EXHIBIT 10.1
[CONFORMED COPY
WITH EXHIBITS X-0, X-0 AND E
CONFORMED AS EXECUTED]
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CREDIT AGREEMENT
dated as of September 17, 1999
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U.S.I. HOLDINGS CORPORATION
Borrower
the Lenders party hereto
CREDIT LYONNAIS CAYMAN ISLAND BRANCH
Administrative Agent
THE CHASE MANHATTAN BANK
Syndication Agent
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CREDIT LYONNAIS
CAYMAN ISLAND BRANCH
and
CHASE SECURITIES INC.
Joint Book Managers and Lead Arrangers
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TABLE OF CONTENTS
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SECTION I
DEFINITIONS ............................................................................1
1.1 Defined Terms................................................................1
1.2 Other Definitional Provisions...............................................27
SECTION 2
AMOUNT AND TERMS OF COMMITMENTS AND LOANS.............................................28
2.1 Revolving Credit Commitments................................................28
2.2 Procedure for Borrowing Revolving Credit Loans..............................28
2.3 Repayment of Revolving Credit Loans.........................................29
2.4 Term Loan...................................................................29
2.5 Procedure for Borrowing Term Loans..........................................30
2.6 Repayment of Term Loans.....................................................30
2.7 Evidence of Indebtedness....................................................31
2.8 Revolving Credit Commitment Fees............................................32
2.9 Termination or Reduction of Revolving Credit Commitments....................32
2.10 Use of Proceeds of Loans....................................................32
2.11 Fee Letter..................................................................33
2.12 Letters of Credit...........................................................33
2.13 Letter of Credit Requests...................................................35
2.14 Letter of Credit Participations.............................................35
2.15 Agreement to Repay Letter of Credit Drawings................................37
2.16 Increased Costs.............................................................38
2.17 Letter of Credit Fees.......................................................38
SECTION 3
GENERAL PROVISIONS APPLICABLE TO COMMITMENTS AND LOANS.................................39
3.1 Optional and Mandatory Prepayments..........................................39
3.2 Conversion and Continuation Options.........................................42
3.3 Amounts and Interest Periods for Eurodollar Loans...........................42
3.4 Interest Rates and Payment Dates............................................42
3.5 Computation of Interest.....................................................43
3.6 Inability to Determine Interest Rate........................................43
3.7 Payments and Pro Rata Treatment.............................................44
3.8 Illegality..................................................................45
3.9 Requirements of Law.........................................................45
3.10 Taxes.......................................................................47
(i)
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3.11 Breakage Costs..............................................................50
SECTION 4
REPRESENTATIONS AND WARRANTIES.........................................................50
4.1 Financial Condition.........................................................50
4.2 No Change...................................................................51
4.3 Corporate Existence; Compliance with Law....................................51
4.4 Corporate Power, Authorization; Enforceable Obligations.....................52
4.5 No Legal Bar................................................................52
4.6 No Material Litigation......................................................52
4.7 No Default..................................................................52
4.8 Ownership of Property; Liens................................................53
4.9 Intellectual Property.......................................................53
4.10 No Burdensome Agreements....................................................53
4.11 Taxes.......................................................................53
4.12 Federal Regulations ........................................................53
4.13 ERISA.......................................................................54
4.14 Investment Company Act; Other Regulations...................................55
4.15 Corporate Structure.........................................................55
4.16 Environmental and Other Matters ............................................56
4.17 Security Documents..........................................................56
4.18 Accuracy of Information.....................................................57
4.19 Insurance...................................................................57
4.20 Solvency....................................................................57
4.21 Labor Relations.............................................................57
4.22 Indebtedness................................................................57
4.23 Real Property...............................................................58
4.24 Representations and Warranties in Loan Documents............................58
4.25 Year 2000 Solution..........................................................58
SECTION 5
CONDITIONS PRECEDENT ..................................................................58
5.1 Closing Conditions..........................................................58
5.2 Additional Conditions to Each Credit Event..................................61
SECTION 6
AFFIRMATIVE COVENANTS .................................................................62
6.1 Financial Statements .......................................................62
6.2 Certificates; Other Information.............................................63
6.3 Payment of Taxes and Other Obligations......................................64
6.4 Conduct of Business; Maintenance of Existence...............................65
6.5 Maintenance of Property and Insurance.......................................65
6.6 Inspection of Property, Books and Records; Discussions......................65
6.7 Notices.....................................................................65
(ii)
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6.8 Environmental Law...........................................................66
6.9 Maintenance of Security 66
6.10 Corporate Structure.........................................................69
6.11 Compliance with ERISA and the Code..........................................69
6.12 Interest Rate Protection....................................................69
6.13 Year 2000 Solution..........................................................70
6.14 Fiduciary Cash..............................................................70
6.15 Obligations under Fee Letter................................................70
SECTION 7
NEGATIVE COVENANTS.....................................................................70
7.1 Financial Covenants.........................................................70
7.2 Limitation on Indebtedness..................................................73
7.3 Limitation on Liens.........................................................74
7.4 Limitation on Guarantee Obligations.........................................74
7.5 Limitation on Fundamental Changes...........................................75
7.6 Limitation on Transfer of Assets............................................75
7.7 Restricted Payments.........................................................75
7.8 Limitation on Investments...................................................76
7.9 Limitation on Optional Payments and Modifications of Indebtedness...........77
7.10 Limitation on Transactions with Affiliates..................................77
7.11 Limitation on Changes in Fiscal Year........................................77
7.12 Limitation on Negative Pledges..............................................77
7.13 Limitation on Payment Restrictions Affecting Subsidiaries...................77
7.14 Limitation on Business and Acquisitions.....................................78
7.15 ERISA Matters...............................................................78
SECTION 8
EVENTS OF DEFAULT .....................................................................79
SECTION 9
THE AGENTS.............................................................................82
9.1 Appointment.................................................................82
9.2 Delegation of Duties........................................................82
9.3 Exculpatory Provisions......................................................82
9.4 Reliance by Agents..........................................................82
9.5 Notice of Default...........................................................83
9.6 Non-Reliance on Agents and Other Lenders....................................83
9.7 Indemnification.............................................................84
9.8 Agents In Their Individual Capacity.........................................84
9.9 Successor Agents............................................................84
9.10 SubAgents; Co-Collateral Agents.............................................85
9.11 Concerning the Collateral...................................................85
9.12 Arranger and Syndication Agent..............................................87
(iii)
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SECTION 10
MISCELLANEOUS..........................................................................87
10.1 Amendments and Waivers......................................................87
10.2 Notices.....................................................................88
10.3 No Waiver; Remedies Cumulative..............................................89
10.4 Survival of Representations and Warranties..................................89
10.5 Payment of Expenses and Taxes; Indemnification..............................89
10.6 Successors and Assigns; Participations and Assignments......................90
10.7 Set-off; Adjustments........................................................92
10.8 Counterparts................................................................93
10.9 Severability................................................................93
10.10 Integration.................................................................93
10.11 GOVERNING LAW...............................................................93
10.12 Submission To Jurisdiction; Waivers.........................................93
10.13 Acknowledgments.............................................................94
10.14 WAIVERS OF JURY TRIAL.......................................................95
10.15 Interest Rate Limitation....................................................95
10.16 Confidentiality.............................................................95
10.17 Generally Accepted Accounting Principles....................................95
(iv)
SCHEDULES:
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Schedule I Commitment and Pro Rata Shares
Schedule 1.1(a) Existing Stock Redemption Obligations
Schedule 1.1(b) Existing Debt and Liens
Schedule 1.1(c) Certain EBITDA Adjustments
Schedule 1.1(d) Shared Subsidiary Collateral Seller Debt
Schedule 1.1(e) Extraordinary Gains/Losses
Schedule 1.1(f) Pre-1997 Seller Debt
Schedule 2.12(d) Existing Letter of Credit
Schedule 4.1(c) Liabilities
Schedule 4.1(d) Transfers
Schedule 4.2 Material Changes
Schedule 4.6 Litigation
Schedule 4.9 Intellectual Property Licenses
Schedule 4.13 ERISA Plans
Schedule 4.15 Corporate and Capital Structure of Borrower and
Subsidiaries
Schedule 4.19 Property Insurance
Schedule 4.22 Existing Lines of Credit
Schedule 4.23 Real Property
Schedule 6.10(a) Non Wholly Owned Subsidiaries
Schedule 6.10(b) Subsidiaries not Owned Through USIS
Schedule 7.8 Existing Investments
EXHIBITS:
Exhibit A Assignment and Acceptance
Exhibit B-1 Borrower Pledge and Security Agreement
Exhibit B-2 Subsidiary Pledge and Security Agreement
Exhibit C Form of Certificate for Permitted Acquisitions
Exhibit D Form of Compliance Certificate
Exhibit E Subsidiary Guaranty
Exhibit F Form of Borrowing Notice
Exhibit G-1 Form of Revolving Credit Note
Exhibit G-2 Form of Term Loan Note
Exhibit H-1 Form of Officer's Closing Certificate of Borrower
Exhibit H-2 Form of Secretary's Closing Certificate of Borrower
Exhibit I-1 Form of Officer's Closing Certificate of Guarantors
Exhibit I-2 Form of Secretary's Closing Certificate of Guarantors
Exhibit J-1 Opinion of Xxxxxx Xxxxxx & Xxxxxxx
Exhibit J-2 Opinion of Morea & Xxxxxxxx
CREDIT AGREEMENT dated as of September 17, 1999, by and among U.S.I.
HOLDINGS CORPORATION, a Delaware corporation (the "Borrower"), the Lenders from
time to time party hereto, CREDIT LYONNAIS CAYMAN ISLAND BRANCH, as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent") and THE CHASE MANHATTAN BANK, as syndication agent for the Lenders (in
such capacity, the "Syndication Agent").
Recitals
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The Borrower has requested the Lenders, and the Lenders have agreed,
to extend credit in the form of (i) a $75,000,000 facility for Revolving Credit
Loans and (ii) a $125,000,000 facility for a Term Loan.
NOW, THEREFORE, in consideration of the mutual agreements set forth
herein, the parties hereby agree as follows:
SECTION 1
DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings:
"Accrued Look-Back Liability" means any Look-Back Liability that has
accrued as of or after the last day of the period on the basis of which, under
the terms of the agreement governing such Look-Back Liability, the amount of
such Look-Back Liability is required to be initially determined, whether or not
payment thereof is then due or is deferred and whether or not any deferred
payment is subject to results of operations in any subsequent period.
"Accrued Retention Liability" means the present value (discounted at
no more than 8% per annum) of all future installment payments of a liability
incurred in connection with a Permitted Acquisition determined as if the Person
or business that is acquired in the Permitted Acquisition in which such
liability is incurred earns annual revenues over the remainder of the period
(which period, under the terms of the agreement governing such liability, serves
as the basis for determining the amount of such liability) which equal the
revenues earned by such Person or business during the immediately preceding
twelve months (adjusted, if such person or business were acquired during such
twelve-month period, by the Borrower reasonably and in good faith, in a manner
consistent with the agreement governing such acquisition, so as to eliminate
noncontinuing and nonrecurring revenues or otherwise reflect changes in
continuing revenues resulting from events occurring prior to or in connection
with such acquisition).
"Acquisition Consideration" means the purchase price, merger
consideration or other purchase consideration for any Permitted Acquisition,
whether paid or payable in cash, property or securities and whether paid or
payable at the consummation of such Permitted Acquisition or at any time
thereafter and includes all liabilities (except accounts payable and
accruals incurred in the ordinary course of business and except contingent
liabilities not required under GAAP to be reflected or reserved for on a balance
sheet or noted in a note thereto) enforceable against the Person or business
acquired in such Permitted Acquisition or the assets thereof that are not
retired at the consummation of such Permitted Acquisition and all deferred
purchase payments (whether or not contingent) such as deferred purchase
consideration, whether or not evidenced by an instrument or security, Look-Back
Liabilities, Retention Liabilities, noncompetition payments, and all other
payments made or liabilities incurred to or for account of any creditor of, or
holder of any equity interest in, any Person or business acquired in a Permitted
Acquisition, except salaries, bonuses and other payments for services rendered.
"Acquisition Funding" means the use of any proceeds of Revolving
Credit Loans, directly or indirectly, to pay any Acquisition Consideration or
fees and costs for any Permitted Acquisition that are due and paid concurrently
with the consummation of such Permitted Acquisition (or, in the case of
Look-Back Liabilities, the amount payable under clause (c) of such definition).
"Acquisition Revolving Loans" means any Revolving Credit Loan the
proceeds of which are used to fund any Permitted Acquisition.
"Adjusted Pro Forma EBITDA" means, for any period, the Consolidated
EBITDA of the Borrower and its Subsidiaries (other than Excluded Subsidiaries)
for such period adjusted, in a manner consistent with the last sentence of this
definition, (a) by factoring into the calculation thereof the Pre-Acquisition
Adjusted EBITDA for such period of each Person and business acquired by the
Borrower or a Subsidiary of the Borrower in such period, as though such
acquisition had been consummated on the first day of such period, except
Pre-Acquisition Adjusted EBITDA of Excluded Subsidiaries, and (b) by factoring
out of the calculation thereof the revenues and other income items and expenses
and other charges attributable to each Subsidiary or business that was sold by
the Borrower or a Subsidiary of the Borrower in such period or attributable to
each Subsidiary (other than an Excluded Subsidiary) that in such period ceased
to be, and each business that in such period ceased to be owned and operated
solely by, a Wholly Owned Subsidiary of the Borrower, in each case as though
such sale had been consummated or such other event had occurred on the first day
of such period. As to any Person or business acquired or sold during any period
for which Adjusted Pro Forma EBITDA is calculated as set forth in the preceding
sentence, the adjustments to Consolidated EBITDA shall be made in compliance
with the requirements of Regulation S-X for a public offering registered under
the Securities Act of 1933 for pro forma EBITDA adjustments, except for certain
specified adjustments set forth on Schedule 1.1 (c) with respect to certain
Persons or businesses acquired or sold prior to the Closing Date.
"Administrative Agent" means Credit Lyonnais, as administrative agent
for the Lenders under this Agreement and the other Loan Documents, or its
successor appointed pursuant to Section 9.9.
"Affiliate" means with respect to any Person (a "designated Person"),
any other Person (a) that directly or indirectly, is in control of, is
controlled by, or is under common
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control with the designated Person, (b) that directly or indirectly beneficially
owns or holds 5% or more of any class of Voting Stock of the designated Person,
(c) 5% or more of the Voting Stock of which is directly or indirectly
beneficially owned or held by the designated Person or any of its Subsidiaries,
(d) that is a limited partner of the designated Person, (e) that is an officer
or director (or member of the immediate family of any officer or director) of
(i) the designated Person or any of its Subsidiaries, or (ii) any Person that
directly or indirectly beneficially owns 5% or more of any class of any Voting
Stock of the designated Person, or (f) that can direct or cause the direction of
the management or policies of the designated Person, whether by contract or
otherwise. Notwithstanding the foregoing, the term "Affiliate" will not include
any Lender or any affiliate of a Lender.
"Agents" means the Administrative Agent and the Syndication Agent.
"Agreement" means this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"Applicable Credit Rating" means the senior secured bank credit
facility rating assigned to the Borrower by Moodys or S&P, as the case may be.
"Applicable Margin" means an amount added as a per annum rate to the
Eurodollar Rate (the "Applicable Eurodollar Rate Margin") or the Base Rate (the
"Applicable Base Rate Margin") determined as follows:
(i) until the six-month anniversary of the Closing Date the Applicable
Eurodollar Rate Margin shall be 4.50% p.a. and the Applicable Base Rate Margin
shall be 3.25% p.a and (ii) for each day thereafter the Applicable Margins shall
be based on the Applicable Credit Rating at such time, with any change in an
Applicable Margin predicated on a change in the Application Credit Rating to be
effective on the day of such rating change, as follows:
Applicable Eurodollar Rate Base Rate
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Level Credit Rating Margin Margin
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(% p.a.) (% p.a.)
I >= Ba3 from 4.25% 3.00%
Moodys and B+
from S&P
II Otherwise 4.50% 3.25%
provided, however, that (a) the Applicable Eurodollar Rate Margin shall be 4.50%
and the Applicable Base Rate Margin shall be 3.25% at all times when the
Borrower does not have an Applicable Credit Rating from both Moodys and S&P and
(b) each Applicable Margin for each Loan shall be two percent (2%) per annum
greater than the amount otherwise set forth above for each day on which any
Event of Default has occurred and is continuing.
"Assignee" has the meaning given to it in Section 10.6(c).
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"Assignment and Acceptance" means an instrument substantially in the
form of Exhibit A
"Base Rate" means a rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to the greater of (i) the Prime Rate in effect on
such day and (ii) the Federal Funds Rate in effect on such day plus 1/2 of 1%
per annum.
"Base Rate Loans" means any amount outstanding on any Loan, except
amounts that then constitute Eurodollar Rate Loans.
"Benefited Lender" has the meaning given to it in Section 10.7(b).
"Board of Governors" means the Board of Governors of the Federal
Reserve System or any successor to the functions and powers thereof.
"Borrower Pledge and Security Agreement" means a Pledge and Security
Agreement executed and delivered by the Borrower in substantially the form of
Exhibit B-1.
"Borrowing Date" means any Business Day specified in or in a notice
pursuant to Section 2.2 or Section 2.5 as a date on which the Borrower requests
the Lenders to make Loans under this Agreement.
"Business Day" means any day other than (i) a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to close and (ii) in connection with a Eurodollar Loan, any day on which
banks are not open for dealings in the London interbank market.
