Exhibit 10.20
CREDIT AGREEMENT
DATED AS OF DECEMBER 19, 2003
AMONG
FORTIS, INC.,
AS BORROWER,
THE BANKS AND FINANCIAL INSTITUTIONS LISTED HEREIN,
AS LENDERS,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.,
AS BOOKRUNNER AND LEAD ARRANGER,
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL CORP.,
AS SYNDICATION AGENT,
CREDIT SUISSE FIRST BOSTON
(ACTING THROUGH ITS CAYMAN ISLANDS BRANCH),
AS DOCUMENTATION AGENT,
AND
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.
AS ADMINISTRATIVE AGENT
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$650,000,000 CREDIT AGREEMENT
CREDIT AGREEMENT
TABLE OF CONTENTS
PAGE
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SECTION 1. DEFINITIONS.................................................................... 7
1.1 Certain Defined Terms............................................................... 7
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement.. 30
1.3 Other Definitional Provisions and Rules of Construction............................. 30
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS AND LOANS...................................... 31
2.1 Commitment; Making of Loan; Notes.................................................... 31
2.2 Interest on the Loans................................................................ 33
2.3 Fees................................................................................. 36
2.4 Repayments and Prepayments; General Provisions Regarding Payments.................... 36
2.5 Increased Costs; Taxes............................................................... 38
2.6 Special Provisions Governing LIBOR Rate Loans........................................ 43
2.7 Removal or Replacement of a Lender................................................... 45
2.8 Mitigation........................................................................... 45
SECTION 3. CONDITIONS PRECEDENT........................................................... 46
3.1 Conditions to Closing Date.......................................................... 46
3.2 Conditions to each Loan............................................................. 49
SECTION 4. BORROWER'S REPRESENTATIONS AND WARRANTIES...................................... 50
4.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries....... 50
4.2 Authorization of Borrowing, etc..................................................... 51
4.3 Valid Issuance of Securities........................................................ 52
4.4 Financial Condition................................................................. 52
4.5 No Material Adverse Change.......................................................... 53
4.6 Title to Properties; Liens.......................................................... 53
4.7 No Litigation; Compliance with Laws................................................. 54
4.8 Payment of Taxes.................................................................... 54
4.9 No Default.......................................................................... 54
4.10 Governmental Regulation............................................................. 55
4.11 Securities Activities............................................................... 55
4.12 Employee Benefit Plans.............................................................. 55
4.13 Certain Fees........................................................................ 56
4.14 Environmental Protection............................................................ 56
4.15 Solvency............................................................................ 57
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4.16 Restrictions........................................................................ 57
4.17 Related Agreements.................................................................. 57
4.18 Insurance Licenses.................................................................. 57
4.19 Disclosure.......................................................................... 58
SECTION 5. BORROWER'S AFFIRMATIVE COVENANTS............................................... 58
5.1 Financial Statements and Other Reports.............................................. 58
5.2 Books and Records................................................................... 62
5.3 Existence........................................................................... 62
5.4 Insurance........................................................................... 62
5.5 Payment of Taxes and Claims......................................................... 63
5.6 Maintenance of Properties........................................................... 63
5.7 Compliance with Laws................................................................ 63
5.8 Use of Proceeds..................................................................... 63
5.9 Assurant IPO; Other Financings...................................................... 64
5.10 Claims Pari Passu................................................................... 64
SECTION 6. BORROWER'S NEGATIVE COVENANTS.................................................. 64
6.1 Liens............................................................................... 65
6.2 Indebtedness........................................................................ 67
6.3 Investments......................................................................... 69
6.4 Restrictions on Subsidiary Distributions............................................ 70
6.5 Restricted Payments................................................................. 71
6.6 Restriction on Fundamental Changes; Asset Sales and Acquisitions.................... 72
6.7 Disposal of Subsidiary Interests.................................................... 73
6.8 Conduct of Business................................................................. 73
6.9 Transactions with Shareholders and Affiliates....................................... 74
6.10 Amendments or Waivers of Related Agreement.......................................... 74
6.11 Financial Covenants................................................................. 75
SECTION 7. EVENTS OF DEFAULT.............................................................. 76
7.1 Failure to Make Payments When Due................................................... 76
7.2 Default in Other Agreements......................................................... 76
7.3 Breach of Certain Covenants......................................................... 76
7.4 Breach of Warranty.................................................................. 77
7.5 Other Defaults Under Loan Documents, Related Agreements and Guaranty................ 77
7.6 Involuntary Bankruptcy; Appointment of Receiver, etc................................ 78
7.7 Voluntary Bankruptcy; Appointment of Receiver, etc.................................. 78
7.8 Judgments and Attachments........................................................... 79
7.9 Dissolution......................................................................... 79
7.10 Employee Benefit Plans.............................................................. 79
7.11 Change in Control................................................................... 79
7.12 Repudiation of Obligations.......................................................... 79
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7.13 Insurance Licenses.................................................................. 79
SECTION 8. MISCELLANEOUS.................................................................. 80
8.1 Assignments and Participations in Loans and Notes................................... 80
8.2 Expenses............................................................................ 83
8.3 Indemnity........................................................................... 84
8.4 Set-Off............................................................................. 85
8.5 Amendments and Waivers.............................................................. 85
8.6 Independence of Covenants........................................................... 86
8.7 Notices............................................................................. 86
8.8 Survival of Representations, Warranties and Agreements.............................. 87
8.9 Failure or Indulgence Not Waiver; Remedies Cumulative............................... 87
8.10 Marshalling; Payments Set Aside..................................................... 87
8.11 Severability........................................................................ 88
8.12 Headings............................................................................ 88
8.13 Applicable Law...................................................................... 88
8.14 Successors and Assigns.............................................................. 88
8.15 Consent to Jurisdiction and Service of Process...................................... 88
8.16 Waiver of Jury Trial................................................................ 89
8.17 Confidentiality..................................................................... 90
8.18 Ratable Sharing..................................................................... 91
8.19 Counterparts; Effectiveness......................................................... 91
8.20 Obligations Several; Independent Nature of Lenders' Rights.......................... 92
8.21 Usury Savings Clause................................................................ 92
SECTION 9. AGENTS......................................................................... 93
9.1 Appointment......................................................................... 93
9.2 Powers and Duties; General Immunity................................................. 93
9.3 Representations and Warranties; No Responsibility For Appraisal of Creditworthiness. 95
9.4 Right to Indemnity.................................................................. 95
9.5 Successor Administrative Agent...................................................... 96
9.6 Guaranty............................................................................ 96
9.7 Acknowledgment of Potential Related Transactions.................................... 97
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EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF NOTE
IV-A FORM OF OPINION OF BORROWER'S IN-HOUSE COUNSEL
IV-B FORM OF OPINION OF BORROWER'S NEW YORK COUNSEL
IV-C FORM OF OPINION OF BORROWER'S NEVADA COUNSEL
IV-D FORM OF OPINION OF FORTIS N.V.'S IN-HOUSE COUNSEL
IV-E FORM OF OPINION OF LENDERS' NETHERLANDS COUNSEL
IV-F FORM OF OPINION OF FORTIS SA/NV'S IN-HOUSE COUNSEL
IV-G FORM OF OPINION OF GUARANTORS' BELGIAN COUNSEL
IV-H FORM OF OPINION OF GUARANTORS' NEW YORK COUNSEL
V FORM OF CERTIFICATE RE NON-BANK STATUS
VI FORM OF GUARANTY
VII FORM OF FINANCIAL CONDITION CERTIFICATE
VIII FORM OF ASSIGNMENT AGREEMENT
IX FORM OF JOINDER AGREEMENT
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SCHEDULES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
3.1F EXISTING INTERCOMPANY OBLIGATIONS
4.1C SUBSIDIARIES
4.7 LITIGATION
4.12 ERISA
6.2 INDEBTEDNESS
6.3A EXISTING INVESTMENTS
6.3B INVESTMENT GUIDELINES
6.4 APPLICABLE ORDERS AND AGREEMENTS
6.9 TRANSACTIONS WITH AFFILIATES
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CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of December 19, 2003 and
entered into by and among Fortis, Inc., a Nevada corporation ("FORTIS" or the
"BORROWER"), the banks and financial institutions listed on the signature pages
hereof (together with their respective successors and assigns, each individually
referred to herein as a "LENDER" and collectively as "LENDERS"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Senior Funding, Inc. ("MSSF") as bookrunner and lead arranger (the "BOOKRUNNER"
and the "ARRANGER", respectively), ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corp. as syndication
agent (the "SYNDICATION AGENT"), Credit Suisse First Boston (acting through its
Cayman Islands branch) as documentation agent (the "DOCUMENTATION AGENT") and
MSSF as administrative agent for the Lenders (in such capacity, the
"ADMINISTRATIVE AGENT").
PRELIMINARY STATEMENTS
The Borrower has requested, and the Lenders have agreed to
extend, the credit facility hereinafter described in the amount and on the terms
and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower, the Lenders, the
Bookrunner, the Arranger, the Syndication Agent, the Documentation Agent and the
Administrative Agent agree as follows:
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the following
meanings:
"ADDITIONAL PARENT DEBT" means short-term Indebtedness owing
by the Borrower to either of the Guarantors or any of their Affiliates and
incurred in the ordinary course of business of the Borrower and consistent with
past business practice.
"ADMINISTRATIVE AGENT" has the meaning assigned to that term
in the introduction to this Agreement.
"AFFECTED LENDER" has the meaning assigned to that term in
Section 2.6B.
"AFFECTED LOANS" has the meaning assigned to that term in
Section 2.6B.
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"AFFILIATE" means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power (i) to vote 10% or more of the Securities having
ordinary voting power for the election of directors of such Person or (ii) to
direct or cause the direction of the management and policies of that Person,
whether through the ownership of voting securities or by contract or otherwise.
"AGENTS" means the Administrative Agent, the Syndication Agent
and the Documentation Agent, collectively, and also means and includes any
successor Administrative Agent appointed pursuant to Section 9.5.
"AGREEMENT" means this Credit Agreement as it may be amended,
supplemented or otherwise modified from time to time.
"APPLICABLE INSURANCE REGULATORY AUTHORITY" means, when used
with respect to any Insurance Subsidiary, the insurance department or similar
administrative authority or agency located in (x) the state or other
jurisdiction in which such Insurance Subsidiary is domiciled or (y) to the
extent asserting regulatory jurisdiction over such Insurance Subsidiary, each
state or other jurisdiction in which such Insurance Subsidiary is licensed or
conducts business, and shall include any Federal insurance regulatory
department, authority or agency that may be created and that asserts regulatory
jurisdiction over such Insurance Subsidiary.
"APPLICABLE MARGIN (GUARANTOR RATE)" means, as of any date, a
percentage per annum determined by reference to the applicable Performance Level
with respect to the Guarantors in effect on such date, as set forth below:
PERFORMANCE LEVEL
(GUARANTOR) LEVEL I LEVEL II LEVEL III ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇
-------------------- ------- -------- --------- -------- ------- -------- ---------
BASE RATE APPLICABLE
MARGIN 0% 0% 0% 0% 0.05% 0.30% 1.25%
-------------------------------------------------------------------------------------------------
LIBOR APPLICABLE
MARGIN 0.275% 0.43% 0.60% 0.80% 1.05% 1.30% 2.25%
; provided, that the definition of Applicable Margin (Guarantor Rate) hereunder
shall be deemed modified (without the consent of any Person) to the extent
necessary to incorporate by reference any amendments, modifications or
supplements to the interest rate provisions of the Existing Parent Facility, to
the extent that any such amendment,
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$650,000,000 CREDIT AGREEMENT
modification or supplement results in an increase in such interest rates under
the Existing Parent Facility.
"APPLICABLE RESERVE REQUIREMENT" means, at any time, for any
LIBOR Rate Loan, the maximum rate, expressed as a decimal, at which reserves
(including, without limitation, any basic marginal, special, supplemental,
emergency or other reserves) are required to be maintained with respect thereto
against "Eurocurrency liabilities" (as such term is defined in Regulation D)
under regulations issued from time to time by the Board of Governors of the
Federal Reserve System or other applicable banking regulator. Without limiting
the effect of the foregoing, the Applicable Reserve Requirement shall reflect
any other reserves required to be maintained by such member banks with respect
to (i) any category of liabilities which includes deposits by reference to which
the applicable LIBOR or any other interest rate of a Loan is to be determined,
or (ii) any category of extensions of credit or other assets which include LIBOR
Rate Loans. A LIBOR Rate Loan shall be deemed to constitute Eurocurrency
liabilities and as such shall be deemed subject to reserve requirements without
benefits of credit for proration, exceptions or offsets that may be available
from time to time to the applicable Lender. The rate of interest on LIBOR Rate
Loans shall be adjusted automatically on and as of the effective date of any
change in the Applicable Reserve Requirement.
"ARRANGER" has the meaning assigned to that term in the
introduction to this Agreement.
"ASSET SALE" means a sale, lease or sub-lease (as lessor or
sublessor), sale and leaseback, assignment, conveyance, transfer or other
disposition to, or any exchange of property with, any Person (other than the
Borrower or its wholly-owned Subsidiaries), in one transaction or a series of
transactions, of all or any part of the Borrower's or any of its Subsidiaries'
businesses, properties or assets of any kind, whether real, personal, or mixed
and whether tangible or intangible, whether now owned or hereafter acquired,
including, without limitation, the Capital Stock of any Subsidiary of the
Borrower, other than (A) such businesses, properties or assets sold in the
ordinary course of business and consistent with past business practice of the
Borrower and its Subsidiaries, (B) any transaction or series of related
transactions in which the Borrower or any of its Subsidiaries receives aggregate
consideration of $500,000 or less (up to a maximum amount of $10,000,000 in the
aggregate for all such transactions), (C) the Ohio Sale/leaseback Transaction
(up to a maximum amount of $25,000,000) and (D) other transactions or series of
related transactions for which the fair market value of the assets subject
thereto (as determined in good faith by the board of directors of the Borrower
or such Subsidiary (or similar governing body) engaging in such transactions)
does not, together with all such transactions, exceed $20,000,000 in the
aggregate.
"ASSIGNMENT AGREEMENT" means an Assignment Agreement
substantially in the form of Exhibit VIII, with such amendments or modifications
as may be approved by the Administrative Agent.
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$650,000,000 CREDIT AGREEMENT
"ASSURANT" means Assurant, Inc., a Delaware corporation and,
on the Closing Date, a wholly-owned Subsidiary of the Borrower.
"ASSURANT IPO" means the initial public offering by Fortis
Insurance, N.V. of the Borrower Common Stock.
"ASSURANT REINCORPORATION" means the merger of Fortis with and
into Assurant, for the purpose of reincorporating Fortis in the State of
Delaware, after which Assurant will be domiciled in the State of Delaware and
will be the successor to the business, operations and obligations of Fortis.
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor statute.
"BASE RATE" means, for any day, a rate per annum equal to the
greater of (i) the Prime Rate in effect on such day and (ii) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Base
Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall
be effective on the effective day of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively.
"BASE RATE LOAN" means a Loan bearing interest at a rate
determined by reference to the Base Rate.
"BOOKRUNNER" has the meaning assigned to that term in the
introduction to this Agreement.
"BORROWER" has the meaning assigned to that term in the
introduction to this Agreement; provided, that, upon consummation of the
Assurant Reincorporation and compliance with Section 5.9(ii), the Borrower shall
mean Assurant, as the successor to Fortis.
"BORROWER COMMON STOCK" means the common Capital Stock of the
Borrower.
"BUSINESS DAY" means (i) for all purposes other than as
covered by clause (ii) below, any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the State of New York or is a day on
which banking institutions located in such state are authorized or required by
law or other governmental action to close and any day on which commercial banks
and foreign exchange markets do not settle payments in Dollars, and (ii) with
respect to all notices, determinations, fundings and payments in connection with
the LIBOR Rate or any LIBOR Rate Loans, any day that is a Business Day described
in clause (i) above and that is also a day for trading by and between banks in
Dollar deposits in the London interbank market.
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$650,000,000 CREDIT AGREEMENT
"CAPITAL LEASE", as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"CAPITAL SECURITIES" means (i) the $150,000,000 liquidation
amount of 8.40% Capital Securities, Series A due 2027 issued by Fortis Capital
Trust and/or (ii) the $50,000,000 liquidation amount of 7.94% Capital
Securities, Series B due 2027 issued by Fortis Capital Trust II.
"CAPITAL STOCK" means any and all shares, interests,
participations or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person (other than
a corporation), including, without limitation, partnership interests and
membership interests, and any and all warrants, rights or options to purchase or
other arrangements or rights to acquire any of the foregoing.
"CASH" means money, currency or a credit balance in any demand
or deposit account.
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after such
date and having, at the time of the acquisition thereof, a rating of at least
A-1 from S&P or at least P-1 from ▇▇▇▇▇'▇; (iii) commercial paper maturing no
more than one year from the date of creation thereof and having, at the time of
the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
▇▇▇▇▇'▇; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that (a) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (b) has Tier 1 capital (as defined in such regulations) of not
less than $100,000,000; and (v) shares of any money market mutual fund that (a)
has substantially all of its assets invested continuously in the types of
investments referred to in clauses (i) and (ii) above, (b) has net assets of not
less than $500,000,000, and (c) has the highest rating obtainable from either
S&P or ▇▇▇▇▇'▇.
"CERTIFICATE RE NON-BANK STATUS" means a certificate
substantially in the form of Exhibit V annexed hereto delivered by a Lender to
the Administrative Agent pursuant to Section 2.5B(iii)(b).
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"CHANGE OF CONTROL" means at any time prior to the
consummation of the Assurant IPO, (i) the Guarantors, collectively, shall cease
to beneficially own and control at least 51% on a fully diluted basis of the
economic and voting interests in the Capital Stock of the Borrower or (ii) the
majority of the seats (other than vacant seats) on the board of directors (or
similar governing body) of the Borrower cease to be occupied by Persons who
either (A) were members of the board of directors of the Borrower on the Closing
Date or (B) were nominated for election by the board of directors of the
Borrower, a majority of whom were directors on the Closing Date or whose
election or nomination for election was previously approved by a majority of
such directors.
"CLOSING DATE" means the date on or after December 1, 2003 but
before December 31, 2003, on which the Loan is made.
"COMMITMENT" means the commitment of a Lender to make a Loan
to the Borrower pursuant to Section 2.1A, and "Commitments" means such
commitments of all Lenders in the aggregate.
"COMPLIANCE CERTIFICATE" means a certificate of the chief
financial officer, treasurer or controller of the Borrower setting forth
computations in reasonable detail satisfactory to the Administrative Agent (i)
demonstrating compliance with the covenants set forth in Section 6.11, as at the
end of the period covered by the financial statements being delivered with such
certificate and (ii) certifying that such officer has obtained no knowledge of
any Potential Event of Default or Event of Default except as specified in such
certificate.
"CONSOLIDATED ADJUSTED EBIT" means, in respect of the Borrower
and its Subsidiaries on a consolidated basis, for any period, an amount equal to
the sum, without duplication, of the amounts for such period of (a) Consolidated
Net Income, (b) Consolidated Financing Expense and (c) provisions for taxes
based on income but excluding (i) deferred gains and losses on business asset
sales and divestitures, (ii) any after-tax prepayment penalties incurred with
respect to the Capital Securities and the Existing Intercompany Obligations and
(iii) non-recurring costs associated with the consummation of the Assurant IPO.
"CONSOLIDATED ADJUSTED NET WORTH" means, as at any date of
determination, the sum of the amounts that would, in accordance with GAAP, be
included on the consolidated balance sheet of the Borrower and its Subsidiaries
as of such date as (a) "common shareholders' equity" and (b) "preferred stock",
but excluding (i) treasury stock, (ii) Disqualified Capital Stock and (iii) the
effects of Financial Accounting Statement No. 115.
"CONSOLIDATED CAPITALIZATION" means, in respect of the
Borrower and its Subsidiaries on a consolidated basis, as at any date of
determination, the sum of Consolidated Total Debt plus Consolidated Adjusted Net
Worth.
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"CONSOLIDATED FINANCING EXPENSE" means, in respect of the
Borrower and its Subsidiaries on a consolidated basis, for any period, total
interest expense (including that portion attributable to Capital Leases in
accordance with GAAP and capitalized interest) with respect to all outstanding
Indebtedness during such period of the Borrower and its Subsidiaries, including
all commissions, discounts and other fees and charges owed with respect to any
letters of credit and bankers' acceptance financing and net costs under Interest
Rate Agreements and Currency Agreements.
"CONSOLIDATED NET INCOME" means, in respect of the Borrower
and its Subsidiaries on a consolidated basis, for any period, (i) the net income
(or loss) for the Borrower and its Subsidiaries for such period taken as a
single accounting period determined in conformity with GAAP, minus (ii) (a) the
income (or loss) of any Person accrued prior to the date it becomes a Subsidiary
of the Borrower or is merged into or consolidated with the Borrower or any of
its Subsidiaries or that Person's assets are acquired by the Borrower or any of
its Subsidiaries, (b) any after-tax gains or losses attributable to returned
surplus assets of any Pension Plan, and (c) (to the extent not included in
clauses (a) and (b) above) any net extraordinary gains or net extraordinary
losses.
"CONSOLIDATED TOTAL DEBT" means, in respect of the Borrower
and its Subsidiaries on a consolidated basis, as at any date of determination,
the aggregate stated balance sheet amount of all Indebtedness, determined on a
consolidated basis in accordance with GAAP, but excluding (i) Indebtedness
constituting letters of credit issued for insurance regulatory purposes and for
which adequate insurance reserves or other appropriate provisions consistent
with Borrower's past practice have been made therefor and (ii) for the Fiscal
Quarter ending December 31, 2003 only, Indebtedness with respect to the Capital
Securities.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any
provision of any securities issued by that Person or of any indenture, mortgage,
deed of trust, or other material contract, undertaking, agreement or other
material instrument to which that Person is a party or by which it or any of its
properties is bound or to which it or any of its properties is subject.
"CONVERSION/CONTINUATION DATE" means the effective date of a
continuation or conversion, as the case may be, as set forth in the applicable
Conversion/Continuation Notice.
"CONVERSION/CONTINUATION NOTICE" means a
Conversion/Continuation Notice substantially in the form of Exhibit II.
"CURRENCY AGREEMENT" means any foreign exchange contract,
currency swap agreement, futures contract, option contract, synthetic cap or
other similar agreement or arrangement.
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"DEMAND NOTE" means that certain Demand Note, dated December
16, 2003, executed by the Borrower in favor of MSSF, which evidences a
$650,000,000 loan made by MSSF to the Borrower, as the same may be amended,
modified or otherwise supplemented from time to time.
"DISQUALIFIED CAPITAL STOCK" means that portion of any Capital
Stock (other than Capital Stock that is solely redeemable, or at the election of
the Borrower (not subject to any condition), may be redeemed, with Capital Stock
that is not Disqualified Capital Stock) which, by its terms (or by the terms of
any security into which it is convertible or for which it is exchangeable at the
option of the holder thereof), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the sole option of the holder thereof, on or prior to May 31,
2005.
"DOCUMENTATION AGENT" has the meaning assigned to that term in
the introduction to this Agreement.
"DOLLARS" and the sign "$" mean the lawful money of the United
States of America.
"ELIGIBLE ASSIGNEE" means (A) any Lender and any Affiliate of
any Lender; and (B) any commercial bank, savings and loan association, savings
bank, insurance company, investment or mutual fund or other entity that is an
"accredited investor" (as defined in Regulation D under the Securities Act) and
which extends credit or buys loans as one of its businesses; provided that no
Affiliate of the Borrower or any of its Subsidiaries or any Guarantor or any of
its Subsidiaries shall be an Eligible Assignee.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is or was maintained or contributed to by
the Borrower or any of its Subsidiaries or, in the case of any such plan subject
to Title IV of ERISA, by any of their respective ERISA Affiliates.
"ENVIRONMENTAL CLAIM" means any investigation, notice, notice
of violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any Governmental Authority or
any other Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law, (ii) in connection with any
Hazardous Materials or any actual or alleged Hazardous Materials Activity or
(iii) in connection with any actual or alleged damage, injury, threat or harm to
health, safety, natural resources or the environment.
"ENVIRONMENTAL LAWS" means any and all current or future
federal, state, local and foreign laws and regulations, statutes, ordinances,
orders, rules, guidance documents, judgments, Governmental Authorizations, or
any other requirements of
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Governmental Authorities relating to (i) environmental matters, including those
relating to any Hazardous Materials Activity, (ii) the generation, use, storage,
transportation or disposal of Hazardous Materials, or (iii) occupational safety
and health, industrial hygiene, land use or the protection of human health or
the environment, in any manner applicable to the Borrower or any of its
Subsidiaries or any Facilities.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor thereto.
"ERISA Affiliate" means, as applied to any Person, (i) any
corporation which is a member of a controlled group of corporations within the
meaning of Section 414(b) of the Internal Revenue Code of which that Person is a
member; (ii) any trade or business (whether or not incorporated) which is a
member of a group of trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code of which that Person is a
member; and (iii) any member of an affiliated service group within the meaning
of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above is a member.
"ERISA Event" means (i) a "reportable event" within the
meaning of Section 4043 of ERISA and the regulations issued thereunder with
respect to any Pension Plan (excluding those for which the provision for 30-day
notice to the PBGC has been waived by regulation); (ii) the failure to meet the
minimum funding requirements of Section 412 of the Internal Revenue Code with
respect to any Pension Plan (whether or not waived in accordance with Section
412(d) of the Internal Revenue Code) or the failure to make by its due date a
required installment under Section 412(m) of the Internal Revenue Code with
respect to any Pension Plan; (iii) the provision by the administrator of any
Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to
terminate such plan in a distress termination described in Section 4041(c) of
ERISA or the commencement of proceedings by the PBGC to terminate a pension plan
or the appointment of a trustee to administer a pension plan; (iv) the
withdrawal by the Borrower, any of its Subsidiaries or any of their respective
ERISA Affiliates from any Pension Plan with two or more contributing sponsors or
the termination of any such Pension Plan resulting in liability pursuant to
Section 4063 or 4064 of ERISA; (v) the occurrence of an event or condition that
could reasonably be expected to give rise to the imposition of liability on the
Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates
pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of
Section 4212(c) of ERISA; (vi) the filing of a material claim (other than
routine claims for benefits) against any Employee Benefit Plan other than a
Multiemployer Plan or the assets thereof, or against the Borrower, any of its
Subsidiaries or any of their respective ERISA Affiliates in connection with any
Employee Benefit Plan; or (vii) the imposition of a Lien pursuant to Section
401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to ERISA with
respect to any Pension Plan.
