Exhibit 10.26
THREE YEAR CREDIT AGREEMENT
DATED AS OF JANUARY 30, 2004
AMONG
ASSURANT, INC.,
AS BORROWER,
THE BANKS AND FINANCIAL INSTITUTIONS LISTED HEREIN,
AS LENDERS,
BANK ONE, NA
AS ADMINISTRATIVE AGENT,
CITICORP NORTH AMERICA INC.,
AS SYNDICATION AGENT,
AND
XXXXXX XXXXXXX SENIOR FUNDING, INC.
AND
JPMORGAN CHASE BANK,
AS CO-DOCUMENTATION AGENTS
CITIGROUP GLOBAL MARKETS INC.
AND
BANC ONE CAPITAL MARKETS, INC.,
JOINT LEAD ARRANGERS AND JOINT BOOKRUNNERS
CREDIT AGREEMENT
TABLE OF CONTENTS
PAGE
Section 1. DEFINITIONS................................................................................... 1
1.1 Certain Defined Terms......................................................................... 1
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement............ 17
1.3 Other Definitional Provisions and Rules of Construction....................................... 17
Section 2. AMOUNT AND TERMS OF COMMITMENTS AND LOANS..................................................... 18
2.1 Commitment; Making of Loan; Notes............................................................. 18
2.2 Interest on the Loans......................................................................... 19
2.3 Fees.......................................................................................... 22
2.4 Repayments and Prepayments; General Provisions Regarding Payments............................. 22
2.5 Increased Costs; Taxes........................................................................ 24
2.6 Special Provisions Governing LIBOR Loans...................................................... 28
2.7 Removal or Replacement of a Lender............................................................ 29
2.8 Mitigation.................................................................................... 30
Section 3. CONDITIONS PRECEDENT.......................................................................... 30
3.1 Conditions to Initial Loans................................................................... 30
3.2 Conditions to each Loan....................................................................... 33
Section 4. BORROWER'S REPRESENTATIONS AND WARRANTIES..................................................... 33
4.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries................. 34
4.2 Authorization of Borrowing, etc............................................................... 34
4.3 Financial Condition........................................................................... 35
4.4 No Material Adverse Change.................................................................... 36
4.5 Title to Properties; Liens.................................................................... 36
4.6 No Litigation; Compliance with Laws........................................................... 36
4.7 Payment of Taxes.............................................................................. 37
4.8 No Default.................................................................................... 37
4.9 Governmental Regulation....................................................................... 37
4.10 Securities Activities......................................................................... 37
4.11 Employee Benefit Plans........................................................................ 38
-i-
TABLE OF CONTENTS
(continued)
PAGE
4.12 Certain Fees.................................................................................. 38
4.13 Environmental Protection...................................................................... 39
4.14 Solvency...................................................................................... 39
4.15 Restrictions.................................................................................. 39
4.16 Insurance Licenses............................................................................ 39
4.17 Disclosure.................................................................................... 40
Section 5. BORROWER'S AFFIRMATIVE COVENANTS.............................................................. 40
5.1 Financial Statements and Other Reports........................................................ 40
5.2 Books and Records............................................................................. 43
5.3 Existence..................................................................................... 43
5.4 Insurance..................................................................................... 43
5.5 Payment of Taxes and Claims................................................................... 44
5.6 Maintenance of Properties..................................................................... 44
5.7 Compliance with Laws.......................................................................... 44
5.8 Use of Proceeds............................................................................... 44
5.9 Claims Pari Passu............................................................................. 45
Section 6. BORROWER'S NEGATIVE COVENANTS................................................................. 45
6.1 Liens......................................................................................... 45
6.2 Indebtedness.................................................................................. 47
6.3 Acquisitions; Certain Investments............................................................. 47
6.4 Restrictions on Subsidiary Distributions...................................................... 48
6.5 Restricted Payments........................................................................... 48
6.6 Restriction on Fundamental Changes and Asset Sales............................................ 49
6.7 Conduct of Business........................................................................... 49
6.8 Transactions with Shareholders and Affiliates................................................. 49
6.9 Financial Covenants........................................................................... 50
Section 7. EVENTS OF DEFAULT............................................................................. 51
7.1 Failure to Make Payments When Due............................................................. 51
7.2 Default in Other Agreements................................................................... 51
7.3 Breach of Certain Covenants................................................................... 51
-ii-
TABLE OF CONTENTS
(continued)
PAGE
7.4 Breach of Warranty............................................................................ 51
7.5 Other Defaults Under Loan Documents........................................................... 52
7.6 Involuntary Bankruptcy; Appointment of Receiver, etc.......................................... 52
7.7 Voluntary Bankruptcy; Appointment of Receiver, etc............................................ 52
7.8 Judgments and Attachments..................................................................... 53
7.9 Dissolution................................................................................... 53
7.10 Employee Benefit Plans........................................................................ 53
7.11 Change in Control............................................................................. 53
7.12 Repudiation of Obligations.................................................................... 53
7.13 Insurance Licenses............................................................................ 53
Section 8. MISCELLANEOUS................................................................................. 54
8.1 Assignments and Participations in Loans and Notes............................................. 54
8.2 Expenses...................................................................................... 57
8.3 Indemnity..................................................................................... 57
8.4 Set-Off....................................................................................... 58
8.5 Amendments and Waivers........................................................................ 59
8.6 Independence of Covenants..................................................................... 59
8.7 Notices....................................................................................... 59
8.8 Survival of Representations, Warranties and Agreements........................................ 60
8.9 Failure or Indulgence Not Waiver; Remedies Cumulative......................................... 60
8.10 Marshalling; Payments Set Aside............................................................... 60
8.11 Severability.................................................................................. 60
8.12 Headings...................................................................................... 61
8.13 Applicable Law................................................................................ 61
8.14 Successors and Assigns........................................................................ 61
8.15 Consent to Jurisdiction and Service of Process................................................ 61
8.16 Waiver of Jury Trial.......................................................................... 62
8.17 Confidentiality............................................................................... 62
8.18 Ratable Sharing............................................................................... 63
8.19 Counterparts.................................................................................. 64
-iii-
TABLE OF CONTENTS
(continued)
PAGE
8.20 Obligations Several; Independent Nature of Lenders' Rights.................................... 64
8.21 Usury Savings Clause.......................................................................... 64
Section 9. AGENTS........................................................................................ 65
9.1 Appointment................................................................................... 65
9.2 Powers and Duties; General Immunity........................................................... 65
9.3 Representations and Warranties; No Responsibility For Appraisal of Creditworthiness........... 67
9.4 Right to Indemnity............................................................................ 67
9.5 Successor Administrative Agent................................................................ 67
9.6 Acknowledgment of Potential Related Transactions.............................................. 68
9.7 Non-Receipt of Funds by the Administrative Agent.............................................. 68
-iv-
TABLE OF CONTENTS
(continued)
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 GENERAL COUNSEL
IV-B FORM OF OPINION OF BORROWER'S NEW YORK COUNSEL
V FORM OF CERTIFICATE RE NON-BANK STATUS
VI FORM OF FINANCIAL CONDITION CERTIFICATE
VII FORM OF ASSIGNMENT AGREEMENT
VIII FORM OF PARENT SUBORDINATION AGREEMENT
-iv-
TABLE OF CONTENTS
(continued)
SCHEDULES
1.1 PRICING SCHEDULE
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
4.1C SUBSIDIARIES
4.6 LITIGATION
4.11 ERISA
6.4 APPLICABLE ORDERS AND AGREEMENTS
6.8 TRANSACTIONS WITH AFFILIATES
-v-
THREE YEAR CREDIT AGREEMENT
This THREE YEAR CREDIT AGREEMENT dated as of January 30, 2004 is
entered into among Assurant, Inc., a Delaware corporation (the "BORROWER"), the
banks and financial institutions listed on the signature pages hereof (together
with their respective successors and assigns, individually each a "LENDER" and
collectively the "LENDERS"), Bank One, NA, having its main office in Chicago,
Illinois ("BANK ONE"), as administrative agent for the Lenders (in such
capacity, the "ADMINISTRATIVE AGENT"), Citicorp North America Inc., as
syndication agent (in such capacity, the "SYNDICATION AGENT"), and Xxxxxx
Xxxxxxx Senior Funding, Inc. and JPMorgan Chase Bank, as co-documentation agents
(in such capacity, the "CO-DOCUMENTATION AGENTS").
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 Syndication
Agent, the Co-Documentation Agents 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:
"ADMINISTRATIVE AGENT" is defined in the introduction to this
Agreement.
"ADMINISTRATIVE QUESTIONNAIRE" means an administrative questionnaire,
substantially in the form supplied by the Administrative Agent, completed by a
Lender and furnished to the Administrative Agent in connection with this
Agreement.
"AFFECTED LENDER" is defined in Section 2.6B.
"AFFECTED LOANS" is defined in Section 2.6B.
"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.
1
$500,000,000 THREE YEAR CREDIT AGREEMENT
"AGENTS" means the Administrative Agent, the Syndication Agent and the
Co-Documentation Agents, collectively, and also means and includes any successor
Administrative Agent appointed pursuant to Section 9.5.
"AGREEMENT" means this Credit Agreement.
"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" means a percentage per annum determined by
reference to Schedule 1.1.