"Capital Expenditures" means, for any Person for any period, any and
all expenditures made by such Person or any of its Subsidiaries in such period
for assets added to or reflected in its property, plant and equipment accounts
or other similar capital asset accounts on the consolidated balance sheet of
such Person and its Subsidiaries prepared in accordance with GAAP, whether such
asset is purchased for cash or financed as an account payable or by the
incurrence of Indebtedness or otherwise, except any such expenditure that
constitutes Acquisition Consideration or is made from Casualty Loss Proceeds
(determined, for this purpose only, without giving effect to the exceptions set
forth in clauses (i) and (ii) of the definition thereof).
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, and
all equivalent ownership interests in any Person that is not a corporation, and
any and all warrants, options and rights to purchase any of the foregoing.
"Capital Lease Obligations" means, with respect to any Person at any
time, the amount of the liability in respect of any capital lease that would at
such time be required to be capitalized on the balance sheet of such Person
prepared in accordance with GAAP.
"Cap Z" shall mean, collectively, Capital Z Financial Services Fund
II, L.P. and Capital Z Financial Services Private Fund II, L.P. and their
respective Affiliates.
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"Cash Equivalents" means, at any time, (i) United States dollars, (ii)
securities issued or directly and fully guaranteed or insured by the United
States government or any agency or instrumentality thereof maturing within one
year, (iii) certificates of deposit, time deposits and bankers' acceptances
maturing within 270 days issued by any domestic commercial bank having capital
and surplus in excess of $250,000,000, (iv) demand deposits with any domestic
commercial bank having capital and surplus in excess of $250,000,000, (v)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (ii) and (iii) above entered into
with any domestic commercial bank having capital and surplus in excess of
$250,000,000, (vi) commercial paper having the highest rating obtainable from
Moodys or S&P and maturing within 270 days, and (vii) investments in money
market funds substantially all of the assets of which comprise United States
dollars or securities of the type described in clauses (ii) through (vi) above.
"Casualty Loss" means, with respect to any tangible property owned or
used by the Borrower or any of its Subsidiaries, (i) any damage to or loss or
destruction of such tangible property, or (ii) any actual condemnation or
taking, by exercise of the power of eminent domain or otherwise, of such
tangible property.
"Casualty Loss Proceeds" means any payment received by the Borrower or
any of its Subsidiaries on account of any Casualty Loss, including insurance
proceeds, condemnation awards and other claims, other than (i) any such payment
applied by the Borrower or any of its Subsidiaries to pay the cost of repair or
replacement of the property subject to such Casualty Loss within six months from
the date of receipt and (ii) the first $200,000 in other payments received in
any calendar year.
"CERCLA" means the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as the same may be amended from time to time, 42
U.S.C. Section 9601 et seq.
"Change of Control" means the occurrence of any of the following:
(a) the consummation of any transaction (including any merger or
consolidation) the result of which is that any "person" or "group" (as such
terms are defined for purposes of the Securities Exchange Act of 1934, as
amended), excluding any such person or group which owns 1% or more of the
Borrower's Voting Stock on the Closing Date, becomes the "beneficial owner" (as
so defined, except that a Person shall be deemed to have "beneficial ownership"
of all securities that such Person has the right to acquire, whether such right
is currently exercisable or is exercisable only upon the occurrence of a
subsequent condition), directly or indirectly, of more than 25% of the aggregate
outstanding Voting Stock of the Borrower (measured by voting power rather than
number of shares),
(b) the first day on which none of CNA, Equitable, Cap Z nor Zurich,
nor any combination of them, their Subsidiaries and any Person that, directly or
indirectly, is in control of, is controlled by, or is under common control with,
any of the aforesaid Persons, is a "beneficial owner" (as defined for purposes
of the Securities Exchange Act of 1934, as amended) of at least 25% of the
aggregate outstanding Voting Stock of the Borrower,
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(c) the first day on which a majority of the members of the board of
directors of the Borrower are not either (i) nominated by the board of directors
of the Borrower or (ii) appointed by directors so nominated,
(d) the Borrower consolidates with, or merges with or into, any
Person, or any Person consolidates with or merges with or into the Borrower, in
any such event pursuant to a transaction in which any of the outstanding Voting
Stock of the Borrower is converted into or exchanged for cash, securities or
other property, other than any such transaction where the Voting Stock of the
Borrower outstanding immediately prior to such transaction is converted into or
exchanged for Voting Stock of the surviving or transferee Person constituting a
majority of the aggregate outstanding shares of such Voting Stock of such
surviving or transferee Person (immediately after giving effect to such
conversion or exchange), or
(e) an event constituting a "Change of Control" (or similar event
consisting of or relating to any change in ownership, control or management of
the Borrower, however denominated) under any instrument evidencing, or indenture
or agreement governing, any Indebtedness of the Borrower or any of its
Subsidiaries outstanding in an aggregate amount exceeding $2,000,000 (including,
without limitation, any Subordinated Indebtedness), if the effect thereof is to
require, or permit any holder of such Indebtedness to require, any payment or
purchase or redemption offer to be made in respect of such Indebtedness.
"Chase" means The Chase Manhattan Bank.
"Closing Date" means September 17, 1999.
"CNA" means CNA Financial Corporation.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral" means all property of the Borrower and its Subsidiaries,
whether now owned or hereafter acquired, upon which a Lien is granted or
purported to be granted under any Security Document or required or intended to
be granted pursuant to any Loan Document.
"Commitment" means, with respect to each Lender, such Lender's
Revolving Credit Commitment or Term Commitment.
"Commonly Controlled Entity" means an entity, whether or not
incorporated, that is or was under common control with the Borrower within the
meaning of Section 4001 of ERISA or is or was part of a group that includes the
Borrower and that is treated as a single employer under Section 414 of the Code.
"Consolidated Debt" means, at any time, the aggregate outstanding
amount of (i) all Loans and all Capital Lease Obligations of the Borrower or any
of its Subsidiaries, all Subordinated Indebtedness, all Permitted Subsidiary
Bank Debt and all Permitted Seller Debt
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(except (A) Non-Recourse Seller Debt, (B) Look-Back Liabilities that are not
then Accrued Look-Back Liabilities and (C) Retention Liabilities that are not
then Accrued Retention Liabilities), in each case whether or not set forth or
required to be set forth on a balance sheet, and (ii) all other Indebtedness of
the Borrower and its Subsidiaries that is set forth, or under GAAP is required
to be set forth, as a liability on a consolidated balance sheet of the Borrower
and its Subsidiaries in accordance with GAAP.
"Consolidated EBITDA" means, for any Person for any period, (a) the
Consolidated Net Income of such Person for such period plus (b) to the extent,
and only to the extent, deducted in the computation of such Consolidated Net
Income, the aggregate amount of (i) Consolidated Interest Expense, (ii)
Consolidated Income Tax Expense, (iii) charges for amortization and depreciation
determined on a consolidated basis in accordance with GAAP, and (iv)
compensation expense accrued in respect of Stock Appreciation Rights, minus (c)
cash payments made in such period to honor, redeem or discharge Stock
Appreciation Rights.
"Consolidated Fixed Charges" means, for any Person for any period, the
sum of Debt Service of such Person and its Subsidiaries (except Excluded
Subsidiaries) for such period.
"Consolidated Income Tax Expense" with respect to any Person for any
period, charges for income taxes (and other taxes of a similar nature or imposed
in lieu thereof) accrued in or for such period by such Person and its
Subsidiaries (except Excluded Subsidiaries), determined on a consolidated basis
in accordance with GAAP.
"Consolidated Interest Expense" means, for any Person for any period,
charges for interest and financing fees and costs and other interest charges
accrued in or for such period by such Person and its Subsidiaries (except
Excluded Subsidiaries), determined on a consolidated basis in accordance with
GAAP.
"Consolidated Interest Income" means, for any Person for any period,
the aggregate amount of all items of interest income (other than interest income
of Excluded Subsidiaries) accrued by such Person and its Subsidiaries (except
Excluded Subsidiaries) for such period (whether or not actually paid during such
period) determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, for any Person for any period, net
earnings (or loss) after income taxes of such Person and its Subsidiaries
(except Excluded Subsidiaries) for such period, determined on a consolidated
basis in accordance with GAAP, but excluding (a) net earnings (or loss) of any
Subsidiary of such Person accrued prior to the date it became a Subsidiary and
any other earnings (or loss) of any Person or business acquired by such Person
or any of its Subsidiaries through purchase, merger or consolidation or
otherwise and earnings (or loss) of any business acquired by such Person or any
of its Subsidiaries, in each case for any period prior to the date of
acquisition; (b) any gain or loss (net of tax effects applicable thereto)
resulting from the sale, conversion or other disposition of capital assets other
than in the ordinary course of business; (c) charges for restructuring and
elimination of duplication relating to the combination of acquired operations;
(d) any extraordinary, unusual
7
or nonrecurring gains or losses, including, without limitation, items described
on Schedule 1.1(e); (e) any gain arising from any reappraisal or write-up of
assets; (f) any portion of the net earnings of any Subsidiary of such Person
that for any reason is unavailable for payment of dividends to such Person; (g)
any gain or loss (net of tax effects applicable thereto) during such period
resulting from the receipt of any proceeds of any insurance policy; (h) net
earnings of any Excluded Subsidiary, except to the extent such net earnings have
actually been received as a lawful and contractually permitted distribution of
capital by the Borrower or by a Wholly Owned Subsidiary of the Borrower that is
not an Excluded Subsidiary; (i) net earnings of any Person that is not a
Subsidiary of such Person in which such Person or any of its Subsidiaries has an
ownership interest, except to the extent such net earnings have actually been
received by such Person or any of its Subsidiaries in the form of cash
distributions; (j) any gain arising from the acquisition of any Indebtedness or
securities of such Person or any of its Subsidiaries; (k) any portion of
earnings attributable to minority interests in any Subsidiary of such Person;
and (l) any portion of the net earnings of such Person that cannot be freely
converted into United States dollars.
"Consolidated Net Interest Expense" means, for any Person for any
period, the greater of (a) the Consolidated Interest Expense of such Person for
such period minus the Consolidated Interest Income of such Person for such
period, and (b) one dollar ($1).
"Consolidated Total Debt Ratio" means, as of any day, the ratio of (a)
Consolidated Debt as of such day to (b) Adjusted Pro Forma EBITDA for the
twelve-month period ending on such day, taken as a single period.
"Credit Event" means the making of any Loan or the issuance of any
Letter of Credit.
"Credit Lyonnais" means Credit Lyonnais, Cayman Island Branch, or,
where another branch or Affiliate of Credit Lyonnais is expressly referred to
herein, such branch or Affiliate.
"Debt Service" means, with respect to any Person for any period, the
sum of (a) Consolidated Interest Expense of such Person for such period plus the
amount of all items included in the Consolidated Interest Income of such Person
for such period that, when accrued, were not currently payable in cash and (b)
scheduled principal payments or amortization in respect of Indebtedness of such
Person and its Subsidiaries (except Excluded Subsidiaries) for such period,
whether or not paid.
"Default" means any of the events specified in Section 8, whether or
not any requirement for the giving of notice or the lapse of time, or both, has
been satisfied.
"Disqualified Stock" means, as to any Person, all outstanding Capital
Stock issued by such Person or by any Affiliate of such Person:
(a) In respect of which such Person is, or upon the lapse of any
period of time or occurrence of any event (including consent thereto by any
creditor of such Person) might
8
become, obligated to pay dividends or make distributions except dividends and
distributions that are to be paid or made solely by issuance of Capital Stock
that is issued by such issuer and does not constitute Disqualified Stock, or
(b) that such Person is, or upon the lapse of any period of time or
occurrence of any event (including consent thereto by any creditor of such
Person) might become, obligated to redeem, purchase or exchange for cash or
Indebtedness or any other form of consideration, except (i) an undertaking to
exchange such Capital Stock solely for Capital Stock that is issued by the same
issuer and does not constitute Disqualified Stock, (ii) an undertaking by an
issuer to redeem preferred Capital Stock issued by it on any date occurring
after the seventh anniversary of the Closing Date, if such redemption is
permitted at the time under any and all indentures and agreements governing
Indebtedness of the Borrower then outstanding and if such redemption obligation
by its terms is subordinated in right of payment to such Indebtedness, (iii)
redemption obligations existing on the date of this Agreement, on the terms
described in Schedule 1.1(a), as to Capital Stock then then outstanding as
described therein (iv) any obligation of the Borrower to repurchase, from any
employee of the Borrower or any of its Subsidiaries upon termination of such
employee's employment, any Capital Stock issued to such employee, if such
obligation (to the extent created after the Closing Date) is required to be
performed by the Borrower only if permitted at the time under this Agreement.
"Drawing" has the meaning given it in Section 2.15(b).
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, directives, claims, liens,
notices of noncompliance or violation, investigations or proceedings relating in
any way to any Environmental Law or any permit issued, or any approval given,
under any Environmental Law, including those (a) by a Governmental Authority for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, (b) by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief in connection with alleged injury or threat of injury to
health, safety or the environment due to the presence or disposition of
Materials of Environmental Concern, (c) based on any fact, circumstance,
condition or occurrence forming the basis of any violation, or alleged
violation, of any Environmental Law, and (d) based on any alleged injury or
threat of injury to public health, public safety or the environment due to the
presence or disposition of Materials of Environmental Concern.
"Environmental Laws " means any and all foreign, federal, state, local
or municipal laws, rules, orders, regulations, statutes, ordinances, codes or
decrees of any Governmental Authority or other Requirements of Law (including
common law) regulating, relating to or imposing liability or standards of
conduct concerning Materials of Environmental Concern or protection of human
health or the environment, as now or at any time hereafter in effect.
"Equitable" means The Equitable Companies Incorporated.
9
"Equity Offering" shall mean the issuance by the Borrower on or prior
to the Closing Date of $125,000,000 common and/or preferred equity on terms and
conditions satisfactory to the Required Lenders.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, together with all rules and regulations promulgated
pursuant thereto, as amended from time to time.
"ERISA Event" means (a) the failure to make any required contribution
to a Plan, (b) a "prohibited transaction," as such term is defined in Section
4975 of the Code or a transaction subject to the prohibitions of Sections 406 or
407 of ERISA, which could subject the Borrower, any of its Subsidiaries or any
Commonly Controlled Entity thereof to the tax or penalty on prohibited
transactions imposed by Section 4975 of the Code, liability under Section 502 of
ERISA or any other liability under ERISA or the Code or (c) a violation of the
applicable requirements of Sections 404 or 405 of ERISA, Section 4975 of the
Code, the exclusive benefit rule under Section 401(a) of the Code or any
provision of ERISA by the Borrower, any of its Subsidiaries or any Commonly
Controlled Entities or with respect to which the Borrower, any of its
Subsidiaries or any Commonly Controlled Entities may incur liability.
"Eurocurrency Reserve Requirements" means, as of any date, the stated
maximum rate (expressed as a decimal and rounded to the next higher multiple of
1/100 of 1 % if the rate is not such a multiple) of all reserve requirements in
effect at such date (including basic, supplemental, marginal and emergency
reserves required by applicable law) applicable to any member bank of the
Federal Reserve System in respect of Eurocurrency funding or liabilities as
defined in Regulation D (or any successor category of liabilities under
Regulation D).
"Eurodollar Rate Loans" means, on any day as to any Loan, the amount
then outstanding on any portion of such Loan that was designated as a Eurodollar
Rate Loan by the Borrower in a notice of borrowing or notice of continuation or
conversion delivered to the Administrative Agent in conformity with the
provisions of this Agreement, if on such day the Interest Period set forth in
the most recent of such notices has not expired.
"Eurodollar Rate" means, for each day during any Interest Period for
any Eurodollar Loan, a rate per annum determined for such day in accordance with
the following formula (rounded upward to the nearest 1/100th of 1 %):
LIBOR determined for such Interest Period
-----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Event of Default" means any of the events specified in Section 8.
"Excess Cash Flow" means, with respect to the Borrower and its
Subsidiaries (except Excluded Subsidiaries) on a consolidated basis for any
Excess Cash Flow Period, (a) their Consolidated EBITDA for such Excess Cash Flow
Period minus (b) the sum of
10
(i) Debt Service for such Excess Cash Flow Period actually paid in cash, (ii)
any voluntary prepayments of Term Loans during such Excess Cash Flow Period,
(iii) Capital Expenditures made in cash in such Excess Cash Flow Period and
permitted hereunder, (iv) liabilities for income taxes (and other taxes of a
similar nature or imposed in lieu thereof) paid in cash during such Excess Cash
Flow Period, (v) an amount equal to any increase in Noncash Working Capital
during such Excess Cash Flow Period, and (vi) 50% of the excess, if any, of the
aggregate amount of cash payments of Acquisition Consideration and fees and
costs for any Permitted Acquisition paid during such Excess Cash Flow Period,
over the Acquisition Funding incurred during such Excess Cash Flow Period, plus
(c) an amount equal to any decrease in Noncash Working Capital during such
Excess Cash Flow Period.
"Excess Cash Flow Period" means (i) the period from July 1, 2000 to
and including June 30, 2001 and (ii) each period from July 1 to and including
the immediately succeeding June 30 occurring thereafter.
"Excluded Assets" has the meaning given to it in Section 6.9(b).
"Excluded Subsidiary" means, at any time or for any period, (a) any
Subsidiary of the Borrower that, at such time or on the last day of such period,
has incurred, assumed, guaranteed or otherwise in any respect is or may become
liable for (whether as primary obligor or under any Guarantee Obligation or
otherwise), the payment of any Seller Debt then outstanding (except the Seller
Debt listed on Schedule 1.1 (d) or Schedule 1.1(f)) or has granted, assumed or
become bound or agreed to become bound by, or the property of which is or may
become in any respect subject to, any Lien directly or indirectly securing any
Seller Debt then outstanding (except the Liens listed on such Schedules) and (b)
each Subsidiary of any such Subsidiary of the Borrower.