15
$650,000,000 CREDIT AGREEMENT
"EVENT OF DEFAULT" means each of the events set forth in
Section 7.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"EXISTING INTERCOMPANY OBLIGATIONS" means the Indebtedness of
the Borrower to the Guarantors and their Affiliates as of the Closing Date;
provided, that, for the avoidance of doubt, any Indebtedness repaid with the
proceeds of the loan evidenced by the Demand Note shall not constitute Existing
Intercompany Obligations.
"EXISTING PARENT FACILITY" means that certain EUR2,000,000,000
Multicurrency Revolving Credit Agreement, dated June 28, 1999, by and among
Fortis Finance N.V., as borrower thereunder, the Guarantors, as guarantors
thereunder, and the other institutions party thereto, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
the terms of the Guaranty.
"FACILITIES" means any and all real property (including,
without limitation, all buildings, fixtures or other improvements located
thereon) now, hereafter or heretofore owned, leased, operated or used by the
Borrower or any of its Subsidiaries or any of their respective predecessors or
Affiliates.
"FEDERAL FUNDS EFFECTIVE RATE" means for any day, the rate per
annum (expressed, as a decimal, rounded upwards, if necessary, to the next
higher 1/100 of 1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers on such day, as published by the Federal Reserve Bank
of New York on the Business Day next succeeding such day; provided, (i) if such
day is not a Business Day, the Federal Funds Rate for such day shall be such
rate on such transactions on the next preceding Business Day as so published on
the next succeeding Business Day, and (ii) if no such rate is so published on
such next succeeding Business Day, the Federal Funds Rate for such day shall be
the average rate charged to the Administrative Agent, in its capacity as a
Lender, on such day on such transactions as determined by the Administrative
Agent.
"FEE LETTER" means the fee letter, dated on or prior to the
Closing Date, among the Borrower and the Lenders party thereto, as the same may
be amended, supplemented or otherwise modified from time to time.
"FINANCIAL CONDITION CERTIFICATE" means an officer's
certificate in the form of Exhibit VII hereto.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of the Borrower and its
Subsidiaries ending on December 31 of each calendar year. For purposes of this
Agreement, any
16
$650,000,000 CREDIT AGREEMENT
particular Fiscal Year shall be designated by reference to the calendar year in
which such Fiscal Year ends.
"FORTIS" has the meaning assigned to that term in the
introduction to this Agreement.
"FUNDING AND PAYMENT OFFICE" means the office of the
Administrative Agent as set forth under the Administrative Agent's name on the
signature pages hereof, or such other office designated in a written notice
delivered by the Administrative Agent to the Borrower and each Lender.
"GAAP" means, subject to the limitations on the application
thereof set forth in Section 1.2, (i) with respect to the Borrower and its
Subsidiaries, generally accepted accounting principles set forth in opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
may be approved by a significant segment of the accounting profession, in each
case as the same are applicable to the circumstances as of the date of
determination, and (ii) with respect to the Guarantors and their Subsidiaries,
"GAAP" as defined in the Guaranty.
"GOVERNMENTAL AUTHORITY" means any federal, state, municipal,
national or other government, governmental department, commission, board,
bureau, court, agency or instrumentality or political subdivision thereof or any
entity or officer exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any government or any court, in
each case whether associated with a state of the United States, the United
States, or a foreign entity or government, and shall include any Applicable
Insurance Regulatory Authority.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, plan, directive, consent order or consent decree of or from any
Governmental Authority.
"GUARANTOR" means each of (i) Fortis N.V., a public company
with limited liability (naamloze vennootschap) incorporated under the laws of
The Netherlands having its statutory seat (statutaire zetel) at Utrecht, The
Netherlands and registered with the Chamber of Commerce in Utrecht under number
30072145 and (ii) Fortis SA/NV, a public company with limited liability (societe
anonyme/naamloze vennootschap) incorporated in Belgium and registered with the
register of legal persons (rechtspersonenregister), Brussels, under company
number 0451406524 (formerly registered with the Brussels Trade Register under
No. 577.615), and their respective successors and assigns.
17
$650,000,000 CREDIT AGREEMENT
"GUARANTOR CHANGE OF CONTROL" means any time that either
Guarantor consummates any merger or consolidation or sells, transfers or leases
all or substantially all of such Guarantor's assets, except to another Person
that (x) assumes the rights and obligations of such Guarantor under the Guaranty
pursuant to an agreement in form and substance satisfactory to the
Administrative Agent and the Lenders and (y) at the time of such assignment or
transfer, such Person assuming the rights or obligations of such Guarantor under
the Guaranty has a credit rating equal to or higher than such Guarantor, as
measured by both S&P and Moody's.
"GUARANTOR CONTRIBUTION" means the contribution in Cash to the
capital of the Borrower, directly or indirectly, by the Guarantors (in exchange
for equity of the Borrower) in an aggregate amount equal to the sum of (i)
$650,000,000, plus (ii) certain additional amounts as may be deemed to be
necessary by the Borrower and the Guarantors in connection with certain items,
including, without limitation, the repayment of the Existing Intercompany
Obligations, the repayment or redemption of the Capital Securities, and the
Assurant IPO, in each case, including, without limitation, amounts required to
enable the Borrower to pay penalties, accrued interest, fees and premiums and to
redeem preferred stock, plus (iii) the principal amount of, and any accrued
interest on, any Additional Parent Debt.
"GUARANTY" means that certain Guaranty made by each of the
Guarantors substantially in the form attached hereto as Exhibit VI, as such
agreement may be amended, supplemented or otherwise modified from time to time.
"GUARANTY OBLIGATIONS" means all obligations of every nature
of the Guarantors under the Guaranty.
"HAZARDOUS MATERIALS" means any chemical, material or
substance, exposure to which is prohibited, limited or regulated by any
Environmental Law or which poses a hazard to the health and safety of the
owners, occupants or any Persons in the vicinity of any Facility or to the
indoor or outdoor environment.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current,
proposed or threatened activity, event or occurrence involving any Hazardous
Materials, including the use, manufacture, possession, storage, holding,
presence, existence, location, Release, threatened Release, discharge,
placement, generation, transportation, processing, construction, treatment,
abatement, removal, remediation, disposal, disposition or handling of any
Hazardous Materials, and any corrective action or response action with respect
to any of the foregoing.
"HYBRID SECURITIES" means any preferred Securities which have
the following characteristics (and which shall include the Capital Securities):
(i) a wholly-owned Subsidiary of the Borrower which is a Delaware business trust
(or similar entity) lends substantially all of the proceeds from the issuance of
such preferred Securities to
18
$650,000,000 CREDIT AGREEMENT
the Borrower or another wholly-owned Subsidiary of the Borrower in exchange for
junior subordinated debt Securities issued by the Borrower or such other
wholly-owned Subsidiary (as the case may be), (ii) such preferred Securities
contain terms providing for the deferral of interest payments corresponding to
provisions providing for the deferral of interest payments on such junior
subordinated debt Securities and (iii) the Borrower or such wholly-owned
Subsidiary of the Borrower (as the case may be) makes periodic interest payments
on such junior subordinated debt Securities, which interest payments are in turn
used to make corresponding payments to the holders of the preferred Securities.
"INDEBTEDNESS", as applied to any Person, means (i) all
indebtedness for borrowed money, (ii) that portion of obligations with respect
to Capital Leases that is properly classified as a liability on a balance sheet
in conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred purchase price of
property or services (excluding any such obligations incurred under ERISA),
which purchase price is (a) due more than six months from the date of incurrence
of the obligation in respect thereof or (b) evidenced by a note or similar
written instrument, (v) all indebtedness secured by any Lien on any property or
asset owned or held by that Person regardless of whether the indebtedness
secured thereby shall have been assumed by that Person or is nonrecourse to the
credit of that Person, (vi) the face amount of any letter of credit issued for
the account of that Person or as to which that Person is otherwise liable for
reimbursement of drawings; (vii) the direct or indirect guaranty, endorsement
(otherwise than for collection or deposit in the ordinary course of business),
co-making, discounting with recourse or sale with recourse by such Person of the
obligation of another of the type described in clauses (i) through (vi) above
and clauses (x) and (xi) below; (viii) any obligation of such Person the primary
purpose or intent of which is to provide assurance to an obligee that the
obligation of the obligor thereof will be paid or discharged, or any agreement
relating thereto will be complied with, or the holders thereof will be protected
(in whole or in part) against loss in respect thereof (other than customary and
reasonable, unmatured and unpaid indemnity obligations with respect to the
Contractual Obligations of the Borrower or a wholly-owned Subsidiary of the
Borrower); (ix) any liability of such Person for an obligation of another
through any agreement (contingent or otherwise) (a) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to provide funds
for the payment or discharge of such obligation (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise) or (b) to
maintain the solvency or any balance sheet item, level of income or financial
condition of another if, in the case of any agreement described under subclause
(a) or (b) of this clause (ix), the primary purpose or intent thereof is as
described in clause (viii) above; (x) all obligations of such Person in respect
of any Interest Rate Agreement and Currency Agreement; and (xi) all obligations
of such Person in respect of any Hybrid Securities.
19
$650,000,000 CREDIT AGREEMENT
"INDEBTEDNESS TO CAPITALIZATION RATIO" means, in respect of
the Borrower and its Subsidiaries on a consolidated basis, the ratio of (i)
Consolidated Total Debt as of the last day of any Fiscal Quarter to (ii)
Consolidated Capitalization as of such date.
"INDEMNITEE" has the meaning assigned to that term in Section
8.3.
"INDEMNIFIED LIABILITIES" has the meaning assigned to that
term in Section 8.3.
"INSURANCE BUSINESS" means one or more aspects of the business
of selling, issuing or underwriting insurance or reinsurance.
"INSURANCE CONTRACT" means any insurance binder, contract or
policy issued by an Insurance Subsidiary but shall not include any Reinsurance
Agreement or Retrocession Agreement.
"INSURANCE LICENSES" means, with respect to each Insurance
Subsidiary, licenses (including, without limitation, licenses or certificates of
authority from Applicable Insurance Regulatory Authorities), permits or
authorizations to transact Insurance Business held, or required to be held, by
such Insurance Subsidiary.
"INSURANCE SUBSIDIARY" means any Subsidiary of the Borrower
that is licensed to conduct, or conducts or is engaged in, an Insurance
Business.
"INTEREST COVERAGE RATIO" means, in respect of the Borrower
and its Subsidiaries on a consolidated basis, the ratio as of the last day of
any Fiscal Quarter of (i) Consolidated Adjusted EBIT for the four Fiscal Quarter
period then ended, to (ii) Consolidated Financing Expense for such four Fiscal
Quarter period.
"INTEREST PAYMENT DATE" means with respect to: (i) any Base
Rate Loan, the last day of each Fiscal Quarter of each year, commencing on the
first such date to occur after the Closing Date, and the Maturity Date; and (ii)
any LIBOR Rate Loan, the last day of the Interest Period applicable to such Loan
and, if such Interest Period is longer than three months, each day during such
Interest Period that occurs at intervals of three months' duration after the
first day of such Interest Period.
"INTEREST PERIOD" has the meaning assigned to that term in
Section 2.2B.
"INTEREST RATE AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement.
"INTEREST RATE DETERMINATION DATE" means, with respect to any
Interest Period, the second Business Day prior to the first day of such Interest
Period.
20
$650,000,000 CREDIT AGREEMENT
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter, and any
successor statute.
"INVESTMENT" means (i) any direct or indirect purchase or
other acquisition by the Borrower or any of its Subsidiaries of, or of a
beneficial interest in, any Securities of any other Person, (ii) any direct or
indirect redemption, retirement, purchase or other acquisition for value, by any
Subsidiary of the Borrower from any Person of any Capital Stock of such Person,
(iii) any direct or indirect loan, advance (other than advances to employees for
moving, entertainment and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital contribution by the
Borrower or any of its Subsidiaries to any other Person, including all
indebtedness and accounts receivable from that other Person that are not current
assets or did not arise from sales to that other Person in the ordinary course
of business, and (iv) any other asset classified as an "investment" in
accordance with GAAP or included in Total Invested Assets in accordance with
SAP. The amount of any Investment shall be the original cost of such Investment
plus the cost of all additions thereto, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to such
Investment.
"JOINDER AGREEMENT" means a Joinder Agreement substantially in
the form of Exhibit IX, with such amendments or modifications as may be approved
by the Administrative Agent.
"JOINT VENTURE" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal form;
provided that in no event shall any Subsidiary of any Person be considered to be
a Joint Venture to which such Person is a party.
"LENDER" and "LENDERS" have the meanings assigned to that term
in the introduction to this Agreement, and shall include any other Person that
shall become a party hereto pursuant to an Assignment Agreement, and shall not
include any Person that ceases to be a party hereto pursuant to an Assignment
Agreement.
"LIBOR" means, for any Interest Rate Determination Date, the
rate per annum obtained by dividing (i) the offered rate in the London interbank
market for deposits in Dollars of amounts equal or comparable to the Loans
offered for a term comparable to such Interest Period, that appears on Telerate
Page 3750 as of approximately 11:00 a.m., London time (or such other page as may
replace such page on such service for the purpose of displaying the rates at
which Dollar deposits are offered by leading banks in the London interbank
deposit market) or if no quotation appears on Telerate Page 3750, the average
rate per annum which the offices of four leading banks selected by the
Administrative Agent and located in London offer for deposits in Dollars in the
London interbank deposit market at approximately 11:00 a.m. (London time) by
(ii) a percentage equal to (x) one (1) minus (y) the Applicable Reserve
Requirement.
21
$650,000,000 CREDIT AGREEMENT
"LIBOR RATE LOAN" means any Loan bearing interest at a rate
calculated on the basis of LIBOR.
"LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"LOAN DOCUMENTS" means this Agreement, the Notes, the
Guaranty, the Fee Letter and (when delivered in accordance with Section 5.9(ii))
the Joinder Agreement, in each case as amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof and Section 8.5
herein.
"LOANS" means the loans made by the Lenders to the Borrower
pursuant to Section 2.1.
"MARGIN STOCK" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as in
effect from time to time.
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon
(i) the business, operations, properties, assets, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries, taken as a whole,
(ii) the ability of the Borrower or either of the Guarantors to perform,
respectively, any of the Obligations of the Borrower or the obligations of
either of the Guarantors under the Guaranty or (iii) the legality, validity,
binding effect or enforceability against the Borrower or either of the
Guarantors of a Loan Document to which it is a party.
"MATERIAL SUBSIDIARY" means, at any time, a Subsidiary of the
Borrower that as of the end of the most recently completed Fiscal Year had total
assets exceeding $5,000,000 or for such Fiscal Year had total revenues exceeding
$25,000,000, in each case as determined by reference to the most recent audited
consolidated financial statements for the Borrower and its Subsidiaries and of
such Subsidiary.
"MATURITY DATE" means the earliest to occur of (i) May 14,
2004 or (ii) such date that the Commitments are reduced in whole or terminated
and/or the Obligations become due and payable pursuant to Section 2.4 or Section
7.
"MOODY'S" means ▇▇▇▇▇'▇ Investor Services, Inc.
"MSSF" has the meaning assigned to that term in the
introduction to this Agreement.
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is
a "multiemployer plan" as defined in Section 3(37) of ERISA.
22
$650,000,000 CREDIT AGREEMENT
"NAIC" means the National Association of Insurance
Commissioners and any successor thereto.
"NET ASSET SALE PROCEEDS" means, with respect to any Asset
Sale, an amount equal to the difference of (i) Cash payments (including any Cash
received by way of deferred payment pursuant to, or by monetization of, a note
receivable or otherwise, but only as and when so received) received from such
Asset Sale, minus (ii) any actual and reasonable documented costs incurred in
connection with such Asset Sale, including (a) income, gains or other taxes or
governmental charges reasonably estimated to be actually payable in connection
with such Asset Sale related to the year of sale and (b) payment of the
outstanding principal amount of, premium or penalty, if any, and interest on any
Indebtedness (other than the Loans) that is secured by a Lien on the assets in
question and that is required to be repaid under the terms thereof as a result
of such Asset Sale.
"NON-US LENDER" has the meaning assigned to that term in
Section 2.5B(iii)(a).
"NOTES" means (i) the promissory notes of the Borrower issued
pursuant to Section 2.1D on the Closing Date with respect to the Loans and (ii)
any promissory notes issued by the Borrower pursuant to Section 8.1E in
connection with assignments of the Loans, in each case substantially in the form
of Exhibit III annexed hereto, as they may be amended, supplemented or otherwise
modified from time to time.
"NOTICE OF BORROWING" means a notice substantially in the form
of Exhibit I annexed hereto delivered by the Borrower to the Administrative
Agent pursuant to Section 2.1B with respect to a proposed borrowing of the
Loans.
"OBLIGATIONS" means all obligations of every nature of the
Borrower from time to time owed to the Agents, the Lenders or any of them under
any of the Loan Documents.
"OFFICERS' CERTIFICATE" means, as applied to any corporation,
a certificate executed on behalf of such corporation by its chairman of the
board (if an officer) or its president or one of its vice presidents and by its
chief financial officer or its treasurer or, as applied to any limited
partnership, a certificate executed on behalf of such limited partnership by the
chairman of the board (if an officer) or the president or one of the vice
presidents and by the chief financial officer or treasurer of the general
partner of such limited partnership, or, if the general partner of such limited
partnership is an individual, executed by such individual; provided that every
Officers' Certificate with respect to the compliance with a condition precedent
to the making of any Loans hereunder shall include: (i) a statement that the
officer or officers making or giving such Officers' Certificate have read such
condition and any definitions or other provisions contained in this Agreement
relating thereto, (ii) a statement that, in the opinion of the signers, they
23
$650,000,000 CREDIT AGREEMENT
have made or have caused to be made such examination or investigation as is
necessary to enable them to express an informed opinion as to whether or not
such condition has been complied with, and (iii) a statement as to whether, in
the opinion of the signers, such condition has been complied with.
"OHIO SALE/LEASEBACK TRANSACTION" means the arrangement with
any Person providing for the leasing by the Borrower or one of its Subsidiaries
of the property of such Borrower or such Subsidiary located in Springfield,
Ohio, which property has been or is to be sold or transferred by the Borrower or
such Subsidiary to such Person.
"ORGANIZATIONAL DOCUMENTS" means (i) with respect to any
corporation, its certificate or articles of incorporation or organization, as
amended, and its by-laws, as amended, (ii) with respect to any limited
partnership, its certificate of limited partnership, as amended, and its
partnership agreement, as amended, (iii) with respect to any general
partnership, its partnership agreement, as amended, and (iv) with respect to any
limited liability company, its articles of organization, as amended, and its
operating agreement, as amended. In the event any term or condition of this
Agreement or any other Loan Document requires any Organizational Document to be
certified by a secretary of state or similar governmental official, the
reference to any such "Organizational Document" shall only be to a document of a
type customarily certified by such governmental official.
"OTHER BRIDGE FACILITY" means that certain $1,100,000,000
Credit Agreement, dated as of the date hereof, among the Borrower, the banks and
financial institutions party thereto, Citigroup Global Markets Inc. ("CGMI") and
MSSF as Joint Bookrunners, CGMI, MSSF and Banc One Capital Markets, Inc. as
Joint Lead Arrangers, MSSF as Syndication Agent, Citigroup North America Inc. as
Documentation Agent, and Bank One, NA as Administrative Agent.
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor thereto.
"PERMITTED ACQUISITIONS" means any acquisition by the Borrower
or any of its wholly-owned Subsidiaries, whether by purchase, merger or
otherwise, of all or substantially all of the assets of, all of the Capital
Stock of, or a business line or unit or a division of, any Person; provided, (i)
immediately prior to, and after giving effect thereto, no Potential Event of
Default or Event of Default shall have occurred and be continuing or would
result therefrom; (ii) all transactions in connection therewith shall be
consummated, in all material respects, in accordance with all applicable laws
and in conformity with all applicable Governmental Authorization; (iii) in the
case of the acquisition of Capital Stock, all of the Capital Stock (except for
any such Securities in the nature of directors' qualifying shares required
pursuant to applicable law) acquired or otherwise issued by such Person or any
newly formed wholly-owned Subsidiary of the Borrower in connection with such
acquisition shall be owned 100% by the Borrower or
24
$650,000,000 CREDIT AGREEMENT
such Subsidiary thereof, as applicable; (iv) the Borrower shall be in compliance
with the financial covenants set forth in Section 6.11 on a pro forma basis
after giving effect to such acquisition as of the last day of the Fiscal Quarter
most recently ended, (as determined in accordance with Section 6.11(v)); (v) the
Borrower shall have delivered to Administrative Agent (A) reasonably in advance
of such acquisition, a Compliance Certificate evidencing compliance with Section
6.11 as required under clause (iv) above, together with all relevant financial
information with respect to such acquired assets, including, without limitation,
the aggregate consideration for such acquisition and any other information
required to demonstrate compliance with Section 6.11; and (vi) any Person or
assets or division as acquired in accordance herewith shall be in same business
or lines of business in which the Borrower and/or its Subsidiaries are engaged
as of the Closing Date.
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.
"PERFORMANCE LEVEL" means, with respect to a Guarantor,
Performance Level I, Performance Level II, Performance Level III, Performance
Level IV, Performance Level V or Performance Level VI, as identified by
reference to the public debt rating of the Guarantors in effect on such date as
set forth below:
PERFORMANCE LEVEL PUBLIC DEBT RATING
----------------------------------------------------------------------------
Long Term Senior Unsecured Debt rated greater than
Level I or equal to A+ by S&P or A1 by ▇▇▇▇▇'▇
----------------------------------------------------------------------------
Long Term Senior Unsecured Debt rated greater than
Level II or equal to A by S&P or A2 by ▇▇▇▇▇'▇
----------------------------------------------------------------------------
Long Term Senior Unsecured Debt rated greater than
Level III or equal to A- by S&P or A3 by ▇▇▇▇▇'▇
----------------------------------------------------------------------------
Long Term Senior Unsecured Debt rated greater than
Level IV or equal to BBB+ by S&P or Baa1 by ▇▇▇▇▇'▇
----------------------------------------------------------------------------
Long Term Senior Unsecured Debt rated greater than
Level V or equal to BBB by S&P or Baa2 by ▇▇▇▇▇'▇
----------------------------------------------------------------------------
Long Term Senior Unsecured Debt rated greater than
Level VI or equal to BBB- by S&P or Baa3 by ▇▇▇▇▇'▇
----------------------------------------------------------------------------
Long Term Senior Unsecured Debt rated less than
or equal to BB+ by S&P or Ba1 by ▇▇▇▇▇'▇, and at all
other times (including if such ratings are not available
Level VII from both S&P and ▇▇▇▇▇'▇)
25
$650,000,000 CREDIT AGREEMENT
For purposes of this definition, the Performance Level shall
be determined by the applicable public debt rating for the Guarantors as
follows: (i) the public debt ratings shall be determined by the then-current
rating announced by either S&P or ▇▇▇▇▇'▇, as the case may be, for any class of
non-credit-enhanced long-term senior unsecured debt issued by a Guarantor, as
applicable; (ii) if only one of S&P and ▇▇▇▇▇'▇ shall have in effect such a
public debt rating, the Performance Level will be Level VII (except as a result
of either S&P or ▇▇▇▇▇'▇, as the case may be, ceasing to be in the business of
issuing public debt ratings, in which case the Performance Level shall be
determined by reference to the available rating); (iii) if neither S&P nor
▇▇▇▇▇'▇ shall have in effect such a public debt rating, the applicable
Performance Level will be Level VII; (iv) if such public debt ratings
established by S&P and ▇▇▇▇▇'▇ shall fall within different levels, or shall fall
within different levels with respect to each Guarantor, in each case the public
debt rating will be determined by the higher of the two ratings, provided, that
in the event that the lower of such public debt ratings is more than one level
below the higher of such public debt ratings, the public debt rating will be
determined based upon the level that is one level above the lower of such public
debt ratings; (v) if any such public debt rating established by S&P or ▇▇▇▇▇'▇
shall be changed, such change shall be effective as of the date on which such
change is first announced publicly by the rating agency making such change; and
(vi) if S&P or ▇▇▇▇▇'▇ shall change the basis on which such public debt ratings
are established, or shall change its respective rating system, each reference to
the public debt rating announced by S&P or ▇▇▇▇▇'▇, as the case may be, shall
refer to the then-equivalent rating by S&P or ▇▇▇▇▇'▇, as the case may be.
"PERSON" means and includes natural persons, corporations,
limited partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and Governmental Authorities.
"PHCS" means Private Health Care Systems, Inc., a Delaware
corporation and an Affiliate of the Borrower.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that,
after notice or lapse of time or both, would constitute an Event of Default.
"PRIME RATE" means the rate of interest as announced by
JPMorgan Chase Bank from time to time as its prime lending rate, as in effect
from time to time. The Prime Rate is a reference rate and does not necessarily
represent the lowest or best rate actually charged to any customer. The
Administrative Agent or any other Lender may make commercial loans or other
loans at rates of interest at, above or below the Prime Rate.
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$650,000,000 CREDIT AGREEMENT
"PRO RATA SHARE" means, (A) prior to the making of the Loans
with respect to each Lender the percentage obtained by dividing (i) the
aggregate principal amount of such Lender's Commitment by (ii) the aggregate
principal amount of all Commitments, and (B) after the making of the Loans with
respect to each Lender the percentage obtained by dividing (i) the principal
amount of such Lender's Loans by (ii) the aggregate principal amount of all
Loans, in each case as such percentage may be adjusted by assignments permitted
pursuant to Section 8.1.
"REINSURANCE AGREEMENT" means any agreement, contract, treaty
or other arrangement whereby one or more insurers, as reinsurers, assume
liabilities under insurance policies or agreements issued by another insurance
or reinsurance company or companies.
"REGISTER" has the meaning assigned to that term in Section
2.1E.
"REGULATION D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"RELATED AGREEMENTS" means the Other Bridge Facility and all
other "Loan Documents" as defined therein.
"RELEASE" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of any Hazardous Material into the indoor or
outdoor environment (including the abandonment or disposal of any barrels,
containers or other closed receptacles containing any Hazardous Material),
including the movement of any Hazardous Material through the air, soil, surface
water or groundwater.
"REPLACEMENT LENDER" has the meaning assigned to that term in
Section 2.7.
"REQUISITE LENDERS" means the Lenders holding more than
66-2/3% of the aggregate outstanding principal amount of the Loans.
"RESTRICTED PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of the Borrower or any of its Subsidiaries now or hereafter
outstanding, except a dividend payable solely in shares of that class of Capital
Stock to the holders of that class; (ii) any redemption, retirement, sinking
fund or similar payment, purchase or other acquisition for value, direct or
indirect, of any shares of any class of Capital Stock of the Borrower or any of
its Subsidiaries now or hereafter outstanding; (iii) any payment made to retire,
or to obtain the surrender of, any outstanding warrants, options or other rights
to acquire shares of any class of Capital Stock of the Borrower or any of its
Subsidiaries now or hereafter outstanding; (iv) management or similar fees
payable to any Guarantor or any of its
27
$650,000,000 CREDIT AGREEMENT
Affiliates (other than the Borrower or any of its wholly-owned Subsidiaries);
and (v) any payment or prepayment of principal of, premium, if any, or interest
on, or redemption, purchase, retirement, defeasance (including in-substance or
legal defeasance), sinking fund or similar payment with respect to, (A) the
Capital Securities and (B) Additional Parent Debt permitted by Section 6.2(iv).