"APPLICABLE RESERVE REQUIREMENT" means, at any time, for any LIBOR
Loan, the maximum rate, expressed as a decimal, at which reserves (including 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 FRB 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 Loans. A LIBOR 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 Loans
shall be adjusted automatically on and as of the effective date of any change in
the Applicable Reserve Requirement.
"ARRANGERS" means Banc One Capital Markets, Inc. and Citigroup Global
Markets Inc.
"ASSIGNMENT AGREEMENT" means an Assignment Agreement substantially in
the form of Exhibit VII, with such amendments or modifications as may be
approved by the Administrative Agent.
"ASSURANT COMMERCIAL PAPER DEBT" means short-term Indebtedness incurred
by the Borrower pursuant to the Borrower's commercial paper program.
"ASSURANT IPO" means the initial public offering by Fortis Insurance,
N.V. of the Borrower Common Stock.
"BANK ONE" is defined in the introduction to this Agreement.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy".
2
$500,000,000 THREE YEAR CREDIT AGREEMENT
"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.
"BOND BRIDGE DOCUMENTS" means the Bond Bridge Facility and all other
"Loan Documents" as defined therein.
"BOND BRIDGE FACILITY" means the $1,100,000,000 Credit Agreement dated
as of December 19, 2003 among the Borrower (then known as Fortis, Inc.), various
financial institutions and Bank One, as administrative agent.
"BORROWER" is defined in the introduction to this Agreement.
"BORROWER COMMON STOCK" means the common Capital Stock of the Borrower.
"BORROWING" means a group of Loans of the same Type made, continued or
converted on the same day and, in the case of LIBOR Loans, having the same
Interest Period.
"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 or in Chicago, Illinois 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 LIBOR 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.
"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, in each case which were
redeemed in full on or prior to the Signing Date.
"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 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.
3
$500,000,000 THREE YEAR CREDIT AGREEMENT
"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 Xxxxx'x; (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
Xxxxx'x; (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 Xxxxx'x.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act (42 U.S.C. Section 9604).
"CERTIFICATE RE NON-BANK STATUS" means a certificate substantially in
the form of Exhibit V delivered by a Lender to the Administrative Agent pursuant
to Section 2.5B(iii)(b).
"CHANGE OF CONTROL" means that (i) any Person or "group" (within the
meaning of Rules 13d-3 and 13d-5 under the Exchange Act) (other than one or both
of the Parents) (a) shall have acquired beneficial ownership of 30% or more on a
fully diluted basis of the voting and/or economic interest in the Capital Stock
of the Borrower or (b) shall have obtained the power (whether or not exercised)
to elect a majority of the members of the board of directors (or similar
governing body) of the Borrower or (ii) after giving effect to the consummation
of the Assurant IPO, 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 Continuing Directors. For purposes of the foregoing, "Continuing
Directors" means Persons who either (a) were members of the board of directors
of the Borrower on the Effective Date (immediately after giving effect to the
consummation of the Assurant IPO) or (b) were nominated for election by the
board of directors of the Borrower, a majority of whom were Continuing
Directors; excluding, in the case of both clause (a) and (b), any individual
whose initial nomination for, or assumption of office as, a member of such board
or directors or similar governing body occurs as a result of an actual or
threatened solicitation of proxies or consents for the election or removal of
one or more directors by any Person or group other than a solicitation for the
election of one or more directors by or on behalf of the board of directors.
"CO-DOCUMENTATION AGENTS" is defined in the introduction to this
Agreement.
"COMMITMENT" means the commitment of a Lender to make Loans to the
Borrower pursuant to Section 2.1A, and "COMMITMENTS" means such commitments of
all Lenders in the
4
$500,000,000 THREE YEAR CREDIT AGREEMENT
aggregate. The amount of the Commitment of each Lender as of the Signing Date is
set forth on Schedule 2.1.
"COMMITMENT FEE RATE" means a percentage per annum determined by
reference to Schedule 1.1.
"COMMITMENT TERMINATION DATE" means the earlier to occur of (i) the
Maturity Date and (ii) the date on which the Commitments terminate pursuant to
Section 2.4(b)(i).
"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 6.9, 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 Parent 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) total stockholders' 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.
"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 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
5
$500,000,000 THREE YEAR CREDIT AGREEMENT
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 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.
"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.
"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 91 days
after the scheduled Maturity Date.
"DOLLARS" and the sign "$" mean the lawful money of the United States
of America.
"EFFECTIVE DATE" means the earlier of (i) February 28, 2004 and (ii)
the date on which all conditions precedent set forth in Sections 3.1 and 3.2
(excluding Section 3.2(i)) to the making of the initial Loans have been
satisfied.
"ELIGIBLE ASSIGNEE" means (i) any Lender and any Affiliate of any
Lender; and (ii) 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 either Parent 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
6
$500,000,000 THREE YEAR CREDIT AGREEMENT
Subsidiaries or, in the case of any such plan subject to Title IV of ERISA, by
any ERISA Affiliate.
"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 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.
"ERISA AFFILIATE" means (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 the Borrower or any Subsidiary 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 the Borrower or any Subsidiary 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 the Borrower, any
Subsidiary, 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 Subsidiary or any ERISA Affiliate 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 Subsidiary or any ERISA
7
$500,000,000 THREE YEAR CREDIT AGREEMENT
Affiliate 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
Subsidiary or any ERISA Affiliate 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.
"EVENT OF DEFAULT" means each of the events set forth in Section 7.
"EXCHANGE ACT" means the Securities Exchange Act of 1934.
"FACILITIES" means any and all real property (including 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, an interest rate per
annum 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 for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 11:00 a.m. on such
day on such transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by the Administrative Agent in its
sole discretion.
"FEE LETTER" means the fee letters, each dated on or prior to the
Signing Date, between the Borrower and the Administrative Agent and the
Borrower, the Administrative Agent and the Arrangers, respectively, in each case
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 VI.
"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 particular Fiscal Year shall be designated by reference to the
calendar year in which such Fiscal Year ends.
"FRB" means the Board of Governors of the Federal Reserve System.
"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, generally accepted accounting principles set forth in
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and
8
$500,000,000 THREE YEAR CREDIT AGREEMENT
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.
"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.
"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: (i) a wholly-owned Subsidiary which is a Delaware
business trust (or similar entity) lends substantially all of the proceeds from
the issuance of such preferred Securities to the Borrower or another
wholly-owned Subsidiary 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 (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
9
$500,000,000 THREE YEAR CREDIT AGREEMENT
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); (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.
"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" is defined in Section 8.3.
"INDEMNIFIED LIABILITIES" is defined 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 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 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
10
$500,000,000 THREE YEAR CREDIT AGREEMENT
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 and the Maturity Date; and (ii) any LIBOR
Loan, (a) the last day of each Interest Period applicable to such Loan, (b) if
any 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, and (c) the Maturity Date.
"INTEREST PERIOD" is defined 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.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986.
"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 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.
"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" are defined in the introduction to this
Agreement and shall include any other Person that shall become a party hereto
pursuant to an Assignment Agreement, but shall not include any Person that
ceases to be a party hereto pursuant to an Assignment Agreement.
"LIBOR" means, with respect to a LIBOR Loan for the relevant Interest
Period, the result of (i) the applicable British Bankers' Association offered
rate in the London interbank market for deposits in Dollars having a maturity
equal to such Interest Period, as reported by any generally recognized financial
information service as of 11:00 a.m. (London time) on the Interest Rate
Determination Date; provided that, if no such British Bankers' Association rate
is available to the Administrative Agent, LIBOR for the relevant Interest Period
shall instead be the rate
11
$500,000,000 THREE YEAR CREDIT AGREEMENT
determined by the Administrative Agent to be the rate at which the
Administrative Agent or one of its Affiliate banks offers to place deposits in
Dollars with first-class banks in the London interbank market at approximately
11:00 a.m. (London time) on the Interest Rate Determination Date, in the
approximate amount of the relevant LIBOR Loan of the Administrative Agent (in
its capacity as a Lender) and having a maturity equal to such Interest Period
divided by (ii) a percentage equal to (x) one minus (y) the Applicable Reserve
Requirement.
"LIBOR 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 Parent
Subordination Agreement and the Fee Letter.
"LOANS" means loans made by the Lenders to the Borrower pursuant to
Section 2.1.
"MARGIN STOCK" is defined in Regulation U of the FRB as in effect from
time to time.
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon (i) the
business, operations, properties or financial condition of the Borrower and its
Subsidiaries, taken as a whole, (ii) the ability of the Borrower to perform any
of the Obligations or (iii) the legality, validity, binding effect or
enforceability against the Borrower of any Loan Document to which it is a party.
"MATERIAL INSURANCE SUBSIDIARY" means, at any time, any Insurance
Subsidiary having Statutory Surplus of $10,000,000 or more at such time.
"MATERIAL SUBSIDIARY" means, at any time, a Subsidiary that as of the
end of the most recently completed Fiscal Year accounted for (a) 5% or more of
the total assets of the Borrower and its Subsidiaries or (b) 5% or more of the
total revenues of the Borrower and its Subsidiaries, in each case as determined
by reference to the most recent audited consolidated financial statements for
the Borrower and its Subsidiaries as of the end of such Fiscal Year.
"MATURITY DATE" means the earliest to occur of (i) the date that is
three years following the Effective Date, (ii) February 28, 2007 and (iii) the
date that all Obligations become due and payable (by acceleration or otherwise).