"Exempt Equity Proceeds" means proceeds from the issuance and sale of
Capital Stock of the Borrower (other than Disqualified Stock) in a transaction
that is not required to be registered under the federal Securities Act of 1933
or its successor, if such Capital Stock (a) is issued and sold to an officer or
employee of the Borrower or any of its Subsidiaries, (b) is issued for use, and
used, solely as Acquisition Consideration, (c) is issued and sold solely to
existing stockholders of the Borrower, but only the first $5,000,000 in proceeds
from such issuances and sales (counting all such issuances and sales effectuated
at any time after the date of this Agreement) shall be Exempt Equity Proceeds,
or (d) is issued pursuant to the Equity Offering.
"Existing Credit Agreement" means the Credit Agreement dated as of
March 2, 1999 by and among the Administrative Agent, the Syndication Agent, the
Lenders party thereto and the Borrower, as amended.
"Existing Debt" means Indebtedness of the Borrower and its
Subsidiaries outstanding (or, in the case of deferred purchase price obligations
incurred in connection with business acquisitions consummated prior to the date
hereof, existing but not yet outstanding) in the amounts (or less) and on the
terms and collateral security (if any) in effect on the date of this Agreement
and described on Schedule 1.1(b).
11
"Existing Letter of Credit" has the meaning given it in Section
2.12(d).
"Facing Fee" has the meaning given it in Section 2.17(b).
"Fair Market Value" means, at any time with respect to any property,
the sale value of such property that would be realized in an arm's-length sale
at such time between an informed and willing buyer and an informed and willing
seller (neither being under a compulsion to buy or sell), as determined in good
faith by the Borrower.
"Federal Funds Rate" means, for each day, the weighted average of the
per annum rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York or, if such
rates are not so published for any day that is a Business Day, the average of
the quotations for such transactions received by the Administrative Agent on
such day from three federal funds brokers of recognized standing selected by it.
"Fee Letter" means the letter, dated August 27, 1999, addressed to the
Borrower by Credit Lyonnais, Chase and Chase Securities Inc., as amended from
time to time by the written agreement of the Borrower, Credit Lyonnais, Chase
and Chase Securities Inc.
"Fiduciary Cash" means premiums received by the Borrower or any of its
Subsidiaries for account of any insurance carrier and not yet remitted to such
insurance carrier, if such premiums are restricted as to use pursuant to any
applicable law or agreement.
"GAAP" has the meaning given to it in Section 10.17.
"Governmental Authority" means the government of any jurisdiction in
which the Borrower or any of its Subsidiaries conducts all or any part of its
business (including the government of the United States of America and all
states and political subdivisions thereof), or that asserts any jurisdiction
over the conduct of the affairs or the property of the Borrower or any of its
Subsidiaries, and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"Guarantee Obligation" means, as to any Person, any guarantee,
endorsement (other than endorsement of checks for collection in the ordinary
course of business), take-or-pay commitment or other form of payment assurance
or payment support, direct or indirect and in any manner (including letters of
credit and reimbursements obligations in respect of any letters of credit), as
to any Indebtedness or any other liability of any other Person.
"Guarantors" means USIS and each other present and future Subsidiary
of the Borrower that at any time executes and delivers, and has not been
released and discharged from, the Subsidiary Guaranty.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under or with respect to (i) all interest rate swap
agreements, interest rate cap
12
agreements and interest rate collar agreements to which such Person is a party,
and (ii) all other agreements or arrangements to which such Person is a party
that are designed to protect such Person against fluctuations in interest rates.
"Indebtedness" means, with respect to any Person:
(a) all obligations of such Person for borrowed money or with respect
to deposits or advances of any kind, except, if incurred in the ordinary course
of business, (i) return premiums from insurance carriers, (ii) amounts currently
payable to insurance carriers and others resulting from premiums and fees
received from insureds and other clients, and (iii) claim payments from
insurance carriers held for remittance to insureds;
(b) all obligations of such Person evidenced by bonds, debentures,
notes or similar instruments;
(c) all obligations of such Person upon which interest charges are
customarily paid;
(d) all obligations of such Person under conditional sale or other
title retention agreements relating to property acquired by such Person;
(e) all obligations of such Person in respect of the deferred purchase
price of property or services, other than current accounts payable and accruals
incurred in the ordinary course of business, including (i) all Acquisition
Consideration for any Permitted Acquisition that is not paid in cash at the
consummation thereof, except Capital Stock of the Borrower, and (ii) all
liabilities incurred prior to the Closing Date in connection with any
acquisition that would constitute Acquisition Consideration if such acquisition
had been a Permitted Acquisition consummated after the Closing Date;
(f) all obligations of such Person or any other Person secured by (or
for which the holder of such obligation has an existing right, contingent or
otherwise, to be secured by) any Lien (except a Permitted Lien) on property then
owned or thereafter to be acquired by such Person, whether or not such Person
has assumed liability for the payment of such obligations;
(g) all Guarantee Obligations of such Person;
(h) all Capital Lease Obligations of such Person;
(i) all obligations of such Person, contingent or otherwise, in
respect of letters of credit, bankers acceptances or other financing
instruments,
(j) all Hedging Obligations of such Person, contingent or otherwise;
(k) all obligations of such Person, contingent or otherwise, under
Profit Payment Agreements; and
(l) all Capital Stock that is, as to such Person, Disqualified Stock.
13
"Indemnified Party" has the meaning given to it in Section 10.5.
"Interest Payment Date" means (i) as to each Base Rate Loan, the last
Business Day of each March, June, September and December to occur while such
Loan is outstanding, commencing September 30, 1999, and the Business Day on
which such Loan is paid in full, and (ii) as to each Eurodollar Loan, the last
day of such Interest Period and, if such Eurodollar Loan has an Interest Period
longer than three months, each prior day that is a three-month anniversary of
the first day of such Interest Period and, if any payment is made on such
Eurodollar Loan and to the extent of such payment, the day on which such payment
is made.
"Interest Period" means, with respect to each Eurodollar Loan, the
period commencing on the date such Eurodollar Loan is funded or continued as or
converted into a Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower in its notice of borrowing, conversion
or continuation given with respect thereto, except that (a) if any Interest
Period would otherwise end on a day that is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless the result
of such extension would be to carry such Interest Period into another calendar
month, in which case such Interest Period shall end on the immediately preceding
Business Day, (b) the Borrower may not select any Interest Period for any Loan
that would extend beyond the maturity date of such Loan, (c) 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;
and (d) the Borrower shall select Interest Periods so as not to require a
payment or prepayment of any Eurodollar Loan during such Interest Period.
"Interest Rate Protection Agreements" means interest rate swaps, caps
or collar agreements or similar arrangements entered into in the ordinary course
of business (and not for speculative purposes) providing for protection against
fluctuations in interest rates or the exchange of nominal interest obligations,
either generally or under specific contingencies.
"Investment" has the meaning given to it in Section 7.8.
"Issuing Bank" means Credit Lyonnais New York Branch.
"LC Participant" has the meaning given it in Section 2.14(a).
"Lender" means each party listed on Schedule I and each Person that
subsequently becomes a party to this Agreement pursuant to an Assignment and
Acceptance.
"Letter of Credit" has the meaning given it in Section 2.12(a).
"Letter of Credit Fee" has the meaning given it in Section 2.17(a).
"Letter of Credit Outstandings" means, at any time, the sum of (i) the
aggregate Stated Amount of all outstanding Letters of Credit and (ii) the amount
of all Unpaid Drawings.
"Letter of Credit Request"' has the meaning given it in Section
2.13(a).
14
"LIBOR" means, with respect to each Interest Period for each
Eurodollar Loan, the rate appearing on Page 3750 of the Telerate Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then "LIBOR" with respect to such
Eurodollar Loan for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of Credit Lyonnais in immediately
available funds in the London interbank market at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period.
"Lien" means, as to any Person, any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, security interest, lien
(statutory or other), charge, easement, encumbrance, preference, priority, or
other security agreement or preferential arrangement of any kind or nature
whatsoever on or with respect to any property of such Person, including any
conditional sale or other title retention agreement, any financing or similar
statement or notice tiled under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction or any other similar recording or notice statute,
and any lease or other arrangement having substantially the same effect as any
of the foregoing.
"Loan Documents" means this Agreement, the Notes, the Subsidiary
Guaranty, the Security Documents, the Fee Letter and each instrument, agreement,
certificate, report or document delivered by or on behalf of the Borrower or any
of its Subsidiaries to the Agents or Lenders pursuant to or in connection with
this Agreement, the Subsidiary Guaranty or any of the Security Documents.
"Loan Parties" means the Borrower and each Subsidiary of the Borrower
that is or at any time becomes a party to any Loan Document.
"Loans" means the Term Loan and the Revolving Credit Loans.
"Look-Back Liability" means any liability incurred by the Borrower
(and not guaranteed by any Subsidiary of the Borrower) in connection with a
Permitted Acquisition that is payable no earlier than 90 days after the close of
a determination period of two or three fiscal years, or the second or third
fiscal year, commencing after the consummation of such Permitted Acquisition
if (a) such liability is contingent upon the achievement of Consolidated EBITDA
for such determination period by the Person or business acquired in such
Permitted Acquisition in an amount exceeding the Consolidated EBITDA targeted by
the Borrower for such determination period at the time of the acquisition
("Targeted EBITDA"), (b) such liability can never be greater than four times the
excess of (i) the Consolidated EBITDA of such Person or business for such fiscal
year over (ii) the Targeted EBITDA, (c) no more than 30% of such liability is
payable no earlier than the 30th day after the close of such
15
determination period and the remainder is payable commensurately to the
scheduled payments due after such day on USI Seller Notes issued in such
Permitted Acquisition, (d) the amount of such liability (if any) is counted as
an Accrued Look-Back Liability as of the last day of such fiscal year and for as
long thereafter as it remains outstanding, whether or not payment thereof is
subject to any contingency, and (e) such liability is not secured by a Lien upon
any property of the Borrower or any of its Subsidiaries.
"Material Adverse Effect" means, with respect to any event or
circumstance (either individually or in the aggregate with all other events and
circumstances), any effect caused by such event or circumstance or resulting
therefrom that would be materially adverse to, or in respect of, (a) the
business, operations, affairs, financial condition, properties, liabilities or
prospects of the Borrower and its Subsidiaries, taken as a whole, (b) the
ability of the Borrower or any other Loan Party to perform its obligations under
the Loan Documents; or (c) the validity or enforceability of any of the Loan
Documents.
"Materials of Environmental Concern" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law (including asbestos, polychlorinated
biphenyls, urea-formaldehyde insulation, lead-based paint, radiation,
radioactive materials and electromagnetic fields).
"Maximum Rate" has the meaning given to it in Section 10.15.
"Moodys" shall mean Xxxxx'x Investors Service, Inc. and its
successors.
"Multiemployer Plan" means a multiemployer plan as defined in Section
3(37) or Section 4001(a)(3) of ERISA.
"Net Proceeds" means, with respect to any sale, transfer or other
disposition of property or incurrence of Indebtedness or issuance of Capital
Stock by any Person, 100% of the cash and Cash Equivalents received by such
Person or any of its Subsidiaries in consideration therefor or otherwise as the
proceeds thereof (including cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received, and cash or
Cash Equivalents received upon the sale, transfer or other disposition of any
non-cash consideration received in connection therewith) minus the sum of (a)
all reasonable legal, accounting, investment banking and other customary fees
and expenses actually incurred or paid by such Person in connection therewith,
(b) all taxes paid or currently payable in cash by such Person as a result
thereof, and (c) in the case of the sale, transfer or other disposition of any
property, any prepayment of Indebtedness permitted under Section 7.2(g) that is
secured by such property and required to be prepaid as a result thereof.
"Noncash Working Capital" means, as to any Person at any time, the
difference between (i) the current assets of such Person and its Subsidiaries at
such time, determined on a consolidated basis in accordance with GAAP but
without counting cash and Cash Equivalents, and (ii) the current liabilities of
such Person and its Subsidiaries at such time, determined on a
16
consolidated basis in accordance with GAAP, but without counting (x) current
maturities of long-term debt and (y) current liabilities attributable to pension
or other post-retirement benefits which are not paid in cash during the fiscal
year in which any such determination is made.
"Non-Excluded Taxes" has the meaning given to it in Section 3.10(a).
"Non-Recourse Seller Debt" means Seller Debt that meets all of the
following requirements:
(a) such Seller Debt is issued as Acquisition Consideration for a
Permitted Acquisition and constitutes the obligation solely of a Wholly Owned
Subsidiary of the Borrower (the "Obligor") that (i) either was acquired in such
Permitted Acquisition or was newly formed by the Borrower for the purpose of
acquiring the assets of a business acquired in such Permitted Acquisition and
(ii) owns no material assets other than the assets of the business acquired in
such Permitted Acquisition and current assets generated in the ordinary course
of operating such business; and the holders of such Seller Debt have expressly
agreed that they shall not have recourse, for the payment thereof, to the
Borrower or any of its Subsidiaries or any of their property or any other person
or property, except the Obligor and the property of the Obligor;
(b) neither the Borrower nor any of its Subsidiaries, except the
Obligor, is directly or indirectly liable (under any Guarantee Obligation or
otherwise) for the payment of such Seller Debt or the performance or observance
of any obligation of the Obligor; and such Seller Debt is not directly or
indirectly secured by any Lien, and is not the subject of any agreement or
undertaking pursuant to which a Lien may be granted, upon any present or future
property of the Borrower or any of its Subsidiaries, except the Obligor; and
(c) no covenant or agreement in any manner restricting the Borrower or
any of its Subsidiaries, other than the Obligor, or requiring any of them to
perform or observe any obligation, is enforceable by any holder of such Seller
Debt; and no default, event of default or right to accelerate any payment due
can arise in favor of the holders of such Seller Debt based upon any default in
respect of any Indebtedness of the Borrower or any of its Subsidiaries, other
than the Obligor, or any other act, omission, event or circumstance by or
affecting the Borrower or any of its Subsidiaries, other than the Obligor.
"Notes" means the Revolving Credit Notes and the Term Notes.
"Obligations" has the meaning given it in Section 6.9(b).
"Other Taxes" has the meaning given to it in Section 3.10(b).
"Participant" has the meaning given to it in Section 10.6(b).
"Permitted Acquisition" means (x) the acquisition by USIS or a Wholly
Owned Subsidiary of USIS, after the Closing Date, of all outstanding Capital
Stock of a Person
17
engaged solely in one or more Permitted Businesses or (y) the acquisition by a
Wholly Owned Subsidiary of USIS, after the Closing Date, of sole ownership of
all or substantially all assets used by any Person to conduct one or more
Permitted Businesses, but (in each case) only if each of the following
conditions is satisfied:
(a) If the Acquisition Consideration for such acquisition is greater
than $5,250,000, not counting potential Look-Back Liabilities and counting, in
the case of any Retention Liability, an amount equal to the Accrued Retention
Liability, determined as of the effective date of the Permitted Acquisition in
which such Retention Liability is incurred, then no later than the tenth day
following the consummation of such acquisition the Borrower shall have delivered
to the Agents and the Lenders a general description of such acquisition, the
amount and terms of the Acquisition Consideration therefor, and the
Pre-Acquisition Adjusted EBITDA of the Person or business to be acquired in such
acquisition, accompanied by a certificate of a Responsible Officer of the
Borrower in substantially the form of Exhibit C demonstrating that:
(i) on a pro forma basis, as if such acquisition had been
completed, and all Indebtedness (which, in the case of any Retention
Liability, shall be an amount equal to the Accrued Retention Liability,
determined as of the effective date of the Permitted Acquisition in which
such Retention Liability is incurred or acquired by the Borrower and its
Subsidiaries in connection with such acquisition) had been incurred or
acquired, on the first day of the 12-month period ending on the last day of
the fiscal quarter of the Borrower most recently ended prior to the date of
consummation of such acquisition, the Borrower would have been in
compliance with the covenants contained in Section 7.1 as of the last day
of such fiscal quarter,
(ii) either (a) the aggregate Acquisition Consideration for such
acquisition does not exceed a multiple of 6.50 (or, in the case of a
Permitted Acquisition in which any Retention Liability is incurred, a
multiple of 6.00) times the Pre-Acquisition Adjusted EBITDA of the business
acquired in the acquisition (so adjusted) or (b) the Acquisition
Consideration for such acquisition is greater than such multiple but does
not, when added to all Acquisition Consideration for all other acquisitions
consummated by the Borrower or any of its Subsidiaries in the same calendar
year for an Acquisition Consideration greater than such multiple, exceed
$8,000,000, and
(iii) on a pro forma basis, the Borrower will be in compliance
with the covenants contained in Section 7.1 at all times during the five
years ending after the closing of such acquisition (based on a five-year
forecast to be prepared by the Borrower and attached to such certificate).
(b) In the case of a Permitted Acquisition in which any Retention
Liability is incurred, the aggregate Acquisition Consideration for such
acquisition does not exceed a multiple of 6.00 times the Pre-Acquisition
Adjusted EBITDA of the business acquired in the acquisition.
18
(c) The agreements governing or relating to such acquisition shall not
prohibit or restrict the grant of a security interest in the rights and
interests of the Borrower or any of its Subsidiaries arising thereunder or the
enforcement of any such security interest by foreclosure, notice to pay and
collection or otherwise;
(d) Upon consummation of such acquisition, the business acquired
therein will be operated as part of the USI Businesses; and
(e) No Default or Event of Default shall have occurred and be
continuing or shall result from, or exist after giving effect to, such
acquisition.