"RETROCESSION AGREEMENT" means any agreement, contract, treaty
or other arrangement whereby one or more insurers or reinsurers, as
retrocessionaries, assume liabilities of reinsurers under a Reinsurance
Agreement or other retrocessionaries under another Retrocession Agreement.
"REVOLVING CREDIT FACILITY" means a multi-year revolving
credit facility, dated after the Closing Date, among the Borrower and one or
more banks or financial institutions, providing an unsecured revolving credit
commitment no greater than $500,000,000 for the Borrower with a maturity date
later than the maturity date under the Other Bridge Facility.
"S&P" means Standard & Poor's Ratings Group, a division of The
McGraw Hill Corporation.
"SAP" means, with respect to any Insurance Subsidiary, the
accounting procedures and practices prescribed or permitted by the Applicable
Insurance Regulatory Authority, applied in accordance with Section 1.2 hereof.
"SECURITIES" means any stock, share, partnership interest,
membership interest in a limited liability company, voting trust certificate,
certificate of interest or participation in any profit-sharing agreement or
arrangement, option, warrant, bond, debenture, note, or other evidence of
indebtedness, secured or unsecured, convertible, subordinated or otherwise, or
in general any instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim certificates for the
purchase or acquisition of, or any right to subscribe to, purchase or acquire,
any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"SOLVENT" means, with respect to any Person, that as of the
date of determination both (A) (i) the then fair saleable value of the property
of such Person is (y) greater than the total amount of liabilities (including
contingent liabilities) of such Person and (z) not less than the amount that
will be required to pay the probable liabilities on such Person's then existing
debts as they become absolute and matured considering all financing alternatives
and potential asset sales reasonably available to such Person; (ii) such
Person's capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (iii) such Person has not incurred
and does
28
$650,000,000 CREDIT AGREEMENT
not intend to incur, or believe (nor should it reasonably believe) that it will
incur, debts beyond its ability to pay such debts as they become due (whether at
maturity or otherwise); and (B) such Person is "solvent" within the meaning
given that term and similar terms under applicable laws relating to fraudulent
transfers and conveyances. For purposes of this definition, the amount of any
contingent liability at any time shall be computed as the amount that, in light
of all of the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured liability.
"STATUTORY STATEMENT" means, as to any Insurance Subsidiary, a
statement of the condition and affairs of such Insurance Subsidiary, prepared in
accordance with SAP, and filed with the Applicable Insurance Regulatory
Authority.
"STATUTORY SURPLUS" means, for any Insurance Subsidiary and
its Subsidiaries, the "Total Adjusted Capital" (as defined by the NAIC) of such
Insurance Subsidiary or Insurance Subsidiaries (as the case may be).
"SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, limited liability company, association, joint venture
or other business entity of which more than 50% of the total voting power of
shares of stock or other ownership interests entitled (without regard to the
occurrence of any contingency) to vote in the election of the Person or Persons
(whether directors, managers, trustees or other Persons performing similar
functions) having the power to direct or cause the direction of the management
and policies thereof is at the time owned or controlled, directly or indirectly,
by that Person or one or more of the other Subsidiaries of that Person or a
combination thereof; provided, that, notwithstanding the foregoing, it is
understood and agreed that (i) Fortis Brussels SA/NV and Fortis Utrecht N.V. are
each Subsidiaries of the Guarantors and (ii) no real estate Joint Venture of the
Borrower or its Subsidiaries shall be considered a Subsidiary of the Borrower or
its Subsidiaries unless such Joint Venture is consolidated on the balance sheet
of the Borrower.
"SYNDICATION AGENT" has the meaning assigned to that term in
the introduction to this Agreement.
"TAX" means any present or future tax, levy, impost, duty,
assessment, charge, deduction or withholding imposed, levied, collected,
withheld or assessed by any Governmental Authority.
"TERMINATED LENDER" has the meaning assigned to that term in
Section 2.7.
"TOTAL INVESTED ASSETS" means at any date, for any Insurance
Subsidiary and its Subsidiaries (determined on a consolidated basis, without
duplication, in accordance with SAP), the amount shown on the most recent
available Statutory
29
$650,000,000 CREDIT AGREEMENT
Statement of such Insurance Subsidiary at p. 2, line 11 (or, if the form of
Statutory Statement of such Insurance Subsidiary shall be amended, such other
page and line of such amended form as shall reflect the same information).
"TYPE OF LOAN" means a Base Rate Loan or a LIBOR Rate Loan.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
UNDER AGREEMENT.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP or SAP, as applicable. Calculations in
connection with the definitions, covenants and other provisions of this
Agreement shall utilize accounting principles and policies in effect on the date
hereof which are in conformity with those used to prepare the financial
statements referred to in Section 4.4. Financial statements and other
information required to be delivered by the Borrower to the Administrative Agent
pursuant to clauses (i) and (ii) of Section 5.1 shall be prepared in accordance
with GAAP as in effect at the time of such preparation. In the event that a
change in GAAP, SAP or other accounting principles and policies after the date
hereof affects in any material respect the calculations of the covenants
contained herein, the Lenders and the Borrower agree to negotiate in good faith
to amend the affected covenants (and related definitions) to compensate for the
effect of such changes so that the restrictions, limitations and performance
standards effectively imposed by such covenants, as so amended, are
substantially identical to the restrictions, limitations and performance
standards imposed by such covenants as in effect on the date hereof; provided
that, if the Requisite Lenders and the Borrower fail to reach agreement with
respect to such amendment within a reasonable period of time following the date
of effectiveness of any such change, calculation of compliance by the Borrower
and its Subsidiaries with the covenants contained herein shall be determined in
accordance with GAAP or SAP, as applicable, as in effect immediately prior to
such change.
1.3 OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION.
A. Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.
B. References to "Sections" and subsections shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided.
C. The use in any of the Loan Documents of the word "include" or
"including", when following any general statement, term or matter, shall not be
construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or
matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with
30
$650,000,000 CREDIT AGREEMENT
reference thereto, but rather shall be deemed to refer to all other items or
matters that fall within the broadest possible scope of such general statement,
term or matter.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENT; MAKING OF LOAN; NOTES.
A. COMMITMENTS. Subject to the terms and conditions of this Agreement
and in reliance upon the representations and warranties of the Borrower herein
set forth, each Lender severally agrees to lend to the Borrower on the Closing
Date an amount not exceeding its Pro Rata Share of the aggregate amount of the
Commitments to be used for the purposes identified in Section 5.8A. The amount
of each Lender's Commitment is set forth opposite its name on Schedule 2.1
annexed hereto and the aggregate amount of the Commitments is $650,000,000;
provided that the Commitments of the Lenders shall be adjusted to give effect to
any assignments of the Commitments pursuant to Section 8.1. Each Lender's
Commitment shall expire immediately and without further action on December 31,
2003 to the extent Loans are not made by such Lender on or before that date. The
Borrower may make only one borrowing under the Commitments. Amounts borrowed
under this Section 2.1A and subsequently repaid or prepaid may not be
reborrowed.
B. BORROWING MECHANICS. When the Borrower desires that the Lenders make
Loans it shall deliver to the Administrative Agent on behalf of the Lenders a
Notice of Borrowing no later than 11:00 a.m. (New York City time) at least three
(3) Business Days in advance of a proposed Loan in the case of a LIBOR Rate
Loan, and no later than 11:00 a.m. (New York City time) at least one Business
Day in advance of a proposed Loan in the case of a Base Rate Loan (or, with
respect to a proposed Base Rate Loan to be made on the Closing Date, no later
than 10:00 a.m. (New York City time) on the Closing Date). Promptly upon receipt
by the Administrative Agent of such Notice of Borrowing, the Administrative
Agent shall notify each Lender of the proposed borrowing.
C. DISBURSEMENT OF FUNDS. Each Lender shall make its Loan available to
the Administrative Agent not later than 12:00 p.m. (New York City time) on the
date of each proposed Loan, by wire transfer of same day funds in Dollars, at
the Funding and Payment Office. Upon satisfaction or waiver of the conditions
precedent specified in Section 3, the Administrative Agent shall make the
proceeds of the Loans available to the Borrower on the date of such proposed
Loans by causing an amount of same day funds in Dollars equal to the proceeds of
all such Loans received by the Administrative Agent from the Lenders to be
credited to the account of the Borrower as may be designated in writing to the
Administrative Agent by the Borrower.
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$650,000,000 CREDIT AGREEMENT
D. NOTES. Upon request by any Lender, the Borrower shall promptly
execute and deliver to such Lender (or to the Administrative Agent for that
Lender) a Note to evidence that Lender's Loans, in the principal amount of that
Lender's Commitment and with other appropriate insertions.
The Administrative Agent may deem and treat the payee of any
Note as the owner thereof for all purposes hereof unless and until an Assignment
Agreement effecting the assignment or transfer thereof shall have been accepted
by the Administrative Agent as provided in Section 8.1C. Any request, authority
or consent of any person or entity who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, assignee or transferee of that Note or of
any Note or Notes issued in exchange therefor.
E. THE REGISTER.
(i) The Administrative Agent shall, on behalf of
Borrower, maintain at its Funding and Payment Office a register for the
recordation of the names and addresses of the Lenders and the Commitment and
Loans of each Lender from time to time (the "Register"). The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
(ii) The Administrative Agent shall record in the Register
the Commitment and the Loans of each Lender, and each repayment or prepayment in
respect of the principal amount of such Loans. Any such recordation shall be
conclusive and binding on the Borrower and each Lender, absent manifest error;
provided that failure to make any such recordation, or any error in such
recordation, shall not affect any Lender's Commitment or the Obligations in
respect of any applicable Loans.
(iii) Each Lender shall record on its internal records
(including the Note held by such Lender) the amount of each Loan made by it and
each payment in respect thereof. Any such recordation shall be conclusive and
binding on the Borrower, absent manifest error; provided that failure to make
any such recordation, or any error in such recordation, shall not affect any
Lender's Commitment or the Obligations in respect of any applicable Loans; and
provided, further, that in the event of any inconsistency between the Register
and any Lender's records, the recordations in the Register shall govern.
(iv) The Borrower, the Administrative Agent and the
Lenders shall deem and treat the Persons listed as Lenders in the Register as
the holders and owners of the corresponding Commitments and Loans listed therein
for all purposes hereof, and no assignment or transfer of any such Commitment or
Loan shall be effective, in each case unless and until an Assignment Agreement
effecting the assignment or transfer thereof shall have been accepted by the
Administrative Agent and recorded in the Register as
32
$650,000,000 CREDIT AGREEMENT
provided in Section 8.1C. Prior to such recordation, all amounts owed with
respect to the applicable Commitment or Loan shall be owed to the Lender listed
in the Register as the owner thereof, and any request, authority or consent of
any Person who, at the time of making such request or giving such authority or
consent, is listed in the Register as a Lender shall be conclusive and binding
on any subsequent holder, assignee or transferee of the corresponding
Commitments or Loans.
2.2 INTEREST ON THE LOANS.
A. RATE OF INTEREST; TYPE OF LOAN.
(i) Subject to the provisions of Sections 2.2E, 2.5 and
2.6, each Loan shall bear interest on the unpaid principal amount thereof from
the date made through the Maturity Date (whether by acceleration or otherwise)
at a rate equal to (a) if a Base Rate Loan, the Base Rate plus the Applicable
Margin (Guarantor Rate) or (b) if a LIBOR Rate Loan, the sum of LIBOR plus the
Applicable Margin (Guarantor Rate).
(ii) The basis for determining the rate of interest with
respect to any Loan, and the Interest Period with respect to any LIBOR Rate
Loan, shall be selected by the Borrower and notified to the Administrative Agent
and the Lenders pursuant to the applicable Notice of Borrowing or
Conversion/Continuation Notice, as the case may be. If on any day a Loan is
outstanding with respect to which a Notice of Borrowing or
Conversion/Continuation Notice has not been delivered to the Administrative
Agent in accordance with the terms hereof specifying the applicable basis for
determining the rate of interest, then for that day such Loan shall be a Base
Rate Loan.
(iii) In the event the Borrower fails to specify between a
Base Rate Loan or a LIBOR Rate Loan in the applicable Notice of Borrowing or
Conversion/Continuation Notice, such Loan (if outstanding as a LIBOR Rate Loan)
will be automatically converted into a Base Rate Loan on the last day of the
then-current Interest Period for such Loan (or if outstanding as a Base Rate
Loan will remain as, or (if not then outstanding) will be made as, a Base Rate
Loan). As soon as practicable after 11:00 a.m. (New York City time) on each
Interest Rate Determination Date, the Administrative Agent shall determine
(which determination shall, absent manifest error, be final, conclusive and
binding upon all parties) the interest rate that shall apply to the LIBOR Rate
Loans for which an interest rate is then being determined for the applicable
Interest Period and shall promptly give notice thereof (in writing or by
telephone confirmed in writing) to the Borrower and each Lender.
B. INTEREST PERIODS. In connection with each LIBOR Rate Loan, the
applicable interest period (each an "INTEREST PERIOD") to be applicable to such
Loan shall be a one, two, three or six month period, as selected by the Borrower
in the applicable Notice of Borrowing or Conversion/Continuation Notice;
provided that
33
$650,000,000 CREDIT AGREEMENT
(i) in the case of immediately successive Interest
Periods applicable to a Loan, each successive Interest Period shall commence on
the day on which the immediately preceding Interest Period expires;
(ii) if an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided that, if any Interest Period would otherwise
expire on a day that is not a Business Day but is a day of the month after which
no further Business Day occurs in such month, such Interest Period shall expire
on the immediately preceding Business Day;
(iii) 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, subject to clause (iv) of this Section 2.2B, end on the last Business Day
of a calendar month;
(iv) no Interest Period with respect to any portion of the
Loans shall extend beyond the scheduled Maturity Date;
(v) there shall be no more than three (3) Interest
Periods outstanding at any time; and
(vi) in the event the Borrower fails to specify an
Interest Period for any LIBOR Rate Loan in the applicable Notice of Borrowing or
Conversion/Continuation Notice, the Borrower shall be deemed to have selected an
Interest Period of one month.
C. INTEREST PAYMENTS. On each Interest Payment Date applicable to any
portion of the Loans, the Borrower shall pay an amount equal to the aggregate
amount of interest that has accrued since the Closing Date or the last Interest
Payment Date, as applicable in respect of such portion of the Loans. In
addition, interest on each Loan shall be payable in arrears upon any scheduled
payment or prepayment of such Loan (to the extent accrued on the amount being
prepaid) and at maturity (including final maturity).
D. DEFAULT RATE. Upon the occurrence and during the continuation of any
Event of Default, the outstanding principal amounts of the Loans not paid when
due and, to the extent permitted by applicable law, any interest payments
thereon not paid when due and any fees and other amounts then due and payable
hereunder, shall thereafter bear interest (including post-petition interest in
any case or proceeding under the Bankruptcy Code or other applicable bankruptcy
laws) payable upon demand at a rate that is 2% per annum in excess of the rate
otherwise payable with respect to the applicable Loans (including, without
limitation, in the case of any such fees and other amounts payable under this
Agreement). Payment or acceptance of the increased rates of interest provided
for in this Section 2.2D is not a permitted alternative to timely payment and
shall not constitute a
34
$650,000,000 CREDIT AGREEMENT
waiver of any Event of Default or otherwise prejudice or limit any rights or
remedies of the Agents or the Lenders.
E. COMPUTATION OF INTEREST. Interest payable pursuant to Section 2.2A
shall be computed (i) in the case of Base Rate Loans at times when the Base Rate
is based on the Prime Rate on the basis of a 365-day or 366-day year, as the
case may be, and (ii) in the case of LIBOR Rate Loans, and Base Rate Loans at
times when the Base Rate is based on the Federal Funds Effective Rate, on the
basis of a 360-day year, in each case for the actual number of days elapsed in
the period during which it accrues. In computing interest on any Loan, the date
of the making of such Loan or the first day of an Interest Period applicable to
such Loan or, with respect to a Base Rate Loan being converted from a LIBOR Rate
Loan, the date of conversion of such LIBOR Rate Loan to such Base Rate Loan, as
the case may be, shall be included, and the date of payment of such Loan or the
expiration date of an Interest Period applicable to such Loan or, with respect
to a Base Rate Loan being converted to a LIBOR Rate Loan, the date of conversion
of such Base Rate Loan to such LIBOR Rate Loan, as the case may be, shall be
excluded; provided, if a Loan is repaid on the same day on which it is made, one
day's interest shall be paid on that Loan.
F. CONVERSION/CONTINUATION.
(i) Subject to Section 2.6 and so long as no Potential
Event of Default or Event of Default shall have occurred and then be continuing,
the Borrower shall have the option:
(a) to convert at any time all or any part of
any Loan equal to $200,000,000 and integral multiples of $25,000,000 in
excess of that amount from one Type of Loan to another Type of Loan;
provided, a LIBOR Rate Loan may only be converted on the expiration of
the Interest Period applicable to such LIBOR Rate Loan unless the
Borrower shall pay all amounts due under Section 2.6 in connection with
any such conversion; or
(b) upon the expiration of any Interest Period
applicable to any LIBOR Rate Loan, to continue all or any portion of
such Loan equal to $200,000,000 and integral multiples of $25,000,000
in excess of that amount as a LIBOR Rate Loan.
(ii) The Borrower shall deliver a Conversion/Continuation
Notice to the Administrative Agent no later than 11:00 a.m. (New York City time)
at least one Business Day in advance of the proposed conversion date (in the
case of a conversion to a Base Rate Loan) and at least three Business Days in
advance of the proposed conversion/continuation date (in the case of a
conversion to, or a continuation of, a LIBOR Rate Loan). Except as otherwise
provided herein, a Conversion/Continuation Notice for conversion to, or
continuation of, any LIBOR Rate Loans (or telephonic notice
35
$650,000,000 CREDIT AGREEMENT
in lieu thereof) shall be irrevocable on and after the related Interest Rate
Determination Date, and the Borrower shall be bound to effect a conversion or
continuation in accordance therewith.
2.3 FEES.
(i) The Borrower agrees to pay to the Administrative
Agent, for the account of each Lender, a commitment fee equal to the average of
the daily difference between (a) the outstanding Commitment of such Lender and
(b) the aggregate outstanding principal amount of the Loans made by such Lender,
multiplied by 0.12%. Accrued commitment fees will be payable in arrears on
December 31, 2003 or, if earlier, on the Maturity Date. All commitment fees will
be computed on the basis of a year of 360 days and will be payable for the
actual number of days elapsed.
(ii) The Borrower agrees to pay to the Arranger and the
Agents such fees in the amounts and at the times separately agreed to by the
Borrower, the Arranger and the Agents.
2.4 REPAYMENTS AND PREPAYMENTS; GENERAL PROVISIONS REGARDING PAYMENTS.
A. PAYMENTS OF LOANS.
The Borrower shall immediately prepay Loans at any time the outstanding
amount of such Loans shall exceed the Commitments. The Loans and all other
amounts owed hereunder with respect to the Loans shall be paid in full no later
than the Maturity Date.
B. PREPAYMENTS; COMMITMENT REDUCTIONS.
(i) Voluntary Prepayments; Commitment Reductions. The
Borrower may (x) at any time and from time to time upon not less than three (3)
Business Day's prior irrevocable written notice given to the Administrative
Agent, terminate or permanently reduce the unused portion of the Commitments on
any Business Day or (y) at any time and from time to time prepay the Loans on
any Business Day, in whole or in part, in each case in an aggregate minimum
amount of $200,000,000 and integral multiples of $25,000,000 in excess of that
amount or such lesser amount that may then be outstanding. Such notice of
termination or reduction of the Commitment or prepayment of the Loans having
been given as aforesaid shall be irrevocable and effective upon receipt by the
Administrative Agent. The principal amount of the Loans specified in any notice
of prepayment shall become due and payable on the prepayment date specified
therein.
36
$650,000,000 CREDIT AGREEMENT
(ii) Mandatory Prepayments; Commitment Reductions.
(a) No later than the third Business Day
following the date of receipt by the Borrower or any of its Subsidiaries of any
Cash proceeds from (x) a capital contribution to, or (y) the issuance of any
Capital Stock of, the Borrower or such Subsidiary (but excluding any issuance by
a Subsidiary of the Borrower to the Borrower or to a wholly-owned Subsidiary of
the Borrower, and any capital contribution by the Borrower or a Subsidiary of
the Borrower to a wholly-owned Subsidiary of the Borrower), the Borrower shall
prepay the Loans and/or the Commitments shall be permanently reduced as set
forth in Section 2.4B(iii) in an aggregate amount equal to 100% of such
proceeds, net of commissions and other reasonable costs and expenses associated
therewith, including reasonable legal fees and expenses.
(b) Concurrently with any prepayment of the
Loans and/or reduction of the Commitments pursuant to Sections 2.4B(ii)(a), the
Borrower shall deliver to the Administrative Agent an Officers' Certificate
demonstrating the calculation of the amount of the applicable net proceeds. In
the event that the Borrower shall subsequently determine that the actual amount
of net proceeds exceeded the amount set forth in such certificate, the Borrower
shall promptly make an additional prepayment of the Loans and/or the Commitments
shall be permanently reduced in an amount equal to such excess, and the Borrower
shall concurrently therewith deliver to the Administrative Agent an Officers'
Certificate demonstrating the derivation of such excess.
(iii) Application of Prepayments/Commitment Reductions. The
amount of any net proceeds received by the Borrower as described in Section
2.4B(ii)(a) (including, without limitation, the proceeds of the Guarantor
Contribution) shall be applied as follows: (1) first, to automatically and
permanently reduce any unused Commitments and (2) second, to the prepayment of
the Loans.
(iv) Application of Prepayments of Loans to Base Rate
Loans and LIBOR Rate Loans. Any prepayment of Loans shall be applied first to
Base Rate Loans to the full extent thereof before application to LIBOR Rate
Loans, in each case in a manner which minimizes the amount of any payments
required to be made by the Borrower pursuant to Section 2.6C.
(v) Guarantor Change of Control. Immediately upon the
occurrence of a Guarantor Change of Control, the Commitments shall terminate and
the Borrower shall repay the Loans.
C. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. All payments by the
Borrower of principal, interest, fees and other Obligations hereunder and under
the Notes shall be made in Dollars in same day funds, without defense, setoff or
counterclaim, free of any
37
$650,000,000 CREDIT AGREEMENT
restriction or condition, and delivered to the Administrative Agent not later
than 2:00 P.M. (New York City time) on the date due at the Funding and Payment
Office for the account of the Administrative Agent; funds received by the
Administrative Agent after that time on such due date shall be deemed to have
been paid by the Borrower on the next succeeding Business Day.
(ii) Payments on Business Days. Whenever any payment to be
made hereunder shall be stated to be due on a day that is not a Business Day,
such payment shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of the payment of
interest hereunder, provided that if such next succeeding Business Day occurs in
the next calendar month, such payment shall be due and payable on the
immediately preceding Business Day.
(iii) Application of Payments to Principal and Interest.
All payments in respect of the principal amount of the Loans shall include
payment of accrued interest on the principal amount being repaid or prepaid, and
all such payments shall be applied to the payment of interest before application
to principal.
(iv) Distribution to Lenders. The Administrative Agent
shall promptly distribute to each Lender, at such address as such Lender shall
indicate in writing, such Lender's applicable Pro Rata Share of all payments and
prepayments of principal and interest due hereunder, together with all other
amounts due thereto, including, without limitation, all fees payable with
respect thereto, to the extent received by the Administrative Agent.
(v) Interest on Costs and Expenses. If any Lender incurs
any cost or expense that this Agreement entitles it to collect from the
Borrower, such cost or expense shall be payable together with interest thereon
at a rate per annum equal to the rate applicable to Base Rate Loans as then in
effect, from the date such cost or expense is incurred until such payment date.
Such Lender shall notify the Borrower, through the Administrative Agent, of the
cost or expense to be paid plus the amount of interest thereon. This provision
shall not apply to payments or prepayments of principal, amounts to be applied
against principal, interest or any cost or expense to be collected pursuant to
Section 2.6C hereof.
2.5 INCREASED COSTS; TAXES.
A. COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the
provisions of Section 2.5B (which shall be controlling with respect to the
matters covered thereby), in the event that any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a Governmental
38
$650,000,000 CREDIT AGREEMENT
Authority, in each case that becomes effective after the date hereof, or
compliance by such Lender with any guideline, request or directive issued or
made after the date hereof by any central bank or other governmental or
quasi-governmental authority (whether or not having the force of law):
(i) subjects such Lender (or its applicable lending
office) to any additional Tax (other than any Non-Excluded Tax covered by
Section 2.5B or any Tax on the overall net income of such Lender) with respect
to this Agreement or any of the other Loan Documents or any of its obligations
hereunder or thereunder or any payments to such Lender (or its applicable
lending office) of principal, interest, fees or any other amount payable
hereunder;
(ii) imposes, modifies or holds applicable any reserve
(including any marginal, emergency, supplemental, special or other reserve),
special deposit, compulsory loan, FDIC insurance or similar requirement against
assets held by, or deposits or other liabilities in or for the account of, or
advances or loans by, or other credit extended by, or any other acquisition of
funds by, any office of such Lender (other than any such reserve or other
requirement with respect to LIBOR Rate Loans that is reflected in the definition
of LIBOR); or
(iii) imposes any other condition (other than with respect
to a Tax matter) on or affecting such Lender (or its applicable lending office)
or its obligations hereunder or the London interbank market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, the Borrower shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, subject
to Section 2.4C(v), such additional amount or amounts (in the form of an
increased rate of, or a different method of calculating, interest or otherwise
as such Lender in its sole discretion shall determine) as may be necessary to
compensate such Lender for any such increased cost or reduction in amounts
received or receivable hereunder. Such Lender shall deliver to the Borrower
(with a copy to the Administrative Agent) a written statement, setting forth in
reasonable detail the basis for calculating the additional amounts owed to such
Lender under this Section 2.5A, which statement shall be conclusive and binding
upon all parties hereto absent manifest error.
B. WITHHOLDING OF TAXES.
(i) Payments to Be Free and Clear. All sums payable by
the Borrower under this Agreement and the other Loan Documents shall (except to
the extent required by law) be paid free and clear of, and without any deduction
or withholding on account of, any Tax (other than a Tax imposed on or measured
by the net income of any Lender
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$650,000,000 CREDIT AGREEMENT
(including franchise taxes imposed in lieu thereof) or any branch profits taxes)
imposed, levied, collected, withheld or assessed by or within the United States
of America or any political subdivision in or of the United States of America or
any other jurisdiction from or to which a payment is made by or on behalf of the
Borrower (a "Non-Excluded Tax").