"MOODY'S" means Xxxxx'x Investor Services, Inc.
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"NAIC" means the National Association of Insurance Commissioners and
any successor thereto.
12
$500,000,000 THREE YEAR CREDIT AGREEMENT
"NON-EXCLUDED TAX" is defined in Section 2.5B(i).
"NON-US LENDER" is defined in Section 2.5B(iii)(a).
"NOTE" means any promissory note of the Borrower issued pursuant to
Section 2.1D or Section 8.1E, in each case substantially in the form of Exhibit
III.
"NOTICE OF BORROWING" means a notice substantially in the form of
Exhibit I 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 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 and its by-laws,
(ii) with respect to any limited partnership, its certificate of limited
partnership and its partnership agreement, (iii) with respect to any general
partnership, its partnership agreement and (iv) with respect to any limited
liability company, its articles of organization and its operating agreement. 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.
"PARENT" 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
13
$500,000,000 THREE YEAR CREDIT AGREEMENT
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.
"PARENT CONTRIBUTION" means the contribution in Cash to the capital of
the Borrower, directly or indirectly, by the Parents (in exchange for equity of
the Borrower) in an aggregate amount not less than $650,000,000.
"PARENT INTERCOMPANY OBLIGATIONS" means the Indebtedness of the
Borrower to the Parents and their Affiliates that was paid in full in
installments on December 16, 2003 and December 19, 2003.
"PARENT SUBORDINATION AGREEMENT" means the letter agreement of the
Parents substantially in the form of Exhibit VIII.
"PBGC" means the Pension Benefit Guaranty Corporation and any successor
thereto.
"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.
"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.
"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 a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as such prime rate
changes.
"PRO RATA SHARE" means, with respect to any Lender, (A) prior to the
termination of the Commitments, the percentage obtained by dividing (i) the
amount of such Lender's Commitment by (ii) the aggregate amount of all
Commitments; and (B) after the termination of the Commitments, 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" is defined in Section 2.1E.
"REGULATION D" means Regulation D of the FRB.
14
$500,000,000 THREE YEAR CREDIT AGREEMENT
"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" is defined in Section 2.7.
"REQUISITE LENDERS" means the Lenders having Pro Rata Shares of more
than 50%.
"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; and (iv) management or similar fees payable to
either Parent or any of its Affiliates (other than the Borrower or any of its
wholly-owned Subsidiaries).
"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.
"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.
"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.
"SIGNING DATE" means the date on which this Agreement has been executed
and delivered by all of the parties hereto.
15
$500,000,000 THREE YEAR CREDIT AGREEMENT
"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 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 Parents and (ii) no real estate Joint Venture of the
Borrower or its Subsidiaries shall be considered a Subsidiary or its
Subsidiaries unless such Joint Venture is consolidated on the balance sheet of
the Borrower. Unless otherwise expressly provided, all references herein to a
"Subsidiary" shall mean a Subsidiary of the Borrower.
"SYNDICATION AGENT" is defined 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" is defined 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
Statement of such Insurance Subsidiary
16
$500,000,000 THREE YEAR CREDIT AGREEMENT
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 Loan.
"UTILIZATION FEE RATE" means a percentage per annum determined by
reference to Schedule 1.1.
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 4.3A. 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 term 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 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.
17
$500,000,000 THREE YEAR CREDIT AGREEMENT
D. Unless otherwise specified, all references herein to times of
day shall be references to New York City time (daylight or standard, as
applicable).
E. Unless otherwise expressly provided herein, (a) references to
agreements (including the Loan Documents) and other contractual instruments
shall be deemed to include all subsequent amendments, restatements, extensions,
supplements and other modifications thereto, but only to the extent that such
amendments, restatements, extensions, supplements and other modifications are
not prohibited by any Loan Document; and (b) references to any statute,
regulation or other law shall include all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting such statute,
regulation or other law.
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, each Lender severally agrees to make loans to the Borrower from time
to time during the period from the Effective Date to the Commitment Termination
Date in an amount not at any time exceeding its Pro Rata Share of the aggregate
amount of the Commitments; provided that, prior to the termination of the Bond
Bridge Facility and the repayment of all obligations of the Borrower thereunder,
no more than $50,000,000 in aggregate principal amount of Loans may be borrowed
hereunder for purposes other than the repayment of maturing Assurant Commercial
Paper Debt. Amounts borrowed under this Section 2.1A may be repaid and, subject
to the terms and conditions hereof, reborrowed from time to time.
B. BORROWING MECHANICS; MINIMUM AMOUNT. The Borrower shall notify
the Administrative Agent of each proposed new Borrowing by delivering a Notice
of Borrowing no later than 11:00 a.m. (a) at least three Business Days in
advance of a proposed Borrowing of LIBOR Loans or (b) on the day of a proposed
Borrowing of Base Rate Loans. Promptly upon receipt by the Administrative Agent
of such Notice of Borrowing, the Administrative Agent shall notify each Lender
of the proposed Borrowing and such Lender's Pro Rata Share of such Borrowing.
Each Borrowing shall be in a principal amount of $5,000,000 or a higher integral
multiple of $1,000,000.
C. DISBURSEMENT OF FUNDS. Each Lender shall make its Loan
available to the Administrative Agent not later than 2:00 p.m. on the date of
each proposed Borrowing, 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
Borrowing 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 at the Funding and Payment Office
or to such other account as may be designated in writing to the Administrative
Agent by the Borrower.
D. NOTES. Upon request by any Lender, the Borrower shall promptly
execute and deliver to the Administrative Agent for such Lender a Note to
evidence such Lender's Loans, in the principal amount of that Lender's
Commitment and with other appropriate insertions. The
18
$500,000,000 THREE YEAR CREDIT AGREEMENT
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 that, 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
issued in exchange therefor.
E. THE REGISTER.
(i) The Administrative Agent shall, on behalf of the Borrower,
maintain at the 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 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 Loan.
(iii) Each Lender shall record on its internal records (or, at
such Lender's option, on the Note held by such Lender) the amount of each Loan
made by it and each payment 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 Loan;
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
(absent manifest error therein).
(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 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 to the date of repayment
19
$500,000,000 THREE YEAR CREDIT AGREEMENT
thereof at a rate equal to (a) at any time such Loan is a Base Rate Loan, the
Base Rate plus the Applicable Margin; and (b) at any time such Loan is a LIBOR
Loan, the sum of LIBOR plus the Applicable Margin.
(ii) The basis for determining the rate of interest on any
Loan, and the Interest Period for any LIBOR Loan, shall be selected by the
Borrower and notified to the Administrative Agent 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) If the Borrower fails to specify Base Rate Loans or
LIBOR Loans in the applicable Notice of Borrowing or Conversion/Continuation
Notice, the applicable Borrowing (if comprised of LIBOR Loans) will be
automatically converted into a Borrowing of Base Rate Loans on the last day of
the then-current Interest Period for such Borrowing (or if outstanding as a
Borrowing of Base Rate Loans will remain as, or (if not then outstanding) will
be made as, a Borrowing of Base Rate Loans). As soon as practicable after 11:00
a.m. 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 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. An interest period (each an "INTEREST
PERIOD") for a Borrowing of LIBOR Loans 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:
(i) each successive Interest Period for a Borrowing 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 end on the
last Business Day of a calendar month;
(iv) no Interest Period shall extend beyond the scheduled
Maturity Date;
(v) there shall be no more than five Interest Periods
outstanding at any time; and
20
$500,000,000 THREE YEAR CREDIT AGREEMENT
(vi) in the event the Borrower fails to specify an Interest
Period for any such Borrowing 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. The Borrower shall pay all accrued and
unpaid interest on each LIBOR Loan on each Interest Payment Date therefor, upon
any prepayment thereof (on the amount being prepaid) and at maturity (by
acceleration or otherwise). Accrued and unpaid interest on Base Rate Loans shall
be payable on each Interest Payment Date therefor and at maturity (by
acceleration or otherwise).
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 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 (or, in the case of any
such fees and other amounts payable under this Agreement, at the Base Rate plus
the Applicable Margin plus 2%). 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 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 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
Loan, the date of conversion of such LIBOR 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 Loan, the date of conversion of
such Base Rate Loan to such LIBOR Loan, as the case may be, shall be excluded;
provided that 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 Borrowing, in an amount equal to $5,000,000 or a higher integral
multiple of $1,000,000, from one Type of Loan to the other Type of
Loan; provided that LIBOR Loans may only be converted on the expiration
of the Interest Period applicable to such LIBOR Loans unless the
Borrower shall pay all amounts due under Section 2.6 in connection with
such conversion; or
21
$500,000,000 THREE YEAR CREDIT AGREEMENT
(b) upon the expiration of any Interest Period
applicable to any Borrowing of LIBOR Loans, to continue all or any
portion of such Borrowing in an amount equal to $5,000,000 or a higher
integral multiple of $1,000,000 as LIBOR Loans for a new Interest
Period.