"Permitted Businesses" means businesses of the type conducted by the
Borrower through USIS and its Subsidiaries as of the date of this Agreement,
including establishing, marketing and administration of preferred provider
organization activities; the sale of insurance (other than title insurance),
annuities and securities; "work-site" marketing involving the sale of insurance
on employers' premises (other than title insurance); financing insurance
premiums for brokerage customers on terms customary for insurance brokers;
licensing software used in the insurance brokerage industry; acting as a 401(k)
administrator, third party administrator, human resource outsourcing, or
managing general agency; acting as an annuity sales company, asset management
company, securities brokerage firm, registered broker-dealer, registered
investment advisor or service company handling stock and bond trades (other
than securities underwriting and dealing activities); payroll servicing; acting
as a captive insurance management company (providing services including the
exercise of underwriting authority delegated by an insurance company, but not
including the acceptance of any risk of underwriting losses); and providing loss
control and risk analysis services.
"Permitted Liens" means (a) any Lien for taxes, assessments or
governmental charges not yet due or, if adequate reserves with respect thereto
are maintained on the books of the Borrower and its Subsidiaries in accordance
with GAAP, being contested in good faith by appropriate proceedings; (b) any
Lien imposed by law on any property of the Borrower or any of its Subsidiaries
that is incurred in the ordinary course of business and does not secure
Indebtedness, such as carriers', warehousemen's, materialmen's and mechanics'
liens, if the liability secured by such Lien either is not overdue by more than
90 days or is being contested in good faith by appropriate proceedings and
adequate reserves with respect thereto are maintained on the books of the
Borrower and its Subsidiaries in accordance with GAAP; (c) deposits, in an
aggregate amount not at any time exceeding $1,000,000, made and maintained in
the ordinary course of business in connection with workers' compensation,
unemployment insurance and other social security legislation, other than ERISA,
or with insurance carriers to secure liability for premiums or to secure the
performance of bids, trade contracts (other than Indebtedness), leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature; (d) any easement, right-of-way, property use
restriction and other similar encumbrance incurred in the ordinary course of
business not securing Indebtedness and neither materially detracting from the
value of the property subject thereto nor materially interfering with the
ordinary conduct of the business of the Borrower and its Subsidiaries, taken as
a whole; (e) any purchase money Lien attaching solely to property
19
acquired with the proceeds of Indebtedness incurred to finance the acquisition
of such property, including Capital Lease Obligations, if such Indebtedness is
permitted by Section 7.2(g); (f) any Lien granted in the Security Documents; (g)
any Lien arising from precautionary Uniform Commercial Code filings covering
solely the equipment leased under any operating lease entered into by the
Borrower or any of its Subsidiaries in the ordinary course of business; (h) any
Lien securing Existing Debt, but only if such Existing Debt and such Lien and
the property encumbered thereby are identified on Schedule 1.1(b); and (i) any
Lien securing Non-Recourse Seller Debt, but only if such Lien attaches solely to
property of the issuer of such Non-Recourse Seller Debt.
"Permitted Prepayments" means (a) any prepayment of Indebtedness that
(i) is secured by a Permitted Lien on any property that has been sold by the
Borrower or any of its Subsidiaries to any Person other than the Borrower or any
of its Subsidiaries and (ii) must be prepaid by reason of such sale in an amount
that does not exceed the aggregate amount of the cash purchase consideration
received by the Borrower or any of its Subsidiaries at the time of such sale;
(b) any prepayment of the Loans; (c) so long as no Event of Default has occurred
and is continuing, any prepayment of Indebtedness permitted under Section
7.2(b); (d) any prepayment of Indebtedness of any Subsidiary of the Borrower
that is payable to the Borrower; (e) any prepayment of Permitted Seller Debt
solely by exchanging such Permitted Seller Debt for the same principal amount of
USI Seller Notes, (f) any prepayment described in Section 2.10(a), or (g) any
prepayment of Permitted Seller Debt with the prior written consent of the
Required Lenders.
"Permitted Prior and Pari Passu Liens" means (a) Permitted Liens that
do not secure Indebtedness (other than liabilities that constitute Indebtedness
solely because secured by such Liens) and are not consensually granted but are
imposed by law and entitled, as a matter of law, to priority over the
Administrative Agent's security interest, (b) Liens granted in a Shared
Subsidiary Security Document, (c) the Liens listed on Schedule 1.1(b), and (d)
purchase money security interests and interests of lessors under Capital Leases
securing Indebtedness permitted under Section 7.2(g).
"Permitted Seller Debt" means:
(a) Pre-1997 Seller Debt outstanding in an aggregate principal amount
not exceeding $3,000,000;
(b) the Seller Debt outstanding on the Closing Date in the amounts, on
the terms, on the collateral security and against the obligors described on
Schedule 1.1(d), which amounts shall not exceed $25,000,000;
(c} USI Seller Notes;
(d) Non-Recourse Seller Debt, so long as the aggregate outstanding
principal amount thereof, when taken together with the aggregate outstanding
principal amount of loans made to Excluded Subsidiaries pursuant to Section
7.8(c) and the aggregate amount of
20
investments therefore made in Excluded Subsidiaries pursuant to Section 7.8(d),
shall not exceed $15,000,000; and
(e) Retention Liabilities, so long as the aggregate amount of Accrued
Retention Liabilities, in each case determined as of the effective date of the
respective Permitted Acquisition in which such Retention Liability is incurred,
does not exceed $15,000,000.
"Permitted Stock Payments" means the Borrower's repurchase, redemption
or acquisition of Capital Stock of the Borrower from an employee of the Borrower
or any of its Subsidiaries for cash upon termination of employment, if the
aggregate amount expended therefor does not exceed $3,000,000 per year (plus the
amount of cash proceeds received in such year from key man life insurance
policies).
"Permitted Subsidiary Bank Debt" means unsecured Indebtedness incurred
by any Subsidiary of the Borrower from any bank or other financial institution,
or insurance carrier, for the purpose of providing such Subsidiary with working
capital to pay expenses incurred by it in the ordinary course of business.
"Person" means an individual, partnership, company, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or other
entity of whatever nature.
"Plan" means, at any time, any "employee benefit plan" (within the
meaning of Section 3(3) of ERISA) which Borrower, any of its Subsidiaries or any
Commonly Controlled Entity sponsors, maintains, administers (except pursuant to
administration services that constitute a part of the ordinary course of the
business of any Subsidiary of the Borrower or any Commonly Controlled Entity,
which services are covered by liability insurance coverage customary for similar
entities engaged in the plan administration service business), or contributes to
or is required to contribute to, or, at any time, sponsored, maintained,
administered (except pursuant to administration services that constitute a part
of the ordinary course of the business of any Subsidiary of the Borrower or any
Commonly Controlled Entity, which services are covered by liability insurance
coverage customary for similar entities engaged in the plan administration
services business), contributed to or was required to contribute to, or with
respect to which Borrower, any of its Subsidiaries or any Commonly Controlled
Entity may incur any liability.
"Pre-Acquisition Adjusted EBITDA" means Consolidated EBITDA of a
Person or business acquired by the Borrower or a Subsidiary in a Permitted
Acquisition, determined on a month-by-month basis for a twelve-month period
ending within three months immediately preceding such acquisition and adjusted
by the Borrower reasonably and in good faith (in a manner consistent with the
agreement governing such acquisition) so as to add back employee compensation
and rental expense items that will be eliminated after such acquisition,
eliminate noncontinuing or nonrecurring revenues, and otherwise reflect changes
in continuing revenues and expenses resulting from events occurring prior to or
in connection with such acquisition.
21
"Pre-1997 Seller Debt" means the liabilities outstanding as of the
date hereof in the amounts, on the terms, on the collateral security and against
the obligors described on Schedule 1.1(f).
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by Credit Lyonnais New York Branch as its prime rate in effect
at its principal office in New York City (such rate is not intended to be the
lowest rate of interest charged by Credit Lyonnais in connection with extensions
of credit to debtors).
"Profit Payment Agreements" means, in respect of any Person, all
agreements pursuant to which such Person is or may become obligated to make any
payment the amount of which is, or the terms of payment of which are, in any
respect subject to or contingent upon the revenues, income, cash flow or profits
(or the like) of any Person or business (except commissions and bonuses payable
for services rendered on terms comparable to those offered other similarly
situated employees and not constituting Stock Appreciation Rights or Acquisition
Consideration) and includes, in the case of the Borrower, all Stock Appreciation
Rights.
"Pro Rata Share" means, with respect to each Lender and as to each
Tranche of Loans at any time, a percentage share determined on the basis of the
ratio that such Lender's Commitment for such Tranche at such time bears to all
Commitments for such Tranche at such time or, if at such time the Commitments
for such Tranche have terminated, the ratio that such Lender's Loans of such
Tranche at such time bears to all Loans of such Tranche at such time.
"Register" has the meaning given to it in Section 10.6(d).
"Regulation D" means Regulation D of the Board of Governors as from
time to time in effect and any successor to all or any portion thereof.
"Regulation U" means Regulation U of the Board of Governors as from
time to time in effect and any successor to all or any portion thereof.
"Regulation X" means Regulation X of the Board of Governors as from
time to time in effect and any successor to all or any portion thereof.
"Reorganization" means, with respect to any Multiemployer Plan, that
such Plan is in reorganization within the meaning of Section 4241 of ERISA,
"Required Lenders" means, at any time, Lenders having at such time
aggregate Pro Rata Shares in excess of 50%.
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, applicable to or binding
upon such Person or any of its property or to which such Person or any of its
property is subject.
22
"Responsible Officer" means, with respect to any Person, any one of
the chairman of the board, the chief executive officer, the president, the
executive vice president or any vice-president of such Person or, with respect
to financial matters, the chief financial officer or controller of such Person.
"Restricted Payment" has the meaning given to it in Section 7.7.
"Retention Liability" means any liability incurred solely by the
Borrower (and not guaranteed by any Subsidiary of the Borrower) in connection
with a Permitted Acquisition if (a) such liability is contingent upon the
revenues earned by the Person or business acquired in such Permitted Acquisition
for a period never exceeding six fiscal years, (b) the amount of such liability
for any such fiscal year can never be greater than 40% of such revenues for such
fiscal year, (c) such liability constitutes (together with any cash advance paid
by the Borrower thereon and any Capital Stock (excluding Disqualified Stock) of
the Borrower issued in connection therewith) the sole Acquisition Consideration
for such Permitted Acquisition, (d) the Accrued Retention Liability with respect
to such Permitted Acquisition is reflected as a liability on the balance sheet
of the Borrower as of the effective date of such Permitted Acquisition and
adjusted semi-annually (and discounted at no more than 8% per annum) at all
times for as long as such liability is outstanding, whether or not such
liability is then contingent, and (e) is not secured by a Lien upon any property
of the Borrower or any of its Subsidiaries.
"Revolving Credit Commitment" means, as to any Revolving Credit
Lender, its obligation to fund or maintain Revolving Credit Loans in an amount
up to, but not exceeding, an aggregate outstanding amount equal to the amount
set forth as to such Revolving Credit Lender in Schedule I under the heading
"Revolving Credit Commitment" as modified to give effect to each Assignment and
Acceptance that has then become effective, as such amount may be reduced from
time to time pursuant to this Agreement.
"Revolving Credit Availability Period" means the period from the
Closing Date until the Business Day immediately preceding the Revolving Credit
Loan Maturity Date or any earlier date on which the Revolving Credit Commitments
shall terminate in accordance with the terms of this Agreement.
"Revolving Credit Lender" means, at any time, a Lender then having a
Revolving Credit Commitment or holding a Revolving Credit Loan.
"Revolving Credit Loan" has the meaning given to it in Section 2.l.
"Revolving Credit Loan Maturity Date" means September 17, 2004.
"Revolving Credit Note" has the meaning given to it in Section 2.7(c).
"RL Percentage" of any Lender at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Revolving Credit
Commitment of such Lender at such time and the denominator of which is the
aggregate Revolving Credit Commitments at
23
such time, provided that if the RL Percentage of any Lender is to be determined
--------
after the Revolving Credit Commitments has been terminated, then the RL
Percentages of the Lenders shall be determined immediately prior (and without
giving effect) to such termination.
"SEC" means the United States Securities and Exchange Commission or
any successor thereto.
"Security Documents" means the Borrower Pledge and Security Agreement,
the Subsidiary Pledge and Security Agreement, each Shared Subsidiary Security
Document and all other security documents delivered after the date of this
Agreement to the Administrative Agent granting or purporting to xxxxx x Xxxx on
any property of any Person to secure the obligations and liabilities of the
Borrower under this Agreement and the other Loan Documents or to secure any
guarantee of any such obligations and liabilities.
"Seller Debt" means (a) the Indebtedness listed on Schedule 1.1(d) and
Schedule 1.1(f) and (b) any Indebtedness incurred at any time after the Closing
Date as Acquisition Consideration for any Permitted Acquisition.
"Shared Subsidiary Security Documents" means, collectively, the
promissory notes, guaranties, security agreements and intercreditor agreements
entered into in connection with Seller Debt referenced on Schedule 1.1(d).
"Solvent" means, with respect to any Person at any time, that (a) the
"present fair saleable value" of the property of such Person at such time would
exceed the debts of such Person, contingent or otherwise, (b) such Person would
not at such time have an unreasonably small amount of capital with which to
conduct its business, and (c) such Person would at such time be able to pay its
debts as they mature or otherwise become payable; in each case after giving
effect to the Loans to be made at such time and to the application of the
proceeds thereof. For this purpose, (i) "debt" means any liability on a "claim,"
and ii "claim" means any (A) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal equitable, secured or unsecured, or (B)
right to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.
"S&P" shall mean Standard & Poor's Ratings Group and its successors.
"Stated Amount" of each Letter of Credit, at any time, means the
maximum amount available to be drawn thereunder (in each case determined without
regard to whether any conditions to drawing could then be met).
"Stock Appreciation Rights" means an obligation of the Borrower
arising under the U.S.I. Long-Term Incentive Plan to make a payment to an
employee of the Borrower upon termination of his or her employment in an amount
contingent upon an increase in the value of the Capital Stock of the Borrower
after the date such obligation was incurred, if such
24
obligation constitutes the liability solely of the Borrower and is not
guaranteed by any Subsidiary of the Borrower or secured by any Lien on any
property of the Borrower and its Subsidiaries.
"Stockholders' Equity" means, for any Person at any time, the
stockholders' equity that would be shown on the balance sheet of such Person and
its Subsidiaries prepared at such time on a consolidated basis in accordance
with GAAP.
"Subordinated Indebtedness" means any Indebtedness (a) incurred by the
Borrower after the date of this Agreement, (b) either (i) not guaranteed by any
Subsidiary. of the Borrower or (ii) subject to Sections 6.9(a) and Section
7.4(b), guaranteed on a subordinated basis by one or more Guarantors, (c) in
amounts, pursuant to agreements, and on terms and conditions, in form and
substance satisfactory to and approved in writing by the Agents and the Required
Lenders, each acting individually at its sole discretion, and (d) subordinated
and junior in right of payment to the Loans and other Obligations and any
extension, renewal, refinancing, refunding or replacement thereof (whether or
not for an increased amount) on the terms and conditions so approved.
"Subsidiary" means, with respect to any Person at any time, any other
Person with respect to which more than fifty percent (50%) of the total combined
voting power of all classes of its Voting Stock shall be beneficially owned,
directly or indirectly, by such parent company at such time, provided that with
--------
respect to the Borrower, the term "Subsidiary" shall exclude the Persons listed
in the last sentence of Schedule 4.15.
"Subsidiary Guaranty" means a Guaranty, Indemnification and
Subordination Agreement in substantially the form of Exhibit E.
"Subsidiary Pledge and Security Agreement" means a Pledge and Security
Agreement executed and delivered by USIS in substantially the form of Exhibit
B-2.
"Subsidiary Stock" means, with respect to any Person at any time, the
Capital Stock of each Subsidiary of such Person that is beneficially owned or
held, directly or indirectly, by such Person at such time.
"Syndication Agent" means Chase, as syndication agent for the Lenders
under this Agreement and the other Loan Documents, or its successor appointed
pursuant to Section 9.9.
"Term Commitment" means as to any Term Loan Lender, its obligation to
fund or maintain a Term Loan in an amount equal to the amount set forth as to
such Term Lender in Schedule I under the heading "Term Loan Commitment" as
modified to give effect to each Assignment and Acceptance that has then become
effective, as such amount may be reduced from time to time pursuant to this
Agreement.
"Term Loan " has the meaning given to it in Section 2.4.
25
"Term Loan Lender" means, at any time, a Lender then having a Term
Commitment or holding a Term Loan.
"Term Loan Maturity Date" means September 17, 2004.
"Term Loan Note" has the meaning given to it in Section 2.7(c).
"Tranche" refers, in respect of any Commitment or Loan, to whether it
is a Revolving Commitment or Revolving Credit Loan or a Term Loan Commitment or
Term Loan.
"Transferee" has the meaning given to it in Section 10.6(f).
"Type" refers, as to any Loan, to whether it is a Base Rate Loan or a
Eurodollar Loan.
"UCC" means the Uniform Commercial Code in effect in the State of New
York.
"Unpaid Drawing" has the meaning provided it in Section 2.15(a).
"Unused Revolving Commitment" means, for any day, the difference (if a
positive number) between (a) the aggregate amount of the Revolving Credit
Commitments on such day and (b) the sum of (i) the aggregate principal amount of
all Revolving Credit Loans outstanding on such day and (ii) the Letter of Credit
Outstanding on such day.
"USI Businesses" means Permitted Businesses operated by USIS and its
Subsidiaries under the control of the Borrower.