(ii) Grossing-up of Payments. If the Borrower or any other
Person is required by law to make any deduction or withholding on account of any
Non-Excluded Tax from any sum paid or payable by the Borrower to the
Administrative Agent or any Lender under any of the Loan Documents:
(a) the Borrower shall promptly notify the
Administrative Agent of any such requirement or any change in any such
requirement;
(b) the Borrower shall pay any such Tax before
the date on which penalties attach thereto, such payment to be made (if the
liability to pay is imposed on the Borrower) for its own account or (if that
liability is imposed on the Administrative Agent or such Lender, as the case may
be) on behalf of and in the name of the Administrative Agent or such Lender;
(c) the sum payable by the Borrower in respect
of which the relevant deduction, withholding or payment is required shall be
increased to the extent necessary to ensure that, after the making of that
deduction, withholding or payment, the Administrative Agent or such Lender, as
the case may be, receives on the due date a net sum equal to what it would have
received had no such deduction, withholding or payment been required or made;
(d) the Borrower shall indemnify each such
Lender, within thirty (30) days after demand by such Lender therefor, for the
full amount of any Non-Excluded Tax paid or incurred by such Lender with respect
to any payment by or obligation of the Borrower under the Loan Documents
(including any Non-Excluded Tax imposed or asserted on or attributable to
amounts payable under this Section 2.5) and any expenses arising therefrom or
with respect thereto, whether or not such Non-Excluded Tax were correctly or
legally imposed or asserted by the relevant Governmental Authority; and
(e) within thirty (30) days after paying any sum
from which it is required by law to make any deduction or withholding, and
within thirty (30) days after the due date of payment of any Tax which it is
required by clause (b) above to pay, the Borrower shall deliver to the
Administrative Agent evidence reasonably satisfactory to the other affected
parties of such deduction, withholding or payment and of the remittance thereof
to the relevant taxing or other authority;
provided, that no such additional amount shall be required to be paid to any
Lender under clause (c) above except to the extent that any change after the
date hereof (in the case of
40
$650,000,000 CREDIT AGREEMENT
each Lender listed on the signature pages hereof on the Closing Date) or after
the effective date of the Assignment Agreement pursuant to which such Lender
became a Lender (in the case of each other Lender) in any such requirement for a
deduction, withholding or payment as is mentioned therein shall result in an
increase in the rate of such deduction, withholding or payment from that in
effect at the date hereof or at the date of such Assignment Agreement, as the
case may be, in respect of payments to such Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is not a United States
Person (as such term is defined in Section 7701(a)(30) of the Internal Revenue
Code for U.S. federal income tax purposes) (a "NON-US LENDER") shall deliver to
the Administrative Agent for transmission to the Borrower, on or prior to the
Closing Date (in the case of each Lender listed on the signature pages hereof on
the Closing Date) or on or prior to the date of the Assignment Agreement
pursuant to which it becomes a Lender (in the case of each other Lender), and at
such other times as may be necessary in the determination of the Borrower or the
Administrative Agent (each in the reasonable exercise of its discretion), two
original copies of Internal Revenue Service Form W-8BEN or W-8ECI (or any
successor forms) or, in the case of a Non-US Lender claiming exemption from U.S.
federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of "portfolio interest" a Certificate re Non-Bank Status and two
original copies of Form W-8BEN, or any subsequent versions thereof or successors
thereto, properly completed and duly executed by such Lender, and/or such other
documentation required under the Internal Revenue Code and reasonably requested
by the Borrower to establish that such Lender is exempt from or entitled to a
reduced rate of withholding of United States federal income tax with respect to
any payments to such Lender of principal, interest, fees or other amounts
payable under any of the Loan Documents.
(b) Each Lender required to deliver any forms,
certificates or other evidence with respect to United States federal income tax
withholding matters pursuant to Section 2.5B(iii)(a) hereby agrees, from time to
time after the initial delivery by such Lender of such forms, certificates or
other evidence, whenever a lapse in time or change in circumstances renders such
forms, certificates or other evidence obsolete or inaccurate in any material
respect, that such Lender shall promptly (1) deliver to the Administrative Agent
for transmission to the Borrower two new original copies of Internal Revenue
Service Form W-8BEN or W-8ECI, or a Certificate re Non-Bank Status and two (2)
original copies of Internal Revenue Service Form W-8BEN, as the case may be,
properly completed and duly executed by such Lender, and/or such other
documentation required under the Internal Revenue Code and reasonably requested
by the Borrower to confirm or establish that such Lender is exempt from or
entitled to a reduced rate of withholding of United States federal income tax
with respect to payments to such Lender under the Loan Documents or (2) notify
the Administrative Agent and the Borrower of its inability to deliver any such
forms, certificates or other evidence.
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$650,000,000 CREDIT AGREEMENT
(c) The Borrower shall not be required to pay
any additional amount to any Non-US Lender under clause (c) of Section 2.5B(ii)
if such Lender shall have failed to satisfy the requirements of clause (a) or
(b)(1) of this Section 2.5B(iii); provided that if such Lender shall have
satisfied the requirements of Section 2.5B(iii)(a) on the Closing Date or on the
date of the Assignment Agreement pursuant to which it became a Lender, as
applicable, nothing in this Section 2.5B(iii)(c) shall relieve the Borrower of
its obligation to pay any additional amounts pursuant to clause (c) of Section
2.5B(ii) in the event that, as a result of any change in any applicable law,
treaty or governmental rule, regulation or order, or any change in the
interpretation, administration or application thereof, such Lender is no longer
properly entitled to deliver forms, certificates or other evidence at a
subsequent date establishing the fact that such Lender is exempt from or
entitled to a reduced rate of withholding.
(iv) Refunds. In the event that an additional payment is
made under this Section 2.5B for the account of any Lender and such Lender, in
its sole discretion, determines that it has finally and irrevocably received or
been granted a credit against or release or remission for, or repayment of, any
Tax paid or payable by it in respect of or calculated with reference to the
deduction or withholding giving rise to such payment, such Lender shall, to the
extent that it determines that it can do so without prejudice to the retention
of the amount of such credit, relief, remission or repayment, pay to the
Borrower such amount as such Lender shall, in its sole discretion, have
determined to be attributable to such deduction or withholding and which will
leave such Lender (after such payment) in no worse position than it would have
been in if the Borrower had not been required to make such deduction or
withholding. Nothing herein contained shall interfere with the right of a Lender
to arrange its tax affairs in whatever manner it thinks fit nor oblige any
Lender to claim any tax credit or to disclose any information relating to its
tax affairs or any computations in respect thereof or require any Lender to do
anything that would prejudice its ability to benefit from any other credits,
reliefs, remissions or repayments to which it may be entitled.
C. CAPITAL ADEQUACY ADJUSTMENT. In the event that any Lender shall have
determined that the adoption, effectiveness, phase-in or applicability after the
Closing Date of any law, rule or regulation (or any provision thereof) regarding
capital adequacy, or any change therein or in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by such Lender (or its applicable lending office) with any guideline, request or
directive regarding capital adequacy (whether or not having the force of law) of
any such Governmental Authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of, or with reference
to, such Lender's Loans or Commitments, or participations therein or other
obligations hereunder with respect to the Loans to a level below that which such
Lender or such controlling corporation could have achieved but for such
adoption, effectiveness, phase-in, applicability, change or compliance (taking
into consideration the
42
$650,000,000 CREDIT AGREEMENT
policies of such Lender or such controlling corporation with regard to capital
adequacy), then from time to time, subject to Section 2.4C(v), the Borrower
shall pay to such Lender such additional amount or amounts as will compensate
such Lender or such controlling corporation on an after-tax basis for such
reduction. Such Lender shall deliver to the Borrower (with a copy to the
Administrative Agent) a written statement, setting forth in reasonable detail
the basis for calculating the additional amounts, which statement shall be
conclusive and binding upon all parties hereto absent manifest error.
2.6 SPECIAL PROVISIONS GOVERNING LIBOR RATE LOANS.
Notwithstanding any other provision of this Agreement to the contrary,
the following provisions shall govern with respect to LIBOR Rate Loans as to the
matters covered:
A. INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the event that
the Administrative Agent shall have determined (which determination shall be
final and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any LIBOR Rate Loans, that by reason of
circumstances affecting the interbank LIBOR market adequate and fair means do
not exist for ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of LIBOR Rate, the Administrative Agent
shall on such date give notice (by telefacsimile or by telephone confirmed in
writing) to the Borrower and each Lender of such determination, whereupon (i) no
Loans may be made as, or converted to, LIBOR Rate Loans until such time as the
Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, and (ii) any Notice of
Borrowing or Conversion/Continuation Notice given by the Borrower with respect
to the Loans in respect of which such determination was made shall be deemed to
be rescinded by the Borrower.
B. ILLEGALITY OR IMPRACTICABILITY OF LIBOR RATE LOANS. In the event
that on any date any Lender shall have determined (which determination shall be
final and conclusive and binding upon all parties hereto but shall be made only
after consultation with the Borrower and the Administrative Agent) that the
making, maintaining or continuation of its LIBOR Rate Loans (i) has become
unlawful as a result of compliance by such Lender in good faith with any law,
treaty, governmental rule, regulation, guideline or order (or would conflict
with any such treaty, governmental rule, regulation, guideline or order not
having the force of law even though the failure to comply therewith would not be
unlawful) or (ii) has become impracticable, or would cause such Lender material
hardship, as a result of contingencies occurring after the date of this
Agreement which materially and adversely affect the interbank LIBOR market or
the position of such Lender in that market, then, and in any such event, such
Lender shall be an "AFFECTED LENDER" and it shall on that day give notice (by
telefacsimile or by telephone confirmed in writing) to the Borrower and the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each
43
$650,000,000 CREDIT AGREEMENT
other Lender). Thereafter (a) the obligation of the Affected Lender to make
Loans as, or to convert Loans to, LIBOR Rate Loans shall be suspended until such
notice shall be withdrawn by the Affected Lender, (b) to the extent such
determination by the Affected Lender relates to a LIBOR Rate Loan then being
requested by the Borrower pursuant to a Notice of Borrowing or a
Conversion/Continuation Notice, the Affected Lender shall make such Loan as (or
continue such Loan as or convert such Loan to, as the case may be) a Base Rate
Loan, (c) the Affected Lender's obligation to maintain its outstanding LIBOR
Rate Loans (the "AFFECTED LOANS") shall be terminated at the earlier to occur of
the expiration of the Interest Period then in effect with respect to the
Affected Loans or when required by law, and (d) the Affected Loans shall
automatically convert into Base Rate Loans on the date of such termination.
Notwithstanding the foregoing, to the extent a determination by an Affected
Lender as described above relates to a LIBOR Rate Loan then being requested by
the Borrower pursuant to a Notice of Borrowing or a Conversion/Continuation
Notice, the Borrower shall have the option, subject to the provisions of Section
2.6C, to rescind such Notice of Borrowing or Conversion/Continuation Notice as
to all Lenders by giving notice (by telefacsimile or by telephone confirmed in
writing) to the Administrative Agent of such rescission on the date on which the
Affected Lender gives notice of its determination as described above (which
notice of rescission the Administrative Agent shall promptly transmit to each
other Lender). Except as provided in the immediately preceding sentence, nothing
in this Section 2.6B shall affect the obligation of any Lender other than an
Affected Lender to make or maintain Loans as, or to convert Loans to, LIBOR Rate
Loans in accordance with the terms hereof.
C. COMPENSATION FOR BREAKAGE. The Borrower shall compensate each Lender
upon written request by such Lender (which request shall set forth the basis for
requesting such amounts) for all reasonable losses, expenses and liabilities
(including any interest paid by such Lender to lenders of funds borrowed by it
to make or carry its LIBOR Rate Loans and any loss, expense or liability
sustained by such Lender in connection with the liquidation or re-employment of
such funds) which that Lender may sustain: (i) if for any reason (other than a
default by such Lender) a borrowing of any LIBOR Rate Loan does not occur on a
date specified therefor in a Notice of Borrowing or a telephonic request for
borrowing, or a conversion to or continuation of any LIBOR Rate Loan does not
occur on a date specified therefor in a Conversion/Continuation Notice or a
telephonic request for conversion or continuation, (ii) if any prepayment or
other principal payment of, or any conversion of, any LIBOR Rate Loan made by
such Lender occurs on a date other than the last day of an Interest Period
applicable to such Loan or (iii) if any prepayment of any LIBOR Rate Loan made
by such Lender is not made on any date specified in a notice of prepayment given
by the Borrower.
D. BOOKING OF LIBOR RATE LOANS. Any Lender may make, carry or transfer
LIBOR Rate Loans at, to, or for the account of any of its branch offices or the
office of an Affiliate of that Lender.
44
$650,000,000 CREDIT AGREEMENT
E. ASSUMPTIONS CONCERNING FUNDING OF LIBOR RATE LOANS. Calculation of
all amounts payable to a Lender under this Section 2.6 and under Section 2.5A
and 2.5C shall be made as though that Lender had actually funded each of its
relevant LIBOR Rate Loans through the purchase of a LIBOR deposit bearing
interest at the rate obtained pursuant to clause (i) of the definition of LIBOR
in an amount equal to the amount of such LIBOR Rate Loan and having a maturity
comparable to the relevant Interest Period and through the transfer of such
LIBOR deposit from an offshore office of that Lender to a domestic office of
that Lender in the United States of America; provided, however, that each Lender
may fund each of its LIBOR Rate Loans in any manner it sees fit and the
foregoing assumptions shall be utilized only for the purposes of calculating
amounts payable under this Section 2.6 and under Section 2.5A and 2.5C.
2.7 REMOVAL OR REPLACEMENT OF A LENDER.
Anything contained herein to the contrary notwithstanding, in the event
that: any Lender shall give notice to the Borrower that such Lender is an
Affected Lender or that such Lender is entitled to receive payments under
Section 2.5 or Section 2.6A or 2.6B, the circumstances which have caused such
Lender to be an Affected Lender or which entitle such Lender to receive such
payments shall remain in effect, and such Lender shall fail to withdraw such
notice within five (5) Business Days after the Borrower's request for such
withdrawal; then, with respect to each such Lender (a "TERMINATED LENDER"), the
Borrower may, by giving written notice to the Administrative Agent and any
Terminated Lender of its election to do so, elect to cause such Terminated
Lender (and such Terminated Lender hereby irrevocably agrees) to assign its
outstanding Loans in full to one or more Eligible Assignees (each a "REPLACEMENT
LENDER") in accordance with the provisions of Section 8.1 for a purchase price
equal to the outstanding principal amount of the Loans assigned and accrued
interest thereon and accrued and theretofore unpaid fees owing to such
Terminated Lender under Section 2.3 through the date of assignment, to be paid
by the Replacement Lender on the date of such assignment; provided, that on the
last day of the next successive Interest Period, the Borrower shall pay any
amounts payable to such Terminated Lender to the date of such assignment
pursuant to Sections 2.5 or 2.6 or otherwise as if it were a prepayment. Upon
the completion of such assignment and the prepayment of all amounts owing to any
Terminated Lender, such Terminated Lender shall no longer constitute a "Lender"
for purposes hereof; provided, that any rights of such Terminated Lender to
indemnification hereunder shall survive as to such Terminated Lender.
2.8 MITIGATION.
Each Lender agrees that, as promptly as practicable after the officer
of such Lender responsible for administering the Loans of such Lender becomes
aware of the occurrence of an event or the existence of a condition that would
cause such Lender to become an Affected Lender or that would entitle such Lender
to receive payments under Section 2.5 or 2.6, it will, to the extent not
inconsistent with the internal policies of such
45
$650,000,000 CREDIT AGREEMENT
Lender and any applicable legal or regulatory restrictions, use reasonable
efforts (i) to make, issue, fund or maintain the Commitment of such Lender or
the Affected Loans of such Lender through another lending office of such Lender,
or (ii) take such other measures as such Lender may deem reasonable, if as a
result thereof the circumstances which would cause such Lender to be an Affected
Lender would cease to exist or the additional amounts which would otherwise be
required to be paid to such Lender pursuant to Section 2.5 or 2.6 would be
materially reduced and if, as determined by such Lender in its sole discretion,
the making, issuing, funding or maintaining of such Commitment or Loans through
such other lending office or in accordance with such other measures, as the case
may be, would not otherwise adversely affect such Commitment or Loans or the
interests of such Lender; provided that such Lender will not be obligated to
utilize such other lending office pursuant to this Section 2.8 unless the
Borrower agrees to pay all incremental expenses incurred by such Lender as a
result of utilizing such other lending office as described in clause (i) above.
A certificate as to the amount of any such expenses payable by the Borrower
pursuant to this Section 2.8 (setting forth in reasonable detail the basis for
requesting such amount) submitted by such Lender to the Borrower (with a copy to
the Administrative Agent) shall be conclusive absent manifest error.
SECTION 3. CONDITIONS PRECEDENT
3.1 CONDITIONS TO CLOSING DATE.
The obligations of the Lenders to make the Loans hereunder on the
Closing Date are subject to the satisfaction of the following conditions prior
to or on the Closing Date:
A. BORROWER DOCUMENTS. The Borrower shall deliver or cause to be
delivered to the Administrative Agent on behalf of each Lender the following
with respect to the Borrower and each Guarantor:
(i) Certified copies of the Organizational Documents of
such Person, each dated a recent date prior to the Closing Date, certified as of
a recent date prior to the Closing Date by the appropriate governmental official
or an officer of such Person, as applicable;
(ii) Resolutions of the board of directors (or similar
governing body) of such Person approving and authorizing the execution, delivery
and performance of the Loan Documents and Related Agreements to which it is a
party and certified as of the Closing Date by an officer of such Person as being
in full force and effect without modification or amendment;
(iii) Signature and incumbency certificates of (or, with
respect to the Guarantors only, powers of attorney from) the officers of such
Person executing on
46
$650,000,000 CREDIT AGREEMENT
behalf of such Person the Loan Documents and Related Agreements to which it is a
party;
(iv) Executed originals of the Loan Documents to which
such Person is a party;
(v) With respect to the Borrower, a good standing
certificate or certificate of existence, as applicable, from the Secretary of
State (or similar official) from the jurisdiction of formation of the Borrower
certified as of a recent date prior to the Closing Date; and
(vi) Such other documents as the Administrative Agent on
behalf of the Lenders may reasonably request.
B. OPINIONS OF COUNSEL. The Administrative Agent shall have received
originally executed copies of one or more favorable written opinions of (i)
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq., Senior Vice President, General Counsel and Secretary
for the Borrower; (ii) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, special New York counsel
for the Borrower, (iii) ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, Nevada counsel for the
Borrower, (iv) ▇▇▇▇▇▇ ▇▇▇▇▇, Esq., in-house legal counsel in The Netherlands to
Fortis N.V., (v) De Brauw Blackstone Westbroek P.C., Netherlands counsel for the
Lenders, (vi) ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq., Director Legal Group of Fortis SA/NV, (vii)
Linklaters ▇▇ ▇▇▇▇▇, Belgian counsel for each of the Guarantors, and (viii)
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, special New York counsel for each of the Guarantors, each
in form and substance reasonably satisfactory to the Administrative Agent and
its counsel, dated as of the Closing Date and setting forth substantially the
matters in the opinions designated in Exhibit IV-A, Exhibit IV-B, Exhibit IV-C,
Exhibit IV-D, Exhibit IV-E, Exhibit IV-F, Exhibit IV-G and Exhibit IV-H
respectively annexed hereto and as to such other matters as the Administrative
Agent may reasonably request.
C. RELATED AGREEMENTS. The Administrative Agent shall have received a
fully executed or conformed copy of each Related Agreement and any documents
executed in connection therewith, and each Related Agreement shall be
satisfactory in form and substance to the Administrative Agent and shall be in
full force and effect and no provision thereof shall have been modified or
waived in any respect determined by any of the Lenders or the Administrative
Agent to be material, in each case without the consent of the Lenders and the
Administrative Agent.
D. STATUTORY RESERVES CERTIFICATE. The Administrative Agent shall have
received a certificate of the chief financial officer or chief actuarial officer
of the Borrower, dated the Closing Date, confirming the information in Section
4.4C.
E. PAYMENT OF AMOUNTS DUE. The Borrower shall have paid to the Arranger
and the Agents, all reasonable out-of-pocket costs, fees (including, without
limitation, those fees due on the Closing Date referred to in Section 2.3),
expenses (including,
47
$650,000,000 CREDIT AGREEMENT
without limitation, legal fees and expenses) and other compensation payable on
the Closing Date.
F. EXISTING INTERCOMPANY OBLIGATIONS; OTHER INDEBTEDNESS. The
Administrative Agent shall have received from the Borrower evidence satisfactory
to it that, on the Closing Date (immediately prior to the funding of the Loan
hereunder), the Borrower and its Subsidiaries have no Indebtedness other than
(i) the Existing Intercompany Obligations (as described on Schedule 3.1F hereto)
and the Demand Note which, collectively, do not exceed $1,275,002,000 in
aggregate principal amount, (ii) under the Related Agreements and (iii) as
permitted by Section 6.2.
G. GOVERNMENTAL AUTHORIZATIONS AND CONSENTS.
(i) The Borrower and each of the Guarantors shall have
obtained all Governmental Authorizations and all consents of other Persons, in
each case that are necessary or advisable in connection with the transactions
contemplated by the Loan Documents and the Related Agreements, and each of the
foregoing shall be in full force and effect and in form and substance
satisfactory to the Administrative Agent and the Lenders. All applicable waiting
periods shall have expired without any action being taken or threatened by any
competent authority which would restrain, prevent or otherwise impose adverse
conditions on the transactions contemplated by the Loan Documents or the Related
Agreements or the financing thereof and no action, request for stay, petition
for review or rehearing, reconsideration, or appeal with respect to any of the
foregoing shall be pending, and the time for any applicable agency to take
action to set aside its consent on its own motion shall have expired.
(ii) Each of the Lenders shall have received, at least two
(2) Business Days in advance of the Closing Date, all documentation and other
information required by Governmental Authorities under applicable
"know-your-customer" and anti-money laundering rules and regulations, including,
without limitation, as required by the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA
PATRIOT ACT) Act of 2001.
H. MATERIAL ADVERSE EFFECT. Since December 31, 2002, there shall not
have occurred a material adverse effect upon (i) the business, operations,
properties, assets, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries, taken as a whole, or (ii) the business,
operations, properties, assets, condition (financial or otherwise) or prospects
of the Guarantors and their Subsidiaries, taken as a whole.
I. NO LITIGATION. There shall not exist any action, suit, proceeding
(whether administrative, judicial or otherwise), arbitration or governmental
investigation at law or in equity, or before or by any Governmental Authority,
domestic or foreign, pending or threatened, that, singly or in the aggregate,
could reasonably be expected to materially impair the transactions contemplated
by the Loan Documents or the transactions
48
$650,000,000 CREDIT AGREEMENT
contemplated by the Related Agreements, or that could reasonably be expected to
have a Material Adverse Effect.
J. SOLVENCY ASSURANCES. The Administrative Agent shall have received a
Financial Condition Certificate from the chief financial officer of the
Borrower, dated the Closing Date, satisfactory to the Administrative Agent, and
with appropriate attachments demonstrating that, before and after giving effect
to the Assurant Reincorporation, the Assurant IPO and the other transactions
contemplated by the Loan Documents and the Related Agreements, the Borrower,
individually, and together with each of its Subsidiaries (on a consolidated
basis), will be, Solvent.
K. FINANCIAL STATEMENTS. The Lenders shall have received from the
Borrower (i) the historical financial statements and (ii) the pro forma
consolidated balance sheets, prepared in accordance with GAAP and reflecting the
consummation of the related financing and the other transactions contemplated by
the Loan Documents and the Related Agreements (which pro forma financial
statements shall be in form and substance satisfactory to the Lenders), in each
case as provided in Section 4.4A of this Agreement.
L. MARKET CONDITIONS. There shall have not occurred or become known to
the Arranger, any of the Agents or any of the Lenders any circumstance, change
or condition in the financial or capital markets generally that, in the judgment
of the Arranger, could materially and adversely impair the consummation of the
Assurant IPO.
3.2 CONDITIONS TO EACH LOAN.
A. CONDITIONS PRECEDENT. The obligations of the Lenders to make any
Loans hereunder, including any Loans made on the Closing Date, are subject to
the satisfaction of the following conditions:
(i) the Administrative Agent shall have received, in
accordance with the provisions of Section 2.1B, an originally executed Notice of
Borrowing signed by the Borrower;
(ii) after giving effect to the making of such Loans, the
aggregate amount of all Loans outstanding shall not exceed the Commitments then
in effect;
(iii) the representations and warranties contained herein
and in the other Loan Documents and in the Related Agreements shall be true,
correct and complete in all material respects on and as of the date of the Loan
to the same extent as though made on and as of that date, except to the extent
such representations and warranties specifically relate to an earlier date, in
which case such representations and warranties shall have been true, correct and
complete in all material respects on and as of such earlier date;
49
$650,000,000 CREDIT AGREEMENT
(iv) no event shall have occurred and be continuing or
would result from the consummation of the borrowing of the Loans hereunder, or
the transactions contemplated by the Related Agreements, that would constitute
an Event of Default or a Potential Event of Default; and
(v) the Administrative Agent shall have received evidence
satisfactory to it that (A) the proceeds of the Loan shall be used, on the
Closing Date, together with the proceeds of loans made under the Other Bridge
Facility (borrowed under the Other Bridge Facility for the same purpose), to
repay (in full) the Demand Note and the Existing Intercompany Obligations, and
all accrued fees, costs, expenses, premiums or penalties in connection therewith
and (B) to the extent that the proceeds of the Loan are to be used to repay or
otherwise redeem the Capital Securities, or to pay accrued fees, costs,
expenses, premiums or penalties in connection therewith, (x) the Borrower shall
be in compliance with Section 5.8A and (y) such proceeds shall be used, together
with the proceeds of loans made under the Other Bridge Facility (borrowed under
the Other Bridge Facility for the same purpose), to repay or otherwise redeem
all Capital Securities and to pay all such fees, costs, expenses, premiums or
penalties.
SECTION 4. BORROWER'S REPRESENTATIONS AND WARRANTIES
In order to induce the Agents and the Lenders to enter into this
Agreement and to induce the Lenders to make the Loans hereunder, the Borrower
represents and warrants to each Agent and each Lender that the following
statements are true, correct and complete:
4.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
SUBSIDIARIES.