(ii) The Borrower shall deliver a Conversion/Continuation Notice
to the Administrative Agent no later than 11:00 a.m. at least one Business Day
in advance of the proposed conversion date (in the case of a conversion to Base
Rate Loans) and at least three Business Days in advance of the proposed
conversion/continuation date (in the case of conversion to, or continuation of,
LIBOR Loans). Except as otherwise provided herein, a Conversion/Continuation
Notice for conversion to, or continuation of, LIBOR Loans (or telephonic notice
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 for the period from the earlier of (a) the Effective
Date and (b) the date on which the Assurant IPO has been consummated to the
Commitment Termination Date, a commitment fee equal to the average of the daily
difference between (1) the outstanding Commitment of such Lender and (2) the
aggregate outstanding principal amount of the Loans made by such Lender,
multiplied by the Commitment Fee Rate determined by reference to Schedule 1.1.
Accrued commitment fees will be payable in arrears on the last day of each
Fiscal Quarter and on the Commitment Termination 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) For each day on which the outstanding principal amount of the
Loans exceeds 33 1/3% of the aggregate amount of the Commitments, the Borrower
agrees to pay to the Administrative Agent, for the account of each Lender, a
utilization fee equal to the Utilization Fee Rate determined in accordance with
Schedule 1.1 multiplied by the outstanding principal amount of the Loans of such
Lender on such day. Accrued utilization fees will be payable in arrears on the
last day of each Fiscal Quarter and on the Commitment Termination Date. All
utilization fees will be computed on the basis of a year of 360 days and will be
payable for the actual number of days elapsed.
(iii) The Borrower agrees to pay to the Arrangers and the Agents
such fees in the amounts and at the times separately agreed to by the Borrower,
the Arrangers and the Agents.
2.4 REPAYMENTS AND PREPAYMENTS; GENERAL PROVISIONS REGARDING PAYMENTS.
A. PAYMENTS OF LOANS.
The Loans and all other outstanding Obligations shall be paid in full
no later than the Maturity Date.
B. COMMITMENT REDUCTIONS; PREPAYMENTS.
22
$500,000,000 THREE YEAR CREDIT AGREEMENT
(i) Commitment Reductions. The Borrower may at any time and from
time to time upon not less than three 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. Any such reduction shall
be in the amount of $5,000,000 or a higher integral multiple of $1,000,000. Any
such notice of termination or reduction of the Commitments having been given as
aforesaid shall be irrevocable and effective upon receipt by the Administrative
Agent.
(ii) Prepayments. The Borrower may from time to time pay, without
penalty or premium, all outstanding Loans, or, in a minimum aggregate amount of
$5,000,000 or a higher integral multiple of $1,000,000, any portion of the
outstanding Loans upon (a) three Business Days' prior notice to the
Administrative Agent, in the case of a prepayment of LIBOR Loans, or (b) one
Business Day's prior notice to the Administrative Agent, in the case of a
prepayment of Base Rate Loans. Any prepayment of a LIBOR Loan on a day other
than the last day of an Interest Period therefor shall be subject to Section
2.6C.
C. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. All payments by the Borrower
hereunder and under the Notes shall be made in Dollars in same day funds,
without defense, setoff or counterclaim, free of any restriction or condition,
and delivered to the Administrative Agent not later than 2:00 P.M. 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) 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 all fees payable with respect thereto, to the
extent received by the Administrative Agent.
(iv) 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 or to amounts to be applied
against principal, interest or any cost or expense to be collected pursuant to
Section 2.6C.
23
$500,000,000 THREE YEAR CREDIT AGREEMENT
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
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 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(iv), 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
24
$500,000,000 THREE YEAR CREDIT AGREEMENT
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
(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 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 30 days after paying any sum from
which it is required by law to make any deduction or withholding, and
within 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 each Lender listed on the signature pages hereof on
the Signing Date) or after the effective date of the Assignment Agreement
pursuant to which such Lender became a Lender (in the case of each
25
$500,000,000 THREE YEAR CREDIT AGREEMENT
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 Signing Date (in the case of each Lender
listed on the signature pages hereof on the Signing 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 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.
(c) The Borrower shall not be required to pay
any additional amount to any Non-US Lender under Section 2.5B(ii)(c) 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 Signing
Date or on the date of the Assignment Agreement pursuant to which it
became a Lender, as
26
$500,000,000 THREE YEAR CREDIT AGREEMENT
applicable, nothing in this Section 2.5B(iii)(c) shall relieve the
Borrower of its obligation to pay any additional amounts pursuant to
Section 2.5B(ii)(c) 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 Signing 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 policies of such Lender or
such controlling corporation with regard to capital adequacy), then from time to
time, subject to Section 2.4C(iv), 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.
27
$500,000,000 THREE YEAR CREDIT AGREEMENT
2.6 SPECIAL PROVISIONS GOVERNING LIBOR LOANS.
Notwithstanding any other provision of this Agreement to the contrary,
the following provisions shall govern with respect to LIBOR Loans as to the
matters covered:
A. APPLICABLE INTEREST RATE NOT DETERMINABLE OR UNFAIR. If, by
reason of circumstances affecting the interbank LIBOR market, (i) the
Administrative Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto) that adequate and fair means
do not exist for ascertaining the interest rate applicable to LIBOR Loans for
any Interest Period on the basis provided for in the definition of LIBOR or (ii)
the Required Lenders shall determine (and notify the Administrative Agent) prior
to the first day of any Interest Period that the LIBOR, as determined by the
Administrative Agent, will not fairly and adequately reflect the cost to such
Lenders of funding their respective LIBOR Loans for such Interest Period, then
the Administrative Agent shall promptly give notice (by telefacsimile or by
telephone confirmed in writing) to the Borrower and each Lender of such
determination, whereupon (a) no Loans may be made as, or converted to, LIBOR
Loans until such time as the Administrative Agent notifies the Borrower and the
Lenders that the circumstances giving rise to such determination no longer
exist, and (b) 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 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 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 other Lender). Thereafter (a) the obligation of the Affected
Lender to make Loans as, or to convert Loans to, LIBOR 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 Borrowing of LIBOR Loans
then being requested by the Borrower pursuant to a Notice of Borrowing or a
Conversion/Continuation Notice, the Affected Lender shall make its applicable
Loan as (or continue its applicable Loan as or convert its applicable Loan to,
as the case may be) a Base Rate Loan, (c) the Affected Lender's obligation to
maintain its outstanding LIBOR 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 Borrowing of LIBOR Loans then
being requested by the Borrower pursuant to a Notice of
28
$500,000,000 THREE YEAR CREDIT AGREEMENT
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 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 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) any LIBOR Loan of such Lender is
not made on a date specified therefor in a Notice of Borrowing or
Conversion/Continuation Notice or in a telephonic request for such Borrowing,
(ii) if any prepayment or other principal payment of, or any conversion of, any
LIBOR 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
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 LOANS. Any Lender may make, carry or transfer
LIBOR Loans at, to, or for the account of any of its branch offices or the
office of an Affiliate of that Lender.
E. ASSUMPTIONS CONCERNING FUNDING OF LIBOR LOANS. Calculation of
all amounts payable to a Lender under this Section 2.6 and under Sections 2.5A
and 2.5C shall be made as though that Lender had actually funded each of its
relevant LIBOR 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 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 that each Lender may fund each of its LIBOR 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
Sections 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, 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
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
29
$500,000,000 THREE YEAR CREDIT AGREEMENT
Administrative Agent and such 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 Section 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 right 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 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 INITIAL LOANS.
The obligation of each Lender to make its initial Loan hereunder is
subject to the satisfaction of the following conditions:
A. BORROWER DOCUMENTS. The Borrower shall deliver or cause to be
delivered to the Administrative Agent on behalf of each Lender the following:
30
$500,000,000 THREE YEAR CREDIT AGREEMENT
(i) Certified copies of the Organizational Documents of the
Borrower, each dated a recent date prior to the Effective Date, certified as of
a recent date prior to the Effective Date by the appropriate governmental
official or an officer of the Borrower, as applicable;
(ii) Resolutions of the board of directors (or similar governing
body) of the Borrower approving and authorizing the execution, delivery and
performance of the Loan Documents to which it is a party and certified as of the
Effective Date by an officer of the Borrower as being in full force and effect
without modification or amendment;
(iii) Signature and incumbency certificates of the officers of the
Borrower executing on behalf of the Borrower the Loan Documents to which it is a
party;
(iv) An executed original of each Note requested by a Lender prior
to the Effective Date;
(v) A good standing certificate from the Secretary of State of the
State of Delaware certified as of a recent date prior to the Effective Date;
(vi) A certificate from an officer of the Borrower certifying
satisfaction of the conditions set forth in Sections 3.2(iii) and (iv) as of the
Effective Date; and
(vii) 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) Xxxxxxxxx Xxxxxxxxx, Esq., Senior Vice President, General Counsel and
Secretary of the Borrower, and (ii) Xxxxxx & Bird LLP, special New York counsel
for the Borrower, each in form and substance reasonably satisfactory to the
Administrative Agent and its counsel, dated as of the Effective Date and setting
forth substantially the matters in the opinions designated in Exhibit IV-A and
Exhibit IV-B and as to such other matters as the Administrative Agent may
reasonably request.
C. 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 Effective Date, confirming the information in
Section 4.3C.
D. PAYMENT OF AMOUNTS DUE. The Borrower shall have paid to the
Arrangers and the Agents all reasonable out-of-pocket costs, fees (including
those fees due on the Effective Date referred to in Section 2.3), expenses
(including legal fees and expenses) and other compensation payable on the
Effective Date.