"USI Seller Note" means a promissory note issued by the Borrower in
payment of Acquisition Consideration for a Permitted Acquisition, or issued by
the Borrower in exchange for any promissory note of the Borrower or any of its
Subsidiaries issued to pay a portion of the purchase consideration for an
acquisition consummated by the Borrower or any of its Subsidiaries prior to the
date of this Agreement, if (a) such promissory note constitutes the liability
solely of the Borrower, (b) such promissory note bears interest at a non-default
rate not exceeding a major bank prime rate plus 3% per annum, (c) no Subsidiary
of the Borrower is directly or indirectly liable (under any Guarantee Obligation
or otherwise) for the payment of such promissory note or the performance or
observance of any obligation of the Borrower; and such promissory note is not
directly or indirectly secured by any Lien, and is not the subject of any
agreement or undertaking pursuant to which a Lien may be granted, upon any
present or future property of any Subsidiary of the Borrower; (d) no covenant or
agreement in any manner restricting the Borrower or any of its Subsidiaries, or
requiring any of them to perform or observe any obligation, is enforceable by
any holder of such promissory note, provided that covenants (excluding financial
maintenance covenants) shall be permitted if limited to covenants relating to
material matters regarding the assets or property acquired in connection with
the respective Permitted Acquisition; and (e) no default, event of default or
26
right to accelerate any payment due can arise in favor of any holder of such
promissory note based upon any default in respect of any Indebtedness of the
Borrower or any of its Subsidiaries, except upon terms which are no more
burdensome on the Borrower than (i) failure to make any payment due on such
promissory note when due or within 10 days thereafter, (ii) failure to pay at
maturity, or acceleration of maturity of, Indebtedness of the Borrower or any
Subsidiary of the Borrower (except an Excluded Subsidiary) outstanding in an
aggregate principal amount of $2,000,000 or more, (iii) proceedings with respect
to the Borrower which are described in Section 8(g) of this Agreement, (iv) the
Borrower ceasing to be a going concern, or (v) material breach by the Borrower
of material covenants of the type permitted under clause (d) above.
"USIS" means USI Insurance Services Corp., a Delaware corporation and
a Wholly Owned Subsidiary of the Borrower.
"Voting Stock" means, for any Person at any time, the Capital Stock of
such Person that is at such time entitled to vote in the election of the board
of directors of such Person.
"Wholly Owned Subsidiary" means, for any Person at any time, any other
Person all of the outstanding Capital Stock of which (other than the minimum
number of directors' qualifying shares) is beneficially owned and held by such
Person at such time or by one or more other Persons that are Wholly Owned
Subsidiaries of such Person.
"Year 2000 Solution" means that all significant risks have been
eliminated that computer hardware, software or equipment containing embedded
microchips essential to the business or operations of the Borrower or any of its
Subsidiaries will not, in the case of dates or time periods occurring after
December 31, 1999, function at least as effectively and reliably as in the case
of times or time periods occurring before January 1, 1999, including the making
of accurate leap year calculations.
"Zurich" means Zurich Insurance Company.
1.2 Other Definitional Provisions.
(a) Other Loan Documents. Unless otherwise specified in the other Loan
Documents, all terms used in the other Loan Documents and each certificate and
document made or delivered pursuant to this Agreement or any other Loan Document
shall have the meanings given them in Section l.l.
(b) Accounting Terms. As used in this Agreement or any other Loan
Document, accounting terms relating to the Borrower and its Subsidiaries not
defined in Section 1.1 and accounting terms partially defined in Section 1.1, to
the extent not defined, shall have the meanings given to them under GAAP.
(c) Certain References. The words "hereof," "herein" and "hereunder"
and words of similar import when used in this Agreement shall refer to this
Agreement as a
27
whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) Number. The meanings given to terms defined in this Agreement
shall be equally applicable to both the singular and plural forms of such terms.
(e) Inclusive Usage. The word "including" is not exclusive and,
wherever used, means "including but not limited to."
(f) Amendments. All references to any Loan Document refer to such Loan
Document as from time to time amended, and all references to any other
instrument or agreement refer to such instrument or agreement as in effect on
the Closing Date or, if thereafter issued or entered into, as originally in
effect and, in each case, as amended from time to time in conformity with any
restrictions relating to the amendment thereof set forth in any Loan Document.
(g) Headings. Section and paragraph headings in this Agreement are
included for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose or in any way affect the meaning or
construction of any provision of this Agreement.
SECTION 2
AMOUNT AND TERMS OF COMMITMENTS AND LOANS
2.1 Revolving Credit Commitments.
(a) Revolving Credit Loans. Subject to the terms and conditions of
this Agreement, each Revolving Credit Lender severally (and not jointly) agrees
to make its Pro Rata Share of revolving credit loans ("Revolving Credit Loans")
to the Borrower from time to time during the Revolving Credit Availability
Period in an amount requested by the Borrower up to, but not exceeding, an
aggregate principal amount outstanding at any time equal to the Revolving Credit
Commitments at such time minus the Letter of Credit Outstanding at such time
(exclusive of Unpaid Drawings which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of Revolving
Credit Loans). Subject to terms and conditions of this Agreement, Revolving
Credit Loans that are prepaid during the Revolving Credit Availability Period
may be reborrowed prior to the expiration of the Revolving Credit Availability
Period up to the aggregate amount of the Revolving Credit Commitments at the
time of reborrowing.
(b) Type and Amount. Subject to Section 2.2 and Section 3.3 of this
Agreement, the Revolving Credit Loans may from time to time be Eurodollar Loans,
Base Rate Loans, or any combination of Eurodollar Loans and Base Rate Loans,
except that (i) no Revolving Credit Loan shall be made as a Eurodollar Loan
after the day that is one month prior to the Revolving Credit Loan Maturity
Date, (ii) each Revolving Credit Loan shall be in
28
an amount equal to (A) in the case of Base Rate Loans, $100,000 or a whole
multiple thereof (or, if the aggregate Unused Revolving Commitments are less
than $100,000, such lesser amount), and (B) in the case of Eurodollar Loans,
$1,000,000 or a whole multiple of $100,000 in excess thereof.
(c) Commitments Several. The failure of any Revolving Credit Lender to
make any Revolving Credit Loan requested by the Borrower on the Borrowing Date
for such Revolving Credit Loan shall not relieve any other Revolving Credit
Lender of its obligation to make its Revolving Credit Loan on such Borrowing
Date in accordance with the terms and conditions of this Agreement. No Lender
shall be responsible for the failure of any other Lender to make any Loan on any
Borrowing Date.
2.2 Procedure for Borrowing Revolving Credit Loans. The Borrower may
borrow Revolving Credit Loans pursuant to Section 2.1 on any Business Day during
the Revolving Credit Availability Period and shall give the Administrative Agent
irrevocable written notice (in the form of Exhibit F) of each borrowing. The
notice must be received by the Administrative Agent (a) prior to 10:00 A.M., New
York City time, three Business Days prior to the requested Borrowing Date, if
all or any part of the requested Revolving Credit Loans are to be Eurodollar
Loans, and (b) prior to 2:00 p.m., New York City time, one Business Day prior to
the requested Borrowing Date, if all of the requested Revolving Credit Loans are
to be Base Rate Loans and must specify (i) the amount to be borrowed, (ii) the
requested Borrowing Date, (iii) the general purpose of the borrowing, (iv)
whether the borrowing is to be of Eurodollar Loans, Base Rate Loans or a
combination thereof, and (v) if the borrowing is to be entirely or partly of
Eurodollar Loans, the respective amounts of such Type of Loan and the respective
lengths of the Interest Periods for such Eurodollar Loans. Upon receipt of any
borrowing notice from the Borrower, the Administrative Agent shall promptly
notify each Lender of such notice. Each Lender shall make its Pro Rata Share of
the funds for each Revolving Credit Loan available to the Administrative Agent
in immediately available United States dollars for the account of the Borrower
at the office of the Administrative Agent specified in Section 10.2 prior to
11:00 A.M., New York City time, on the Borrowing Date requested by the Borrower.
The United States dollar funds made available to the Administrative Agent for
any Loan will be made available by 1:00 P.M., New York City time, to the
Borrower by credit to a deposit account of the Borrower maintained at such
office or as the Borrower and Administrative Agent may otherwise agree.
2.3 Repayment of Revolving Credit Loans. The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Revolving Credit Lender the entire outstanding principal balance of the
Revolving Credit Loans on the Revolving Credit Loan Maturity Date or any earlier
date on which the Revolving Credit Loans become due and payable pursuant to
Sections 3 or Section 8. The Borrower hereby further agrees to pay interest on
the unpaid principal amount of the Revolving Credit Loans from time to time
outstanding at the rates per annum, and on the dates, set forth in Section 3.4.
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2.4 Term Loan.
(a) Funding Commitments. Subject to the terms and conditions of this
Agreement, each Term Loan Lender severally (and not jointly) agrees to make a
term loan (a "Term Loan") to the Borrower in a single funding on the Closing
Date in an amount equal to the Term Loan Commitment of such Term Loan Lender on
the Closing Date.
(b) Type. The Term Loan may from time to time be Eurodollar Loans,
Base Rate Loans or a combination thereof, as determined by the Borrower and
notified to the Administrative Agent in accordance with Section 2.5 and Section
3.2.
(c) Solely Available for a Single Funding. No portion of the Term Loan
Commitment which has not been borrowed on the Closing Date and no portion of the
Term Loan which is repaid or prepaid may be borrowed or reborrowed thereafter.
(d) Commitments Several. The failure of any Term Loan Lender to make
any Term Loan requested by the Borrower on the Borrowing Date for such Term Loan
shall not relieve any other Term Loan Lender of its obligation to make its Term
Loan on such Borrowing Date in accordance with the terms and conditions of this
Agreement. No Lender shall be responsible for the failure of any other Lender to
make a Loan on any Borrowing Date.
2.5 Procedure for Borrowing Term Loans. The Borrower shall give the
Administrative Agent irrevocable written notice (in the form of Exhibit F) of
any borrowing of the Term Loan. The notice must be received by the
Administrative Agent (a) prior to 10:00 A.M., New York City time, three Business
Days prior to the requested Borrowing Date, if all or any part of the requested
Term Loan is to be a Eurodollar Loan, or (b) prior to 2:00 p.m., New York City
time, one Business Day prior to the requested Borrowing Date, if the requested
Term Loan is to be a Base Rate Loan, and must specify (i) the amount to be
borrowed, (ii) the requested Borrowing Date, (iii) whether the borrowing is to
be a Eurodollar Loan, Base Rate Loan or a combination thereof, and (iv) if the
borrowing is to be entirely or partly a Eurodollar Loan, the amount of such
Type of Loan and the length of the Interest Period for such Eurodollar Loan.
Upon receipt of any such borrowing notice from the Borrower, the Administrative
Agent shall promptly notify each Term Loan Lender of such notice. Each Term
Lender shall make its Pro Rata Share of the funds for the Term Loan of such
Tranche available to the Administrative Agent in immediately available United
States dollars for the account of the Borrower at the office of the
Administrative Agent specified in Section 10.2 prior to 11:00 A.M., New York
City time, on the Borrowing Date requested by the Borrower. The United States
dollar funds made available to the Administrative Agent for any Loan will be
made available by 1:00 P.M., New York City time, to the Borrower by credit to a
deposit account of the Borrower maintained at such office or as the Borrower and
Administrative Agent may otherwise agree.
2.6 Repayment of Term Loans. (a) The Borrower hereby unconditionally
promises to pay to the Administrative Agent for the account of the Term Loan
Lenders (i) the entire outstanding principal balance of the Term Loan on the
Term Loan Maturity Date or any
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earlier date on which the Term Loan becomes due and payable pursuant to Section
3 or Section 8 and (ii) prior to the Term Loan Maturity Date to prepay the Term
Loan in quarterly installments due on each date set out below in the amount set
forth next to such date below (or, if less, the outstanding principal balance):
Date Amount
---- ------
December 31, 1999 $ 1,250,000
March 31, 2000 1,250,000
June 30, 2000 1,250,000
September 30, 2000 1,250,000
December 31, 2000 1,250,000
March 31, 2001 1,250,000
June 30, 2001 1,250,000
September 30, 2001 1,250,000
December 31, 2001 2,500,000
March 31, 2002 2,500,000
June 30, 2002 2,500,000
September 30, 2002 2,500,000
December 31, 2002 3,750,000
March 31, 2003 3,750,000
June 30, 2003 3,750,000
September 30, 2003 3,750,000
December 31, 2003 22,500,000
March 31, 2004 22,500,000
June 30, 2004 22,500,000
September 17, 2004 22,500,000
(b) Interest on Term Loan. The Borrower hereby further agrees to pay
interest on the unpaid principal amount of the Term Loan from time to time
outstanding from the date hereof until payment in full thereof at the rates per
annum, and on the dates, set forth in Section 3.4.
2.7 Evidence of Indebtedness.
(a) Lender's Loan Accounts. Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing indebtedness of the
Borrower to such Lender resulting from each Loan outstanding to such Lender from
time to time, including the amounts of principal and interest payable and paid
to such Lender from time to time under this Agreement.
(b) Register. The Administrative Agent shall maintain the Register
pursuant to Section 10.6(d), and a subaccount therein for each Lender, in which
shall be recorded (i) the amount of each Loan made under this Agreement, the
Tranche and Type of each Loan and, in the case of Eurodollar Loans, each
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the
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Borrower to each Lender under this Agreement, and (iii) the amount of any sum
received by the Administrative Agent under this Agreement from the Borrower and
the amount of each Lender's share thereof, if any.
(c) Notes. On the Closing Date, the Borrower will execute and deliver
to each Revolving Credit Lender a promissory note of the Borrower to evidence
the Borrower's obligation to repay Revolving Credit Loans, payable to the order
of such Revolving Credit Lender in the amount of its Revolving Credit Commitment
in substantially the form of Exhibit G-1 (a "Revolving Credit Note") and to each
Term Loan Lender a promissory note of the Borrower to evidence the Borrower's
obligation to repay the Term Loan, payable to the order of such Term Loan Lender
in the amount of its Term Loan Commitment in substantially the form of Exhibit
G-2 (a "Term Loan Note").
(d) Notation. Each Lender is hereby authorized (but shall not be
obligated or in any respect required) to record on any Note held by it, or any
schedule attached thereto, such notations as it may elect to make as to the date
and amount of each Loan evidenced thereby and each payment or prepayment of
principal thereof and any information related thereto, or a summary of the
foregoing or of the aggregate outstanding principal amount of the Loans
evidenced thereby and accrued interest outstanding thereon.
(e) Prima Facie Evidence. The accounts maintained by the Lenders
pursuant to Section 2.7(a), the entries made in the Register by the
Administrative Agent pursuant to Section 2.7(b) and Section 10.6(d), and each
notation made by any Lender pursuant to Section 2.7(d) shall be prima facie
evidence of the matters set forth therein.
(f) Maintenance of Records and Notation not Required. The failure of
any Lender to maintain any account pursuant to Section 2.7(a) or the failure of
the Administrative Agent to maintain the Register or any subaccount thereof
pursuant to Section 2.7(b) or Section 10.6(b) or the failure of any Lender to
make any notation pursuant to Section 2.7(d), or (in each case) any error
therein, shall not in any manner (i) affect or impair the obligation of the
Borrower to repay the Loans with interest in accordance with the terms of this
Agreement or (ii) impose or result in any liability whatsoever upon any Lender
or the Administrative Agent.
2.8 Revolving Credit Commitment Fees. The Borrower agrees to pay to
the Administrative Agent for the account of the Revolving Credit Lenders a
Revolving Credit Loan commitment fee for each day in the Revolving Credit
Availability Period payable in arrears quarterly on the last Business Day of
each March, June, September and December, commencing September 30, 1999, and, in
addition, on the Revolving Credit Loan Maturity Date and any earlier date on
which the Revolving Credit Commitments terminate, in each case in an amount
determined by applying to the aggregate Unused Revolving Commitments on each day
of the period commencing on the Closing Date or the last day in the preceding
commitment fee accrual period, as the case may be, and ending on the day
immediately preceding such payment date, a rate per annum (based on a year of
360 days) that shall be equal to 0.75% per annum.
32
2.9 Termination or Reduction of Revolving Credit Commitments. The
Borrower shall have the right, upon not less than five Business Days' notice to
the Administrative Agent, at any time to terminate the Revolving Credit
Commitments or from time to time to partially reduce the amount of the Revolving
Credit Commitments. Any partial reduction in the amount of the Revolving Credit
Commitments shall be in a minimum amount of $500,000 or a whole multiple of
$100,000 in excess thereof or the entire remaining balance of the Revolving
Credit Commitments. Any such notice shall be irrevocable and any such
termination or reduction shall be permanently effective on the date set forth in
such notice (which shall be a Business Day), and on such date all outstanding
Revolving Credit Loans, in case of such termination, or all Revolving Credit
Loans outstanding in an amount in excess of the amount to which the Revolving
Credit Commitments are reduced as set forth in such notice, in case of such
reduction, shall be due and payable without further notice or demand.
2.10 Use of Proceeds of Loans.
(a) On the Closing Date. On the Closing Date, subject to the terms and
conditions set forth herein, the Borrower shall request funding of the Term Loan
in the full amount of the Term Loan Commitment and shall request funding of
Revolving Credit Loans in an amount sufficient to pay, and shall use the
proceeds of all such funding on the Closing Date to pay:
(i) Existing Credit Agreement. All principal, interest, fees,
expense reimbursements and other obligations then outstanding under the
Existing Credit Agreement; and the Administrative Agent is irrevocably
authorized (but shall not be obligated) to apply such proceeds to repay
such obligations, by direct credit or direct remittance to the holders
thereof and without being required to remit funds to the Borrower or any
other Person; and, thereafter,
(ii) Seller Debt Retirement. Pre-1997 Seller Debt and other
Seller Debt, after giving effect to which the outstanding principal amount
of Pre-1997 Seller Debt shall not exceed $3,000,000 and the outstanding
principal amount of all other Seller Debt shall not exceed $25,000,000; and
(A) prior to the Closing Date the Borrower shall deliver to the
Administrative Agent such payout letters, estoppel letters, payment
authorizations, lien and covenant release agreements and releases and other
documents executed by the holders of such Pre-1997 Seller Debt and other
Seller Debt as the Administrative Agent or any Lender may request to
confirm satisfaction of such conditions and compliance with the other
matters set forth in Schedule 1.1(f) and Schedule 1.1(d) and (B) the
Administrative Agent is irrevocably authorized (but shall not be obligated)
to apply such proceeds to such payment, by direct remittance to the holders
of such Pre-1997 Seller Debt or such other Seller Debt, as the case may be,
and without being required to remit funds to the Borrower or any other
Person; and, thereafter,
(iii) Fees and Expenses. Fees and expenses payable by the
Borrower in connection with this Agreement and the other transactions
consummated on or about the Closing Date.