A. ORGANIZATION AND POWERS. The Borrower is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization. Each Subsidiary of the Borrower is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, except where the failure to be duly organized, validly existing or
in good standing has not had and could not reasonably be expected to have a
Material Adverse Effect. The Borrower and each of its Subsidiaries has all
requisite power and authority to own, lease and operate its properties, to carry
on its business as now conducted and as proposed to be conducted, to enter into
the Loan Documents and Related Agreements to which it is a party and to carry
out the transactions contemplated thereby.
B. QUALIFICATION AND GOOD STANDING. The Borrower and each of its
Subsidiaries is duly qualified to do business and in good standing in every
jurisdiction where its assets are located and wherever necessary to carry out
its business and operations, except in jurisdictions where the failure to be so
qualified or in good standing has not had and could not reasonably be expected
to have a Material Adverse Effect.
50
$650,000,000 CREDIT AGREEMENT
C. SUBSIDIARIES. Schedule 4.1C sets forth the ownership interest of the
Borrower and each of its Subsidiaries in their respective Subsidiaries as of the
Closing Date, and identifies each Subsidiary that is an Insurance Subsidiary.
4.2 AUTHORIZATION OF BORROWING, ETC.
A. AUTHORIZATION OF BORROWING, ETC. The execution, delivery and
performance of each Loan Document and each Related Agreement to which it is a
party have been duly authorized by all necessary action on the part of the
Borrower.
B. NO CONFLICT. The execution, delivery and performance by the Borrower
of each Loan Document and each Related Agreement to which it is a party and the
consummation of the transactions contemplated by each Loan Document and each
Related Agreement to which it is a party do not and will not (i) violate any
provision of any law or any governmental rule or regulation applicable to the
Borrower or any of its Subsidiaries, or any of the Organizational Documents of
the Borrower or any of its Subsidiaries, (ii) violate any order, judgment or
decree of any court or other agency of government binding on the Borrower or any
of its Subsidiaries, except to the extent such violation could not reasonably be
expected to have a Material Adverse Effect, (iii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any Contractual Obligation of the Borrower or any of its Subsidiaries,
(iv) result in or require the creation or imposition of any Lien upon any of the
properties or assets of the Borrower or any of its Subsidiaries, or (v) require
any approval of stockholders, partners or members or any approval or consent of
any Person under any Contractual Obligation of the Borrower or any of its
Subsidiaries, except for such approvals or consents which will be obtained on or
before the Closing Date and disclosed in writing to the Administrative Agent.
C. GOVERNMENTAL CONSENTS. The execution, delivery and performance by
the Borrower of each Loan Document and each Related Agreement to which it is a
party and the consummation of the transactions contemplated by each Loan
Document and each Related Agreement to which it is a party do not and will not
require any registration with, consent or approval of, or notice to, or other
action to, with or by, any Governmental Authority.
D. BINDING OBLIGATION. Each of the Loan Documents and each of the
Related Agreements to which it is a party has been duly executed and delivered
by the Borrower and is the legally valid and binding obligation of the Borrower,
enforceable against the Borrower in accordance with its respective terms, except
as may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or limiting creditors' rights generally or by equitable
principles relating to enforceability.
51
$650,000,000 CREDIT AGREEMENT
4.3 VALID ISSUANCE OF SECURITIES.
The Capital Stock of the Borrower and each of its Material Subsidiaries
has been duly authorized and validly issued, and is fully paid and
nonassessable. No stockholder of the Borrower has or will have any preemptive
rights to subscribe for any additional Capital Stock of the Borrower.
4.4 FINANCIAL CONDITION.
A. GAAP FINANCIAL STATEMENTS. The Borrower has heretofore delivered to
the Administrative Agent (a) the audited consolidated balance sheet of the
Borrower and its Subsidiaries as at December 31, 2002 and the audited
consolidated balance sheet of the Guarantors and their Subsidiaries as at
December 31, 2002, and the related audited consolidated statements of income,
stockholders' equity and cash flows of each of such companies for the Fiscal
Year then ended, together with all related notes and schedules thereto and (b)
the unaudited pro forma consolidated balance sheet of the Borrower and its
Subsidiaries as at September 30, 2003, and the related unaudited statements of
income, stockholders' equity and cash flows of each of such companies for the
portion of the Fiscal Year then ended. All such statements of the Borrower and
its Subsidiaries were prepared in conformity with GAAP and fairly present, in
all material respects, the financial position of the entities described in such
financial statements as at the respective dates thereof and the results of
operations and cash flows of the entities described therein for each of the
periods then ended, subject, in the case of any such unaudited financial
statements, to changes resulting from audit and normal year-end adjustments.
Neither the Borrower nor any of its Subsidiaries has any contingent liability or
liability for taxes, long-term lease or unusual forward or long-term commitment
that is not reflected in the foregoing financial statements or the notes thereto
and which in any such case could reasonably be expected to have a Material
Adverse Effect.
B. STATUTORY FINANCIAL STATEMENTS. All annual convention statements
("ANNUAL CONVENTION STATEMENTS") and the quarterly convention statements
("QUARTERLY CONVENTION STATEMENTS") and supplements thereto, in each case
required to be filed since January 1, 2000 with any Applicable Insurance
Regulatory Authority by the Insurance Subsidiaries have been duly filed and,
except where the failure to file in a timely fashion, individually or in the
aggregate, is not reasonably likely to have a Material Adverse Effect, all such
filings have been timely. Such Annual Convention Statements for the Fiscal Years
ended December 31, 2000, 2001 and 2002 and such Quarterly Convention Statements
for the fiscal quarters ended March 31, 2003, June 30, 2003 and September 30,
2003 (including the financial statements on a statutory basis and the
accompanying exhibits and schedules) and supplements thereto, were prepared in
accordance with SAP applied on a consistent basis throughout such periods except
as otherwise stated therein or required by the rules and regulations of the
Applicable Insurance Regulatory Authorities and in accordance with the books and
records of the Insurance Subsidiaries and present fairly, in accordance with
such practices, the statutory
52
$650,000,000 CREDIT AGREEMENT
financial position as at the date of, and the statutory results of its
operations for the periods covered by, such Annual Convention Statements. Each
Insurance Subsidiary owns assets that qualify as legal reserve assets under
applicable insurance laws in an amount at least equal to all such required
reserves and other similar amounts of such Insurance Subsidiary, except where
the failure to do so could not reasonably be expected to have a Material Adverse
Effect.
C. STATUTORY RESERVES. The statutory reserves of each of the Insurance
Subsidiaries (the "STATUTORY RESERVES") as set forth in the Annual Convention
Statements and the Quarterly Convention Statements (i) were determined in
accordance with generally accepted actuarial standards consistently applied,
(ii) were fairly stated in all material respects in accordance with sound
actuarial principles, (iii) were based on actuarial assumptions that are in
accordance with those specified in the related policy provisions, (iv) make
adequate provision for all matured and unmatured liabilities of the Insurance
Subsidiaries under the terms of its Insurance Contracts, Reinsurance Agreements
and Retrocession Agreements at such date, (v) are computed and are fairly stated
in all material respects in accordance with SAP, and (vi) are in compliance in
all material respects with the requirements of all Applicable Insurance
Regulatory Authorities. Since December 31, 2002, there has been no change in the
Statutory Reserves of any of the Insurance Subsidiaries, except for changes that
could not reasonably be expected to have a Material Adverse Effect.
4.5 NO MATERIAL ADVERSE CHANGE.
Since December 31, 2002, no event or change has occurred that has
caused or evidences, or would reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.
4.6 TITLE TO PROPERTIES; LIENS.
The Borrower and each of its Subsidiaries has (i) good and marketable
title in fee simple in (in the case of fee interests in real property), (ii)
valid leasehold interests in (in the case of leasehold interests in real or
personal property), or (iii) good and marketable title to (in the case of all
other personal property), all of its material properties and assets reflected in
the financial statements referred to in Section 4.4A or in the most recent
financial statements delivered pursuant to Section 5.1, in each case except for
assets disposed of since the date of such financial statements and prior to the
Closing Date or as otherwise permitted under Section 6.6. Except as permitted by
this Agreement or as contemplated by the Loan Documents and Related Agreements,
all such properties and assets are free and clear of Liens.
53
$650,000,000 CREDIT AGREEMENT
4.7 NO LITIGATION; COMPLIANCE WITH LAWS.
Except as otherwise disclosed on Schedule 4.7 hereto, there are no
actions, suits, proceedings (whether administrative, judicial or otherwise),
arbitrations or governmental investigations (whether or not purportedly on
behalf of the Borrower or any of it Subsidiaries) at law or in equity, or before
or by any Governmental Authority, domestic or foreign (including any
Environmental Claims), that are pending or, to the knowledge of the Borrower or
any of its Subsidiaries, threatened against or affecting the Borrower or any of
its Subsidiaries or any property of the Borrower or any of its Subsidiaries and
that (x) individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect or (y) involve any of the Loan Documents or
the Related Agreements or the transactions contemplated thereby. Neither the
Borrower nor any of its Subsidiaries (i) is in violation of any applicable laws
(including Environmental Laws) that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect or (ii) is subject
to or in default with respect to any final judgments, writs, injunctions,
decrees, rules or regulations of any Governmental Authority, domestic or
foreign, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect.
4.8 PAYMENT OF TAXES.
Except as otherwise permitted under Section 5.5, all tax returns and
reports of the Borrower and its Subsidiaries required to be filed by any of them
have been timely filed, and all taxes shown on such tax returns to be due and
payable and all assessments, fees and other governmental charges imposed upon
the Borrower and its Subsidiaries and upon their respective properties, assets,
income, businesses and franchises which are due and payable have been paid when
due and payable, except to the extent the failure to do so could not reasonably
be expected to have a Material Adverse Effect. Neither the Borrower nor any of
its Subsidiaries knows of any proposed tax assessment against Borrower or any of
its Subsidiaries which is not adequately reserved in accordance with GAAP and
being contested by the Borrower or such Subsidiary in good faith and by
appropriate proceedings.
4.9 NO DEFAULT.
Neither the Borrower nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, could not reasonably be expected to have a
Material Adverse Effect.
54
$650,000,000 CREDIT AGREEMENT
4.10 GOVERNMENTAL REGULATION.
Neither the Borrower nor any of its Subsidiaries is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act or the Investment Company Act of 1940 or under any federal or state
statute or regulation which may limit its ability to incur Indebtedness or which
may otherwise render all or any portion of the Obligations unenforceable.
Neither the Borrower nor any of its Subsidiaries is a "registered investment
company" or a company "controlled" by a "registered investment company" or a
"principal underwriter" of a "registered investment company" as such terms are
defined in the Investment Company Act of 1940.
4.11 SECURITIES ACTIVITIES.
Neither the Borrower nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock. No part of
the proceeds of the Loans will be used to purchase or carry any such margin
stock or to extend credit to others for the purpose of purchasing or carrying
any such margin stock or for any purpose that violates, or is inconsistent with,
the provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System.
4.12 EMPLOYEE BENEFIT PLANS.
A. Each of the Borrower and its Subsidiaries are in all material
respects in compliance with all applicable provisions and requirements of ERISA
and the Internal Revenue Code and the regulations and published interpretations
thereunder with respect to each Employee Benefit Plan, and have performed all
their obligations under each Employee Benefit Plan, except where the failure to
do so could not reasonably be expected to result in a material liability to the
Borrower or any of its Subsidiaries. Each Employee Benefit Plan that is intended
to be qualified under Section 401(a) of the Internal Revenue Code has received a
favorable determination letter from the Internal Revenue Service, and the
Borrower is not aware of any circumstances likely to result in revocation of
such favorable determination letter.
B. No liability to the PBGC (other than required premium payments), the
Internal Revenue Service, any Employee Benefit Plan or any trust established
under Title IV of ERISA (other than required contributions which have been
timely made when due) has been or is expected to be incurred by the Borrower or
any of its Subsidiaries or any of their ERISA Affiliates, and no ERISA Event has
occurred or is reasonably expected to occur, in each case that would reasonably
be expected to result in a material liability to the Borrower, any of its
Subsidiaries or any of their respective ERISA Affiliates.
C. Except as disclosed on Schedule 4.12 hereto and to the extent
required under Section 4980B of the Internal Revenue Code, no Employee Benefit
Plan provides health
55
$650,000,000 CREDIT AGREEMENT
or welfare benefits (through the purchase of insurance or otherwise) for any
retired or former employee of the Borrower and its Subsidiaries. The Borrower
has retained the right to amend or terminate its retiree medical arrangements at
any time.
D. The present value of the aggregate benefit liabilities under each
Pension Plan sponsored, maintained or contributed to by the Borrower or any of
its Subsidiaries or any of their ERISA Affiliates (determined as of the
beginning of the most recent plan year on the basis of the actuarial assumptions
specified for funding purposes in the most recent actuarial valuation for such
Pension Plan), did not exceed the actuarial value of the assets of each such
Pension Plan, in each case by an amount which could reasonably be expected to
have a Material Adverse Effect.
E. None of the Borrower, any Subsidiary of the Borrower or any of their
respective ERISA Affiliates contributes to or is required to contribute to a
Multiemployer Plan. No Subsidiary or ERISA Affiliate of the Borrower or any
Subsidiary of the Borrower maintains an Employee Benefit Plan subject to Title
IV of ERISA.
4.13 CERTAIN FEES.
No broker's or finder's fee or commission will be payable with respect
to this Agreement or any of the transactions contemplated hereby except for such
fees payable under Section 2.3 or as otherwise disclosed to the Arranger and the
Agents, and the Borrower hereby indemnifies the Arranger and each of the Agents
and each Lender against, and agrees that it will hold the Arranger and each of
the Agents and each Lender harmless from, any claim, demand or liability for any
such broker's or finder's fees alleged to have been incurred in connection
herewith or therewith and any expenses (including reasonable fees, expenses and
disbursements of counsel) arising in connection with any such claim, demand or
liability.
4.14 ENVIRONMENTAL PROTECTION.
A. Neither the Borrower nor any of its Subsidiaries nor any of their
respective Facilities or operations are subject to any outstanding written
order, consent decree or settlement agreement with any Person relating to any
Environmental Law, any Environmental Claim, or any Hazardous Materials Activity
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
B. Neither the Borrower nor any of its Subsidiaries has received any
letter or request for information under Section 104 of the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. ss. 9604) or
any comparable state law.
C. There are and, to the Borrower's and each of its Subsidiaries'
knowledge, have been no conditions, occurrences, or Hazardous Materials
Activities which could
56
$650,000,000 CREDIT AGREEMENT
reasonably be expected to form the basis of an Environmental Claim against the
Borrower or any of its Subsidiaries that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
D. Compliance with all current or reasonably anticipated future
requirements pursuant to or under Environmental Laws is not reasonably expected
to have a Material Adverse Effect.
4.15 SOLVENCY.
The Borrower, individually, and together with each of its Subsidiaries
(on a consolidated basis), is, and on each date on which the Borrower incurs any
Obligations will be, Solvent.
4.16 RESTRICTIONS.
There are no contractual restrictions on the Borrower or any of its
Subsidiaries which prohibit or otherwise restrict the transfer of cash or other
assets from any Subsidiary of the Borrower to the Borrower, other than
prohibitions or restrictions permitted under Section 6.4.
4.17 RELATED AGREEMENTS.
A. The Borrower has delivered to the Administrative Agent complete and
correct copies of each Related Agreement and of all exhibits and schedules
thereto. Each of the representations and warranties given by the Borrower in the
Related Agreements is true and correct in all material respects as of the
Closing Date (or as of any earlier date to which such representation and
warranty specifically relates).
B. All Governmental Authorizations and all other authorizations,
approvals and consents of any other Person required by the Related Agreements or
to consummate the borrowings contemplated by the Related Agreements have been
obtained and are in full force and effect.
C. On the Closing Date, (i) all of the conditions to effecting or
consummating the borrowings contemplated by the Related Agreements as set forth
in the Related Agreements have been duly satisfied or, with the consent of the
Administrative Agent, waived, and (ii) the borrowings contemplated by the
Related Agreements have been consummated in accordance with the Related
Agreements and all applicable laws.
4.18 INSURANCE LICENSES.
No Insurance License, the suspension, revocation, termination,
non-renewal or limitation of which could reasonably be expected to have a
Material Adverse Effect, is the subject of a proceeding for suspension,
revocation, termination, non-renewal or
57
$650,000,000 CREDIT AGREEMENT
limitation and, to the knowledge of the Borrower and its Subsidiaries, no such
suspension, revocation, termination, non-renewal or limitation has been
threatened by any Governmental Authority. No Insurance Subsidiary transacts any
Insurance Business, directly or indirectly, in any jurisdiction where such
business requires any Insurance License that is not validly maintained by such
Insurance Subsidiary, except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.
4.19 DISCLOSURE.
No representation or warranty of the Borrower contained in any of the
Loan Documents or in any other document, certificate or written statement
furnished to any of the Agents or any of the Lenders by or on behalf of the
Borrower or any of its Subsidiaries for use in connection with the transactions
contemplated by this Agreement (including, without limitation, the Form S-1 of
Assurant as filed with the Securities and Exchange Commission (together with
filed amendments)) contains any untrue statement of a material fact or omits to
state a material fact (known to the Borrower or any of its Subsidiaries, in the
case of any document not furnished by any of them) necessary in order to make
the statements contained herein or therein not misleading in light of the
circumstances in which the same were made. Any projections and pro forma
financial information contained in such materials are based upon good faith
estimates and assumptions believed by the Borrower to be reasonable at the time
made, it being recognized by the Agents and the Lenders that such projections as
to future events are not to be viewed as facts and that actual results during
the period or periods covered by any such projections may differ from the
projected results. There are no facts known to the Borrower or any of its
Subsidiaries (other than matters of a general economic nature) that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect and that have not been disclosed herein or in such other
documents, certificates and statements furnished to each of the Agents for use
in connection with the transactions contemplated hereby.
SECTION 5. BORROWER'S AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that, so long as the Commitments
hereunder shall remain in effect and until payment in full of the Loans and all
other Obligations, unless the provisions of this Section 5 are waived or amended
in accordance with Section 8.5, the Borrower shall perform all covenants in this
Section 5.
5.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
The Borrower will deliver to the Administrative Agent:
(i) Quarterly Financial Statements: within 45 days after
the end of each Fiscal Quarter ending after the Closing Date, the unaudited
consolidated balance
58
$650,000,000 CREDIT AGREEMENT
sheet of the Borrower and its Subsidiaries as at the end of such Fiscal Quarter
and the related consolidated statements of income, stockholders' equity and cash
flows of the Borrower and its Subsidiaries for such Fiscal Quarter and for the
period from the beginning of the then-current Fiscal Year to the end of such
Fiscal Quarter, setting forth in each case in comparative form the corresponding
figures for the corresponding periods of the previous Fiscal Year, all in
reasonable detail and certified by the chief financial officer of the Borrower
as fairly presenting, in all material respects, the financial condition of the
Borrower and its Subsidiaries as at the date indicated and the results of their
operations and cash flows for the periods indicated in conformity with GAAP,
subject to changes resulting from audit and normal year-end adjustments;
(ii) Annual Financial Statements: within 90 days after the
end of each Fiscal Year, (a) the consolidated balance sheets of the Borrower and
its Subsidiaries as at the end of such Fiscal Year and the related consolidated
statements of income, stockholders' equity and cash flows of the Borrower and
its Subsidiaries for such Fiscal Year, setting forth in each case in comparative
form the corresponding figures for the previous Fiscal Year, in reasonable
detail and certified by the chief financial officer of the Borrower as fairly
presenting, in all material respects, the financial condition of the Borrower
and its Subsidiaries as at the date indicated and the results of their
operations and cash flows for the periods indicated; and (b) with respect to
such consolidated financial statements a report thereon of
PricewaterhouseCoopers LLP or other independent certified public accountants of
recognized national standing selected by the Borrower, and reasonably
satisfactory to the Administrative Agent (which report shall be unqualified as
to going concern and scope of audit, and shall state that such consolidated
financial statements fairly present, in all material respects, the consolidated
financial position of the Borrower and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated in conformity with GAAP applied on a basis consistent with
prior years (except as otherwise disclosed in such financial statements) and
that the examination by such accountants in connection with such consolidated
financial statements has been made in accordance with generally accepted
auditing standards) together with a written statement by such independent
certified public accountants stating (1) that their audit examination has
included a review of the terms of the Loan Documents, (2) whether, in connection
therewith, any condition or event that constitutes a Potential Event of Default
or an Event of Default has come to their attention and, if such a condition or
event has come to their attention, specifying the nature and period of existence
thereof, and (3) that nothing has come to their attention that causes them to
believe that the information contained in any Compliance Certificate is not
correct or that the matters set forth in such Compliance Certificate are not
stated in accordance with the terms hereof (it being understood that such
statement shall be limited to the items that independent certified public
accountants are permitted to cover in such statements pursuant to the
professional standards and customs of the accounting profession);
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(iii) Compliance Certificate: together with each delivery
of financial statements of the Borrower and its Subsidiaries pursuant to
Sections 5.1(i) and 5.1(ii), a duly executed and completed Compliance
Certificate;
(iv) Filings: (a) promptly upon their becoming available,
copies of all financial statements, periodic reports and proxy statements filed
with, or furnished to, the Securities and Exchange Commission, or, after the
closing of the Assurant IPO, sent by the Borrower to its shareholders or other
security holders, and (b) promptly following the request of the Administrative
Agent or any Lender, a copy of all material information filed by the Borrower
with any Governmental Authority to the Administrative Agent or such Lender;
(v) Notice of Default, etc.: promptly (with a copy to
each Lender) upon (a) the occurrence of any condition or event that constitutes
an Event of Default or Potential Event of Default or notice being given to the
Borrower or any of its Subsidiaries with respect thereto, (b) any Person giving
any notice to the Borrower or any of its Subsidiaries or taking any other action
with respect to a claimed default or event or condition of the type referred to
in Section 7.2, or (c) the occurrence of any event or change that has caused or
evidences, either in any case or in the aggregate, a Material Adverse Effect, an
Officers' Certificate specifying the nature and period of existence of such
condition, event or change, or specifying the notice given or action taken by
any such Person and the nature of such claimed Event of Default, Potential Event
of Default, default, event or condition, and what action the Borrower has taken,
is taking and proposes to take with respect thereto;
(vi) Notice of Litigation: promptly after the Borrower
becomes aware or has knowledge of (x) the institution of any action, suit,
proceeding (whether administrative, judicial or otherwise), governmental
investigation or arbitration against or affecting the Borrower or any of its
Subsidiaries or any of their respective property (collectively, "PROCEEDINGS")
or (y) any material development in any such Proceeding, in either case that (A)
the Borrower believes has a reasonable possibility of an adverse determination
that could reasonably be expected to have a Material Adverse Effect or (B) seeks
to enjoin or otherwise prevent the consummation of, or to recover any damages or
obtain relief as a result of, the transactions contemplated hereby or by the
Related Agreements, written notice thereof together with such other information
as may be reasonably available to the Borrower or such Subsidiary to enable the
Lenders and their counsel to evaluate such matters;
(vii) Change in Rating: prompt written notice of any and
all changes in the rating given the Borrower or either of the Guarantors by
▇▇▇▇▇'▇ or S&P;
(viii) Insurance Reports and Filings:
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(a) (1) prompt written notice to the
Administrative Agent and each Lender of the failure by any Insurance Subsidiary
to file its Statutory Statements and any statements referred to in Section 4.4B
or in Section 4.4C, and (2) promptly following the request of the Administrative
Agent or any Lender, a complete copy of any Statutory Statement and any
statements referred to in Section 4.4B or in Section 4.4C to the Administrative
Agent or such Lender;
(b) promptly following the delivery or receipt,
as the case may be, by any Insurance Subsidiary or any of their respective
Subsidiaries, copies of (1) each material examination and/or audit report or
other similar report submitted to any Insurance Subsidiary by any Applicable
Insurance Regulatory Authority, (2) all material information which the Lenders
may from time to time request with respect to the nature or status of any
material deficiencies or violations reflected in any such examination, report or
other similar report and (3) each registration, filing, submission, report,
order, direction, instruction, approval, authorization, license or other notice
which the Borrower or any Insurance Subsidiary may at any time make with, or
receive from, any Applicable Insurance Regulatory Authority except with respect
to matters arising in the ordinary course of business of the Borrower or such
Insurance Subsidiary;
(c) promptly following the preparation thereof,
any material report by an independent actuarial consulting firm reviewing the
adequacy of loss reserves (net of reinsurance) of any Insurance Subsidiary,
together with such firm's opinion affirming the adequacy of such loss reserves;
and
(d) promptly following notification thereof from
a Governmental Authority, and in any event not later than five (5) Business Days
after receipt of such notice, written notice of the revocation, suspension,
termination, non-renewal or limitation of, or the taking of any other action in
respect of, any material Insurance License;
(ix) Related Agreements: copies of all notices given or
received by the Borrower in connection with the Related Agreements on the day
that such notice is given by the Borrower or within three (3) Business Days
after such notice is received by it, as the case may be (except that for notices
of potential and actual defaults or events of default given or received by the
Borrower, the Borrower will deliver copies of such notices to the Administrative
Agent on the day that such notice is given by the Borrower or within one (1)
Business Day after any such notice is received by the Borrower); provided,
however, that so long as no Event of Default or Potential Event of Default has
occurred and is continuing, notices of borrowing or extensions of credit given
or received in the ordinary course by the Borrower in connection with the
Related Agreements need not be delivered; and
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(x) Other Information: with reasonable promptness, such
other information and data with respect to the Borrower or any of its
Subsidiaries as from time to time may be reasonably requested by the
Administrative Agent or any Lender.
5.2 BOOKS AND RECORDS.
The Borrower will, and will cause each of its Subsidiaries to, keep
proper books of records and accounts in which full, true and correct entries in
all material respects in conformity with GAAP and SAP, as applicable,
consistently applied shall be made of all material dealings and transactions in
relation to its business and activities; and (b) permit representatives or
agents of the Administrative Agent (or during the continuance of a Event of
Default hereunder, any Lender) to visit and inspect any of its properties or
assets and examine and make abstracts from any of its books and records upon
reasonable prior notice during normal business hours and as often as may
reasonably be desired, and to discuss the business, operations, properties and
financial and other condition of the Borrower and its Subsidiaries with officers
and employees of the Borrower and its Subsidiaries so long as the Borrower is
provided the opportunity to participate.
5.3 EXISTENCE.
Except as otherwise permitted by Section 6.6, the Borrower will, and
will cause each of its Material Subsidiaries to, at all times preserve and keep
in full force and effect its existence and all rights, privileges, licenses
(including Insurance Licenses) and franchises material to its business;
provided, that neither the Borrower nor any of its Subsidiaries shall be
required to preserve the existence of any such Subsidiary, or any such right,
privilege, license or franchise of the Borrower or such Subsidiary if the
Borrower's or such Subsidiary's board of directors (or similar governing body)
shall determine that the preservation of such existence, right, privilege,
license or franchise is no longer desirable in the conduct of the business of
such Person, and that the loss thereof or dissolution (as the case may be) is
not disadvantageous in any material respect to the Borrower or such Subsidiary
or the Lenders.