E. REPAYMENT OF INDEBTEDNESS. The Administrative Agent shall have
received evidence satisfactory to it that, on the Effective Date, the Borrower
has repaid in full all Indebtedness of the Borrower under the $650,000,000
bridge credit facility dated as of December 19, 2003 among the Borrower (then
known as Fortis, Inc.), various financial institutions and Xxxxxx Xxxxxxx Senior
Funding, Inc., as administrative agent and such credit facility has been
terminated.
31
$500,000,000 THREE YEAR CREDIT AGREEMENT
F. GOVERNMENTAL AUTHORIZATIONS AND CONSENTS.
(i) The Borrower 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 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 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
Business Days in advance of the Effective Date, all documentation and other
information required by Governmental Authorities under applicable
"know-your-customer" and anti-money laundering rules and regulations, including
as required by the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of
2001.
G. MATERIAL ADVERSE EFFECT. Since December 31, 2002, there shall
not have occurred a material adverse effect upon the business, operations,
properties or financial condition of the Borrower and its Subsidiaries, taken as
a whole.
H. 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 that could reasonably be expected to have
a Material Adverse Effect.
I. SOLVENCY ASSURANCES. The Administrative Agent shall have
received a Financial Condition Certificate from the chief financial officer of
the Borrower, dated the Effective Date, satisfactory to the Administrative
Agent, and with appropriate attachments demonstrating that, before and after
giving effect to the transactions contemplated by the Loan Documents, the
Borrower, individually, and together with each of its Subsidiaries (on a
consolidated basis), will be Solvent.
J. 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 (which pro forma financial statements shall be in form and
substance satisfactory to the Lenders), in each case as provided in Section
4.3A.
K. MARKET CONDITIONS. There shall have not occurred or become
known to any of the Arrangers, any of the Agents or any of the Lenders any
circumstance, change or condition in
32
$500,000,000 THREE YEAR CREDIT AGREEMENT
the financial or capital markets generally that, in the judgment of the
Arrangers, could have a material adverse effect on the market for capital market
debt Securities.
L. PARENT CONTRIBUTION. The Parent Contribution shall have been
made.
M. PARENT SUBORDINATION AGREEMENT. The Administrative Agent shall
have received the executed Parent Subordination Agreement.
N. RATINGS. The public debt rating of the Borrower shall be at
least Baa2 from Xxxxx'x and BBB from S&P, in each case with a stable or positive
outlook.
O. ASSURANT REORGANIZATION. Fortis, Inc. shall have been merged
with and into the Borrower for the purpose of reincorporating Fortis, Inc. in
the State of Delaware.
P. ASSURANT IPO. The Assurant IPO shall have been consummated.
3.2 CONDITIONS TO EACH LOAN.
The obligation of each Lender to make any Loan hereunder, including any
Loan to be made on the Effective Date, is subject to the satisfaction of the
following conditions:
(i) the Administrative Agent shall have received, in accordance
with the provisions of Section 2.1B, a Notice of Borrowing signed by the
Borrower;
(ii) after giving effect to such Loan (and all other Loans made as
part of the same Borrowing), the aggregate principal 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 (other than, in the case of Loans the proceeds of which
will be used solely to repay maturing commercial paper issued by the Borrower,
the representations and warranties set forth in (x) the last sentence of each of
Sections 4.3A and 4.3C, (y) Section 4.4 and (z) Section 4.6) shall be true,
correct and complete in all material respects on and as of the date of such 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; and
(iv) no event shall have occurred and be continuing or would
result from such Loan that would constitute an Event of Default or a Potential
Event of Default.
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:
33
$500,000,000 THREE YEAR CREDIT AGREEMENT
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 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 material properties, to carry on its business as now
conducted and as proposed to be conducted, to enter into the Loan Documents 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.
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 Effective Date, and identifies each Subsidiary that is an Insurance
Subsidiary as of the Effective Date.
4.2 AUTHORIZATION OF BORROWING, ETC.
A. AUTHORIZATION OF BORROWING, ETC. The execution, delivery and
performance of each Loan Document 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 to which it is a party and the consummation of
the transactions contemplated by each Loan Document 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 Effective Date and disclosed
in writing to the Administrative Agent.
C. GOVERNMENTAL CONSENTS. The execution, delivery and performance
by the Borrower of each Loan Document to which it is a party and the
consummation of the transactions contemplated by each Loan Document to which it
is a party do not and will not
34
$500,000,000 THREE YEAR CREDIT AGREEMENT
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 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.
4.3 FINANCIAL CONDITION.
A. GAAP FINANCIAL STATEMENTS. The Borrower has heretofore
delivered to the Administrative Agent (a) the audited consolidated balance sheet
of Fortis, Inc. and its 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 Fortis, Inc. 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 Fortis, Inc. 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 would reasonably be
expected to have a Material Adverse Effect.
B. STATUTORY FINANCIAL STATEMENTS. All annual convention
statements for the Fiscal Years ended December 31, 2000, 2001 and 2002,
including the financial statements on a statutory basis and the accompanying
exhibits and schedules and supplements thereto (the "ANNUAL CONVENTION
STATEMENTS"), and the 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 ("QUARTERLY CONVENTION STATEMENTS"), in each
case filed with any Applicable Insurance Regulatory Authority by the Insurance
Subsidiaries, (a) were duly filed, (b) 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 (c) present fairly, in accordance with such
practices, the statutory financial position as at the date of, and the statutory
results of its operations for the periods covered by, such Annual Convention
Statements and Quarterly Convention Statements, as applicable. 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.
35
$500,000,000 THREE YEAR CREDIT AGREEMENT
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) made 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)
were computed and fairly stated in all material respects in accordance with SAP,
and (vi) were in compliance with the requirements of all Applicable Insurance
Regulatory Authorities, except where such noncompliance could not reasonably be
expected to have a Material Adverse Effect. Since December 31, 2002, there has
been no adverse change in the Statutory Reserves of any of the Insurance
Subsidiaries, except for changes that would not reasonably be expected to have a
Material Adverse Effect.
4.4 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.
4.5 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 4.3A 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
Signing Date or as otherwise permitted under Section 6.6. Except as permitted by
this Agreement or as contemplated by the Loan Documents, all such properties and
assets are free and clear of Liens.
4.6 NO LITIGATION; COMPLIANCE WITH LAWS.
Except as otherwise disclosed on Schedule 4.6, 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
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,
36
$500,000,000 THREE YEAR CREDIT AGREEMENT
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.
4.7 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 the 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.
4.8 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.
4.9 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.
4.10 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 FRB.
37
$500,000,000 THREE YEAR CREDIT AGREEMENT
4.11 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, any Subsidiary or any ERISA Affiliate, 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 Subsidiary or
any ERISA Affiliate.
C. Except as disclosed on Schedule 4.11 and to the extent
required under Section 4980B of the Internal Revenue Code, no Employee Benefit
Plan provides health 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, any
Subsidiary or any ERISA Affiliate (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 or any ERISA Affiliate
contributes to or is required to contribute to a Multiemployer Plan. No
Subsidiary or ERISA Affiliate (other than the Borrower) maintains an Employee
Benefit Plan subject to Title IV of ERISA.
4.12 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 Arrangers and
the Agents, and the Borrower hereby indemnifies each of the Arrangers and each
of the Agents and each Lender against, and agrees that it will hold each of the
Arrangers 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.
38
$500,000,000 THREE YEAR CREDIT AGREEMENT
4.13 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. As of the Effective Date, neither the Borrower nor any of its
Subsidiaries has received any letter or request for information under Section
104 of CERCLA 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 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.
4.14 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.
4.15 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 to the Borrower, other than prohibitions or
restrictions permitted under Section 6.4.
4.16 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 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.
