the ordinary
course of business and attaching solely to the property of such Persons;
(k) Liens securing obligations owed to the Company or owed by
any Subsidiary of the Company to any of its other Subsidiaries; and
(l) Liens securing other Obligations of the Company and its
Subsidiaries not to exceed $100,000,000 in the aggregate at any one time
outstanding.
7.02 Disposition of Assets. The Company shall not, and shall not suffer
or permit any Subsidiary to, directly or indirectly, sell, assign, lease,
convey, transfer or otherwise dispose of (whether in one or a series of
transactions) any property (including accounts and notes receivable, with or
without recourse) or enter into any agreement to do any of the foregoing,
except:
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(a) dispositions of used, worn-out or surplus equipment in the
ordinary course of business and other dispositions of immaterial property
(including charitable donations) made in the ordinary course of business;
(b) the sale of equipment to the extent that such equipment is
exchanged for credit against the purchase price of similar replacement
equipment, or the proceeds of such sale are reasonably promptly applied to the
purchase price of such replacement equipment;
(c) dispositions of investments by any Insurance Subsidiary;
(d) dispositions of property by SAFECO Properties, Inc. and its
Subsidiaries in the ordinary course of business so long as such proceeds are
promptly used by such Persons to purchase other property or repay Indebtedness
of such Persons;
(e) transfers of property to the Company or any of its
Subsidiaries; and
(f) dispositions not otherwise permitted hereunder which are
made for fair market value; provided, that (i) at the time of any disposition,
no Event of Default shall exist or shall result from such disposition and (ii)
the aggregate value of all assets sold pursuant to this subsection 7.02(f) by
the Company and its Subsidiaries, together, shall not exceed 25% of
Shareholders' Equity (determined as of the last day of the preceding fiscal
year) in any fiscal year.
7.03 Consolidations and Mergers. The Company shall not merge,
consolidate with or into, or convey, transfer, lease or otherwise dispose of
(whether in one transaction or in a series of transactions) all or substantially
all of its assets (whether now owned or hereafter acquired) to or in favor of
any Person, except that the Company may merge with an entity organized under the
laws of the United States so long as (a) the Company is the surviving entity in
such merger, (b) all applicable regulatory requirements have been satisfied and
(c) no Default or Event of Default has occurred and is continuing or would occur
after giving effect thereto.
7.04 Limitation on Indebtedness. The Company shall not suffer or permit
any Subsidiary to create, incur, assume, suffer to exist, or otherwise become or
remain directly or indirectly liable with respect to, any Indebtedness if, after
giving effect thereto, the ratio of (a) the aggregate Indebtedness of the
Company's Subsidiaries to (b) the sum of (i) the Company's Shareholders' Equity,
plus (ii) the Company's consolidated Indebtedness would exceed .25 to 1.0. For
the purposes of this Section 7.04, any debt securities issued by the Company or
any Subsidiary which are treated as equity securities by S&P (or portion
thereof) shall also be treated as such in determining Shareholders' Equity.
7.05 Use of Proceeds. The Company shall not, and shall not suffer or
permit any Subsidiary to, use any portion of the Loan proceeds, directly or
indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or otherwise
refinance indebtedness of the Company or others incurred to purchase or carry
Margin Stock, (iii) to extend credit for the purpose of purchasing or carrying
any Margin Stock, or (iv) to acquire any security in any transaction that is
subject to Section 13 or 14 of the Exchange Act.
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7.06 ERISA. The Company shall not, and shall not suffer or permit any of
its ERISA Affiliates to: (a) engage in a prohibited transaction or violation of
the fiduciary responsibility rules with respect to any Plan which has resulted
or could reasonably be expected to result in liability of the Company in an
aggregate amount in excess of $50,000,000 or (b) engage in a transaction that
could be subject to Section 4069 or 4212(c) of ERISA.
7.07 Accounting Changes. The Company shall not, and shall not suffer or
permit any Material Subsidiary to, make any significant change in accounting
treatment or reporting practices, except as required by SAP or GAAP, as
applicable, or change the fiscal year of the Company or of any Material
Subsidiary.