5.4 INSURANCE.
The Borrower will maintain or cause to be maintained, with financially
sound and reputable insurers, such public liability insurance, third party
property damage insurance and casualty insurance with respect to liabilities,
losses or damage in respect of the assets, properties and businesses of the
Borrower and its Subsidiaries as may customarily be carried or maintained under
similar circumstances by Persons of established reputation engaged in similar
businesses, in each case in such amounts (giving effect to self-insurance), with
such deductibles, covering such risks and otherwise on such terms and conditions
as shall be customary for such Persons.
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$650,000,000 CREDIT AGREEMENT
5.5 PAYMENT OF TAXES AND CLAIMS.
The Borrower will, and will cause each of its Subsidiaries to, pay all
Taxes imposed upon it or any of its properties or assets or in respect of any of
its income, businesses or franchises before any penalty or fine accrues thereon,
and all claims (including claims for labor, services, materials and supplies)
for sums that have become due and payable and that by law have or may become a
Lien upon any of its properties or assets, prior to the time when any penalty or
fine shall be incurred with respect thereto; provided, no such Tax or claim need
be paid if it is being contested in good faith by appropriate proceedings and
adequate reserve or other appropriate provision, as shall be required in
conformity with GAAP, shall have been made therefor.
5.6 MAINTENANCE OF PROPERTIES.
The Borrower will, and will cause each of its Subsidiaries to, maintain
or cause to be maintained in good repair, working order and condition, ordinary
wear and tear excepted, all material properties used or useful in the business
of the Borrower and its Subsidiaries and from time to time will make or cause to
be made all appropriate repairs, renewals and replacements thereof.
5.7 COMPLIANCE WITH LAWS.
The Borrower will, and will cause each of its Subsidiaries to, comply
with the requirements of all applicable laws, rules, regulations and orders of
any Governmental Authority (including all Environmental Laws), noncompliance
with which could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
5.8 USE OF PROCEEDS.
A. PROCEEDS OF LOANS. The proceeds of the Loans made pursuant to 2.1A
shall be used (i) on the Closing Date, together with the proceeds of loans made
under the Other Bridge Facility (borrowed under the Other Bridge Facility for
the same purpose) to repay (in full) the Demand Note and the Existing
Intercompany Obligations, and all accrued fees, costs, expenses, premiums or
penalties in connection therewith, (ii) to repay or otherwise redeem the Capital
Securities, and to pay accrued fees, costs, expenses, premiums or penalties in
connection therewith, or (iii) for general corporate purposes; provided, that
not more than $125,000,000 of proceeds from Loans hereunder and under the Other
Bridge Facility (borrowed under the Other Bridge Facility for the same purpose),
in the aggregate, may be used for general corporate purposes; provided, further,
that to the extent that the proceeds of any of the Loans are to be used to repay
or otherwise redeem the Capital Securities, or to pay accrued fees, costs,
expenses, premiums or penalties in connection therewith, such proceeds shall be
used, together with the proceeds of loans made under the Other
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$650,000,000 CREDIT AGREEMENT
Bridge Facility (borrowed under the Other Bridge Facility for the same purpose),
to repay or otherwise redeem all Capital Securities and to pay all such fees,
costs, expenses, premiums or penalties.
B. MARGIN REGULATIONS. No part of the proceeds of the Loans made to the
Borrower will be used, directly or indirectly, to purchase or carry any Margin
Stock or to extend credit to others for the purpose of purchasing or carrying
any Margin Stock or for any purpose that violates, or is inconsistent with, the
provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System.
5.9 ASSURANT IPO; OTHER FINANCINGS.
(i) The Borrower will use its best efforts to, as soon as
practicable following the Closing Date, to (a) consummate the Assurant IPO, (b)
enter into the Revolving Credit Facility in form and substance reasonably
satisfactory to the Agents and (c) repay or otherwise redeem (in full) the
Capital Securities.
(ii) The Borrower will, on or before the closing date of
the Assurant IPO, (a) consummate the Assurant Reincorporation and (b) in
connection therewith, deliver or cause to be delivered to the Administrative
Agent (A) a Joinder Agreement duly executed by Assurant (and the other parties
thereto) and (B) favorable legal opinions covering such matters with respect to
Assurant, the Loan Documents and such Joinder Agreement consistent with opinions
delivered with respect to the Borrower and the Loan Documents on the Closing
Date and addressed to the Administrative Agent and the Lenders in form and
substance reasonably satisfactory thereto.
(iii) The Borrower will provide written notice to the
Administrative Agent reasonably in advance of the consummation of the Assurant
Reincorporation and the entering into of the Revolving Credit Facility.
5.10 CLAIMS PARI PASSU.
The Borrower shall ensure that at all times the Obligations and any
other claims of the Arranger, the Agents and the Lenders arising hereunder or
under any of the Loan Documents rank at least pari passu with the claims of all
of the Borrower's or its Subsidiaries' other senior unsecured creditors, except
(i) those creditors whose claims are preferred by any bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally and (ii) those claims which are permitted to be secured under
Section 6.1.
SECTION 6. BORROWER'S NEGATIVE COVENANTS
The Borrower covenants and agrees that, so long as the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations,
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unless the provisions of this Section are waived or amended in accordance with
Section 8.5, the Borrower shall perform, and shall cause each of its
Subsidiaries to perform, all covenants in this Section 6.
6.1 LIENS.
The Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create, incur, assume or permit to exist any Lien on
or with respect to any property or asset of any kind of the Borrower, whether
now owned or hereafter acquired, or any income or profits therefrom, except:
(i) Liens existing on the Closing Date securing
Indebtedness in an aggregate principal amount not to exceed $20,000,000;
(ii) Liens imposed by law for Taxes that are not yet
required to be paid pursuant to Section 5.5;
(iii) statutory Liens of landlords, banks (and rights of
set-off), of carriers, warehousemen, mechanics, repairmen, workmen and material
men, and other Liens imposed by law, in each case incurred in the ordinary
course of business for amounts not yet overdue or for amounts that are overdue
and that (in the case of any such amounts overdue for a period in excess of five
days) are being contested in good faith by appropriate proceedings, so long as
such reserves or other appropriate provisions, if any, as shall be required by
GAAP shall have been made for any such contested amounts;
(iv) deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types of
social security, or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts, performance and
return-of-money bonds, Reinsurance Agreements, Retrocession Agreements and other
similar obligations (exclusive of obligations for the payment of borrowed money)
incurred in the ordinary course of business;
(v) Liens on pledges or deposits of cash or securities
made by any Insurance Subsidiary as a condition to obtaining or maintaining any
licenses issued to it by any Applicable Insurance Regulatory Authority;
(vi) easements, rights-of-way, restrictions,
encroachments, and other minor defects or irregularities in title to real
property, in each case which do not and will not, individually or in the
aggregate, interfere in any material respect with the use or value thereof;
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$650,000,000 CREDIT AGREEMENT
(vii) any interest or title of a lessor or sublessor under
any operating or true lease of real estate entered into by the Borrower or one
of its Subsidiaries in the ordinary course of its business covering only the
assets so leased;
(viii) Liens created pursuant to Capital Leases permitted
pursuant to Section 6.2(ix); provided, that such Liens are only in respect of
the property or assets subject to, and secure only, such Capital Leases;
(ix) purchase money Liens in real property, improvements
thereto or equipment hereafter acquired (or, in the case of improvements,
constructed) by the Borrower or one of its Subsidiaries; provided, that (a) such
Lien secures Indebtedness permitted by Section 6.2(ix)), (b) such Lien is
incurred, and the Indebtedness secured thereby is created, within ninety (90)
days after such acquisition (or construction), (c) the Indebtedness secured
thereby does not exceed 100% of the lesser of the cost or the fair market value
of such real property, improvements or equipment at the time of such acquisition
(or construction) and (d) such Lien does not apply to any other property or
assets of the Borrower or any of its Subsidiaries;
(x) Liens given to secure the obligations of an Insurance
Subsidiary under Reinsurance Agreements, Retrocession Agreements and other
similar obligations (other than obligations for the payment of borrowed money),
incurred by such Insurance Subsidiary in the ordinary course of business;
(xi) Liens securing judgments that do not constitute an
Event of Default under Section 7.8;
(xii) Liens that are contractual rights of set-off (a)
relating to the establishment of depository relations with banks not given in
connection with the issuance of Indebtedness or (b) relating to pooled deposit
or sweep accounts of the Borrower or any of its Subsidiaries to permit
satisfaction of overdraft or similar obligations incurred in the ordinary course
of business of the Borrower and its Subsidiaries;
(xiii) licenses of intellectual property granted in a manner
consistent with past practice; and
(xiv) other Liens securing Indebtedness in an aggregate
principal amount not to exceed $10,000,000 at any time outstanding.
Notwithstanding any of the foregoing exceptions, the Borrower will not, and will
not permit any of its Subsidiaries to, create, incur, assume or suffer to exist
any Lien upon the Capital Stock of any of its Subsidiaries owned by the Borrower
or any such Subsidiary or upon any Indebtedness owed to such Subsidiary by the
Borrower or any of its Subsidiaries.
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6.2 INDEBTEDNESS.
The Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create, incur, assume or guaranty, or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i) the Obligations;
(ii) Indebtedness arising under the Related Agreements;
(iii) Indebtedness in respect of the Capital Securities;
(iv) Additional Parent Debt in an aggregate principal
amount not to exceed $200,000,000 at any time outstanding; provided, that all
such Indebtedness (a) shall be unsecured, (b) shall be incurred after the
Closing Date and (c) shall be extinguished on or prior to the consummation of
the Assurant IPO;
(v) Indebtedness existing on the Closing Date and set
forth on Schedule 6.2, but, in each case, not any extensions, renewals or
replacements of such Indebtedness except (a) renewals and extensions expressly
provided for in the agreements evidencing any such Indebtedness as the same are
in effect on the date of this Agreement and (b) refinancings and extensions of
any such Indebtedness if the terms and conditions thereof are not less favorable
to the obligor thereon or to the Lenders than the Indebtedness being refinanced
or extended, and the average life to maturity thereof is greater than or equal
to that of the Indebtedness being refinanced or extended; provided, such
Indebtedness permitted under the immediately preceding clause (a) or (b) above
shall not (A) include Indebtedness of an obligor that was not an obligor with
respect to the Indebtedness being extended, renewed or refinanced, (B) exceed in
a principal amount the Indebtedness being renewed, extended or refinanced or (C)
be incurred, created or assumed if any Potential Event of Default or Event of
Default has occurred and is continuing or would result therefrom;
(vi) Indebtedness owing by the Borrower to any Subsidiary;
provided, that all such Indebtedness shall be unsecured and subordinated in
right of payment to the payment in full of the Obligations pursuant to the terms
of the applicable promissory notes or an intercompany subordination agreement
that in any such case is satisfactory to the Administrative Agent;
(vii) Indebtedness owing by any wholly-owned Subsidiary of
the Borrower to the Borrower or to another wholly-owned Subsidiary of the
Borrower;
(viii) Indebtedness owing by any non-wholly-owned Subsidiary
of the Borrower to the Borrower or to a wholly-owned Subsidiary of the Borrower;
provided,
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that the aggregate principal amount of all such Indebtedness under this clause
(ix) shall not exceed $10,000,000 at any time outstanding;
(ix) purchase money Indebtedness and Capital Leases, in
each case incurred in the ordinary course of business after the Closing Date,
(a) in an aggregate principal amount (including the capitalized portion of any
Capital Leases) not to exceed $3,000,000 at any time outstanding and (b) any
Capital Lease in connection with the Ohio Sale/leaseback Transaction;
(x) Indebtedness of any Insurance Subsidiary in respect
of letters of credit issued under letter of credit facilities and (a) securing
obligations under Reinsurance Agreements or Retrocession Agreements entered into
in the ordinary course of business of such Subsidiary or (b) issued in lieu of
deposits to satisfy any requirements imposed by any Applicable Insurance
Regulatory Authority, in any case to the extent such letters of credit are not
drawn upon or, if and to the extent drawn upon, such drawing is reimbursed not
later than ten (10) days following receipt by such Subsidiary of notice of
payment on such letter of credit;
(xi) Indebtedness of the Borrower under Interest Rate
Agreements entered into (a) in respect of the Obligations and the obligations
under the Related Agreements and (b) in the ordinary course of business and
consistent with past business practice of the Borrower and its Subsidiaries (and
not for speculative purposes);
(xii) Indebtedness owed to (including obligations in
respect of letters of credit or bank guarantees or similar instruments for the
benefit of) any Person providing workers' compensation, health, disability or
other employee benefits or property, casualty or liability insurance to the
Borrower or any of its Subsidiaries, pursuant to reimbursement or
indemnification obligations to such Person, provided that upon the incurrence of
Indebtedness with respect to reimbursement obligations regarding workers'
compensation claims, such obligations are reimbursed not later than 30 days
following such incurrence;
(xiii) Indebtedness arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument drawn
against insufficient funds in the ordinary course of business, provided that
such Indebtedness is extinguished within three Business Days of its incurrence;
and
(xiv) other Indebtedness in an aggregate principal amount
not to exceed $10,000,000 at any time outstanding.
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6.3 INVESTMENTS.
The Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, make or own any Investment in any Person, including
without limitation any Joint Venture, except:
(i) Investments by the Borrower and its Subsidiaries in
Cash Equivalents;
(ii) (a) the Borrower and its Subsidiaries may continue to
own each Investment owned by it on September 30, 2003 (and other Investments
owned as of the Closing Date) and identified in reasonable detail on Schedule
6.3A and (b) may continue to own and make Investments which comply with the
Borrower's investment guidelines (including Investments in real estate as
described therein in the form of Joint Ventures) attached hereto as Schedule
6.3B (with such amendments, supplements or other modifications to such
investment guidelines as the Business Unit Investment Committees and/or the Risk
Management Committee of the Borrower and its Subsidiaries may from time to time
approve in the ordinary course of business and consistent with past business
practice of the Borrower and its Subsidiaries, provided that copies of any such
amendment, supplement or other modification shall be delivered to the
Administrative Agent promptly following such approval);
(iii) (a) Investments constituting intercompany
Indebtedness permitted by Section 6.2, (b) Investments in wholly-owned
Subsidiaries of the Borrower that are in existence on the Closing Date and (c)
Investments in wholly-owned Insurance Subsidiaries and wholly-owned Subsidiaries
that engage in a business reasonably related to an Insurance Business;
(iv) (a) loans and advances to employees of the Borrower
and its Subsidiaries for relocation and travel expenses made in the ordinary
course of business and consistent with past practice, and (b) other loans and
advances to employees of the Borrower and its Subsidiaries made in the ordinary
course of business in an aggregate principal amount not to exceed $2,000,000 at
any time outstanding (the amounts under this clause (b) to be inclusive of the
amount of such loans and advances listed on Schedule 6.3A);
(v) any non-Cash consideration in connection with any
Asset Sale permitted pursuant to Section 6.6(iii);
(vi) Investments received by the Borrower or any of its
Subsidiaries in connection with the bankruptcy or reorganization of, or
settlement of delinquent accounts and disputes with, customers, suppliers or
other Persons, in each case in the ordinary course of business;
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$650,000,000 CREDIT AGREEMENT
(vii) accounts receivable arising and trade credit granted
in the ordinary course of business and any securities received in satisfaction
or partial satisfaction thereof from financially troubled account debtors to the
extent reasonably necessary in order to prevent or limit loss and any
prepayments and other credits to suppliers made in the ordinary course of
business;
(viii) the Borrower may repurchase or otherwise acquire
shares of its Capital Stock in connection with employee compensation in the
ordinary course of business in accordance with plans approved by the board of
directors of the Borrower;
(ix) Investments by the Borrower in PHCS not to exceed
$25,000,000 in the aggregate;
(x) Investments by the Borrower or any of its
Subsidiaries in customers or related ventures of the Borrower or such
Subsidiaries; provided that (i) such customers or ventures are engaged, and
continue to engage, in an Insurance Business or a business reasonably related to
an Insurance Business, (ii) such Investments are made in the ordinary course of
business and consistent with past practice of the Borrower or such Subsidiary
and (iii) with respect to such Investments (A) existing on the Closing Date, the
amount of such Investments (and renewals thereof with the same customer or
venture) shall not exceed $38,000,000 and (B) made after the Closing Date, such
Investments shall not exceed $25,000,000 in the aggregate for any Fiscal Year;
and
(xi) Investments made in connection with Permitted
Acquisitions permitted pursuant to Section 6.6.
6.4 RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS
The Borrower shall not, and shall not permit any of its Subsidiaries
to, create or otherwise cause or suffer to exist or become effective any
consensual encumbrance or restriction of any kind on the ability of any
Subsidiary of the Borrower to (a) pay dividends or make any other distributions
on any of such Subsidiary's Capital Stock owned by the Borrower or any other
Subsidiary of the Borrower, (b) repay or prepay any Indebtedness owed by such
Subsidiary to the Borrower or any other Subsidiary of the Borrower, (c) make
loans or advances to the Borrower or any other Subsidiary of the Borrower, or
(d) transfer any of its property or assets to the Borrower or any other
Subsidiary of the Borrower, other than restrictions existing (i) under this
Agreement or any Related Agreement, (ii) under agreements evidencing
Indebtedness permitted by Section 6.2(ix) that impose restrictions on the
property so acquired, (iii) under any applicable law, rule or regulation which
applies generally to all insurance companies regulated thereunder, (iv) under
any order from or agreement with an Applicable Insurance Regulatory Authority
existing on the Closing Date as described on Schedule 6.4 hereto, (v) under any
order from or agreement with an Applicable Insurance Regulatory Authority
arising after the Closing Date which could not reasonably be
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expected to result in a Material Adverse Effect and (vi) by reason of customary
provisions restricting assignments, subletting or other transfers contained in
leases, licenses, Joint Venture agreements and similar agreements entered into
in the ordinary course of business.
6.5 RESTRICTED PAYMENTS.
The Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, declare, order, pay, make or set apart any sum for
any Restricted Payment, except that:
(i) so long as no Potential Event of Default or Event of
Default shall have occurred and be continuing, or would result after giving
effect thereto, the Borrower, in accordance with its dividend policy as in
effect at the closing of the Assurant IPO, may declare and pay regularly
scheduled dividends: (a) with respect to the Borrower Common Stock; provided,
that with respect to the Class B Common Stock of the Borrower and the Class C
Common Stock of the Borrower, such dividends shall not exceed $45,000,000 in the
aggregate and (b) with respect to the Class B Preferred Stock of the Borrower
and the Class C Preferred Stock of the Borrower; provided, that with respect to
such Class B Preferred Stock, such dividends shall not exceed 4.0% per $1000
liquidation price per share per annum, and with respect to such Class C
Preferred Stock, such dividends shall not exceed 4.0% per $1000 liquidation
price per share per annum (in each case under the foregoing clauses (a) and (b),
taking into account all such dividends made prior to the Closing Date, and with
such share amount to be adjusted ratably in respect of stock distributions,
recapitalizations, stock splits or any similar event);
(ii) any Subsidiary of the Borrower may make Restricted
Payments to its parent if such parent is the Borrower or a wholly-owned
Subsidiary of the Borrower; provided, that, notwithstanding anything to the
contrary contained herein, the Borrower shall cause its Subsidiaries to make
Restricted Payments in a timely manner to the Borrower necessary to enable the
Borrower to pay interest on the Obligations in accordance with this Agreement;
provided, further, in the event that such Restricted Payments are not sufficient
to enable the Borrower to pay interest on the Obligations in accordance with
this Agreement, the Borrower will use its best efforts to obtain the approvals
of any Governmental Authority to permit its Insurance Subsidiaries to make
Restricted Payments to the Borrower in an amount sufficient for the Borrower to
repay such Obligations;
(iii) the Borrower may make Restricted Payments to repay or
otherwise redeem the Capital Securities;
(iv) so long as no Potential Event of Default or Event of
Default shall have occurred and be continuing, or would result after giving
effect thereto, the Borrower may make regularly scheduled payments of interest
in respect of the Additional Parent
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$650,000,000 CREDIT AGREEMENT
Debt permitted by Section 6.2(iv) and the Capital Securities, in each case in
accordance with the terms of, and only to the extent required by, the indentures
or other agreements pursuant to which such Capital Securities and Additional
Parent Debt were issued, respectively, and may prepay or repay such Additional
Parent Debt; and
(v) Restricted Payments in connection with Investments
described under Section 6.3(viii).
6.6 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS.
The Borrower shall not, and shall not permit any of its Subsidiaries
to, enter into any transaction of merger or consolidation, or liquidate, wind-up
or dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease or sub-lease (as lessor or sub-lessor), exchange, transfer or otherwise
dispose of, in one transaction or a series of transactions, all or any portion
of its business, assets or property of any kind whatsoever, whether real,
personal or mixed and whether tangible or intangible, whether now owned or
hereafter acquired, or acquire by purchase or otherwise the business, property
or fixed assets of, or stock or other evidence of beneficial ownership of, any
Person or any division or line of business of any Person, in each case except:
(i) (A) any Subsidiary of the Borrower may be merged with
or into the Borrower or any wholly-owned Subsidiary of the Borrower, (B) any
non-wholly-owned Subsidiary of the Borrower may be merged with or into any other
non-wholly-owned Subsidiary of the Borrower, (C) any Subsidiary of the Borrower
may be liquidated, wound up or dissolved, or all or any part of its business,
property or assets may be conveyed, sold, leased, transferred or otherwise
disposed of, in one transaction or a series of transactions, to the Borrower or
any wholly-owned Subsidiary of the Borrower or (D) any non-wholly-owned
Subsidiary of the Borrower may be liquidated, wound up or dissolved, or all or
any part of its business, property or assets may be conveyed, sold, leased,
transferred or otherwise disposed of, in one transaction or a series of
transactions, to any other non-wholly-owned Subsidiary of the Borrower;
provided, in the case of (x) a merger with the Borrower, the Borrower shall be
the continuing or surviving Person (except following consummation of the
Assurant Reincorporation and upon compliance with Section 5.9(ii), pursuant to
which Assurant shall be the continuing and surviving Person), (y) a merger not
involving the Borrower and involving a wholly-owned Subsidiary of the Borrower,
such wholly-owned Subsidiary shall be the continuing or surviving Person and (z)
any such transaction involving non-wholly-owned Subsidiaries in which the
Borrower and its Subsidiaries have different ownership percentages, the
transferee, or the continuing or surviving Subsidiary, shall be the
non-wholly-owned Subsidiary in which the Borrower and its Subsidiaries have the
greater ownership percentage (which percentage shall be unchanged as a result of
such transaction);
(ii) sales or other dispositions of assets that do not
constitute Asset Sales;
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$650,000,000 CREDIT AGREEMENT
(iii) Asset Sales (the proceeds of which shall be valued at
the principal amount thereof in the case of non-Cash proceeds consisting of
notes or other debt Securities and valued at fair market value in the case of
other non-Cash proceeds); provided (1) the consideration received for such
assets shall be in an amount at least equal to the fair market value thereof
(determined in good faith by the board of directors of the Borrower or such
Subsidiary (or similar governing body) engaging in such Asset Sale), (2) no less
than 90% of such consideration shall be paid in Cash, (3) in the case of a
Subsidiary engaging in such Asset Sale, there shall exist no restriction on the
ability of such Subsidiary to dividend or otherwise distribute the Net Asset
Sale Proceeds thereof to the Borrower and (4) the Net Asset Sale Proceeds
thereof shall be applied as required by Section 2.4B(ii)(a) of the Other Bridge
Facility;
(iv) sales, transfers or dispositions of Investments
permitted to exist in accordance with Section 6.3(i) and (ii), and Investments
permitted by Section 6.3(iii);
(v) any Insurance Subsidiary may enter into any Insurance
Contract, Reinsurance Agreement or Retrocession Agreement in the ordinary course
of its existing Insurance Business in accordance with its normal underwriting,
indemnity and retention policies; and
(vi) Permitted Acquisitions, the consideration for which
does not exceed $5,000,000 in the aggregate.
6.7 DISPOSAL OF SUBSIDIARY INTERESTS.
Except for any sale of all of its interests in the Capital Stock of any
of its Subsidiaries in compliance with the provisions of Section 6.6, the
Borrower shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, sell, assign, pledge or otherwise encumber or dispose of any Capital
Stock of any of its Subsidiaries, except to (i) the Borrower or a wholly-owned
Subsidiary of the Borrower (subject to the restrictions on such disposition
otherwise imposed hereunder) or (ii) qualify directors if required by applicable
law.
6.8 CONDUCT OF BUSINESS.
From and after the Closing Date, the Borrower shall not, and shall not
permit any of its Subsidiaries to, engage in any business or conduct any
activities other than engaging in the business as now conducted by the Borrower
and its Subsidiaries and businesses reasonably related thereto, and in the case
of Insurance Subsidiaries, to engage in only those lines of insurance business
for which the Insurance Subsidiaries are licensed by Applicable Insurance
Regulatory Authority from time to time. The Borrower shall solely be a holding
company, and shall not enter into Insurance Contracts, Reinsurance Agreements or
Retrocession Agreements.
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$650,000,000 CREDIT AGREEMENT
6.9 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
The Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, enter into or permit to exist any transaction
(including the purchase, sale, lease or exchange of any property or the
rendering of any service or the making of any intercompany loan) with any
Affiliate of the Borrower or any of its Subsidiaries, any holder of Capital
Stock or other interests in the Borrower or any of its Subsidiaries, or any such
Affiliate of any such holder, except on fair and reasonable terms that are no
less favorable to the Borrower or that Subsidiary, as the case may be, than
those that might be obtained at the time in a comparable arm's length
transaction from a Person who is not such a holder or Affiliate; provided, that
the foregoing restriction shall not apply to (a) any transaction between the
Borrower and its Subsidiaries or between such Subsidiaries, or between the
Borrower or its Subsidiaries and the Guarantors, in each case to the extent
otherwise permitted under the other provisions of Section 6 herein; (b)
reasonable and customary fees paid to members of the board of directors (or
similar governing body) of the Borrower and its Subsidiaries; (c) compensation
arrangements for officers and other employees of the Borrower and its
Subsidiaries entered into in the ordinary course of business; and (d)
transactions described in Schedule 6.9.
6.10 AMENDMENTS OR WAIVERS OF RELATED AGREEMENT.
(i) The Borrower will not agree to any amendment, restatement,
supplement or other modification to, or waive any of its rights under, any
Related Agreement or any agreement relating to the Assurant Reincorporation, in
each case to the extent any such amendment, restatement, supplement or
modification could be materially adverse to the Lenders, without obtaining the
prior written consent of the Requisite Lenders.