39
$500,000,000 THREE YEAR CREDIT AGREEMENT
4.17 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 the Form S-1 of the Borrower as filed
with the Securities and Exchange Commission (together with filed amendments))
contained as of the date such document or certificate was so furnished any
untrue statement of a material fact or omitted 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 (with, in the
case of any of the following delivered in tangible form, a sufficient number of
copies for each Lender):
(i) Quarterly Financial Statements: within five Business Days
after the date on which the Borrower is required to file a quarterly report with
the Securities and Exchange Commission with respect to any Fiscal Quarter ending
after the Effective Date (but in any event not later than 50 days after the end
of such Fiscal Quarter), the unaudited consolidated balance 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
40
$500,000,000 THREE YEAR CREDIT AGREEMENT
adjustments; provided that delivery by the Borrower of a quarterly report on
Form 10-Q for such Fiscal Quarter shall be sufficient for purposes of this
clause (i) so long as it contains all of the foregoing information;
(ii) Annual Financial Statements: within five Business Days
after the date on which the Borrower is required to file an annual report with
the Securities and Exchange Commission with respect to any Fiscal Year (but in
any event not later than 95 days after the end of such 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);
(iii) Compliance Certificate: together with each delivery of
financial statements of the Borrower and its Subsidiaries pursuant to Section
5.1(i) or (ii), a duly executed and completed Compliance Certificate;
(iv) Filings: (a) promptly upon their becoming available,
copies of all financial statements, periodic reports (including reports on Form
8-K) and proxy statements filed with, or furnished to, the Securities and
Exchange Commission or sent by the Borrower to its shareholders or other
security holders, and (b) promptly following the reasonable 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;
41
$500,000,000 THREE YEAR CREDIT AGREEMENT
(v) Notice of Default, etc.: promptly 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) Change in Rating: prompt written notice of any and all
changes in the rating given the Borrower by Xxxxx'x or S&P;
(vii) Insurance Reports and Filings:
(a) (1) prompt written notice to the
Administrative Agent of the failure by any Insurance Subsidiary to file
its Statutory Statements and any statements referred to in Section 4.3B
or 4.3C, (2) promptly following the filing thereof, a complete copy of
any Statutory Statement filed with respect to (A) an Insurance
Subsidiary that has Statutory Surplus of $250,000,000 or more as of the
date of such Statutory Statement and (B) the Borrower and/or its
consolidated Insurance Subsidiaries, and (3) 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 4.3B
or 4.3C to the Administrative Agent or such Lender;
(b) promptly following the delivery or receipt,
as the case may be, by the Borrower or any Material Insurance
Subsidiary, copies of (1) each material examination and/or audit report
or other similar report, in each case in final and binding form,
submitted to any Material Insurance Subsidiary by any Applicable
Insurance Regulatory Authority, (2) all material information which the
Lenders may from time to time reasonably 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 Material 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 Material 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
Material Insurance Subsidiary, together with such firm's opinion
affirming the adequacy of such loss reserves; and
(viii) Insurance License Notices: promptly following
notification thereof from a Governmental Authority, and in any event not later
than five Business Days after receipt of such
42
$500,000,000 THREE YEAR CREDIT AGREEMENT
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) Environmental Notices: promptly following receipt
thereof, a copy of any letter or request for information received by the
Borrower or any Subsidiary under Section 104 of CERCLA or any comparable state
law; and
(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, (i) keep
proper books of records and account 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 (ii) permit representatives or
agents of the Administrative Agent or the Syndication Agent (and, during the
existence of an Event of Default, 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;
provided that the Borrower and the Administrative Agent, the Syndication Agent
or such Lender, as applicable, shall have entered into a confidentiality
agreement prior to or concurrently with such visit or inspection in form and
substance reasonably satisfactory to such parties (with the approval of such
confidentiality agreement not to be unreasonably withheld or delayed by any
party thereto). The Borrower and its Subsidiaries shall pay the reasonable cost
of any such visit, inspection, examination or discussion if an Event of Default
or Potential Event of Default exists at the time thereof or is discovered as a
result thereof (but shall have no responsibility therefor under any
circumstance).
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 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
43
$500,000,000 THREE YEAR CREDIT AGREEMENT
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.
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 material 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
material penalty or fine shall be incurred with respect thereto; provided that
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 Borrower will use the proceeds of the
Loans made pursuant to 2.1A for general corporate purposes of the Borrower and
its Subsidiaries, including the repayment of maturing commercial paper issued by
the Borrower.
B. MARGIN REGULATIONS. The Borrower will not permit any part of
the proceeds of the Loans made to the Borrower to 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 FRB.
44
$500,000,000 THREE YEAR CREDIT AGREEMENT
5.9 CLAIMS PARI PASSU.
The Borrower shall ensure that at all times the Obligations and any
other claims of the Arrangers, the Agents and the Lenders arising hereunder or
under any of the other 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, 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 Signing 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;
45
$500,000,000 THREE YEAR CREDIT AGREEMENT
(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;
(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 (including any
Capital Lease entered into in connection with the Ohio Sale/leaseback
Transaction); provided that (a) such Liens are only in respect of the property
or assets subject to, and secure only, such Capital Leases and (b) the sum of
(1) the aggregate amount of Indebtedness secured by such Liens and (2) the
aggregate amount of Indebtedness secured by Liens permitted by clause (ix) below
does not exceed $35,000,000 at any time outstanding;
(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) the
sum of (1) the aggregate amount of Indebtedness secured by such Liens and (2)
the aggregate amount of Indebtedness secured by Liens permitted by clause (viii)
above does not exceed $35,000,000 at any time outstanding, (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;
(xiv) Liens on property or assets of any Person that becomes a
Subsidiary after the Signing Date; provided that such Liens are in existence at
the time such Person becomes a Subsidiary and were not created in anticipation
thereof; and
46
$500,000,000 THREE YEAR CREDIT AGREEMENT
(xv) other Liens securing obligations in an aggregate
principal amount not to exceed 5% of Consolidated Adjusted Net Worth 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.
6.2 INDEBTEDNESS.
(i) The Borrower shall not, and shall not permit any
Subsidiary to, directly or indirectly, create, incur, assume or guaranty, or
otherwise become or remain directly or indirectly liable with respect to any
Indebtedness other than (a) Indebtedness payable after the scheduled Maturity
Date, (b) Assurant Commercial Paper Debt, (c) Indebtedness secured by Liens
permitted by Section 6.1(viii), (ix) or (xiv), (d) Indebtedness owed to the
Borrower or a Subsidiary, (e) Indebtedness arising under letters of credit
issued for the account of the Borrower and/or any Subsidiary, (f) Indebtedness
of a Person that becomes a Subsidiary, or is merged into the Borrower or a
Subsidiary, after the Signing Date, provided that (1) such Indebtedness is not
incurred in anticipation thereof and (2) the aggregate amount of such
Indebtedness does not exceed $100,000,000 at any time outstanding, (g)
Indebtedness of the Borrower or any Subsidiary arising under Interest Rate
Agreements and Currency Agreements, provided that such agreements are entered
into to hedge bona fide business risks and not for speculation, (h) Indebtedness
arising under the Bond Bridge Facility and (i) other Indebtedness having an
aggregate principal amount not exceeding $100,000,000 at any time outstanding.
(ii) The Borrower shall not permit the aggregate
outstanding principal amount of all Indebtedness of its Subsidiaries to exceed
5% of Consolidated Adjusted Net Worth at any time; provided that the following
Indebtedness shall be excluded in determining whether Indebtedness of
Subsidiaries exceeds 5% of Consolidated Adjusted Net Worth: (a) Indebtedness
described in Section 6.2(i)(c) through (i)(g), (b) Indebtedness of the type
described in clause (vii), (viii) or (ix) of the definition of Indebtedness
incurred by any Subsidiary with respect to the obligations of one of its
Subsidiaries and (c) Indebtedness of the type described in clause (viii) or (ix)
of the definition of Indebtedness incurred in connection with insurance products
offered by Subsidiaries in the ordinary course of business.
6.3 ACQUISITIONS; CERTAIN INVESTMENTS.
The Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly:
(i) acquire all or substantially all of the assets or Capital
Stock of any Person unless (a) 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; (b) 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; (c) the Borrower shall be in compliance with the financial
covenants set forth in Section 6.9 on a pro forma basis after giving effect to
such acquisition as of the last day of the Fiscal Quarter most
47
$500,000,000 THREE YEAR CREDIT AGREEMENT
recently ended (as determined in accordance with Section 6.9(v)); (d) the
Borrower shall have delivered to the Administrative Agent reasonably in advance
of such acquisition, a Compliance Certificate (1) certifying compliance with
Section 6.7 and (2) evidencing compliance with (1) Section 6.9 as required under
clause (c) above, together with all relevant financial information with respect
to such acquired assets, including the aggregate consideration for such
acquisition and any other information required to demonstrate compliance with
Section 6.9; and (e) in the case of the acquisition of Capital Stock of any
Person, such Person's board of directors or similar governing body shall not at
any time have announced its intention to, or commenced any action to, oppose
such acquisition; or
(ii) make any loan or advance (other than advanced commissions
in the ordinary course of business) to, or other investment in, any customer or
related venture of the Borrower or any Subsidiary, other than any loan, advance
or investment (a) in a customer or venture that is engaged, and continues to
engage, in an Insurance Business or a business reasonably related to an
Insurance Business and (b) made in the ordinary course of business and
consistent with past practice of the Borrower or such Subsidiary; provided that
the aggregate amount of such loans, advances and other investments (and renewals
thereof with the same customer or venture) (A) existing on the Signing Date
shall not exceed $38,000,000, (B) made after the Signing Date shall not exceed
$25,000,000 in the aggregate for any Fiscal Year and (C) shall not exceed
$100,000,000 in the aggregate at any time outstanding.
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 that limits in any material
respect the ability of any Subsidiary 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, (b) repay or prepay any Indebtedness owed by such
Subsidiary to the Borrower or any other Subsidiary, (c) make loans or advances
to the Borrower or any other Subsidiary or (d) transfer any of its property or
assets to the Borrower or any other Subsidiary, in each case pursuant to any
agreement that is material to the Borrower and its Subsidiaries taken as a
whole, and that adversely affects, directly or indirectly, the repayment of the
Obligations, other than restrictions existing (i) under this Agreement or any
Bond Bridge Document, (ii) under agreements evidencing Indebtedness secured by
Liens permitted by Section 6.1(viii) 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 Signing Date as described on Schedule 6.4, (v) under any order from or
agreement with an Applicable Insurance Regulatory Authority arising after the
Signing Date which could not reasonably be 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 if an Event
48
$500,000,000 THREE YEAR CREDIT AGREEMENT
of Default exists or would result therefrom; provided that any Subsidiary may at
any time make Restricted Payments to its parent if such parent is the Borrower
or a wholly-owned Subsidiary. Notwithstanding anything to the contrary contained
herein, (i) the Borrower shall cause its Subsidiaries to make Restricted
Payments in a timely manner to the Borrower necessary to enable the Borrower to
repay the Obligations in accordance with this Agreement and (ii) if such
Restricted Payments are not sufficient to enable the Borrower to repay the
Obligations in accordance with this Agreement, the Borrower will use its
reasonable 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.