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(b) Revolving Credit Loans for Other Purposes. From time to time after
the Closing Date and during the Revolving Credit Availability Period, the
Borrower may request Revolving Credit Loans (subject to the terms and conditions
hereof) for any lawful purpose that does not constitute or result in any Default
hereunder (including without limitation, Acquisition Funding and payment of Term
Loans).
2.11 Fee Letter. The Borrower agrees to perform its obligations under
the Fee Letter and to pay the fees specified in the Fee Letter when due and
payable thereunder, for account solely of the Persons specified therein as
entitled to payment thereof. No other Person shall have, by reason of this
Agreement, any interest therein.
2.12 Letters of Credit. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower may request that the Issuing Bank
issue, at any time and from time to time on and after the Closing Date and prior
to the Revolving Credit Loan Maturity Date, for the account of the Borrower and
for the benefit of any holder (or any trustee, agent or other similar
representative for any such holders) of Indebtedness or other obligations of the
Borrower or any of its Subsidiaries, an irrevocable sight standby letter of
credit, in a form customarily used by the Issuing Bank or in such other form as
has been approved by the Issuing Bank (each such letter of credit, a "Letter of
Credit") in support of such Indebtedness or other obligations.
(b) Subject to the terms and conditions contained herein, the Issuing
Bank hereby agrees that it will, at any time and from time to time on or after
the Closing Date and prior to the Revolving Credit Loan Maturity Date, following
its receipt of the respective Letter of Credit Request, issue for the account of
the Borrower one or more Letters of Credit in support of such Indebtedness or
other obligations of the Borrower or any of its Subsidiaries as is permitted to
remain outstanding without giving rise to a Default or Event of Default
hereunder, provided that the Issuing Bank shall be under no obligation to issue
--------
any Letter of Credit of the types described above if at the time of such
issuance:
(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain the Issuing
Bank from issuing such Letter of Credit or any requirement of law
applicable to the Issuing Bank or any request or directive (whether or not
having the force of law) from any governmental authority with jurisdiction
over the Issuing Bank shall prohibit, or request that the Issuing Bank
refrain from, the issuance of letters of credit generally or such Letter of
Credit in particular or shall impose upon the Issuing Bank with respect to
such Letter of Credit any restriction or reserve or capital requirement
(for which the Issuing Bank is not otherwise compensated) not in effect on
the date hereof, or any unreimbursed loss, cost or expense which was not
applicable, in effect or known to the Issuing Bank as of the date hereof
and which the Issuing Bank in good xxxxx xxxxx material to it; or
(ii) the Issuing Bank shall have received notice from any Lender prior
to the issuance of such Letter of Credit of the type described in the
second sentence of Section 2.13(b).
34
(c) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and
prior to the issuance of, the respective Letter of Credit) at such time would
exceed either (x) $5,000,000 (subject to the immediately succeeding sentence) or
(y) when added to the aggregate principal amount of all Revolving Credit Loans
then outstanding, an amount equal to the aggregate Revolving Credit Commitments
at such time, (ii) each Letter of Credit shall be denominated in U.S. dollars,
(iii) each Letter of Credit shall by its terms terminate on or before the
earlier of (x) the date which occurs 12 months after the date of the issuance
thereof (although any such Letter of Credit may be automatically extendable for
successive periods of up to 12 months, but not beyond the fifth Business Day
prior to the Revolving Credit Loan Maturity Date, on terms acceptable to the
Issuing Bank) and (y) the fifth Business Day prior to the Revolving Credit Loan
Maturity Date, and (iv) the Stated Amount of each Letter of Credit upon issuance
shall be not less than $100,000 or such lesser amount as is acceptable to the
Issuing Bank.
(d) Schedule 2.12(d) attached hereto contains a description of all
letters of credit issued or deemed issued and outstanding under the Existing
Credit Agreement on the Closing Date. Each such letter of credit (each an
"Existing Letter of Credit") shall constitute a "Letter of Credit" for all
purposes of this Agreement issued, for purposes of Section 2.14(a), on the
Closing Date.
2.13 Letter of Credit Requests. (a) Whenever the Borrower desires that
a Letter of Credit be issued for its account, the Borrower shall give the
Administrative Agent and the Issuing Bank at least five Business Days' (or such
shorter period as is acceptable to the Issuing Bank) written notice thereof in a
form customarily used by the Issuing Bank (each such notice, a "Letter of Credit
Request").
(b) The making of each Letter of Credit Request shall be deemed to be
a representation and warranty by the Borrower that such Letter of Credit may be
issued in accordance with, and will not violate the requirements of, Section
2.12(c). Unless the respective Issuing Bank has received notice from any Bank
before it issues a Letter of Credit that one or more of the conditions specified
in Section 5, are not then satisfied, or that the issuance of such Letter of
Credit would violate Section 2.12(c), then the Issuing Bank shall issue the
requested Letter of Credit for the account of the Borrower in accordance with
the Issuing Bank's usual and customary practices. Upon the issuance of or
amendment to any Letter of Credit, the Issuing Bank shall promptly notify each
Bank of such issuance or amendment and such notice shall be accompanied by a
copy of the issued Letter of Credit or amendment, as the case may be.
2.14 Letter of Credit Participations. (a) Immediately upon the
issuance by the Issuing Bank of any Letter of Credit, the Issuing Bank shall be
deemed to have sold and transferred to each Bank with a Revolving Credit
Commitment, other than the Issuing Bank (each such Lender, in its capacity under
this Section 2.14, an "LC Participant"), and each such LC Participant shall be
deemed irrevocably and unconditionally to have purchased and received from the
Issuing Bank, without recourse or warranty, an undivided interest and
35
participation, to the extent of such LC Participant's RL Percentage, in such
Letter of Credit, each drawing made thereunder and the obligations of the
Borrower under this Agreement with respect thereto, and any security therefor or
guaranty pertaining thereto. Upon any change in the Revolving Credit Commitments
or RL Percentages of the Lenders pursuant to this Agreement, it is hereby agreed
that, with respect to all outstanding Letters of Credit and Unpaid Drawings,
there shall be an automatic adjustment to the participations pursuant to this
Section 2.03 to reflect the new RL Percentages of the assignor and assignee
Lender.
(b) In determining whether to pay under any Letter of Credit, the
Issuing Bank shall have no obligation relative to the other Lenders other than
to confirm that any documents required to be delivered under such Letter of
Credit appear to have been delivered and that they appear to comply on their
face with the requirements of such Letter of Credit. Any action taken or omitted
to be taken by the Issuing Bank under or in connection with any Letter of Credit
if taken or omitted in the absence of gross negligence or willful misconduct as
determined by a court of competent jurisdiction, shall not create for such
Issuing Bank any resulting liability to the Borrower or any Lender.
(c) In the event that any Issuing Bank makes any payment under any
Letter of Credit and the Borrower shall not have reimbursed such amount in full
to the Issuing Bank pursuant to Section 2.15(a), the Issuing Bank shall promptly
notify the Administrative Agent, which shall promptly notify each LC
Participant, of such failure, and each LC Participant shall promptly and
unconditionally pay to the Issuing Bank the amount of such LC Participant's RL
Percentage of such unreimbursed payment in U.S. dollars and in same day funds.
If the Administrative Agent so notifies, prior to 11:00 A.M. (New York time) on
any Business Day, any LC Participant required to fund a payment under a Letter
of Credit, such LC Participant shall make available to the Issuing Bank in U.S.
dollars such LC Participant's RL Percentage of the amount of such payment on
such Business Day in same day funds. If and to the extent such LC Participant
shall not have so made its RL Percentage of the amount of such payment available
to the Issuing Bank, such LC Participant agrees to pay to the Issuing Bank,
forthwith on demand such amount, together with interest thereon, for each day
from such date until the date such amount is paid to the Issuing Bank at the
overnight Federal Funds Rate. The failure of any LC Participant to make
available to the Issuing Bank its RL Percentage of any payment under any Letter
of Credit shall not relieve any other LC Participant of its obligation hereunder
to make available to the Issuing Bank its RL Percentage of any Letter of Credit
on the date required, as specified above, but no LC Participant shall be
responsible for the failure of any other LC Participant to make available to the
Issuing Bank such other LC Participant's RL Percentage of any such payment.
(d) Whenever the Issuing Bank receives a payment of a reimbursement
obligation as to which it has received any payments from the LC Participants
pursuant to clause (c) above, the Issuing Bank shall forward such payment to the
Administrative Agent, which in turn shall distribute to each LC Participant
which has paid its RL Percentage thereof, in U.S. dollars and in same day funds,
an amount equal to such LC Participant's share (based upon the proportionate
aggregate amount originally funded by such LC Participant to the aggregate
amount funded by all LC Participants) of the principal amount of such
36
reimbursement obligation and interest thereon accruing after the purchase of the
respective participations.
(e) Upon the request of any LC Participant, the Issuing Bank shall
furnish to such LC Participant copies of any Letter of Credit issued by it and
such other documentation as may reasonably be requested by such Participant.
(f) The obligations of the LC Participants to make payments to the
Issuing Bank with respect to Letters of Credit issued by it shall be irrevocable
and not subject to any qualification or exception whatsoever and shall be made
in accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement or any of
the other Loan Documents;
(ii) the existence of any claim, setoff, defense or other right which
the Borrower or any of its Subsidiaries may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), the
Administrative Agent, the Issuing Bank, any LC Participant, or any other
Person, whether in connection with this Agreement, any Letter of Credit,
the transactions contemplated herein or any unrelated transactions
(including any underlying transaction between the Borrower and the
beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or any other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Loan Documents; or
(v) the occurrence of any Default or Event of Default.
2.15 Agreement to Repay Letter of Credit Drawings. (a) The Borrower
hereby agrees to reimburse the Issuing Bank, by making payment to the
Administrative Agent in immediately available funds, for any payment or
disbursement made by it under any Letter of Credit (each such amount, so paid
until reimbursed, an "Unpaid Drawing"), no later than three Business Days after
the date of such payment or disbursement, with interest on the amount so paid or
disbursed by the Issuing Bank, to the extent not reimbursed prior to 12:00 Noon
(New York time) on the date of such payment or disbursement, from and including
the date paid or disbursed to but excluding the date such Issuing Bank was
reimbursed by the Borrower therefor at a rate per annum which shall be the Base
Rate in effect from time to time plus the Applicable Margin for Revolving Credit
Loans maintained as Base Rate Loans, provided, however, to the extent such
amounts are not reimbursed prior to 12:00 Noon (New York time) on the third
Business Day following such payment or disbursement, interest
37
shall thereafter accrue on the amounts so paid or disbursed by the Issuing Bank
(and until reimbursed by the Borrower) at a rate per annum which shall be the
Base Rate in effect from time to time plus the Applicable Margin for Revolving
Credit Loans maintained as Base Rate Loans plus 2%, in each such case, with
interest to be payable on demand. The Issuing Bank shall give the Borrower
prompt notice of each Drawing under any Letter of Credit, provided that the
failure to give any such notice shall in no way affect, impair or diminish the
Borrower's obligations hereunder.
(b) The obligations of the Borrower under this Section 2.15 to
reimburse the Issuing Bank with respect to drawings on Letters of Credit (each,
a "Drawing") (including, in each case, interest thereon) shall be absolute and
unconditional under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment which the Borrower may have or have had
against any Lender (including in its capacity as issuer of the Letter of Credit
or as an LC Participant), or any nonapplication or misapplication by the
beneficiary of the proceeds of such Drawing, the Issuing Bank's only obligation
to the Borrower being to confirm that any documents required to be delivered
under such Letter of Credit appear to have been delivered and that they appear
to comply on their face with the requirements of such Letter of Credit. Any
action taken or omitted to be taken by the Issuing Bank under or in connection
with any Letter of Credit if taken or omitted in the absence of gross negligence
or willful misconduct as determined by a court of competent jurisdiction, shall
not create for the Issuing Bank any resulting liability to the Borrower.
2.16 Increased Costs. If at any time after the date of this Agreement,
the introduction of or any change in any applicable law, rule, regulation,
order, guideline or request or in the interpretation or administration thereof
by any governmental authority charged with the interpretation or administration
thereof, or compliance by any Issuing Bank or any LC Participant with any
request or directive by any such authority (whether or not having the force of
law), or any change in generally accepted accounting principles, shall either
(i) impose, modify or make applicable any reserve, deposit, capital adequacy or
similar requirement against letters of credit issued by the Issuing Bank or
participated in by any Participant, or (ii) impose on the Issuing Bank or any LC
Participant any other conditions relating, directly or indirectly, to this
Agreement or any Letter of Credit; and the result of any of the foregoing is to
increase the cost to the Issuing Bank or any LC Participant of issuing,
maintaining or participating in any Letter of Credit, or reduce the amount of
any sum received or receivable by the Issuing Bank or any LC Participant
hereunder or reduce the rate of return on its capital with respect to Letters of
Credit (except for changes in the rate of tax on, or determined by reference to,
the net income or profits of the Issuing Bank or such LC Participant, or any
franchise tax based on the net income or profits of such Lender or LC
Participant, in either case pursuant to the laws of the United States of
America, the jurisdiction in which it is organized or in which its principal
office or applicable lending office is located or any subdivision thereof or
therein), then, upon demand to the Borrower by the Issuing Bank or any LC
Participant (a copy of which demand shall be sent by the Issuing Bank or such LC
Participant to the Administrative Agent) and the Borrower shall pay to the
Issuing Bank or such LC Participant such additional amount or amounts as will
compensate such Lender for such increased cost or reduction in the amount
receivable or reduction on the rate of return on
38
its capital. The Issuing Bank or any LC Participant, upon determining that any
additional amounts will be payable pursuant to this Section 2.16, will give
prompt written notice thereof to the Borrower, which notice shall include a
certificate submitted to the Borrower by the Issuing Bank or such LC Participant
(a copy of which certificate shall be sent by the Issuing Bank or such LC
Participant to the Administrative Agent), setting forth in reasonable detail the
basis for and the calculation of such additional amount or amounts necessary to
compensate the Issuing Bank or such LC Participant. The certificate required to
be delivered pursuant to this Section 2.16 shall, if delivered in good faith and
absent manifest error, be final and conclusive and binding on all parties
hereto.
2.17 Letter of Credit Fees. (a) The Borrower agrees to pay to the
Administrative Agent for distribution to each Lender with a Revolving Credit
Commitment (based on their respective RL Percentages) a fee in respect of each
Letter of Credit issued hereunder (the "Letter of Credit Fee"), for the period
from and including the date of issuance of such Letter of Credit to and
including the termination of such Letter of Credit, computed at a rate per annum
equal to the Applicable Margin then in effect for Revolving Credit Loans
maintained as Eurodollar Rate Loans on the daily average Stated Amount of such
Letter of Credit. Accrued Letter of Credit Fees shall be due and payable
quarterly in arrears on the last Business Day of each March, June, September and
December and upon the first day on or after the termination of the Revolving
Credit Commitments upon which no Letters of Credit remain outstanding.
(b) The Borrower agrees to pay to the Issuing Bank, for its own
account, a facing fee in respect of each Letter of Credit issued hereunder (the
"Facing Fee") for the period from and including the date of issuance of such
Letter of Credit to and including the termination of such Letter of Credit,
computed at a rate equal to 1/4 of 1 % per annum of the daily average Stated
Amount of such Letter of Credit. Accrued Facing Fees shall be due and payable
quarterly in arrears on the last Business Day of each March, June, September and
December and on the date upon which the Revolving Credit Commitments has been
terminated and such Letter of Credit has been terminated in accordance with its
terms.
(c) The Borrower shall pay, upon each drawing under, issuance of, or
amendment to, any Letter of Credit, such amount as shall at the time of such
event be the administrative charge which the Issuing Bank is generally imposing
in connection with such occurrence with respect to letters of credit.
SECTION 3
GENERAL PROVISIONS APPLICABLE TO COMMITMENTS AND LOANS
3.1 Optional and Mandatory Prepayments.
(a) Optional Prepayments. The Borrower may at any time prepay either
the outstanding Revolving Credit Loans or the outstanding Term Loan in whole or
in part (in an aggregate principal amount of $500,000 or a whole multiple
thereof, in the case of Base
39
Rate Loans, and in an aggregate principal amount of $2,000,000 or a whole
multiple of $500,000 in excess thereof, in the case of Eurodollar Loans),
without premium or penalty, upon at least three Business Days' irrevocable
notice to the Administrative Agent, specifying the date and amount of prepayment
and whether and to what extent the prepayment is of Eurodollar Loans or Base
Rate Loans. Upon receipt of any such prepayment notice, the Administrative Agent
shall promptly notify each Lender. If any such prepayment notice is given, the
amount specified in such notice shall be due and payable on the date specified
therein, together with (i) in the case of any prepayment of Eurodollar Loans,
all interest accrued and unpaid on the amount prepaid and, if such prepayment is
made on any day other than the last day of the Interest Period for such
Eurodollar Loans, with all breakage costs due under Section 3.11 and (ii) in the
case of any prepayment in full of all outstanding Revolving Credit Loans or Term
Loans, with all interest accrued and unpaid thereon. Partial prepayments of the
Term Loans shall be made and applied, subject to Section 3.7(d), ratably to each
Tranche of Term Loans then outstanding and shall be credited to the remaining
scheduled installment payments to become due on such Tranche pursuant to Section
2.6 ratably based on the proportion that each remaining scheduled installment
payment on such Tranche bears to the aggregate amount of the remaining scheduled
installment payments on such Tranche.