(ii) The Borrower will not, and will not permit any of its
Subsidiaries to, amend or otherwise change the terms of any Indebtedness
described in clause (v) of the definition of Restricted Payments (other than the
Additional Parent Debt) or the certificate of designations or other document
governing the rights or obligations with respect to the Class B and Class C
Common Stock of the Borrower and the Class B and Class C Preferred Stock of the
Borrower, or make any payment consistent with an amendment thereof or change
thereto, if the effect of such amendment or change is to increase the interest
rate on such Indebtedness or the rate or frequency of dividends payable on such
Capital Stock, change (to earlier dates) any dates upon which payments of
principal or interest are due thereon or the date for redemptions thereof,
change any event of default or condition to an event of default with respect
thereto (other than to eliminate any such event of default or increase any grace
period related thereto), change the redemption, prepayment or defeasance
provisions thereof, change the subordination provisions thereof (or of any
guaranty thereof), or if the effect of such amendment or change, together with
all other amendments or changes made, is to increase materially the obligations
of the obligor thereunder or to confer any additional rights on the holders of
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$650,000,000 CREDIT AGREEMENT
such Indebtedness or Capital Stock (or a trustee or other representative on
their behalf) which could be materially adverse to the Lenders.
6.11 FINANCIAL COVENANTS.
(i) Minimum Statutory Capital. The Borrower shall not
permit the Statutory Surplus of the Insurance Subsidiaries (on a consolidated
basis) at any time to be less than $1,500,000,000.
(ii) Minimum Interest Coverage Ratio. The Borrower shall
not permit the Interest Coverage Ratio as of the last day of any Fiscal Quarter
to be less than 4.00:1.00.
(iii) Maximum Indebtedness to Capitalization Ratio. The
Borrower shall not permit the Indebtedness to Capitalization Ratio as of the
last day of any Fiscal Quarter to exceed 0.5:1.00.
(iv) Minimum Consolidated Adjusted Net Worth. The Borrower
shall not permit its Consolidated Adjusted Net Worth at any time to be less than
the sum of (x) $1,800,000,000 (minus any after-tax prepayment penalties incurred
with respect to the Capital Securities and the Existing Intercompany
Obligations), plus (y) 50% of Consolidated Net Income for each Fiscal Quarter
(beginning with the first Fiscal Quarter ending after the Closing Date) for
which Consolidated Net Income (measured at the end of each such Fiscal Quarter)
is a positive amount plus (z) 100% of the proceeds from any capital contribution
to, or issuance of any Capital Stock of, the Borrower or any Subsidiary of the
Borrower (but excluding any issuance by a Subsidiary of the Borrower to the
Borrower or to a wholly-owned Subsidiary of the Borrower, and any capital
contribution by the Borrower or a Subsidiary of the Borrower to a wholly-owned
Subsidiary of the Borrower).
(v) Certain Calculations. With respect to any period
during which a Permitted Acquisition or an Asset Sale has occurred (each, a
"SUBJECT TRANSACTION"), for purposes of determining compliance with the
financial covenants set forth in this Section 6.11, Consolidated Adjusted EBIT
shall be calculated with respect to such period on a pro forma basis (including
pro forma adjustments arising out of events which are directly attributable to a
specific transaction, are factually supportable and are expected to have a
continuing impact, in each case determined on a basis consistent with Article 11
of Regulation S-X promulgated under the Securities Act and as interpreted by the
staff of the Securities and Exchange Commission, which would include cost
savings resulting from head count reduction, closure of facilities and similar
restructuring charges, which pro forma adjustments shall be certified by the
chief financial officer of the Borrower) using the historical audited financial
statements of any business so acquired or to be acquired or sold or to be sold
and the consolidated financial statements of the Borrower and its Subsidiaries
which shall be reformulated as if such Subject Transaction, and any
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$650,000,000 CREDIT AGREEMENT
Indebtedness incurred or repaid in connection therewith, had been consummated or
incurred or repaid at the beginning of such period (and assuming that such
Indebtedness bears interest during any portion of the applicable measurement
period prior to the relevant acquisition at the weighted average of the interest
rates applicable to outstanding Loans incurred during such period).
SECTION 7. EVENTS OF DEFAULT
If any of the following conditions or events ("EVENTS OF DEFAULT")
shall occur:
7.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by the Borrower to pay any installment of principal of the Loan
when due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; or failure by the Borrower to
pay any interest on the Loan or any fee or any other amount due under this
Agreement within three (3) Business Days after the date due; or
7.2 DEFAULT IN OTHER AGREEMENTS.
(i) Failure of the Borrower or any of its Subsidiaries to pay when due
any principal of or interest on or any other amount payable in respect of one or
more items of Indebtedness (other than Indebtedness referred to in Section 7.1
above) in excess of $20,000,000 individually or $50,000,000 in the aggregate and
in each case beyond the end of any grace period provided therefor, if any; or
(ii) breach or default by the Borrower or any of its Subsidiaries with respect
to any other material term of (a) one or more items of such Indebtedness or (b)
any loan agreement, mortgage, indenture or other agreement relating to such
item(s) of Indebtedness, in each case beyond the end of any grace period
provided therefor, if any, if the effect of such breach or default is to cause,
or to permit the holder or holders of that Indebtedness (or a trustee on behalf
of such holder or holders) to cause, that Indebtedness to become or be declared
due and payable (or redeemable) prior to its stated maturity or the stated
maturity of any underlying obligation, as the case may be; or
7.3 BREACH OF CERTAIN COVENANTS.
(i) Failure of the Borrower to perform or comply with any term or
condition contained in Sections 2.4B(ii), 2.4B(v), 5.1(v), 5.3 (with respect to
the existence of the Borrower only), 5.8, 5.10 or Section 6 of this Agreement;
(ii) failure of the Borrower to perform or comply with Section 5.1(vi) and such
failure shall not have been remedied or waived within five (5) days after an
officer of the Borrower or any of its Subsidiaries becoming aware of such
failure; or (iii) failure of any Guarantor to perform or comply
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$650,000,000 CREDIT AGREEMENT
with any term or condition contained in Sections 2.7(a) (with respect to the
existence of any Guarantor or any Guarantor Material Subsidiary (as such term is
defined in the Guaranty) only), 2.7(d), 2.7(e) or 2.7(f) of the Guaranty; or
7.4 BREACH OF WARRANTY.
(i) Any representation, warranty, certification or other statement made
by the Borrower in any Loan Document or Related Agreement, or by the Borrower or
any of its Subsidiaries in any statement or certificate at any time given by the
Borrower or any such Subsidiary in writing pursuant hereto or thereto, or in
connection herewith or therewith shall be false in any material respect on the
date as of which made, or (ii) any representation, warranty, certification or
other statement made by any Guarantor in the Guaranty, or by any Guarantor or
any of its Subsidiaries in any statement or certificate at any time given by any
Guarantor or any such Subsidiary in writing pursuant hereto or thereto, or in
connection herewith or therewith shall be false in any material respect on the
date as of which made; or
7.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS, RELATED AGREEMENTS AND GUARANTY.
(i) The Borrower shall default in the performance of or compliance with
any term contained in this Agreement, any of the other Loan Documents or the
Related Agreements to which it is a party, or any Guarantor shall default in the
performance of or compliance with any term contained in the Guaranty or the
Related Agreements to which it is a party, in each case other than any such term
referred to in any other subsection of this Section 7, and such default shall
not have been remedied or waived within thirty (30) days after receipt by the
Borrower of notice from the Administrative Agent of such default; or
(ii) the occurrence of any event that would otherwise constitute an
"Event of Default" (as that term is defined in the Existing Parent Facility)
under Clause 17.4 through Clause 17.8, inclusive, and Clause 17.11 through
17.13, inclusive, of the Existing Parent Facility, which such Clauses, together
with all definitions in the Existing Parent Facility applicable to such Clauses
(as amended by the Guaranty, as applicable), are hereby incorporated by
reference as if set forth herein in their entirety; provided, that all
references to "Obligor" therein shall mean and be a reference to each
"Guarantor" herein, all references to "Material Adverse Effect" therein shall
mean and be a reference to "Material Adverse Effect" as defined in the Guaranty,
all references to "Material Subsidiary" therein shall mean and be a reference to
"Guarantor Material Subsidiary" as defined in the Guaranty, all references to
"subsidiary" therein shall mean and be a reference to "Subsidiary" as defined
herein, all references to "Instructing Group" therein shall mean and be a
reference to "Requisite Lenders" as defined herein, and all references to
"Agreement" shall mean and be a reference to the Guaranty; provided, further,
that no amendment, modification or supplement to such provisions or definitions
made to the Existing Parent Facility, or the termination, refinancing or
replacement of the Existing
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$650,000,000 CREDIT AGREEMENT
Parent Facility, shall be effective to amend such provisions or definitions as
incorporated by reference herein; provided, however, that this Section 7.5(ii)
will be deemed modified (without the consent of any Person) to the extent
necessary to incorporate by reference any such respective amendment,
modification or supplement to the Existing Parent Facility which contains
provisions more favorable to the Lenders; or
7.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) A court of competent jurisdiction shall enter a
decree or order for relief in respect of the Borrower or any of its Material
Subsidiaries in an involuntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect,
which decree or order is not stayed; or any other similar relief shall be
granted under any applicable federal or state law; or (ii) an involuntary case
shall be commenced against the Borrower or any of its Material Subsidiaries
under the Bankruptcy Code or under any other applicable bankruptcy, insolvency
or similar law now or hereafter in effect; or a decree or order of a court
having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having similar
powers over the Borrower or any of its Material Subsidiaries, or over all or a
substantial part of their respective property, shall have been entered; or there
shall have occurred the involuntary appointment of an interim receiver, trustee
or other custodian of the Borrower or any of its Material Subsidiaries for all
or a substantial part of their respective property; or a warrant of attachment,
execution or similar process shall have been issued against any substantial part
of the property of the Borrower or any of its Material Subsidiaries, and any
such event described in this clause (ii) shall continue for sixty (60) days
unless dismissed, bonded or discharged; or
7.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) The Borrower or any of its Material Subsidiaries
shall have an order for relief entered with respect to it or commence a
voluntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, or shall
consent to the entry of an order for relief in an involuntary case, or to the
conversion of an involuntary case to a voluntary case, under any such law, or
shall consent to the appointment of or taking possession by a receiver, trustee
or other custodian for all or a substantial part of its property; or the
Borrower or any of its Material Subsidiaries shall make any assignment for the
benefit of creditors; or (ii) the Borrower or any of its Material Subsidiaries
shall be unable, or shall fail generally, or shall admit in writing their
respective inability, to pay its debts as such debts become due; or the board of
directors (or similar governing body) of the Borrower or any of its Material
Subsidiaries (or any committee thereof) shall adopt any resolution or otherwise
authorize any action to approve any of the actions referred to in this Section
7.7 or in Section 7.6 above; or
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7.8 JUDGMENTS AND ATTACHMENTS.
Any money judgment, writ or warrant of attachment or similar process
involving in excess of $20,000,000 individually or $50,000,000 in the aggregate
(in each case not adequately covered by insurance as to which a solvent and
unaffiliated insurance company has acknowledged coverage) shall be entered or
filed against the Borrower or any of its Subsidiaries, or any of their
respective assets, and shall remain undischarged, unvacated, unbonded or
unstayed for a period of sixty (60) days (or in any event later than five (5)
days prior to the date of any proposed sale thereunder); or
7.9 DISSOLUTION.
Any order, judgment or decree shall be entered against the Borrower or
any of its Material Subsidiaries decreeing the dissolution or split up of such
Person; or
7.10 EMPLOYEE BENEFIT PLANS.
There shall occur one or more ERISA Events which individually or in the
aggregate results in or is reasonably be expected to result in liability of the
Borrower or any of its Subsidiaries or any of their respective ERISA Affiliates
in excess of $25,000,000 during the term of this Agreement; or the occurrence of
an event or condition that could reasonably be expected to result in the
imposition of a Lien or security interest under Section 412(n) of the Internal
Revenue Code or under ERISA; or
7.11 CHANGE IN CONTROL.
A Change of Control shall occur; or
7.12 REPUDIATION OF OBLIGATIONS.
At any time after the execution and delivery thereof, (i) the Guaranty
for any reason shall cease to be in full force and effect (other than by reason
of the satisfaction in full of the Obligations or the Guaranty Obligations, or
any other termination of the Guaranty in accordance with the terms thereof) or
shall be declared null and void, or any Guarantor shall repudiate in writing its
obligations thereunder, (ii) this Agreement for any reason shall cease to be in
full force and effect (other than by reason of the satisfaction in full of the
Obligations) or shall be declared null and void, or (iii) the Borrower or any
Guarantor shall contest the validity or enforceability of any Loan Document or
the Guaranty, or any Related Document, or deny in writing that it has any
further liability under any Loan Document to which it is a party; or
7.13 INSURANCE LICENSES.
Any one or more Insurance Licenses shall be suspended, revoked,
terminated, not renewed or limited, or any other action shall be taken by a
Governmental Authority, in
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$650,000,000 CREDIT AGREEMENT
each case which would reasonably be expected to have, either individually or in
the aggregate, a Material Adverse Effect;
THEN (i) upon the occurrence of any Event of Default described in Section 7.6 or
7.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans and (b) all other Obligations shall automatically become immediately due
and payable, without presentment, demand, protest or other requirements of any
kind, all of which are hereby expressly waived by the Borrower and (ii) upon the
occurrence and during the continuation of any other Event of Default, the
Administrative Agent shall, upon the written request or with the written consent
of the Requisite Lenders, by notice to the Borrower, declare all or any portion
of the amounts described in clauses (a) and (b) above to be, and the same shall
forthwith become, immediately due and payable.
SECTION 8. MISCELLANEOUS
8.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS AND NOTES.
A. RIGHT TO ASSIGN. Each Lender shall have the right at any time to
sell, assign or transfer all or a portion of its rights and obligations under
this Agreement, including, without limitation, all or a portion of its
Commitment or Loans owing to it or other Obligation (provided, however, that
each such assignment shall be of a uniform, and not varying, percentage of all
rights and obligations under and in respect of any Loan and any related
Commitment): (i) to any Person meeting the criteria of clause (A) of the
definition of the term of "Eligible Assignee" upon the giving of notice to the
Borrower and the Administrative Agent; and (ii) to any Person meeting the
criteria of clause (B) of the definition of the term of "Eligible Assignee" and
consented to by each of the Borrower and the Administrative Agent (such consent
not to be (x) unreasonably withheld or delayed or, (y) in the case of the
Borrower, required at any time an Event of Default shall have occurred and then
be continuing); provided, further each such assignment pursuant to this Section
8.1A shall be in an aggregate amount of not less than $1,000,000 (or such lesser
amount as may be agreed to by the Borrower and the Administrative Agent or as
shall constitute the aggregate amount of the Commitment and Loans of the
assigning Lender).
B. REQUIREMENTS. The assigning Lender and the assignee thereof shall
execute and deliver to the Administrative Agent an Assignment Agreement,
together with such forms, certificates or other evidence, if any, with respect
to United States federal income tax withholding matters as the assignee under
such Assignment Agreement may be required to deliver to the Administrative Agent
pursuant to Section 2.5B(iii) as if such assignee was a Lender pursuant to that
Section.
C. ACCEPTANCE AND NOTICE OF ASSIGNMENT. Upon its receipt of a duly
executed and completed Assignment Agreement, together with the processing and
recordation fee
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$650,000,000 CREDIT AGREEMENT
referred to in Section 8.1B (and any forms, certificates or other evidence
required by this Agreement in connection therewith), the Administrative Agent
shall record the information contained in such Assignment Agreement in the
Register, shall give prompt notice thereof to the Borrower and shall maintain a
copy of such Assignment Agreement.
D. REPRESENTATIONS AND WARRANTIES OF ASSIGNEE. Each Lender, upon
execution and delivery hereof or upon executing and delivering an Assignment
Agreement, as the case may be, represents and warrants as of the Closing Date or
as of the applicable Effective Date (as defined in the applicable Assignment
Agreement) that (i) it is an Eligible Assignee; (ii) it has experience and
expertise in the making of or investing in commitments or loans such as the
applicable Commitment or Loans, as the case may be; and (iii) it will make or
invest in, as the case may be, its Commitment or Loans for its own account in
the ordinary course of its business and without a view to distribution of such
Commitment or Loans within the meaning of the Securities Act or the Exchange Act
or other federal securities laws (it being understood that, subject to the
provisions of this Section 8.1, the disposition of such Commitment or Loans or
any interests therein shall at all times remain within its exclusive control).
E. EFFECT OF ASSIGNMENT. Subject to the terms and conditions of this
Section 8.1, as of the "Effective Date" specified in the applicable Assignment
Agreement: (i) the assignee thereunder shall have the rights and obligations of
a "Lender" hereunder to the extent such rights and obligations hereunder have
been assigned to it pursuant to such Assignment Agreement and shall thereafter
be a party hereto and a "Lender" for all purposes hereof; (ii) the assigning
Lender thereunder shall, to the extent that rights and obligations hereunder
have been assigned thereby pursuant to such Assignment Agreement, relinquish its
rights (other than any rights which survive the termination hereof under Section
8.8) and be released from its obligations hereunder (and, in the case of an
Assignment Agreement covering all or the remaining portion of an assigning
Lender's rights and obligations hereunder, such Lender shall cease to be a party
hereto; provided, anything contained in any of the Loan Documents to the
contrary notwithstanding, such assigning Lender shall continue to be entitled to
the benefit of all indemnities hereunder as specified herein with respect to
matters arising out of the prior involvement of such assigning Lender as a
Lender hereunder); (iii) the Commitments shall be modified to reflect the
Commitments of such assignee and of such assigning Lender, if any; and (iv) if
any such assignment occurs after the issuance of any Note hereunder, the
assigning Lender shall, upon the effectiveness of such assignment or as promptly
thereafter as practicable, surrender its applicable Notes to the Administrative
Agent for cancellation, and thereupon the Borrower shall issue and deliver a new
Note, if so requested by the assignee and/or assigning Lender, to such assignee
and/or to such assigning Lender, with appropriate insertions, to reflect the new
Commitments and/or outstanding Loans of the assignee and/or the assigning
Lender.
F. CERTAIN OTHER PERMITTED ASSIGNMENTS. In addition to any other
assignment permitted pursuant to this Section 8.1, (i) any Lender may assign
and/or pledge all or any
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portion of its Loans, the other Obligations owed by or to such Lender, and its
Notes, if any, to secure obligations of such Lender including, without
limitation, any Federal Reserve Bank as collateral security pursuant to
Regulation A of the Board of Governors of the Federal Reserve System and any
operating circular issued by such Federal Reserve Bank; provided, no Lender, as
between the Borrower and such Lender, shall be relieved of any of its
obligations hereunder as a result of any such assignment and pledge, and
provided further, in no event shall the applicable Federal Reserve Bank, pledgee
or trustee be considered to be a "Lender" or be entitled to require the
assigning Lender to take or omit to take any action hereunder.
G. ASSIGNMENT TO A SPECIAL PURPOSE FUNDING VEHICLE. Notwithstanding
anything to the contrary contained herein, any Lender (a "GRANTING LENDER") may
grant to a special purpose funding vehicle (a "SPFV"), identified as such in
writing from time to time by the Granting Lender to the Administrative Agent and
the Borrower, the option to provide to the Borrower all or any part of any Loan
that such Granting Lender would otherwise be obligated to make to the Borrower
pursuant to this Agreement; provided that (i) nothing herein shall constitute a
commitment by any SPFV to make any Loan, (ii) if an SPFV elects not to exercise
such option or otherwise fails to provide all or any part of such Loan, the
Granting Lender shall be obligated to make such Loan pursuant to the terms
hereof. The making of a Loan by an SPFV hereunder shall utilize the Commitment
of the Granting Lender to the same extent, and as if, such Loan were made by
such Granting Lender. Each party hereto hereby agrees that no SPFV shall be
liable for any indemnity or similar payment obligation under this Agreement (all
liability for which shall remain with the Granting Lender). In furtherance of
the foregoing, each party hereto hereby agrees (which agreement shall survive
the termination of this Agreement) that, prior to the date that is one year and
one day after the payment in full of all outstanding commercial paper or other
senior indebtedness of any SPFV, it will not institute against, or join any
other person in instituting against, such SPFV any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the United
States or any State thereof. In addition, notwithstanding anything to the
contrary contained in this Section 8.1G, any SPFV may (i) with notice to, but
without the prior written consent of, the Borrower and the Administrative Agent
and without paying any processing fee therefor, assign all or a portion of its
interests in any Loans to the Granting Lender or to any financial institutions
(consented to by the Borrower and Administrative Agent) providing liquidity
and/or credit support to or for the account of such SPFV to support the funding
or maintenance of Loans and (ii) disclose on a confidential basis any non-public
information relating to its Loans to any rating agency, commercial paper dealer
or provider of any surety, guarantee or credit or liquidity enhancement to such
SPFV.
H. PARTICIPATIONS. Each Lender shall have the right at any time to sell
one or more participations to any Person (other than the Borrower, any of its
Subsidiaries or any of its Affiliates, or any Guarantor, any of its Subsidiaries
or any of its Affiliates) in all or any part of its Commitment, Loans or in any
other Obligation. The holder of any such
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participation, other than an Affiliate of the Lender granting such
participation, shall not be entitled to require such Lender to take or omit to
take any action hereunder except with respect to any amendment, modification or
waiver that would (i) extend the final scheduled maturity of any Loan or Note in
which such participant is participating, or reduce the rate or extend the time
of payment of interest or fees thereon (except in connection with a waiver of
applicability of any post default increase in interest rates) or reduce the
principal amount thereof, or increase the amount of the participant's
participation over the amount thereof then in effect (it being understood that a
waiver of any Event of Default or of a mandatory reduction in the Commitments
shall not constitute a change in the terms of such participation, and that an
increase in any Commitment or Loan shall be permitted without the consent of any
participant if the participant's participation is not increased as a result
thereof), (ii) consent to the assignment or transfer by the Borrower of any of
its rights and obligations under this Agreement or (iii) release any or all of
the Guarantors from the Guaranty or terminate the Guaranty. The Borrower agrees
that each participant shall be entitled to the benefits of Sections 2.6C and 2.5
to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to Section 8.1A; provided, (i) a participant shall not be
entitled to receive any greater payment under Section 2.5 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such participant, unless the sale of the participation to such
participant is made with the Borrower's prior written consent and (ii) a
participant that would be a Non-US Lender if it were a Lender shall not be
entitled to the benefits of Section 2.5B unless the Borrower is notified of the
participation sold to such participant and such participant agrees, for the
benefit of the Borrower, to comply with Section 2.5B as though it were a Lender.
To the extent permitted by law, each participant also shall be entitled to the
benefits of Section 8.4 as though it were a Lender, provided such Participant
agrees to be subject to Section 8.18 as though it were a Lender.
8.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, the Borrower agrees to pay promptly (i) all actual and reasonable
costs and out-of-pocket expenses incurred by the Arranger and each Agent in
connection with the negotiation, preparation and execution of the Loan Documents
and the transactions contemplated thereby; (ii) all the costs of furnishing all
opinions by counsel for the Borrower and the Guarantors; (iii) the reasonable
fees, out-of-pocket expenses and disbursements of counsel to the Arranger and
the Agents in connection with the negotiation, preparation and execution of the
Loan Documents and any other documents or matters requested by the Borrower;
(iv) all actual and reasonable costs and out-of-pocket expenses incurred by the
Administrative Agent in connection with any consents, amendments, waivers or
other modifications of the Loan Documents (including the reasonable fees,
out-of-pocket expenses and disbursements of counsel to the Administrative Agent
in connection therewith); and (v) after the occurrence of an Event of Default,
all costs and expenses, including reasonable attorneys' fees and costs of
settlement, incurred by the Arranger, any Agent or Lender in enforcing any
Obligations of or in collecting any payments due
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from the Borrower hereunder or under the other Loan Documents by reason of such
Event of Default (including in connection with the sale of, collection from, or
other realization upon any collateral or the enforcement of the Guaranty) or in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in each case in the nature of a "work-out" or
pursuant to any insolvency or bankruptcy cases or proceedings.
8.3 INDEMNITY.
A. In addition to the payment of expenses pursuant to Section 8.2,
whether or not the transactions contemplated hereby shall be consummated, the
Borrower agrees to defend (subject to Indemnitees' selection of counsel),
indemnify, pay and hold harmless the Arranger, the Agents and each Lender, and
the respective partners, officers, directors, employees, agents, attorneys, and
affiliates of each of the Arranger and each of the Agents and each Lender
(collectively called the "INDEMNITEES"), from and against any and all
Indemnified Liabilities (as hereinafter defined); provided that the Borrower
shall not have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities arise from
the gross negligence or willful misconduct of that Indemnitee as determined by a
final judgment of a court of competent jurisdiction. As used herein,
"INDEMNIFIED LIABILITIES" means, collectively, any and all liabilities,
obligations, losses, damages (including natural resource damages), penalties,
actions, judgments, suits, claims (including Environmental Claims), costs,
expenses and disbursements of any kind or nature whatsoever (including the
reasonable fees and disbursements of counsel for Indemnitees in connection with
any investigative, administrative or judicial proceeding commenced or threatened
by any Person, whether or not any such Indemnitee shall be designated as a party
or a potential party thereto, and any fees or expenses incurred by Indemnitees
in enforcing this indemnity), whether direct, indirect or consequential and
whether based on any federal, state or foreign laws, statutes, rules or
regulations (including securities and commercial laws, statutes, rules or
regulations and Environmental Laws), on common law or equitable cause or on
contract or otherwise, that may be imposed on, incurred by, or asserted against
any such Indemnitee, in any manner relating to or arising out of this Agreement
or the other Loan Documents or the transactions contemplated hereby or thereby
(including the Lenders' agreements to make the Loans hereunder or the use or
intended use of the proceeds thereof, or any enforcement of any of the Loan
Documents).
B. To the extent that the undertakings to defend, indemnify, pay and
hold harmless set forth in this Section 8.3 may be unenforceable in whole or in
part because they are violative of any law or public policy, the Borrower shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
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C. To the extent permitted by applicable law, the Borrower and each of
its Subsidiaries shall not assert, and each hereby waives, any claim against the
Lenders, the Agents, the Arranger and their respective Affiliates, officers,
directors, employees, attorneys or agents, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) (whether or not the claim therefor is based on contract, tort or
duty imposed by any applicable legal requirement) arising out of, in connection
with, as a result of, or in any way related to, this Agreement or any other Loan
Document, any Related Agreement or any agreement or instrument contemplated
hereby or thereby or referred to herein or therein, the transactions
contemplated hereby or thereby, any Loan or the use of the proceeds thereof or
any act or omission or event occurring in connection therewith, and the Borrower
and each of its Subsidiaries hereby waives, releases and agrees not to ▇▇▇ upon
any such claim or any such damages, whether or not accrued and whether or not
known or suspected to exist in its favor.