6.6 RESTRICTION ON FUNDAMENTAL CHANGES AND ASSET SALES.
The Borrower will not consolidate or merge with or into, or convey or
transfer (or permit the conveyance or transfer of) all or substantially all of
the properties and assets of the Borrower and its Subsidiaries to, any other
Person unless (i) the surviving or acquiring entity (A) is a Person organized
under the laws of the United States or any state thereof, (B) if other than the
Borrower, expressly assumes the performance of the Obligations pursuant to
documentation reasonably satisfactory to the Administrative Agent and the
Syndication Agent and (C) after giving effect to such transaction, will have
ratings on its senior, unsecured, non-credit-enhanced debt of at least BBB by
S&P and Baa2 by Xxxxx'x and (ii) immediately after giving effect to such
transaction, no Event of Default or Potential Event of Default exists.
6.7 CONDUCT OF BUSINESS.
From and after the Signing 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.
6.8 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 that 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, in each case to the
extent otherwise permitted under the other provisions of Section 6; (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
49
$500,000,000 THREE YEAR CREDIT AGREEMENT
Subsidiaries entered into in the ordinary course of business; and (d)
transactions described in Schedule 6.8.
6.9 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 the correlative ratio set forth opposite such date below:
Fiscal Quarter(s) ended Interest Coverage Ratio
----------------------- -----------------------
March 31, 2004 4.00 to 1.00
Thereafter 5.00 to 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 0.35 to 1.0.
(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 Parent Intercompany Obligations),
plus (y) 50% of Consolidated Net Income for each Fiscal Quarter (beginning with
the Fiscal Quarter ending December 31, 2003) for which Consolidated Net Income
(measured at the end of each such Fiscal Quarter) is a positive amount plus (z)
100% of the net proceeds received by the Borrower or any Subsidiary after
December 31, 2003 from any capital contribution to, or issuance of any Capital
Stock of, the Borrower or any Subsidiary (but excluding any issuance by a
Subsidiary to the Borrower or to a wholly-owned Subsidiary, and any capital
contribution by the Borrower or a Subsidiary to a wholly-owned Subsidiary).
(v) Certain Calculations. With respect to any period during
which an acquisition permitted by Section 6.3(i) or a merger, consolidation or
disposition permitted by Section 6.6 has occurred (each, a "SUBJECT
TRANSACTION"), for purposes of determining compliance with the financial
covenants set forth in this Section 6.9, Consolidated Adjusted EBIT (and,
notwithstanding the definition thereof but without duplication, Consolidated Net
Income) 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
50
$500,000,000 THREE YEAR CREDIT AGREEMENT
acquired (including by way of merger or consolidation) 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 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 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) in excess in the aggregate of $50,000,000 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.
Failure of the Borrower to perform or comply with any term or condition
contained in Section 5.1(v), 5.3 (with respect to the existence of the Borrower
only), 5.8, 5.9 or 6.
7.4 BREACH OF WARRANTY.
Any representation, warranty, certification or other statement made by
the Borrower in any Loan Document, 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
51
$500,000,000 THREE YEAR CREDIT AGREEMENT
7.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS.
The Borrower shall default in the performance of or compliance with any
term contained in this Agreement or any of the other Loan Documents to which it
is a party, or either Parent shall default in the performance of or compliance
with any term contained in the Parent Subordination Agreement, 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 30 days after
receipt by the Borrower of notice from the Administrative Agent of such default;
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 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; or
52
$500,000,000 THREE YEAR CREDIT AGREEMENT
7.8 JUDGMENTS AND ATTACHMENTS.
Any money judgment, writ or warrant of attachment or similar process
involving in excess in the aggregate of $50,000,000 which is 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 60 days (or in any
event later than five 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, any Subsidiary or any ERISA Affiliate 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 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) 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 (ii) the Borrower or either Parent shall contest the validity
or enforceability of any Loan Document to which it is a party 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 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
53
$500,000,000 THREE YEAR CREDIT AGREEMENT
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 all or a portion of its Commitment or Loans owing to
it or other Obligation (provided 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 (i) 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 (ii) 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, that
each such assignment pursuant to this Section 8.1A shall be in an aggregate
amount of not less than $5,000,000 (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 (i) a processing and recordation fee of $3,500 (paid by the
assigning Lender or the assignee), and (ii) 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 referred to in Section 8.1B (and any form, certificate 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 Signing 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,
54
$500,000,000 THREE YEAR CREDIT AGREEMENT
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 that, 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 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 any Federal Reserve Bank as collateral security pursuant to Regulation
A of the FRB and any operating circular issued by such Federal Reserve Bank;
provided that 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, that 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
55
$500,000,000 THREE YEAR CREDIT AGREEMENT
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 either Parent, 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 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) or (ii)
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement. 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 that (a) 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 (b) 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.
56
$500,000,000 THREE YEAR CREDIT AGREEMENT
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 each Arranger and each Agent in
connection with the syndication of the Loans and 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; (iii)
the reasonable fees, out-of-pocket expenses and disbursements of counsel to the
Arrangers 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 either Arranger, any Agent or Lender
in enforcing any Obligations of or in collecting any payments due 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 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 each of the Arrangers and Agents and each
Lender, and the respective partners, officers, directors, employees, agents,
attorneys, and affiliates of each of the Arrangers 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
57
$500,000,000 THREE YEAR CREDIT AGREEMENT
intended use of the proceeds thereof, or any enforcement of any of the Loan
Documents). If any claim or proceeding is commenced as to which any of the
Indemnitees proposes to demand indemnification, such Indemnitees shall notify
the Borrower with reasonable promptness; provided that any failure to so notify
the Borrower shall not relieve the Borrower from its obligations hereunder
except to the extent such failure materially and adversely affects the Borrower.
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.
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, Arrangers 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 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 xxx 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, without notice to the Borrower or to any other
Person, 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. Each Lender agrees that it will promptly notify the Administrative
Agent of any exercise of such Lender's rights pursuant to Section 8.4; provided
that no failure of such Lender to deliver such notice shall affect the rights of
such Lender hereunder.
58
$500,000,000 THREE YEAR CREDIT AGREEMENT
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 that (A) 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
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" or
(viii) consent to the assignment or transfer by the Borrower of any of its
rights and obligations under this Agreement; and (B) 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. 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, (i) in
the case of the Borrower or the Administrative Agent, at its address, facsimile
number or email address set forth on the signature pages hereto and (ii) in the
case of each Lender, at the address, facsimile number or email address set forth
in such Lender's Administrative Questionnaire, or, as to each party, at such
other address, facsimile number or email 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.
59
$500,000,000 THREE YEAR CREDIT AGREEMENT
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 and 8.3 and the agreements of the Lenders set forth in Sections 8.17, 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 either 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 each 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 other Loan
Document. 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.
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.
60
$500,000,000 THREE YEAR CREDIT AGREEMENT
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).
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 XXX XXXXX, XXXXXX XXX XXXX XX XXX XXXX, XX 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
(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
61
$500,000,000 THREE YEAR CREDIT AGREEMENT
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
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)
62
$500,000,000 THREE YEAR CREDIT AGREEMENT
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.
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 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.
63
$500,000,000 THREE YEAR CREDIT AGREEMENT
8.19 COUNTERPARTS.
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.
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.
64
$500,000,000 THREE YEAR CREDIT AGREEMENT
SECTION 9. AGENTS
9.1 APPOINTMENT.
Bank One 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 either Parent.
9.2 POWERS AND DUTIES; GENERAL IMMUNITY.
X. XXXXXX; 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 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
65
$500,000,000 THREE YEAR CREDIT AGREEMENT
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) 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.
66
$500,000,000 THREE YEAR CREDIT AGREEMENT
E. SYNDICATION AGENT AND CO-DOCUMENTATION AGENTS. No Lender
identified in this Agreement as the "Syndication Agent" or a "Co-Documentation
Agent" shall have any right, power, obligation, liability, responsibility or
duty under this Agreement other than those applicable to all Lenders as such,
except as otherwise expressly set forth in this Agreement. Without limiting the
foregoing, no such Lender shall have or be deemed to have a fiduciary
relationship with any other Lender.
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, 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 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
67
$500,000,000 THREE YEAR CREDIT AGREEMENT
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 ACKNOWLEDGMENT OF POTENTIAL RELATED TRANSACTIONS.
The Borrower hereby acknowledges its understanding that each of the
Arrangers, 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, each of the Arrangers, 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.
9.7 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT.
Unless the Borrower or a Lender, as the case may be, notifies the
Administrative Agent prior to the date on which it is scheduled to make payment
to the Administrative Agent of (i) in the case of a Lender, the proceeds of a
Loan or (ii) in the case of the Borrower, a payment of principal, interest or
fees to the Administrative Agent for the account of the Lenders, that it does
not intend to make such payment, the Administrative Agent may assume that such
payment has been made. The Administrative Agent may, but shall not be obligated
to, make the amount of such payment available to the intended recipient in
reliance upon such assumption. If such Lender or the Borrower, as the case may
be, has not in fact made such payment to the Administrative Agent, the recipient
of such payment shall, on demand by the Administrative Agent, repay to the
Administrative Agent the amount so made available together with interest thereon
in respect of each day during the period commencing on the date such amount was
so made available by the Administrative Agent until the date the Administrative
Agent recovers such amount at a rate per annum equal to (x) in the case of
payment by a Lender, the Federal Funds Effective Rate for such day for the first
three days and, thereafter, the interest rate applicable to the relevant Loan or
(y) in the case of payment by the Borrower, the interest rate applicable to the
relevant Loan.