ARTICLE VIII
EVENTS OF DEFAULT
8.01 Event of Default. Any of the following shall constitute an "Event
of Default":
(a) Non-Payment. The Company fails to pay, (i) when and as
required to be paid herein, any amount of principal of any Loan, or (ii) within
five days after the same becomes due, any interest, fee or any other amount
payable hereunder or under any other Loan Document; or
(b) Representation or Warranty. Any representation or warranty
by the Company made or deemed made herein or in any other Loan Document, or
contained in any certificate, document or financial or other statement by the
Company, or any Responsible Officer, furnished at any time under this Agreement,
or in or under any other Loan Document, is incorrect in any material respect on
or as of the date made or deemed made; or
(c) Specific Defaults. The Company fails to perform or observe
any term, covenant or agreement contained in any of Section 6.03(a)(i), 6.09 or
6.12 or in Article VII; or
(d) Other Defaults. The Company fails to perform or observe any
other term or covenant contained in this Agreement or any other Loan Document,
and such default shall continue unremedied for a period of 30 days after the
earlier of (i) the date upon which a Responsible Officer knew or reasonably
should have known of such failure or (ii) the date upon which written notice
thereof is given to the Company by the Agent or any Bank; or
(e) Cross-Default. (i) The Company or any Subsidiary (A) fails
to make any payment in respect of any Indebtedness or Contingent Obligation
(other than in respect of Swap Contracts), having an aggregate principal amount
(including undrawn committed or available amounts and including amounts owing to
all creditors under any combined or syndicated credit arrangement) of more than
$50,000,000, when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) and such failure continues after the
applicable grace or notice period, if any, specified in the relevant document on
the date of such failure; or (B) fails to perform or observe any other condition
or covenant, or any other event shall occur or condition exist, under any
agreement or instrument relating to any such Indebtedness or Contingent
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Obligation, and such failure continues after the applicable grace or notice
period, if any, specified in the relevant document on the date of such failure
if the effect of such failure, event or condition is to cause, or to permit the
holder or holders of such Indebtedness or beneficiary or beneficiaries of such
Indebtedness (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause such Indebtedness to be declared to be
due and payable prior to its stated maturity, or such Contingent Obligation to
become payable or cash collateral in respect thereof to be demanded; or (ii)
there occurs under any Swap Contract an Early Termination Date (as defined in
such Swap Contract) resulting from (1) any event of default under such Swap
Contract as to which the Company or any Subsidiary is the Defaulting Party (as
defined in such Swap Contract) or (2) any Termination Event (as so defined) as
to which the Company or any Subsidiary is an Affected Party (as so defined),
and, in either event, the Swap Termination Value owed by the Company or such
Subsidiary as a result thereof is greater than $50,000,000; or
(f) Insolvency; Voluntary Proceedings. The Company or any
Material Subsidiary (i) ceases or fails to be solvent, or generally fails to
pay, or admits in writing its inability to pay, its debts as they become due,
subject to applicable grace periods, if any, whether at stated maturity or
otherwise; (ii) voluntarily ceases to conduct its business in the ordinary
course; (iii) commences any Insolvency Proceeding with respect to itself; or
(iv) takes any action to effectuate or authorize any of the foregoing; or
(g) Involuntary Proceedings. (i) Any involuntary Insolvency
Proceeding is commenced or filed against the Company or any Material Subsidiary,
or any writ, judgment, warrant of attachment, execution or similar process, is
issued or levied against a substantial part of the Company's or any Material
Subsidiary's properties, and any such proceeding or petition shall not be
dismissed, or such writ, judgment, warrant of attachment, execution or similar
process shall not be released, vacated or fully bonded within 60 days after
commencement, filing or levy; (ii) the Company or any Material Subsidiary admits
the material allegations of a petition against it in any Insolvency Proceeding,
or an order for relief (or similar order under non-U.S. law) is ordered in any
Insolvency Proceeding; (iii) the Company or any Material Subsidiary acquiesces
in the appointment of a receiver, trustee, custodian, conservator, liquidator,
mortgagee in possession (or agent therefor), or other similar Person for itself
or a substantial portion of its property or business; or (iv) any Material
Insurance Subsidiary shall become subject to any conservation, rehabilitation or
liquidation order, directive or mandate issued by any Governmental Authority;
(h) ERISA. (i) An ERISA Event shall occur with respect to a
Pension Plan or Multiemployer Plan which has resulted or could reasonably be
expected to result in liability of the Company or any ERISA Affiliate under
Title IV of ERISA to the Pension Plan or Multiemployer Plan or to the PBGC in an
aggregate amount in excess of $50,000,000; (ii) the aggregate amount of Unfunded
Pension Liability among all Pension Plans at any time exceeds $50,000,000; or
(iii) the Company or any ERISA Affiliate shall fail to pay when due, after the
expiration of any applicable grace period, any installment payment with respect
to its withdrawal liability under Section 4201 of ERISA under a Multiemployer
Plan in an aggregate amount in excess of $50,000,000; or
(i) Monetary Judgments. One or more non-interlocutory judgments,
non-interlocutory orders, decrees or arbitration awards is entered against the
Company or any Subsidiary by any Governmental Authority involving in the
aggregate a liability (to the extent not covered by independent third-party
insurance as to which the insurer does not dispute coverage) as to any single
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or related series of transactions, incidents or conditions, of $50,000,000 or
more, and the same shall remain unsatisfied, unvacated and unstayed pending
appeal for a period of 10 days after the entry thereof; or
(j) Non-Monetary Judgments. Any non-monetary judgment, order,
directive, mandate or decree is entered against the Company or any Subsidiary by
any Governmental Authority which does or could reasonably be expected to have a
Material Adverse Effect, and there shall be any period of 30 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or
(k) Change of Control. There occurs any Change of Control; or
(l) Loss of Licenses. Any Governmental Authority revokes, fails
to renew or suspends any license, permit or franchise of the Company or any
Material Insurance Subsidiary, which revocation, failure or suspension has had
or could reasonably be expected to have a Material Adverse Effect, or the
Company or any Material Insurance Subsidiary for any reason loses any license,
permit or franchise which loss has had or could reasonably be expected to have a
Material Adverse Effect, or the Company or any Material Insurance Subsidiary
suffers the imposition of any restraining order, escrow, suspension or impound
of funds in connection with any proceeding (judicial or administrative) with
respect to any license, permit or franchise which imposition has or could
reasonably be expected to have a Material Adverse Effect; or
(m) Adverse Order. Any Material Insurance Subsidiary shall be
the subject of a final non-appealable order imposing a fine in an amount in
excess of $10,000,000 in any single instance or other such orders imposing fines
in excess of $25,000,000 in the aggregate after the date of this Agreement by or
at the request of any state insurance regulatory agency as a result of the
violation by such Material Insurance Subsidiary of such state's applicable
insurance laws or the regulations promulgated in connection therewith.