8.4 SET-OFF.
In addition to any rights now or hereafter granted under applicable law
and not by way of limitation of any such rights, upon the occurrence and during
the continuance of any Event of Default, each of the Agents and each Lender, and
each of their respective Affiliates, is hereby authorized by the Borrower at any
time or from time to time subject to the consent of the Administrative Agent
(such consent not to be unreasonably withheld or delayed), without notice to the
Borrower or to any other Person (other than the Administrative Agent), any such
notice being hereby expressly waived, to set off and to appropriate and to apply
any and all deposits (general or special, including Indebtedness evidenced by
certificates of deposit, whether matured or unmatured, but not including trust
accounts) and any other Indebtedness at any time held or owing by such Agent or
such Lender, or their respective Affiliates, as the case may be, to or for the
credit or the account of the Borrower against and on account of any obligations
and liabilities of the Borrower to such Agent or such Lender under this
Agreement and the other Loan Documents which are then due and payable, including
all claims of any nature or description arising out of or connected with this
Agreement or any other Loan Document, irrespective of whether or not (i) such
Agent or such Lender shall have made any demand hereunder or (ii) said
obligations and liabilities, or any of them, may be unmatured.
8.5 AMENDMENTS AND WAIVERS.
No amendment, modification, termination or waiver of any provision of
this Agreement or of any other Loan Document, or consent to any departure by the
Borrower therefrom, shall in any event be effective without the written
concurrence of the Requisite Lenders; provided, (A) that no amendment,
modification, termination, waiver or consent shall, without the consent of each
Lender affected thereby: (i) extend the scheduled final maturity of any Loan or
Note, (ii) waive, reduce or postpone any scheduled repayment (but not
prepayment), (iii) reduce the rate of interest on any Loan or any fee or other
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amount payable hereunder, (iv) extend the time for payment of any such interest
or fees, (v) reduce the principal amount of any Loan or Note, (vi) amend,
modify, terminate or waive any provision of this Section 8.5, (vii) amend,
modify or replace the definition of "Requisite Lenders" or "Pro Rata Share",
(viii) release any or all of the Guarantors from the Guaranty or terminate the
Guaranty (it being understood that any amendment, modification or waiver of any
provision of the Guaranty shall be in accordance with Section 3.5 thereof) or
(ix) consent to the assignment or transfer by the Borrower of any of its rights
and obligations under this Agreement; (B) that no such amendment, modification,
termination or waiver of any provision of the Loan Documents, or consent to any
departure by the Borrower therefrom, shall: (i) increase the Commitment of any
Lender over the amount thereof then in effect without the consent of such Lender
or (ii) amend, modify, terminate or waive any provision of this Agreement as the
same applies to the rights or obligations of any Agent, in each case without the
consent of such Agent; and (C) that no amendment, modification, waiver or
consent shall, without the prior written consent of the Guarantors: (i) extend
the scheduled final maturity of any Loan or Note, (ii) increase the rate of
interest on any Loan, (iii) increase the principal amount of any Loan or Note or
(iv) amend, modify, terminate or waive any provision of this proviso (C) to
Section 8.5. The Administrative Agent may, but shall have no obligation to, with
the concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of such Lender. Any waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it was given. No
notice to or demand on the Borrower in any case shall entitle the Borrower to
any other or further notice or demand in similar or other circumstances.
8.6 INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
8.7 NOTICES.
Unless otherwise specifically provided herein, all notices or other
communications provided for hereunder between the Borrower and any other Person
party hereto shall be in writing (including telecopier or electronic mail) and
mailed, sent by overnight courier, telecopied, e-mailed, or delivered to, in the
case of each signatory to this Agreement, at its address set forth on the
signature pages hereto, or, as to each party, at such other address or to such
other person as shall be designated by such party in a written notice to all
other parties. Any notice, request or demand to or upon the Borrower or any
other Person party hereto shall not be effective until received.
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8.8 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
hereunder.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of the Borrower set forth in Sections 2.5, 2.6C, 8.2,
8.3 and 8.4 and the Agreements of the Lenders set forth in Sections 8.18, 9.2C
and 9.4 shall survive the payment of the Loans and the termination of this
Agreement.
8.9 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of the Arranger, any Agent or any
Lender in the exercise of any power, right or privilege hereunder or under any
other Loan Document shall impair such power, right or privilege or be construed
to be a waiver of any default or acquiescence therein, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. The rights, powers
and remedies given to the Arranger, each Agent and each Lender hereby are
cumulative and shall be in addition to and independent of all rights, powers and
remedies existing by virtue of any statute or rule of law or in any of the other
Loan Document or any Related Agreement. Any forbearance or failure to exercise,
and any delay in exercising, any right, power or remedy hereunder shall not
impair any such right, power or remedy or be construed to be a waiver thereof,
nor shall it preclude the further exercise of any such right, power or remedy.
8.10 MARSHALLING; PAYMENTS SET ASIDE.
No Agent or Lender shall be under any obligation to marshal any assets
in favor of the Borrower or any other Person or against or in payment of any or
all of the Obligations. To the extent that the Borrower makes a payment or
payments to the Administrative Agent or the Lenders (or to the Administrative
Agent, on behalf of the Lenders) or the Administrative Agent or the Lenders
enforce any security interests or exercises their rights of setoff, and such
payment or payments or the proceeds of such enforcement or setoff or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside and/or required to be repaid to a trustee, receiver or any other party
under any bankruptcy law, any other state or federal law, common law or any
equitable cause, then, to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied, and all Liens, rights and remedies
therefor or related thereto, shall be revived and continued in full force and
effect as if such payment or payments had not been made or such enforcement or
setoff had not occurred.
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8.11 SEVERABILITY.
In case any provision in or obligation under this Agreement or the
Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
8.12 HEADINGS.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
8.13 APPLICABLE LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
8.14 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of the Agents and the Lenders (it being
understood that each Lender's rights of assignment are subject to Section 8.1).
Except as part of the Assurant Reincorporation and upon compliance with Section
5.9(ii), the Borrower may not assign or delegate its rights or obligations
hereunder or any interest therein without the prior written consent of each
Lender. Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, Affiliates of each of the Agents and the Lenders) any legal
or equitable right, remedy or claim under or by reason of this Agreement.
8.15 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST THE BORROWER ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇ IN ANY COURT LOCATED
IN ITS OWN CORPORATE DOMICILE. BY EXECUTING AND DELIVERING THIS AGREEMENT, THE
BORROWER, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
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(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, TO THE BORROWER AT ITS ADDRESS PROVIDED
IN ACCORDANCE WITH SECTION 8.7;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE
IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE BORROWER IN ANY
SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE
AND BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT EACH AGENT AND EACH LENDER RETAINS THE
RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING
PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER
JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SECTION 8.15
RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO
THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW
SECTION 5-1402 OR OTHERWISE.
8.16 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver
is intended to be all-encompassing of any and all disputes that may be filed in
any court and that relate to the subject matter of this transaction, including
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each party hereto acknowledges that this waiver is a material
inducement to enter into a business relationship, that each has already relied
on this waiver in entering into this Agreement, and that each will continue to
rely on this waiver in their related future dealings. Each party hereto further
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warrants and represents that it has reviewed this waiver with its legal counsel
and that it knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SECTION 8.16 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
8.17 CONFIDENTIALITY.
Each Lender shall hold all non-public information regarding the
Borrower and its Subsidiaries and their businesses in accordance with such
Lender's customary procedures for handling confidential information of this
nature and in accordance with safe and sound banking practices, it being
understood and agreed by the Borrower that in any event each Lender may make
disclosures (i) to Affiliates of such Lender and their agents and advisors (and
to other persons authorized by a Lender to organize, present or disseminate such
information in connection with disclosures otherwise made in accordance with
this Section 8.17); (ii) reasonably required by any bona fide or potential
assignee, transferee or participant in connection with the contemplated
assignment, transfer or participation by any Lender of its Loans or any interest
therein, provided that, prior to any disclosure, such Persons to whom such
disclosure is made will be informed of the confidential nature of such
information and instructed to keep such information confidential; (iii) to any
rating agency when required by it, provided that, prior to any disclosure, such
rating agency shall undertake in writing to preserve the confidentiality of any
confidential information relating to the Borrower or its Subsidiaries received
by it from any of the Agents or any Lender; and (iv) required or requested by
any governmental agency or representative thereof or by the NAIC or pursuant to
legal process; provided that unless specifically prohibited by applicable law or
court order, each Lender shall make reasonable efforts to notify the Borrower of
any request by any governmental agency or representative thereof (other than any
such request in connection with any examination of the financial condition or
other routine examination of such Lender by such governmental agency) for
disclosure of any such non-public information prior to disclosure of such
information; and provided, further that in no event shall any Lender be
obligated or required to return any materials furnished by the Borrower or any
of its Subsidiaries. Notwithstanding anything to the contrary set forth herein,
each party (and each of their respective employees, representatives or other
agents) may disclose to any and all persons, without limitations of any kind,
the tax treatment and tax structure of the transactions contemplated by this
Agreement and all materials of any kind (including opinions and other tax
analyses) that are provided to any such party relating to such tax
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treatment and tax structure. However, any information relating to the tax
treatment or tax structure shall remain subject to the confidentiality
provisions hereof (and the foregoing sentence shall not apply) to the extent
reasonably necessary to comply with applicable securities laws. For this
purpose, "tax structure" means any facts relevant to the federal income tax
treatment of the transactions contemplated by this Agreement but does not
include information relating to the identity of any of the parties hereto or any
of their respective Affiliates.
8.18 RATABLE SHARING.
The Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms hereof), through the exercise of any
right of set-off or banker's lien, by counterclaim or cross action or by the
enforcement of any right under the Loan Documents or otherwise, or as adequate
protection of a deposit treated as cash collateral under the Bankruptcy Code,
receive payment or reduction of a proportion of the aggregate amount of
principal, interest, amounts payable in respect of facility fees or commitment
fees and other amounts then due and owing to such Lender hereunder or under the
other Loan Documents (collectively, the "AGGREGATE AMOUNTS DUE" to such Lender),
which is greater than the proportion received by any other Lender in respect to
of the Aggregate Amounts Due to such other Lender, then the Lender receiving
such proportionately greater payment shall (i) notify the Administrative Agent
and each other Lender of the receipt of such payment and (ii) apply a portion of
such payment to purchase participations (which it shall be deemed to have
purchased from each seller of a participation simultaneously upon the receipt by
such seller of its portion of such payment) in the Aggregate Amounts Due to the
other Lenders so that all such recoveries of Aggregate Amounts Due shall be
shared by all Lenders in proportion to the Aggregate Amounts Due to them;
provided that, if all or part of such proportionately greater payment received
by such purchasing Lender is thereafter recovered from such Lender upon the
bankruptcy or reorganization of the Borrower or otherwise, those purchases shall
be rescinded and the purchase prices paid for such participations shall be
returned to such purchasing Lender ratably to the extent of such recovery, but
without interest. The Borrower and each of its Subsidiaries expressly consents
to the foregoing arrangement and agrees that any holder of a participation so
purchased may exercise any and all rights of banker's lien, set-off or
counterclaim with respect to any and all monies owing by the Borrower or any of
its Subsidiaries to that holder with respect thereto as fully as if that holder
were owed the amount of the participation held by that holder.
8.19 COUNTERPARTS; EFFECTIVENESS.
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same instrument.
This Agreement shall become
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effective upon the execution of a counterpart hereof by each of the parties
hereto and receipt by the Administrative Agent of written or telephonic
notification of such execution and authorization of delivery thereof.
8.20 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
The obligations of the Lenders hereunder are several and no Lender
shall be responsible for the obligations or Commitment of any other Lender
hereunder. Nothing contained herein or in any other Loan Document, and no action
taken by any of the Lenders pursuant hereto or thereto, shall be deemed to
constitute any of the Lenders as a partnership, an association, a joint venture
or any other kind of entity. The amounts payable at any time hereunder to each
Lender shall be a separate and independent debt, and each Lender shall be
entitled to protect and enforce its rights arising hereunder and it shall not be
necessary for any other Lender to be joined as an additional party in any
proceeding for such purpose.
8.21 USURY SAVINGS CLAUSE.
Notwithstanding any other provision herein, the aggregate interest rate
charged with respect to any of the Obligations, including all charges or fees in
connection therewith deemed in the nature of interest under applicable law shall
not exceed the Highest Lawful Rate. As used herein, "HIGHEST LAWFUL RATE" means
the maximum lawful interest rate, if any, that at any time or from time to time
may be contracted for, charged, or received under the laws applicable to any
Lender which are presently in effect or, to the extent allowed by law, under
such applicable laws which may hereafter be in effect and which allow a higher
maximum nonusurious interest rate than applicable laws now allow. If the rate of
interest (determined without regard to the preceding sentence) under this
Agreement at any time exceeds the Highest Lawful Rate, the outstanding amount of
the Loans made hereunder shall bear interest at the Highest Lawful Rate until
the total amount of interest due hereunder equals the amount of interest which
would have been due hereunder if the stated rates of interest set forth in this
Agreement had at all times been in effect. In addition, if when the Loans made
hereunder are repaid in full the total interest due hereunder (taking into
account the increase provided for above) is less than the total amount of
interest which would have been due hereunder if the stated rates of interest set
forth in this Agreement had at all times been in effect, then to the extent
permitted by law, the Borrower shall pay to the Administrative Agent an amount
equal to the difference between the amount of interest paid and the amount of
interest which would have been paid if the Highest Lawful Rate had at all times
been in effect. Notwithstanding the foregoing, it is the intention of the
Lenders and the Borrower to conform strictly to any applicable usury laws.
Accordingly, if any Lender contracts for, charges, or receives any consideration
which constitutes interest in excess of the Highest Lawful Rate, then any such
excess shall be cancelled automatically and, if previously paid, shall at such
Lender's option be applied to the outstanding amount of the Loans made hereunder
or be refunded to the Borrower.
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SECTION 9. AGENTS
9.1 APPOINTMENT.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corp. is hereby appointed as Syndication Agent
hereunder, and each Lender hereby authorizes Syndication Agent to act as its
agent in accordance with the terms of this Agreement and the other Loan
Documents. Credit Suisse First Boston (acting through its Cayman Islands Branch)
is hereby appointed as Documentation Agent hereunder, and each Lender hereby
authorizes Documentation Agent to act as its agent in accordance with the terms
of this Agreement and the other Loan Documents. MSSF is hereby appointed by each
Lender as the Administrative Agent hereunder and under the other Loan Documents
and each Lender hereby authorizes the Administrative Agent to act as its
contractual representative in accordance with the terms of this Agreement and
the other Loan Documents. Each Agent hereby agrees to act upon the express
conditions contained in this Agreement and the other Loan Documents, as
applicable. The provisions of this Section 9 are solely for the benefit of the
Agents and the Lenders, and the Borrower shall have no rights as a third party
beneficiary of any of the provisions thereof. In performing its functions and
duties under this Agreement, each of the Agents shall act solely as an agent of
the Lenders and does not assume and shall not be deemed to have assumed any
obligation towards or relationship of agency or trust with or for the Borrower
or any of its Subsidiaries or any Guarantor.
9.2 POWERS AND DUTIES; GENERAL IMMUNITY.
▇. ▇▇▇▇▇▇; DUTIES SPECIFIED. Each Lender irrevocably authorizes each
Agent to take such action on such Lender's behalf and to exercise such powers,
rights and remedies hereunder and under the other Loan Documents as are
specifically delegated or granted to such Agent by the terms hereof and thereof,
together with such powers, rights and remedies as are reasonably incidental
thereto. Each Agent shall have only those duties and responsibilities that are
expressly specified in this Agreement and the other Loan Documents. Each Agent
may exercise such powers, rights and remedies and perform such duties by or
through its agents, employees and shall not be answerable to the Lenders, except
as to money or securities received by it or its authorized agents, for the
default or misconduct of any such agent, employee or attorney-in-fact selected
by it with reasonable care. Each Agent shall be entitled to advice of counsel
concerning the contractual arrangement between such Agent and the Lenders and
all matters pertaining to such Agent's duties hereunder and under any other Loan
Document. No Agent shall have, by reason of this Agreement or any of the other
Loan Documents, a fiduciary relationship in respect of any Lender; and nothing
in this Agreement or any of the other Loan Documents, expressed or implied, is
intended to or shall be so construed as to impose upon any Agent any obligations
in respect of this Agreement or any of the other Loan Documents except as
expressly set forth herein or therein. In its capacity as the Lenders'
contractual representative, the Administrative Agent is acting as an independent
contractor, the rights and duties of which are limited to those expressly set
forth in this
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$650,000,000 CREDIT AGREEMENT
Agreement and the other Loan Documents. Each of the Lenders hereby agrees to
assert no claim against any Agent on any agency theory or any other theory of
liability for breach of fiduciary duty, all of which claims each Lender hereby
waives.
B. NO RESPONSIBILITY FOR CERTAIN MATTERS. No Agent shall be responsible
to any Lender for the execution, effectiveness, genuineness, validity,
enforceability, collectability or sufficiency of this Agreement or any other
Loan Document or any other document or instrument furnished in connection
herewith or therewith, or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by any Agent to the Lenders or by or on
behalf of the Borrower to any Agent or any Lender in connection with the Loan
Documents and the transactions contemplated thereby or for the financial
condition or business affairs of the Borrower or any other Person liable for the
payment of any Obligations or any Subsidiary or Affiliate of the Borrower or any
such Person, nor shall any Agent be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions, covenants
or agreements contained in any of the Loan Documents or as to the use of the
proceeds of the Loans or as to the existence or possible existence of any Event
of Default or Potential Event of Default or to make disclosures with respect to
the foregoing. Anything contained in this Agreement to the contrary
notwithstanding, the Administrative Agent shall not have any liability arising
from confirmations of the amount of outstanding Loans or the component amounts
thereof.
C. EXCULPATORY PROVISIONS. No Agent nor any of its officers, partners,
directors, employees or agents shall be liable to the Lenders for any action
taken or omitted by any Agent under or in connection with any of the Loan
Documents except to the extent determined in a final non-appealable judgment by
a court of competent jurisdiction to have arisen from such Agent's gross
negligence or willful misconduct. Each Agent shall be entitled to refrain from
any act or the taking of any action (including the failure to take an action) in
connection with this Agreement or any of the other Loan Documents or from the
exercise of any power, discretion or authority vested in it hereunder or
thereunder unless and until such Agent shall have received written instructions
in respect thereof from the Requisite Lenders (or such other number of Lenders
as may be required to give such instructions under Section 8.5) and, upon
receipt of such instructions from the Requisite Lenders (or such other Lenders,
as the case may be), such Agent shall be entitled to act or (where so
instructed) refrain from acting, or to exercise such power, discretion or
authority, in accordance with such instructions. Without prejudice to the
generality of the foregoing, (i) each Agent shall be entitled to rely, and shall
be fully protected in relying, upon any communication, instrument or document
believed by it to be genuine and correct and to have been signed or sent by the
proper Person or Persons, and shall be entitled to rely and shall be protected
in relying on opinions and judgments of attorneys (who may be attorneys for the
Borrower and its Subsidiaries or employees of any Agent), accountants, experts
and other professional advisors selected by it; and (ii)
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$650,000,000 CREDIT AGREEMENT
no Lender shall have any right of action whatsoever against any Agent as a
result of such Agent acting or (where so instructed) refraining from acting
under this Agreement or any of the other Loan Documents in accordance with the
instructions of the Requisite Lenders (or such other number of Lenders as may be
required to give such instructions under Section 8.5).
D. ADMINISTRATIVE AGENT ENTITLED TO ACT AS LENDER. The agency hereby
created shall in no way impair or affect any of the rights and powers of, or
impose any duties or obligations upon, any Agent in its individual capacity as a
Lender hereunder. With respect to its participation in the Loans, each Agent
shall have the same rights and powers hereunder as any other Lender and may
exercise the same as though it were not performing the duties and functions
delegated to it hereunder, and the term "Lender" shall, unless the context
clearly otherwise indicates, include each Agent in its individual capacity. Any
Agent and its Affiliates may accept deposits from, lend money to, own Securities
of, and generally engage in any kind of banking, trust, financial advisory or
other business with the Borrower or any of its Affiliates as if it were not
performing the duties specified herein, and may accept fees and other
consideration from the Borrower for services in connection with this Agreement
and otherwise without having to account for the same to the Lenders.
E. ARRANGER; BOOKRUNNER, ETC. Except as otherwise expressly set forth
in this Agreement, the Arranger, the Bookrunner, the Documentation Agent and the
Syndication Agent shall not have any duties or responsibilities under the Loan
Documents in their respective capacities as such.
9.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
CREDITWORTHINESS.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of the Borrower
and its Subsidiaries in connection with the making of the Loans hereunder and
that it has made and shall continue to make its own appraisal of the
creditworthiness of the Borrower and its Subsidiaries. No Agent shall have any
duty or responsibility, either initially or on a continuing basis, to make any
such investigation or any such appraisal on behalf of the Lenders or to provide
any Lender with any credit or other information with respect thereto, whether
coming into its possession before the making of the Loans or at any time or
times thereafter, and no Agent shall have any responsibility with respect to the
accuracy of or the completeness of any information provided to the Lenders.
9.4 RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify each Agent, to the extent that such Agent shall not have been
reimbursed by the Borrower, for and against any and all liabilities,
obligations, losses, damages, penalties,
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$650,000,000 CREDIT AGREEMENT
actions, judgments, suits, costs, expenses (including counsel fees and
disbursements) or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against such Agent in exercising its powers,
rights and remedies or performing its duties hereunder or under the other Loan
Documents or otherwise in its capacity as such Agent in any way relating to or
arising out of this Agreement or the other Loan Documents (including for any
such amounts incurred by or asserted against such Agent in connection with any
dispute between such Agent and any Lender or between two or more Lenders);
provided that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements to the extent any of the foregoing is found in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Agent's gross negligence or willful misconduct. If any indemnity
furnished to any Agent for any purpose shall, in the opinion of such Agent, be
insufficient or become impaired, such Agent may call for additional indemnity
and cease, or not commence, to do the acts indemnified against until such
additional indemnity is furnished.
9.5 SUCCESSOR ADMINISTRATIVE AGENT.
The Administrative Agent may resign at any time by giving thirty (30)
days' prior written notice thereof to the Lenders and the Borrower, and the
Administrative Agent may be removed at any time with or without cause by an
instrument or concurrent instruments in writing delivered to the Borrower and
the Administrative Agent and signed by the Requisite Lenders. Upon any such
notice of resignation or any such removal, the Requisite Lenders shall have the
right to select a successor Administrative Agent, with the consent of the
Borrower (which consent shall not be unreasonably withheld or delayed);
provided, that the Borrower's consent shall not be required for the Requisite
Lenders to appoint any Lender as the Administrative Agent or at any time that an
Event of Default shall have occurred and be continuing. Upon the acceptance of
any appointment as the Administrative Agent hereunder by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Administrative Agent and the retiring or removed
Administrative Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring or removed Administrative Agent's resignation
or removal hereunder as the Administrative Agent, the provisions of this Section
9 shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was the Administrative Agent under this Agreement.
9.6 GUARANTY.
Each Lender hereby further authorizes the Administrative Agent, on
behalf of and for the benefit of the Lenders, to enter into, and to be the agent
for and representative of the Lenders under, the Guaranty and each Lender agrees
to be bound by the terms of the Guaranty; provided, that, except as otherwise
provided in the Guaranty, the Administrative Agent shall not enter into or
consent to any amendment, modification,
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$650,000,000 CREDIT AGREEMENT
termination or waiver of any provision contained in the Guaranty without the
prior consent of the Requisite Lenders. Anything contained in any of the Loan
Documents to the contrary notwithstanding, the Borrower, the Administrative
Agent and each Lender hereby agree that no Lender shall have any right
individually to enforce the Guaranty, it being understood and agreed that all
powers, rights and remedies hereunder and under the Guaranty may be exercised
solely by the Administrative Agent for the benefit of the Lenders in accordance
with the terms hereof and thereof.
9.7 ACKNOWLEDGMENT OF POTENTIAL RELATED TRANSACTIONS.
The Borrower hereby acknowledges its understanding that the Arranger,
each of the Agents and each of the Lenders may from time to time effect
transactions (for its own account or the account of customers), and hold
positions in loans or options on loans that may be the subject of this
arrangement. In addition, certain Affiliates of the Lenders are full service
securities firms and as such may from time to time effect transactions (for
their own account or the account of customers), and hold positions, in loans or
options on loans or securities or options on securities that may be the subject
of this arrangement. In addition, the Arranger, each of the Agents and each of
the Lenders may employ the services of its affiliates in providing certain
services hereunder and may exchange with such affiliates information concerning
the Borrower and other companies that may be the subject of this arrangement.
[Remainder of page intentionally left blank]
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$650,000,000 CREDIT AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
FORTIS, INC.
By: /s/ Miles ▇. ▇▇▇▇▇
-----------------------------------------
Name: Miles Yakre
Title: Vice President/Treasurer
Notice Address:
Fortis, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
S-650M
$650,000,000 CREDIT AGREEMENT
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.,
as Lender, Bookrunner, Arranger and
Administrative Agent
By: /s/ Jaap L. Tonckens
-----------------------------------------
Name: Jaap L. Tonckens
Title: Vice President
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING
Funding and Payment Office/Notice Address:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Tel. (▇▇▇) ▇▇▇-▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇ / 1866
S-650M
$650,000,000 CREDIT AGREEMENT
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL CORP.,
as Syndication Agent
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
Notice Address:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corp.
4 World Financial Center
16th Floor, D0829
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ BANK USA,
as Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Notice Address: with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Bank USA ▇▇▇▇▇▇▇ ▇▇▇▇▇ Loan Portfolio Management
▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇ 4 World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
S-650M
$650,000,000 CREDIT AGREEMENT
CREDIT SUISSE FIRST BOSTON
(ACTING THROUGH ITS CAYMAN ISLANDS BRANCH),
as Lender and Documentation Agent
By: /s/ ▇▇▇ ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇ ▇▇▇▇▇
Title: Director
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Director
Notice Address:
Credit Suisse First Boston
One Madison Avenue, 2nd Floor
New York, New York 10010
Attention: ▇▇ ▇▇▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
S-650M
$650,000,000 CREDIT AGREEMENT
SCHEDULE 2.1
(LENDERS' COMMITMENTS AND PRO RATA SHARES)
LENDER COMMITMENT PRO RATA SHARE
----------------------------------- --------------- --------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc. $325,000,000.00 50%
▇▇▇▇▇▇▇ ▇▇▇▇▇ Bank USA $162,500,000.00 25%
Credit Suisse First Boston (acting $162,500,000.00 25%
through its Cayman Islands branch)
TOTAL $650,000,000.00 100%