(b) Mandatory Prepayments.
(i) Certain Mandatory Prepayments. If, and on each occasion that,
at any time after the date of this Agreement:
(A) Asset Transfers. The Borrower or any of its Subsidiaries
receives any Net Proceeds from any sale, transfer or other disposition
of any or all of its property, except those permitted under Sections
7.6(a), 7.6(b) and 7.6(c) the Borrower shall contemporaneously
therewith reduce the Commitments and prepay the Loans in an amount
equal to 100% of such Net Proceeds.
(B) Incurrence of Other Indebtedness. The Borrower or any
Subsidiary of the Borrower receives any Net Proceeds from the
incurrence, issuance or sale of any Indebtedness (including
Subordinated Indebtedness) other than (x) Permitted Seller Debt and
(y) Indebtedness permitted under Section 7.2(b), (e), (f), (g), (h),
(i) or (j), as in effect on the date of this Agreement, the Borrower
shall contemporaneously therewith reduce the Commitments and prepay
the Loans in an amount equal to 100% of such Net Proceeds.
(C) Issuance of Stock by Subsidiaries. Any Subsidiary of the
Borrower receives any Net Proceeds from the issuance or sale of its
Capital Stock to any Person other than the Borrower or USIS, the
Borrower shall contemporaneously therewith reduce the Commitments and
prepay the Loans in an amount equal to 100% of such Net Proceeds.
40
(D) Private Sale of Borrower Stock. The Borrower receives
any Net Proceeds from the issuance or sale of any of its Capital Stock
in any transaction that is not required to be registered under the
federal Securities Act of 1933 or its successor (except Exempt Equity
Proceeds), the Borrower shall contemporaneously therewith reduce the
Commitments and prepay the Loans in an amount equal to 50% of such Net
Proceeds.
(E) Public Offering of Borrower Stock. The Borrower receives
any Net Proceeds from the issuance or sale of any of its Capital Stock
in a transaction that is required to be registered under the federal
Securities Act of 1933 or its successor, the Borrower shall
contemporaneously therewith reduce the Commitments and prepay the
Loans in an amount equal to 75% of such Net Proceeds.
(F) Casualty Loss. The Borrower or any of its Subsidiaries
receives any Casualty Loss Proceeds, the Borrower shall
contemporaneously therewith reduce the Commitments and prepay the
Loans in an amount equal to such Casualty Loss Proceeds.
(G) Excess Cash Flow. The Borrower has Excess Cash Flow for
any Excess Cash Flow Period, commencing with the Excess Cash Flow
Period ending July l, 2001, the Borrower shall prepay the Loans on the
last Business Day in August following the end of such Excess Cash Flow
Period in an amount equal to 75% of such Excess Cash Flow.
All prepayments required under this Section 3.1(b)(i) shall be applied,
first, to the ratable prepayment of outstanding Term Loan until the Term
Loan has been paid in full, second, except to the extent consisting of a
prepayment under Section 3.1(b)(i)(G), to the ratable reduction of the
Revolving Credit Commitments until the Revolving Credit Commitments are
reduced to zero (and, to the extent Revolving Credit Loans are then
outstanding, to the ratable prepayment of the Revolving Credit Loans up to
the amount of such reduction in the Revolving Credit Commitments). Each
such reduction in the Commitments shall be permanent and irrevocable. Each
such reduction of any Tranche of Commitments and prepayment of any Tranche
of Loans shall be allocated ratably to the Term Loan Lenders for such
Tranche based on their then Pro Rata Shares for such Tranche and shall be
credited to the remaining scheduled installment payments to become due on
such Tranche pursuant to Section 2.6 ratably based on the proportion that
each remaining scheduled installment payment on such Tranche bears to the
aggregate amount of the remaining scheduled installment payments on such
Tranche.
(ii) Excess Exposure. If at any time the aggregate outstanding
amount of Revolving Credit Loans or Term Loans exceeds the then amount of
the Commitments therefor, the Borrower shall prepay such Loans in an amount
equal to the excess. If, after giving effect to the prepayment of all
outstanding Revolving Credit Loans of all Lenders, the aggregate amount of
the Letter of Credit Outstandings
41
exceeds the Revolving Credit Commitments as then in effect, the Borrower
shall pay to the Administrative Agent on such date an amount of cash or
Cash Equivalents equal to the amount of such excess (up to a maximum amount
equal to the Letter of Credit Outstandings at such time), such cash or Cash
Equivalents to be held as security for all obligations of the Borrower to
the Lenders hereunder in a cash collateral account to be established by the
Administrative Agent.
(iii) Change of Control. If at any time any Change of Control
occurs, the Borrower shall prepay all outstanding Loans, and terminate all
Commitments, on the tenth Business Day after demand for such prepayment is
made by the Required Lenders.
(c) Deferral of Certain Prepayments. If any mandatory prepayment of
Loans pursuant to Section 3.1(b)(i) would require any Eurodollar Loan to be
prepaid before the then-current Interest Period for such Eurodollar Loan has
ended, the Borrower may defer prepayment of such Eurodollar Loan until such
Interest Period has ended, but only if and to the extent (i) breakage costs are
due and have been demanded pursuant to Section 3.11 by reason of such
prepayment, (ii) on the date such prepayment is due (without giving effect to
such deferral), no Default is continuing and the Borrower delivers funds
sufficient to make such prepayment to a collateral account under the dominion
and control of the Administrative Agent for investment in Cash Equivalents that
mature on or prior to the end of such Interest Period, and (iii) such funds are
applied (and the Administrative Agent hereby is irrevocably authorized to apply
such funds) to the repayment of such Eurodollar Loan on the last day of such
Interest Period or any earlier date on which any Default occurs and is
continuing.
3.2 Conversion and Continuation Options.
(a) Conversion. The Borrower may elect from time to time to convert a
Base Rate Loan to a Eurodollar Loan effective on any Business Day by giving the
Administrative Agent written notice thereof received by the Administrative Agent
prior to 10:00 a.m. New York City time at least three Business Days prior to
such Business Day.
(b) Continuation. The Borrower may elect from time to time to continue
a Eurodollar Loan as a Eurodollar Loan upon the expiration of the then current
Interest Period with respect thereto by giving the Administrative Agent written
notice thereof received by the Administrative Agent prior to 10:00 a.m. New York
City time three Business Days prior to expiration of the current Interest
Period.
(c) Content and Effect of Notice. The notice of conversion or
continuation shall specify the length of the Interest Period of each Eurodollar
Loan, shall specify the Tranche of Loans of which such Eurodollar Loan is a
part, and shall be irrevocable. Upon receipt of such notice, the Administrative
Agent shall promptly notify each Lender.
(d) Limitation on Conversion and Continuation. Notwithstanding the
provisions of Section 3.2(a) and Section 3.2(b), no Loan may be converted into
or continued as a Eurodollar Loan (i) at any time when any Event of Default has
occurred and is
42
continuing, or (ii) unless the remaining amount of Base Rate Loans of the same
Tranche of Loans exceeds all scheduled principal payments due on such Tranche of
Loans during the Interest Period specified by the Borrower for such Eurodollar
Loan.
(e) Automatic Conversion into Base Rate Loans. If the Borrower is not
entitled to continue any Eurodollar Loan as a Eurodollar Loan or fails to give
notice of continuation with respect to any Eurodollar Loan pursuant to Section
3.2(b), such Eurodollar Loan shall automatically be converted to a Base Rate
Loan on the last day of the expiring Interest Period for such Eurodollar Loan.
3.3 Amounts and Interest Periods for Eurodollar Loans. All borrowings
and continuations of, and conversions into, Eurodollar Loans and all selections
of Interest Periods shall be made so that, after giving effect thereto, (a) the
aggregate principal amount of the Eurodollar Loans allocated to each Interest
Period is equal to $2,000,000 or a whole multiple of $500,000 in excess thereof,
(b) each Interest Period applies solely to Eurodollar Loans of a single Tranche,
and (c) no more than five separate Interest Periods for Eurodollar Loans are
outstanding at any time.
3.4 Interest Rates and Payment Dates.
(a) Eurodollar Rate and Eurodollar Margins. Each Eurodollar Loan shall
bear interest for each day during each Interest Period applicable to such Loan
at a rate per annum equal to sum of the Eurodollar Rate determined for such
Interest Period and for such day plus the Applicable Eurodollar Margin
determined for such day for the Tranche of Loans of which such Eurodollar Loan
is a part.
(b) Base Rate and Base Rate Margins. All Base Rate Loans outstanding
on any day shall bear interest for such day at a rate per annum equal to the sum
of the Base Rate in effect on such day plus the Applicable Base Rate Margin
determined for such day for the Tranche of Loans of which such Base Rate Loan is
a part.
(c) Defaulted Payments. If all or a portion of (i) the principal
amount of any Loan, (ii) any interest payable on any Loan, or (iii) any
commitment fee or other amount payable under this Agreement or under any other
Loan Document is not paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum that is 2% per annum in excess the rate otherwise applicable thereto,
from the date of non-payment until such amount is paid in full (before as well
as after any judgment).
(d) Payment of Interest. Interest on each Type of Loan shall be
payable in arrears on each Interest Payment Date for such Type of Loan, except
that interest accruing pursuant to Section 3.4(c) shall be payable from time to
time on demand.
43
3.5 Computation of Interest.
(a) Computation. Interest shall be calculated on the basis of a
360-day year for the actual days elapsed, except that whenever interest is
calculated on the basis of the Prime Rate, interest shall be calculated on the
basis of a year of 365 days (or 366 days, in a leap year) for the actual days
elapsed. Any change in the interest rate on a Loan resulting from a change in
the Base Rate or the Eurocurrency Reserve Requirements shall become effective as
of the opening of business on the day on which such change becomes effective.
The Administrative Agent shall promptly upon request therefor confirm to the
Borrower or any Lender any determination made by the Administrative Agent as to
a Eurodollar Rate or as to any such change in interest rate that has become
effective.
(b) Agent's Determinations Conclusive and Binding. Each determination
of an interest rate by the Administrative Agent pursuant to any provision of
this Agreement shall be conclusive and binding on the Borrower and the Lenders
in the absence of manifest error.
3.6 Inability to Determine Interest Rate. If on the Business Day prior
to the first day of any Interest Period for any Loan that the Borrower has
requested to be funded as, converted into or continued as a Eurodollar Loan (a)
the Administrative Agent has determined that, by reason of circumstances
affecting the London interbank market, adequate and reasonable means do not
exist for ascertaining the Eurodollar Rate with respect to such Eurodollar Loan,
or (b) Lenders constituting Required Lenders have notified the Administrative
Agent that the cost to such Lenders of making or maintaining such Eurodollar
Loan is more than three basis points (0.03%) greater than the Eurodollar Rate
with respect to such Eurodollar Loan, the Administrative Agent shall give
telecopy, or telephonic notice thereof to the Borrower and the Lenders as soon
as practicable thereafter. If such notice is given, (i) such Loan shall not be
funded as, converted into or continued as a Eurodollar Loan and shall, instead,
be made or maintained as a Base Rate Loan and (ii) no other Loans shall be
funded as, converted into or continued as Eurodollar Loans until such time as
the Administrative Agent has determined and advised the Borrower and the Lenders
that the circumstances giving rise to such notice no longer exist. Each
determination by the Administrative Agent under this Section 3.6 shall be
conclusive and binding on the Borrower and the Lenders absent manifest error.
3.7 Payments and Pro Rata Treatment.
(a) Payments. All payments to be made by the Borrower under this
Agreement, whether on account of principal, interest, fees or otherwise, shall
be made (i) in United States dollars in immediately available funds, without
reservation of right, set-off or counterclaim, and (ii) prior to 1:00 p.m. New
York City time on the date due to the Administrative Agent, for the account of
the Lenders, at the Administrative Agent's office specified in Section 10.2 or
by wire transfer in accordance with the instructions of the Administrative
Agent. Payments received by the Administrative Agent after such time shall be
deemed to have been received on the next Business Day. The Administrative Agent
shall
44
distribute such payments to the Lenders entitled thereto upon receipt in the
same funds received.
(b) Funding Reliance. Unless the Administrative Agent is notified in
writing by any Lender prior to a Borrowing Date for any Loan that such Lender
will not make its Pro Rata Share of the funding for such Loan available to the
Administrative Agent on the Borrowing Date in United States dollars in
immediately available funds, the Administrative Agent may assume that such
Lender will make such amount available to the Administrative Agent and the
Administrative Agent may, in reliance upon such assumption, make such Lender's
Pro Rata Share of such Loan available to the Borrower. If such Lender fails to
make such amount available to the Administrative Agent by the required time on
the Borrowing Date for such Loan, such Lender shall pay to the Administrative
Agent, on demand, such amount with interest thereon at a rate equal to the daily
average Federal Funds Rate until such Lender makes such amount immediately
available to the Administrative Agent. A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts owing under this Section
3.7(b) shall be conclusive and binding on such Lender absent manifest error. If
any Lender's Pro Rata Share of the funds for any Loan is not made available to
the Administrative Agent by such Lender within three Business Days of the
Borrowing Date for such Loan, the Administrative Agent shall be entitled to
recover such amount, with interest thereon at the rate per annum then applicable
to Revolving Credit Loans that are Base Rate Loans, on demand from the Borrower.
(c) Ratable Funding and Commitment Reduction. Each borrowing by the
Borrower of Loans of any Tranche shall be funded ratably by the Lender having
Commitments for such Tranche, based on their Pro Rata Shares for such Tranche.
Any reduction of Commitments for any Tranche of Loans shall be allocated ratably
to such Commitments.
3.8 Illegality.
(a) Eurodollar Loans. If the adoption of or any change in any law or
regulation, or in the administration or interpretation thereof by any
Governmental Authority charged with the administration or interpretation thereof
makes it unlawful for any Lender to make, convert into or continue Eurodollar
Loans as contemplated by this Agreement, or to give effect to its obligations as
contemplated by this Agreement with respect to any Eurodollar Loan, then such
Lender may by written notice to the Borrower and the Administrative Agent (i)
declare that Eurodollar Loans will not thereafter be made by such Lender under
this Agreement, whereupon any request by the Borrower for a Eurodollar Loan
shall, as to such Lender only, be deemed a request for a Base Rate Loan unless
and until such declaration is subsequently withdrawn and (ii) require that all
outstanding Eurodollar Loans made by such Lender be converted to Base Rate
Loans, in which event all such Eurodollar Loans shall be automatically converted
to Base Rate Loans as of the effective date of such notice as provided in
Section 3.8(c).
(b) Application of Prepayments. If any Lender exercises its rights
under Section 3.8(a), all payments and prepayments of principal that would
otherwise have been applied to repay such Lender's Eurodollar Loans shall
instead be applied to repay the Base
45
Rate Loans made by such Lender in lieu of, or resulting from the conversion of,
such Eurodollar Loans.
(c) Effectiveness of Notice. For purposes of this Section 3.8, to the
extent lawful, any notice to the Borrower by any Lender shall be effective for
each of its Eurodollar Loans on the last day of the then current Interest Period
for each such Loan regardless of when such notice is actually received by the
Borrower. Otherwise, any such notice shall be effective on the date of receipt
by the Borrower.
3.9 Requirements of Law.
(a) Increase in Eurodollar Loan Costs. If after the date of this
Agreement the adoption of or any change in applicable law or regulation, or in
the interpretation or administration thereof, by any Governmental Authority
charged with the administration or interpretation thereof (whether or not having
the force of law):
(i) changes the basis of taxation of payments to any Lender in
respect of the principal of or interest on any Eurodollar Loan made by such
Lender or any fees or other amounts payable under this Agreement (other
than taxes imposed on or measured by the net income or profits of such
Lender, including franchise tax and branch profits tax, imposed by the
jurisdiction in which such Lender is organized or any state or political
subdivision thereof),
(ii) imposes, modifies or holds applicable any reserve, special
deposit, compulsory loan or other similar requirement against assets of,
deposits with or for the account of, or other extensions of credit by, any
office of such Lender (which requirement is not otherwise included in the
determination of the Eurodollar Rate), or
(iii) imposes on such Lender any other condition affecting this
Agreement or Eurodollar Loans made by such Lender,
and the result of any of the foregoing is to increase the cost to such Lender of
making, converting into or continuing Eurodollar Loans, or to reduce any amount
receivable by such Lender under this Agreement, then the Borrower shall pay to
such Lender any additional amounts necessary (as determined in good faith by
such Lender) to compensate such Lender, after giving effect to all tax
consequences of such payment, for such increase in cost or reduction in the
amount receivable. If any Lender becomes entitled to claim any additional
amounts pursuant to this Section 3.9, such Lender shall promptly notify the
Borrower, through the Administrative Agent, of the event by reason of which it
has become entitled to receive such additional amounts.