8.02 Remedies. If any Event of Default occurs, the Agent shall, at the
request of, or may, with the consent of, the Required Banks,
(a) declare the Commitment of each Bank to make Loans to be
terminated, whereupon such Commitments shall be terminated;
(b) declare the unpaid principal amount of all outstanding
Loans, all interest accrued and unpaid thereon, and all other amounts owing or
payable hereunder or under any other Loan Document to be immediately due and
payable, without presentment, demand, protest or other notice of any kind, all
of which are hereby expressly waived by the Company; and
(c) exercise on behalf of itself and the Banks all rights and
remedies available to it and the Banks under the Loan Documents or applicable
law;
provided, however, that upon the occurrence of any event specified in subsection
(f) or (g) of Section 8.01 (in the case of clause (i) of subsection (g) upon the
expiration of the 60-day period mentioned therein), the obligation of each Bank
to make Loans shall automatically terminate and
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the unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable without further
act of the Agent or any Bank.
8.03 Rights Not Exclusive. The rights provided for in this Agreement and
the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
ARTICLE IX
THE AGENT
9.01 Appointment and Authorization; "Agent". Each Bank hereby
irrevocably (subject to Section 9.09) appoints, designates and authorizes the
Agent to take such action on its behalf under the provisions of this Agreement
and each other Loan Document and to exercise such powers and perform such duties
as are expressly delegated to it by the terms of this Agreement or any other
Loan Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the Agent
have or be deemed to have any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent. Without limiting the generality of the
foregoing sentence, the use of the term "agent" in this Agreement with reference
to the Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.
9.02 Delegation of Duties. The Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
9.03 Liability of Agent. None of the Agent-Related Persons shall (a) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (b) be responsible in any manner to any of the Banks for any recital,
statement, representation or warranty made by the Company or any Subsidiary or
Affiliate of the Company, or any officer thereof, contained in this Agreement or
in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of the Company or any other party to
any Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Bank to ascertain or
to inquire as to the observance or performance of any of the agreements
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contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of the Company or any of the Company's
Subsidiaries or Affiliates.
9.04 Reliance by Agent. (a) The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to the Company), independent accountants and other experts selected by the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Banks as it deems appropriate
and, if it so requests, it shall first be indemnified to its satisfaction by the
Banks against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or consent of
the Required Banks and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the conditions
specified in Section 4.01, each Bank that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by the Agent to such Bank for consent,
approval, acceptance or satisfaction, or required thereunder to be consented to
or approved by or acceptable or satisfactory to the Bank.
9.05 Notice of Default. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default, except with
respect to defaults in the payment of principal, interest and fees required to
be paid to the Agent for the account of the Banks, unless the Agent shall have
received written notice from a Bank or the Company referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". The Agent will notify the Banks of its receipt of any such
notice. The Agent shall take such action with respect to such Default or Event
of Default as may be requested by the Required Banks in accordance with Article
VIII; provided, however, that unless and until the Agent has received any such
request, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable or in the best interest of the Banks.
9.06 Credit Decision. Each Bank acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Company and its Subsidiaries, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Bank. Each Bank represents to the
Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Company and its Subsidiaries, and all applicable bank regulatory laws relating
to the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Company hereunder. Each Bank also
represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents
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and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Company. Except for notices, reports and other documents
expressly herein required to be furnished to the Banks by the Agent, the Agent
shall not have any duty or responsibility to provide any Bank with any credit or
other information concerning the business, prospects, operations, property,
financial and other condition or credit worthiness of the Company which may come
into the possession of any of the Agent-Related Persons.