[Remainder of page intentionally left blank]
68
$500,000,000 THREE YEAR 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.
ASSURANT, INC.
By: /s/ Miles X. Xxxxx
_____________________________________
Name: Miles X. Xxxxx
Title: VP & Treasurer
Notice Address:
Assurant, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxxx Xxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
S-1
$500,000,000 THREE YEAR CREDIT AGREEMENT
BANK ONE, NA,
as Lender and Administrative Agent
By: /s/ Xxxxxx X. Xxxxxxx
_____________________________________
Name: Xxxxxx X. Xxxxxxx
Title: Director
Funding and Payment Office Address:
Bank One, NA
1 Bank One Plaza
Mail Code: IL1-0010
Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Notice Address:
Bank One, NA
1 Bank One Plaza
Mail Code: IL1-0325
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
S-2
$500,000,000 THREE YEAR CREDIT AGREEMENT
CITICORP NORTH AMERICA INC., as Lender
and Syndication Agent
By: /s/ Xxxxx X. Xxxxxxx
_____________________________________
Name: Xxxxx X. Xxxxxxx
Title: Managing Director
S-3
$500,000,000 THREE YEAR CREDIT AGREEMENT
XXXXXX XXXXXXX SENIOR FUNDING, INC.,
as Lender and Co-Documentation Agent
By: /s/ Jaap L. Tonckens
_____________________________________
Name: Jaap L. Tonckens
Title: Vice President
Xxxxxx Xxxxxxx Bank
S-4
$500,000,000 THREE YEAR CREDIT AGREEMENT
JPMORGAN CHASE BANK, as Lender and
Co-Documentation Agent
By: /s/ Xxxxxxx X. Xxxxxxxxx
_____________________________________
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President
S-5
$500,000,000 THREE YEAR CREDIT AGREEMENT
CREDIT SUISSE FIRST BOSTON (ACTING
THROUGH ITS CAYMAN ISLANDS BRANCH)
By: /s/ Xxx Xxxxx
-------------------------------------
Name: Xxx Xxxxx
Title: Director
By: /s/ Xxxxx X. Xxxx
-------------------------------------
Name: Xxxxx X. Xxxx
Title: Associate
S-6
$500,000,000 THREE YEAR CREDIT AGREEMENT
KEYBANK, NATIONAL ASSOCIATION
By: /s/ Xxxx X. Xxxxx
-------------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
S-7
$500,000,000 THREE YEAR CREDIT AGREEMENT
M&I XXXXXXXX & XXXXXX BANK
By: /s/ Xxxxxx X. Xxxxxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Vice President
By: /s/ Xxx X. Xxxxxxxxxx
-------------------------------------
Name: Xxx X. Xxxxxxxxxx
Title: Senior Vice President
S-8
$500,000,000 THREE YEAR CREDIT AGREEMENT
XXXXXXX XXXXX BANK USA
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: Director
S-9
$500,000,000 THREE YEAR CREDIT AGREEMENT
SUNTRUST BANK
By: /s/ Xxxxx X. Xxxxxxxxx
_____________________________________
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
S-10
$500,000,000 THREE YEAR CREDIT AGREEMENT
U.S. BANK NATIONAL ASSOCIATION
By: /s/ Xxxx Xxxxxxxxxx
_____________________________________
Name: Xxxx Xxxxxxxxxx
Title: Vice President
S-11
$500,000,000 THREE YEAR CREDIT AGREEMENT
XXXXXXX STREET COMMITMENT CORPORATION
(RECOURSE ONLY TO ASSETS OF XXXXXXX
STREET COMMITMENT CORPORATION)
By: /s/ Xxxxxxxx X. Xxxx
_____________________________________
Name: Xxxxxxxx X. Xxxx
Title: Vice President and CFO
S-12
$500,000,000 THREE YEAR CREDIT AGREEMENT
BEAR XXXXXXX CORPORATE LENDING INC.
By: /s/ Xxxxx X. Xxxx
_______________________________________
Name: Xxxxx X. Xxxx
Title: Vice President
S-13
$500,000,000 THREE YEAR CREDIT AGRREEMENT
COMMERCE BANK, NA
By: /s/ Xxxxxx X. Xxxx
_______________________________________
Name: Xxxxxx X. Xxxx
Title: Vice President
S-14
$500,000,000 THREE YEAR CREDIT AGREEMENT
SCHEDULE 2.1
(Lenders' Commitments and Pro Rata Shares)
LENDER COMMITMENT PRO RATA SHARE
------ ---------- --------------
Bank One, NA $ 65,000,000 13.000000000%
Citicorp North America Inc. $ 65,000,000 13.000000000%
JPMorgan Chase Bank $ 50,000,000 10.000000000%
Xxxxxx Xxxxxxx Senior Funding, Inc. $ 50,000,000 10.000000000%
Credit Suisse First Boston (acting through its
Cayman Islands Branch) $ 35,000,000 7.000000000%
KeyBank, National Association $ 35,000,000 7.000000000%
M&I Xxxxxxxx & Ilsley Bank $ 35,000,000 7.000000000%
Xxxxxxx Xxxxx Bank USA $ 35,000,000 7.000000000%
SunTrust Bank $ 35,000,000 7.000000000%
U.S. Bank National Association $ 35,000,000 7.000000000%
Xxxxxxx Street Commitment Corporation $ 35,000,000 7.000000000%
Bear Xxxxxxx Corporate Lending Inc. $ 15,000,000 3.000000000%
Commerce Bank, NA $ 10,000,000 2.000000000%
TOTAL $500,000,000 100.000000000%
$500,000,000 THREE YEAR CREDIT AGREEMENT
SCHEDULE 1.1
PRICING SCHEDULE
The Applicable Margin for Base Rate Loans and LIBOR Loans, the Commitment Fee
Rate and the Utilization Fee Rate shall be determined based on the applicable
Performance Level (as defined below).
PERFORMANCE LEVEL LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V LEVEL VI
----------------- ------- -------- --------- -------- ------- --------
APPLICABLE MARGIN FOR BASE
RATE LOANS 0% 0% 0% 0. 250% 0.750% 1.500%
APPLICABLE MARGIN FOR LIBOR
LOANS 0.500% 0.625% 0.750% 1.000% 1.500% 2.250%
COMMITMENT FEE RATE 0.100% 0.125% 0.150% 0.175% 0.200% 0.250%
UTILIZATION FEE RATE 0.125% 0.125% 0.125% 0.250% 0.250% 0.250%
; provided that so long as any obligation of the Borrower under the Bond Bridge
Facility is guaranteed by the Parents, (i) the Applicable Margin for LIBOR Loans
shall be increased by 0.200% for each Performance Level and (ii) the Commitment
Fee Rate shall be increased by 0.050% for each Performance Level.
$500,000,000 THREE YEAR CREDIT AGREEMENT
"PERFORMANCE LEVEL" means 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 Borrower
in effect on such date as set forth in the following chart:
PERFORMANCE LEVEL PUBLIC DEBT RATING
----------------- ------------------
LEVEL I Long Term Senior Unsecured Debt rated greater
than or equal to A by S&P or A2 by Xxxxx'x
LEVEL II Long Term Senior Unsecured Debt rated greater
than or equal to A- by S&P or A3 by Xxxxx'x
LEVEL III Long Term Senior Unsecured Debt rated greater
than or equal to BBB+ by S&P or Baa1 by Xxxxx'x
LEVEL IV Long Term Senior Unsecured Debt rated greater
than or equal to BBB by S&P or Baa2 by Xxxxx'x
LEVEL V Long Term Senior Unsecured Debt rated greater
than or equal to BBB- by S&P or Baa3 by Xxxxx'x
LEVEL VI Long Term Senior Unsecured Debt rated less than or
equal to BB+ by S&P or Ba1 by Xxxxx'x, and at all other
times (including if such ratings are not available from
both S&P and Xxxxx'x)
For purposes of this definition, the Performance Level shall be
determined by the applicable public debt rating for the Borrower as follows: (i)
the public debt rating shall be determined by the then-current rating announced
by either S&P or Xxxxx'x, as the case may be, for any class of
non-credit-enhanced long-term senior unsecured debt issued by the Borrower; (ii)
if only one of S&P and Xxxxx'x shall have in effect such a public debt rating,
the Performance Level will be Level VI (except as a result of either S&P or
Xxxxx'x, 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 Xxxxx'x shall have
in effect such a public debt rating, the applicable Performance Level will be
Level VI; (iv) if such public debt ratings established by S&P and Xxxxx'x shall
fall within different levels, 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
$500,000,000 THREE YEAR CREDIT AGREEMENT
ratings; (v) if any such public debt rating established by S&P or Xxxxx'x 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 Xxxxx'x 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 Xxxxx'x, as the case may be, shall refer
to the then-equivalent rating by S&P or Xxxxx'x, as the case may be.