9.07 Indemnification of Agent. Whether or not the transactions
contemplated hereby are consummated, the Banks shall indemnify upon demand the
Agent-Related Persons other than the Arranger (to the extent not reimbursed by
or on behalf of the Company and without limiting the obligation of the Company
to do so), pro rata, from and against any and all Indemnified Liabilities;
provided, however, that no Bank shall be liable for the payment to the
Agent-Related Persons of any portion of such Indemnified Liabilities resulting
from such Person's gross negligence or willful misconduct. Without limitation of
the foregoing, each Bank shall reimburse the Agent upon demand for its ratable
share of any costs or out-of-pocket expenses (including Attorney Costs) incurred
by the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein, to the extent that the Agent
is not reimbursed for such expenses by or on behalf of the Company. The
undertaking in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of the Agent.
9.08 Agent in Individual Capacity. BofA and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Company and its
Subsidiaries and Affiliates as though BofA were not the Agent hereunder and
without notice to or consent of the Banks. The Banks acknowledge that, pursuant
to such activities, BofA or its Affiliates may receive information regarding the
Company or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Company or such Subsidiary) and
acknowledge that the Agent shall be under no obligation to provide such
information to them. With respect to its Loans, BofA shall have the same rights
and powers under this Agreement as any other Bank and may exercise the same as
though it were not the Agent, and the terms "Bank" and "Banks" include BofA in
its individual capacity.
9.09 Successor Agent. The Agent may, and at the request of the Required
Banks, shall resign as Agent upon 30 days' notice to the Banks. If the Agent
resigns under this Agreement, the Required Banks shall appoint from among the
Banks a successor agent for the Banks which successor agent shall, so long as no
Event of Default has occurred and is continuing, be approved by the Company. If
no successor agent is appointed prior to the effective date of the resignation
of the Agent, the Agent may appoint, after consulting with the Banks and the
Company, a successor agent from among the Banks. Upon the acceptance of its
appointment as successor agent hereunder, such successor agent shall succeed to
all the rights, powers and duties of the retiring Agent and the term "Agent"
shall mean such successor agent and the retiring Agent's appointment, powers and
duties as Agent shall be terminated. After any retiring Agent's resignation
hereunder as Agent, the
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provisions of this Article IX and Sections 10.04 and 10.05 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement. If no successor agent has accepted appointment as Agent by
the date which is 30 days following a retiring Agent's notice of resignation,
the retiring Agent's resignation shall nevertheless thereupon become effective
and the Banks shall perform all of the duties of the Agent hereunder until such
time, if any, as the Required Banks appoint a successor agent as provided for
above.
9.10 Withholding Tax. (a) If any Bank is a "foreign corporation,
partnership or trust" within the meaning of the Code and such Bank claims
exemption from, or a reduction of, U.S. withholding tax under Sections 1441 or
1442 of the Code, such Bank agrees with and in favor of the Agent, to deliver to
the Agent:
(i) if such Bank claims an exemption from, or a
reduction of, withholding tax under a United States tax treaty, two
properly completed and executed copies of IRS Form 1001 before the
payment of any interest in the first calendar year and before the
payment of any interest in each third succeeding calendar year during
which interest may be paid under this Agreement;
(ii) if such Bank claims that interest paid under
this Agreement is exempt from United States withholding tax because it
is effectively connected with a United States trade or business of such
Bank, two properly completed and executed copies of IRS Form 4224 before
the payment of any interest is due in the first taxable year of such
Bank and in each succeeding taxable year of such Bank during which
interest may be paid under this Agreement; and
(iii) such other form or forms as may be required
under the Code or other laws of the United States as a condition to
exemption from, or reduction of, United States withholding tax.
Such Bank agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.
(b) If any Bank claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form 1001 and
such Bank sells, assigns, grants a participation in, or otherwise transfers all
or part of the Obligations of the Company to such Bank, such Bank agrees to
notify the Agent of the percentage amount in which it is no longer the
beneficial owner of Obligations of the Company to such Bank. To the extent of
such percentage amount, the Agent will treat such Bank's IRS Form 1001 as no
longer valid.
(c) If any Bank claiming exemption from United States
withholding tax by filing IRS Form 4224 with the Agent sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations of the
Company to such Bank, such Bank agrees to undertake sole responsibility for
complying with the withholding tax requirements imposed by Sections 1441 and
1442 of the Code.
(d) If any Bank is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such Bank
an amount equivalent to the applicable
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withholding tax after taking into account such reduction. However, if the forms
or other documentation required by subsection (a) of this Section are not
delivered to the Agent, then the Agent may withhold from any interest payment to
such Bank not providing such forms or other documentation an amount equivalent
to the applicable withholding tax imposed by Sections 1441 and 1442 of the Code,
without reduction.
(e) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that the Agent did not properly
withhold tax from amounts paid to or for the account of any Bank (because the
appropriate form was not delivered or was not properly executed, or because such
Bank failed to notify the Agent of a change in circumstances which rendered the
exemption from, or reduction of, withholding tax ineffective, or for any other
reason) such Bank shall indemnify the Agent fully for all amounts paid, directly
or indirectly, by the Agent as tax or otherwise, including penalties and
interest, and including any taxes imposed by any jurisdiction on the amounts
payable to the Agent under this Section, together with all costs and expenses
(including Attorney Costs). The obligation of the Banks under this subsection
shall survive the payment of all Obligations and the resignation or replacement
of the Agent.
9.11 Documentation Agent; Syndication Agent; Co-Agents; Lead Managers.
None of the Documentation Agent, the Syndication Agent or any of the Banks
identified on the facing page or signature pages of this Agreement as a
"co-agent" or "lead manager" shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Banks as such. Without limiting the foregoing, none of the Documentation Agent,
the Syndication Agent or any of the Banks so identified as a "co-agent" or "lead
manager" shall have or be deemed to have any fiduciary relationship with any
Bank. Each Bank acknowledges that it has not relied, and will not rely, on the
Documentation Agent, the Syndication Agent or any of the Banks so identified in
deciding to enter into this Agreement or in taking or not taking action
hereunder.
ARTICLE X
MISCELLANEOUS
10.01 Amendments and Waivers. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by the Company therefrom, shall be effective unless the same shall be
in writing and signed by the Required Banks (or by the Agent at the written
request of the Required Banks) and the Company and acknowledged by the Agent,
and then any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however, that
no such waiver, amendment, or consent shall, unless in writing and signed by all
the Banks and the Company and acknowledged by the Agent, do any of the
following:
(a) increase or extend the Commitment of any Bank (or reinstate
any Commitment terminated pursuant to Section 8.02);
(b) postpone or delay any date fixed by this Agreement or any
other Loan Document for any payment of principal, interest, fees or other
amounts due to the Banks (or any of them) hereunder or under any other Loan
Document;
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(c) reduce the principal of, or the rate of interest specified
herein on any Loan, or (subject to clause (ii) below) any fees or other amounts
payable hereunder or under any other Loan Document;
(d) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans which is required for the Banks or any of
them to take any action hereunder; or
(e) amend this Section 10.01, or Section 2.13, or any provision
herein providing for consent or other action by all Banks;
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Agent in addition to the Required Banks or all the
Banks, as the case may be, affect the rights or duties of the Agent under this
Agreement or any other Loan Document, (ii) no amendment, waiver or consent
shall, unless in writing and signed by the Swing Line Bank in addition to the
Required Banks or all the Banks, as the case may be, affect the rights or duties
of the Swing Line Bank under this Agreement or any other Loan Document, and
(iii) the Fee Letter may be amended, or rights or privileges thereunder waived,
in a writing executed by the parties thereto.
10.02 Notices. (a) All notices, requests, consents, approvals, waivers
and other communications shall be in writing (including, unless the context
expressly otherwise provides, by facsimile transmission, provided that any
matter transmitted by the Company by facsimile (i) shall be immediately
confirmed by a telephone call to the recipient at the number specified on
Schedule 10.02, and (ii) shall be followed promptly by delivery of a hard copy
original thereof) and mailed, faxed or delivered, to the address or facsimile
number specified for notices on Schedule 10.02; or, as directed to the Company
or the Agent, to such other address as shall be designated by such party in a
written notice to the other parties, and as directed to any other party, at such
other address as shall be designated by such party in a written notice to the
Company and the Agent.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon the third Business Day after the date
deposited into the U.S. mail, or if delivered, upon delivery, except that
notices pursuant to Article II or IX to the Agent shall not be effective until
actually received by the Agent.
(c) Any agreement of the Agent and the Banks herein to receive
certain notices by telephone or facsimile is solely for the convenience and at
the request of the Company. The Agent and the Banks shall be entitled to rely on
the authority of any Person purporting to be a Person authorized by the Company
to give such notice and, after complying with reasonable security procedures to
verify the identity of such Person, the Agent and the Banks shall not have any
liability to the Company or other Person on account of any action taken or not
taken by the Agent or the Banks in reliance upon such telephonic or facsimile
notice. The obligation of the Company to repay the Loans shall not be affected
in any way or to any extent by any failure by the Agent and the Banks to receive
written confirmation of any telephonic or facsimile notice or the receipt by the
Agent and the Banks of a confirmation which is at variance with the terms
understood by the Agent and the Banks to be contained in the telephonic or
facsimile notice.
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10.03 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Agent or any Bank, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.
10.04 Costs and Expenses. The Company shall:
(a) whether or not the transactions contemplated hereby are
consummated, pay or reimburse BofA (including in its capacity as Agent) and the
Arranger within 30 Business Days after demand (subject to subsection 4.01(e))
for all reasonable costs and expenses incurred by BofA (including in its
capacity as Agent) and the Arranger in connection with the development,
preparation, delivery, administration, syndication and execution of, and any
amendment, supplement, waiver or modification to (in each case, whether or not
consummated), this Agreement, any Loan Document and any other documents prepared
in connection herewith or therewith, and the consummation of the transactions
contemplated hereby and thereby, including reasonable Attorney Costs incurred by
BofA (including in its capacity as Agent) and the Arranger with respect thereto;
and
(b) pay or reimburse the Agent, the Arranger and each Bank
within five Business Days after demand (subject to subsection 4.01(e)) for all
costs and expenses (including Attorney Costs) incurred by them in connection
with the enforcement, attempted enforcement, or preservation of any rights or
remedies under this Agreement or any other Loan Document during the existence of
an Event of Default or after acceleration of the Loans (including in connection
with any "workout" or restructuring regarding the Loans, and including in any
Insolvency Proceeding or appellate proceeding).
10.05 Company Indemnification. Whether or not the transactions
contemplated hereby are consummated, the Company shall indemnify, defend and
hold the Agent-Related Persons, and each Bank and each of its respective
officers, directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including Attorney Costs) of any kind or
nature whatsoever (collectively, "Costs and Expenses") which may at any time
(including at any time following repayment of the Loans and the termination,
resignation or replacement of the Agent or replacement of any Bank) be imposed
on, incurred by or asserted against any such Person in any way relating to or
arising out of this Agreement or any other Loan Document or the transactions
contemplated hereby, or any action taken or omitted by any such Person under or
in connection with any of the foregoing, including with respect to any
investigation, litigation or proceeding (including any Insolvency Proceeding or
appellate proceeding) related to or arising out of this Agreement or the Loans
or the use of the proceeds thereof, whether or not any Indemnified Person is a
party thereto (all the foregoing, collectively, the "Indemnified Liabilities");
provided, that the Company shall have no obligation hereunder to any Indemnified
Person with respect to Indemnified Liabilities to the extent resulting from the
gross negligence or willful misconduct of such Indemnified Person; provided,
further, that the Company shall not be required to pay the Costs and Expenses of
any Indemnified Person to the extent arising in connection with any action by or
on behalf of the Company against such Indemnified Person where final judgment
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is rendered against such Indemnified Person. The agreements in this Section
shall survive payment of all other Obligations.
10.06 Payments Set Aside. To the extent that the Company makes a payment
to the Agent or the Banks, or the Agent or the Banks exercise their right of
set-off, and such payment or the proceeds of such set-off or any part thereof
are subsequently invalidated, declared to be fraudulent or preferential, set
aside or required (including pursuant to any settlement entered into by the
Agent or such Bank in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any Insolvency Proceeding or otherwise, then (a)
to the extent of such recovery the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred, and (b)
each Bank severally agrees to pay to the Agent upon demand its pro rata share of
any amount so recovered from or repaid by the Agent.
10.07 Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Company may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of the Agent and each Bank.
10.08 Assignments, Participations, etc. (a) Any Bank may, with the
written consent of the Company, at all times other than during the existence of
an Event of Default, the Agent and the Swing Line Bank, which consents shall not
be unreasonably withheld, at any time assign and delegate to one or more
Eligible Assignees (provided that no written consent of the Company, the Agent
or the Swing Line Bank shall be required in connection with any assignment and
delegation by a Bank to an Eligible Assignee that is an Affiliate of such Bank)
(each an "Assignee") all, or any ratable part of all, of the Loans, the
Commitments and the other rights and obligations of such Bank hereunder, in a
minimum amount which, when added to the amount of any concurrent assignment
being made by such Bank to the same assignee pursuant to Section 10.08 of the
Company's September 24, 1997 $500,000,000 364-Day Credit Agreement, as from time
to time amended, is at least equal to $25,000,000 (or, if less, the entire
amount of its Commitments and Loans); provided, however, that the Company and
the Agent may continue to deal solely and directly with such Bank in connection
with the interest so assigned to an Assignee until (i) written notice of such
assignment, together with payment instructions, addresses and related
information with respect to the Assignee, shall have been given to the Company
and the Agent by such Bank and the Assignee; (ii) such Bank and its Assignee
shall have delivered to the Company and the Agent an Assignment and Acceptance
in the form of Exhibit F ("Assignment and Acceptance") together with any Note or
Notes subject to such assignment and (iii) the assignor Bank or Assignee has
paid to the Agent a processing fee in the amount of $2,500.
(b) From and after the date that the Agent notifies the assignor
Bank that it has received (and provided its consent with respect to) an executed
Assignment and Acceptance and payment of the above-referenced processing fee,
(i) the Assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, shall have the rights and obligations of a Bank under
the Loan Documents, and (ii) the assignor Bank shall, to the extent that rights
and obligations hereunder and under the other Loan Documents have been assigned
by it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Loan Documents.
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(c) Within five Business Days after its receipt of notice by the
Agent that it has received an executed Assignment and Acceptance and payment of
the processing fee, (and provided that it consents to such assignment in
accordance with subsection 10.08(a)), the Company shall execute and deliver to
the Agent new Notes evidencing such Assignee's assigned Loans and Commitment
and, if the assignor Bank has retained a portion of its Loans and its
Commitment, replacement Notes in the principal amount of the Loans retained by
the assignor Bank (such Notes to be in exchange for, but not in payment of, the
Notes held by such Bank). Immediately upon each Assignee's making its processing
fee payment under the Assignment and Acceptance, this Agreement shall be deemed
to be amended to the extent, but only to the extent, necessary to reflect the
addition of the Assignee and the resulting adjustment of the Commitments arising
therefrom. The Commitment allocated to each Assignee shall reduce such
Commitments of the assigning Bank pro tanto.
(d) Any Bank may at any time sell to one or more commercial
banks or other Persons not Affiliates of the Company (a "Participant")
participating interests in any Loans, the Commitment of that Bank and the other
interests of that Bank (the "Originator") hereunder and under the other Loan
Documents; provided, however, that (i) the Originator's obligations under this
Agreement shall remain unchanged, (ii) the Originator shall remain solely
responsible for the performance of such obligations, (iii) the Company and the
Agent shall continue to deal solely and directly with the Originator in
connection with the Originator's rights and obligations under this Agreement and
the other Loan Documents, and (iv) no Bank shall transfer or grant any
participating interest under which the Participant has rights to approve any
amendment to, or any consent or waiver with respect to, this Agreement or any
other Loan Document, except to the extent such amendment, consent or waiver
would require unanimous consent of the Banks as described in clause (a) (but
only in respect of any increase in the Originator's Commitment), (b) or (c) of
the first proviso to Section 10.01. In the case of any such participation, the
Participant shall be entitled to the benefit of Sections 3.01, 3.03 and 10.05 as
though it were also a Bank hereunder; provided, that the Participant shall not
receive any amount thereunder in excess of what would have been payable to the
participating Bank. If amounts outstanding under this Agreement are due and
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall be deemed to have
the right of set-off in respect of its participating interest in amounts owing
under this Agreement to the same extent as if the amount of its participating
interest were owing directly to it as a Bank under this Agreement.
(e) Notwithstanding any other provision in this Agreement, any
Bank may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement and the Note held by
it in favor of any Federal Reserve Bank in accordance with Regulation A of the
FRB or U.S. Treasury Regulation 31 CFR Section203.14, and such Federal Reserve
Bank may enforce such pledge or security interest in any manner permitted under
applicable law.
10.09 Confidentiality. Each Bank agrees to take and to cause its
Affiliates to take normal and reasonable precautions and exercise due care to
maintain the confidentiality of all information identified as "confidential" or
"secret" by the Company and provided to it by the Company or any Subsidiary, or
by the Agent on the Company's or such Subsidiary's behalf, under this Agreement
or any other Loan Document, and neither it nor any of its Affiliates shall use
any such information other than in connection with or in enforcement of this
Agreement and the other Loan Documents or in connection with other business now
or hereafter existing or contemplated with the Company
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or any Subsidiary; except to the extent such information (i) was or becomes
generally available to the public other than as a result of disclosure by the
Bank, or (ii) was or becomes available on a non-confidential basis from a source
other than the Company, provided that such source is not bound by a
confidentiality agreement with the Company known to the Bank; provided, however,
that any Bank may disclose such information (A) at the request or pursuant to
any requirement of any Governmental Authority to which the Bank is subject or in
connection with an examination of such Bank by any such authority; (B) pursuant
to subpoena or other court process; (C) when required to do so in accordance
with the provisions of any applicable Requirement of Law; (D) to the extent
reasonably required in connection with any litigation or proceeding to which the
Agent or any Bank or their respective Affiliates may be party; (E) to the extent
reasonably required in connection with the exercise of any remedy hereunder or
under any other Loan Document; (F) to such Bank's independent auditors and other
professional advisors; (G) to any Participant or Assignee, actual or potential,
provided that such Person agrees in writing to keep such information
confidential to the same extent required of the Banks hereunder; (H) as to any
Bank or its Affiliate, as expressly permitted under the terms of any other
document or agreement regarding confidentiality to which the Company or any
Subsidiary is party or is deemed party with such Bank or such Affiliate; and (I)
to its Affiliates.
10.10 Set-off. In addition to any rights and remedies of the Banks
provided by law, if an Event of Default exists or the Loans have been
accelerated, each Bank is authorized at any time and from time to time, without
prior notice to the Company, any such notice being waived by the Company to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by,
and other indebtedness at any time owing by, such Bank to or for the credit or
the account of the Company against any and all Obligations owing to such Bank,
now or hereafter existing, irrespective of whether or not the Agent or such Bank
shall have made demand under this Agreement or any Loan Document and although
such Obligations may be contingent or unmatured. Each Bank agrees promptly to
notify the Company and the Agent after any such set-off and application made by
such Bank; provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application.
10.11 Notification of Addresses, Lending Offices, Etc. Each Bank shall
notify the Agent in writing of any changes in the address to which notices to
the Bank should be directed, of addresses of any Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of such
other administrative information as the Agent shall reasonably request.
10.12 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
10.13 Severability. The illegality or unenforceability of any provision
of this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
10.14 No Third Parties Benefited. This Agreement is made and entered
into for the sole protection and legal benefit of the Company, the Banks, the
Agent and the Agent-Related Persons, and their permitted successors and assigns,
and no other Person shall be a direct or indirect legal
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beneficiary of, or have any direct or indirect cause of action or claim in
connection with, this Agreement or any of the other Loan Documents.
10.15 Governing Law and Jurisdiction. (a) THIS AGREEMENT AND THE
NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS
OF THE STATE OF ILLINOIS (WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS PROVISIONS
THEREOF); PROVIDED, THAT THE AGENT AND THE BANKS SHALL RETAIN ALL RIGHTS ARISING
UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF ILLINOIS OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY, THE AGENT AND THE
BANKS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. EACH OF THE COMPANY, THE AGENT AND THE BANKS
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT
OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE COMPANY, THE AGENT AND THE
BANKS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS,
WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY ILLINOIS LAW.
10.16 Waiver of Jury Trial. THE COMPANY, THE BANKS AND THE AGENT EACH
WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST
ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER
WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE COMPANY, THE
BANKS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE
TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED
BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
10.17 Entire Agreement. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding among the Company,
the Banks and the Agent, and supersedes all prior or contemporaneous agreements
and understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof.
[signature pages to follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in Chicago, Illinois by their proper and duly
authorized officers as of the day and year first above written.
S-1
63
SAFECO CORPORATION
By:
------------------------------------
Title:
----------------------------------
By:
------------------------------------
Title:
----------------------------------
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By:
------------------------------------
Title:
----------------------------------
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as a Bank and
Swing Line Bank
By:
------------------------------------
Title:
----------------------------------
MELLON BANK, N.A.,
as Documentation Agent and as a Bank
By:
------------------------------------
Title:
----------------------------------
THE CHASE MANHATTAN BANK,
as Syndication Agent and as a Bank
By:
------------------------------------
Title:
----------------------------------
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64
Title:
THE BANK OF NEW YORK,
as a Co-Agent and as a Bank
By:
------------------------------------
Title:
----------------------------------
THE BANK OF TOKYO-MITSUBISHI, LTD.,
as a Co-Agent and as a Bank
By:
------------------------------------
Title:
----------------------------------
CITIBANK, N.A.
as a Co-Agent and as a Bank
By:
------------------------------------
Title:
----------------------------------
THE FIRST NATIONAL BANK OF CHICAGO,
as a Co-Agent and as a Bank
By:
------------------------------------
Title:
----------------------------------
FLEET NATIONAL BANK,
as a Co-Agent and as a Bank
By:
------------------------------------
Title:
----------------------------------
UNION BANK OF CALIFORNIA, N.A.
as a Co-Agent and as a Bank
By:
------------------------------------
Title:
----------------------------------
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65
U.S. BANK, N.A.
as a Co-Agent and as a Bank
By:
------------------------------------
Title:
----------------------------------
DEUTSCHE BANK AG
as a Lead Manager and as a Bank
By:
------------------------------------
Title:
----------------------------------
KEYBANK NATIONAL ASSOCIATION
as a Lead Manager and as a Bank
By:
------------------------------------
Title:
----------------------------------
XXXXX FARGO BANK, N.A.
as a Lead Manager and as a Bank
By:
------------------------------------
Title:
----------------------------------
CIBC INC.
By:
------------------------------------
Title:
----------------------------------
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66
DRESDNER BANK AG, NEW YORK BRANCH
AND GRAND CAYMAN BRANCH
By:
------------------------------------
Title:
----------------------------------
By:
------------------------------------
Title:
----------------------------------
FIRST HAWAIIAN BANK
By:
------------------------------------
Title:
----------------------------------
THE FUJI BANK, LIMITED, SAN FRANCISCO
AGENCY
By:
------------------------------------
Title:
----------------------------------
MERCANTILE BANK NATIONAL ASSOCIATION
By:
------------------------------------
Title:
----------------------------------
NATIONAL CITY BANK OF INDIANA
By:
------------------------------------
Title:
----------------------------------
THE NORTHERN TRUST COMPANY
By:
------------------------------------
Title:
----------------------------------
61
00
XXXXX XXXX XX XXXXXX
By:
------------------------------------
Title:
----------------------------------
STATE STREET BANK AND TRUST COMPANY
By:
------------------------------------
Title:
----------------------------------
WACHOVIA BANK, N.A.
By:
------------------------------------
Title:
----------------------------------