(b) Reduction in Return on Capital. If any Lender determines that the
applicability of any existing law, rule, regulation or guideline, or the
adoption of any new law, rule, regulation or guideline after the date of this
Agreement, or any change in any of the foregoing or in the interpretation or
administration of any of the foregoing by any
46
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or its
holding company with any request, guideline 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 such Lender's or such holding company's capital
as a consequence of its obligations under this Agreement to a level below that
which such Lender or such holding company could have achieved but for such
adoption, change or compliance (taking into consideration such Lender's or such
holding company's policies with respect to capital adequacy), then from time to
time after submission by such Lender to the Borrower (with a copy to the
Administrative Agent) of a written request therefor, the Borrower shall pay to
such Lender such additional amount or amounts as are necessary (as determined in
good faith by such Lender) to compensate such Lender for any such reduction
suffered.
(c) Notice and Payment of Claims. If any Lender becomes entitled to
receive any additional amount pursuant to Section 3.9(a) or Section 3.9(b), such
Lender shall deliver a notice to the Borrower (with a copy to the Administrative
Agent) specifying the amount or amounts payable to such Lender, and the reason
that such amount or amounts are payable to such Lender. Any such notice shall be
conclusive and binding on the Borrower absent manifest error. The Borrower shall
pay each Lender the amount shown as due in any such notice within 5 Business
Days after the Borrower's receipt of such notice. The agreement of the Borrower
in this Section 3.9 shall survive the termination of this Agreement and the
payment of the Loans and all interest and other amounts payable with respect to
the Loans under this Agreement and the Notes.
3.10 Taxes.
(a) Payments Free and Clear. All payments made by the Borrower under
this Agreement and the Notes shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future taxes,
levies, imposts, charges, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, excluding
net income taxes, franchise taxes, or any other taxes imposed on or measured by
the net income or profits of (x) the Administrative Agent in the jurisdiction
under the laws of which it is organized or any state or political subdivision
thereof, (y) any Lender in the jurisdiction in which it is organized or any
state or political subdivision thereof or in the jurisdiction in which such
Lender's lending office is located or any state or political subdivision thereof
(all such taxes, levies, imposts, charges, deductions and withholdings, except
those expressly excluded above, the "Non-Excluded Taxes").
(b) Other Taxes. In addition, the Borrower agrees to pay to each
relevant Governmental Authority in accordance with applicable law any current or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies that arise from any payment made under this Agreement or from
the execution, delivery or registration of, or otherwise with respect to, this
Agreement ("Other Taxes").
(c) Withholding Gross-Up. If any Non-Excluded Taxes or Other Taxes are
required by law to be withheld from any amounts payable to the Administrative
Agent or any
47
Lender under this Agreement or under the Notes, the amounts payable to the
Administrative Agent or such Lender under this Agreement and the Notes shall be
increased to the extent necessary, after giving effect to the tax consequences
of the increase, to yield to the Administrative Agent and each Lender interest
or any such other amounts payable under this Agreement at the rates or in the
amounts specified in this Agreement and the Notes.
(d) Receipts. Whenever any Non-Excluded Taxes or Other Taxes are
payable by the Borrower on behalf of the Administrative Agent or any Lender
pursuant to this Section 3.10, upon receipt by the Borrower of any official
receipt showing payment thereof, the Borrower shall send a certified copy of
such official receipt to the Administrative Agent.
(e) Indemnity. The Borrower shall indemnify the Administrative Agent
and each Lender for the full amount of Non-Excluded Taxes, Other Taxes and any
taxes imposed by any jurisdiction on amounts payable under this Section 3.10
that are paid by such Lender or the Administrative Agent (including penalties,
interest and expenses arising therefrom or with respect thereto).
(f) Contest. If the Borrower determines in good faith that a
reasonable basis exists for contesting any Non-Excluded Taxes or Other Taxes,
the Administrative Agent and the Lenders shall cooperate with the Borrower in
challenging such Non-Excluded Taxes or Other Taxes at the Borrower's expense if
requested by the Borrower (it being understood and agreed that neither the
Administrative Agent nor any Lenders shall have any obligation to contest or
responsibility for contesting such Non-Excluded Taxes or Other Taxes). If any
Lender receives a refund in respect of any Non-Excluded Taxes or Other Taxes for
which such Lender has received payment from the Borrower under this Agreement,
such Lender shall, within 30 days of receipt by such Lender, deliver such refund
to the Borrower. The Borrower, upon demand by such Lender, shall return such
refund (plus any penalties, interest or other charges) to such Lender in the
event such Lender is subsequently required to repay such refund.
(g) Survival. The agreements of the Borrower in this Section 3.10
shall survive the termination of this Agreement and the payment of the Loans and
all interest and other amounts payable with respect to the Loans under this
Agreement and the Notes.
(h) Foreign Lenders. Each Lender that is not incorporated under the
laws of the United States of America or a state thereof shall:
(i) Banks. In the case of a Lender that is a "bank" under Section
881(c)(3)(A) of the Code:
(A) on or before the Closing Date or on or before the
effective date of the Assignment and Acceptance pursuant to which such
Lender initially acquires an interest in the Loans, deliver to the
Borrower and the Administrative Agent two accurate and complete
original signed copies of Internal Revenue Service Form W-8ECI or
Form W-8BEN (with respect to a complete exemption under an income tax
treaty) (or successor forms) certifying to such Lender's
48
entitlement as of such date to a complete exemption from United States
withholding tax with respect to payments to be made under this
Agreement and under any Notes;
(B) deliver to the Borrower and the Administrative Agent two
further copies of any such form or certification on or before the date
that any such form or certification expires or becomes obsolete and
promptly upon the occurrence of any event requiring a change in the
most recent form previously delivered by it to the Borrower and the
Administrative Agent, or immediately notify Borrower and the
Administrative Agent of its inability to deliver any such form or
certificate, in which case such Lender shall not be required to
deliver any such form or certificate pursuant to this Section 3.10(h);
and
(C) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by the
Borrower or the Administrative Agent; or
(ii) Other Lenders. In the case of a Lender that is not a "bank"
under Section 881(c)(3)(A) of the Code:
(A) on or before the date of the first payment to such
Lender pursuant to this Agreement or on or before the effective date
of the Assignment and Acceptance pursuant to which such Lender
initially acquires an interest in the Loans, deliver to the Borrower
and the Administrative Agent (i) a statement under penalties of
perjury that such Lender (x) is not a "bank" under Section
881(c)(3)(A) of the Code, is not subject to regulatory or other legal
requirements as a bank in any jurisdiction, and has not been treated
as a bank for purposes of any tax, securities law or other filing or
submission made to any Governmental Authority, any application made to
a rating agency or qualification for any exemption from tax,
securities law or other legal requirements, (y) is not a 10-percent
shareholder within the meaning of Section 881(c)(3)(B) of the Code,
and (z) is not a controlled foreign corporation receiving interest
from a related person within the meaning of Section 881(c)(3)(C) of
the Code, and (ii) two accurate and complete original signed copies of
Internal Revenue Service Form W-8BEN (with respect to the portfolio
interest exemption) (or successor form);
(B) deliver to the Borrower and the Administrative Agent two
new accurate and complete original signed copies of Internal Revenue
Service Form W-8BEN (with respect to the portfolio interest
exemption), (or any successor applicable form) on or before the date
that any such Form W-8BEN expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent form
previously delivered by such Lender, or immediately notify Borrower
and the Administrative Agent of its inability to deliver any such form
or certificate, in which case such Lender shall not be
49
required to deliver any such form or certificate pursuant to this
Section 3.10(h); and
(C) obtain such extensions of time for filing and complete
such forms or certifications as may be reasonably requested by the
Borrower or the Administrative Agent unless an event (including any
change in treaty, law or regulation) has occurred prior to the date on
which any such delivery would otherwise be required that renders such
forms inapplicable or that would prevent such Lender from duly
completing and delivering such forms with respect to it and such
Lender so advises the Borrower and the Administrative Agent, in which
case such Lender shall certify to the Borrower and the Administrative
Agent (i) in the case of a Form W-8BEN or W-8ECI, that such Lender is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, and (ii) in the
case of a Form W-8BEN or W-9, that such Lender is entitled to an
exemption from United States backup withholding tax. Each Person that
becomes a Participant pursuant to Section 10.6 shall be required to
provide all of the forms and statements required pursuant to this
Section 3.10(h) to the Lender from which such Person's participation
was purchased
Notwithstanding the foregoing provisions of this Section 3.10(h), the
Borrower shall not be obligated to gross up payments to a Lender pursuant to
Sections 3.10(a), (b), or (c) or indemnify a Lender under Section 3.10(e) if
such Lender shall fail to provide the forms or certification required by this
Section 3.10(h).
3.11 Breakage Costs. The Borrower agrees to indemnify and hold
harmless each Lender from any loss or expense that such Lender may sustain or
incur as a consequence of (a) any default by the Borrower for any reason in
making a borrowing of, conversion into, or continuation of any Eurodollar Loan
after the Borrower has given a notice requesting that such Loan be made,
converted or continued in accordance with the provisions of this Agreement, (b)
any default by the Borrower for any reason in making any prepayment of any
Eurodollar Loan after the Borrower has given a notice thereof in accordance with
the provisions of this Agreement, or (c) any prepayment (whether voluntary or
mandatory) of any Eurodollar Loan by the Borrower for any reason on any day that
is not the last day of an Interest Period with respect to such Eurodollar Loan.
Such loss or reasonable expense may include any loss, including, without
limitation, loss of anticipated profits, costs or expense incurred by reason of
the liquidation or reemployment of deposits or other funds in order to fund or
maintain such Eurodollar Loans. The agreements of the Borrower in this Section
3.11 shall survive the termination of this Agreement and the payment of the
Loans and all interest and other amounts payable with respect to the Loans under
this Agreement and the Notes.
50
SECTION 4
REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this Agreement and
to make the Loans, the Borrower hereby represents and warrants to the Agents and
each Lender that:
4.1 Financial Condition.
(a) Annual Audited Statements. The audited balance sheet of the
Borrower and its Subsidiaries as of December 31, 1998, and the related audited
consolidated statements of income, shareholders' equity and cash flows for the
year then ended, copies of which have previously been furnished to the Agents,
and all audited financial statements hereafter delivered to the Agents or
Lenders pursuant to Section 6.1(a) have been certified in conformity with the
requirements of Section 6.1(a) and present fairly the consolidated financial
condition of the Borrower and its Subsidiaries as at the date thereof and the
consolidated results of their operations and their cash flows for the year then
ended in conformity with GAAP.
(b) Quarterly Statements. The unaudited balance sheet of the Borrower
and its Subsidiaries as of June 30, 1999, and the related unaudited consolidated
statements of income, shareholders' equity and cash flows for the six-month
period then ended, copies of which have previously been furnished to the Agents,
and all quarterly financial statements hereafter delivered to the Agents or
Lenders pursuant to Section 6.1(b) have been certified in conformity with the
requirements of Section 6.1(b) and present fairly the consolidated financial
condition of the Borrower and its Subsidiaries as at each such date and the
consolidated results of their operations for each period then ended (subject to
normal year-end audit adjustments and the absence of footnote disclosure). All
such financial statements, including the schedules and notes thereto, have been
prepared on a basis consistent with the audited financial statements of the
Borrower for the fiscal year most recently ended, subject to year-end
adjustments and the absence of footnote disclosure.
(c) Liabilities. As of the date of any of the financial statements
described in Section 4.1 (a) and Section 4.1(b), neither the Borrower nor any of
its Subsidiaries had any Indebtedness, Guarantee Obligation, contingent
liability, liability for taxes, lease, long-term commitment or liability that
(a) would be required to be reflected on the consolidated balance sheet of the
Borrower and its Subsidiaries or the notes thereto if such balance sheet (i) was
prepared on a basis consistent with the then most recent audited consolidated
balance sheet of the Borrower and its Subsidiaries in accordance with GAAP, and
(ii) fairly presented the consolidated financial condition of the Borrower and
its Subsidiaries, and (b) is not reflected in such financial statements or, as
of the date of any financial statement described in Section 4.1(a), in the
schedules or notes thereto or disclosed on Schedule 4.1(c).
(d) Transfers. Except as set forth on Schedule 4.1(d), during the
period from December 31, 1998 to and including the Closing Date of this
Agreement, there has been no sale, transfer or other disposition by the Borrower
or any of its Subsidiaries of any of their property, except in the ordinary
course of business, and no purchase or other acquisition by the Borrower or any
of its Subsidiaries of any property from any other Person (including any
51
Capital Stock of any other Person), except in the ordinary course of business,
material in relation to the consolidated financial condition of the Borrower and
its Subsidiaries at December 31, 1998.
(e) Stockholders' Equity. The Borrower has no outstanding Disqualified
Stock. On the Closing Date, the Stockholders' Equity of the Borrower is not less
than $200,000,000, taking into account the Equity Offering.
4.2 No Change. Since December 31, 1998 (a) there has been no material
adverse change in the business, operations, properties, assets, liabilities,
performance or condition (financial or otherwise) or prospects of the Borrower
or its Subsidiaries, taken as a whole, and (b) no dividends or other
distributions have been declared, paid or made upon the Capital Stock of the
Borrower nor has any of the Capital Stock of the Borrower been redeemed,
retired, purchased or otherwise acquired for value by the Borrower or any of its
Subsidiaries except as set forth on Schedule 4.2 or permitted by Section 7.8.
4.3 Corporate Existence; Compliance with Law. Each of the Borrower and
its Subsidiaries (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization (except in the case of
inactive Subsidiaries listed on Schedule 4.15 solely with respect to good
standing and valid existence), (b) has the corporate power and authority to own
and operate its property, to lease the property it operates as lessee and to
conduct the business in which it is currently engaged, (c) is duly qualified as
a foreign corporation in good standing under the laws of each jurisdiction where
its ownership, lease or operation of property or the conduct of its business
requires such qualification except for any such failure to so qualify that would
not, individually or in the aggregate, have a Material Adverse Effect, and (d)
is in compliance with all Requirements of Law except for any such failure to
comply therewith that would not, individually or in the aggregate, have a
Material Adverse Effect.
4.4 Corporate Power, Authorization; Enforceable Obligations. Each Loan
Party has (a) the corporate power and authority to make, deliver and perform the
Loan Documents to which it is a party, and (b) taken all necessary corporate
action to authorize the execution, delivery and performance of the Loan
Documents to which it is a party. No consent, approval or authorization of,
filing with, notice to or other act by any Governmental Authority or any other
Person is required in connection with the borrowings under this Agreement, or
with the execution, delivery and performance of the Loan Documents to which any
Loan Party is a party or in connection with the transactions contemplated hereby
or thereby. This Agreement and each other Loan Document has been duly executed
and delivered by each Loan Party that is a party hereto or thereto. This
Agreement and each other Loan Document constitutes a legal, valid and binding
obligation of each Loan Party that is a party hereto or thereto, enforceable
against each such Loan Party in accordance .with its terms except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
52
4.5 No Legal Bar. The execution, delivery and performance of this
Agreement and the other Loan Documents by each Loan Party that is a party hereto
or thereto, the borrowings under this Agreement, the issuance of the Notes and
the use of the proceeds of the Loans will not violate any Requirement of Law or
any indenture, agreement or other instrument to which any Loan Party is a party
or by which such Loan Party or any of its property is bound and will not result
in, or require, the creation or imposition of any Lien on any property or
revenues of the Borrower or any of its Subsidiaries pursuant to any such
Requirement of Law or any such indenture, agreement or other instrument;
provided, that in connection with the issuance of its Capital Stock to certain
--------
employees the Borrower granted such employees the contractual right to put such
Capital Stock to the Borrower upon termination of employment, and such
contractual put rights may conflict with the terms of this Agreement to the
extent that the aggregate amount required to be paid by the Borrower in any one
calendar year as a result of the exercise of such put rights exceeds the
Permitted Stock Payments for such year.
4.6 No Material Litigation. Except as set forth on Schedule 4.6, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against the Borrower or any of its Subsidiaries or against any
of their properties or revenues (a) with respect to this Agreement or any other
Loan Document or any of the transactions contemplated hereby or thereby, or (b)
that could, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
4.7 No Default. Neither the Borrower nor any of its Subsidiaries is in
default under or with respect to any indenture, agreement or other instrument to
which it is a party or by which it or any of its property is bound (i)
evidencing, governing, securing or relating to any Indebtedness or (ii)
otherwise, as to any other agreement, in any respect that could, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing or will occur as the
result of any Loan or the use of proceeds of any Loan.
4.8 Ownership of Property; Liens. Each of the Borrower and its
Subsidiaries has good and marketable title in fee simple to, or a valid
leasehold interest in, all its real property, and good title to, or a valid
leasehold interest in, all its other property material to its business, except
for (a) minor defects in title that do not affect the ability to use such
property in the conduct of its business and (b) any encumbrance or restriction
arising in the ordinary course of business that is not a Lien and that does not
materially restrict the intended use of such property; and none of such property
is subject to any Lien except for Liens permitted under Section 7.3.
4.9 Intellectual Property. Each of the Borrower and its Subsidiaries
owns, or is licensed to use, all trademarks, tradenames, copyrights, technology,
know-how and processes necessary for the conduct of its business as currently
conducted (the "Intellectual Property"). No claim has been asserted or is
pending by any Person challenging or questioning the use of any Intellectual
Property by the Borrower or any of its Subsidiaries or
53
the validity or effectiveness of any Intellectual Property, nor does the
Borrower know of any valid basis for any such claim. The use of the Intellectual
Property by the Borrower and its Subsidiaries does not infringe on the rights of
any other Person. Neither the Borrower nor any of its Subsidiaries has licensed
any material Intellectual Property to any other Person, other than as set forth
on Schedule 4.9.
4.10 No Burdensome Agreements. No indenture, agreement or other
instrument to which the Borrower or any of its Subsidiaries is a party or by
which it or any of its property is bound could if performed according to its
terms, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
4.11 Taxes. Each of the Borrower and its Subsidiaries has filed, or
caused to be filed, all federal, state and local tax returns that are required
to be filed and has paid all taxes shown to be due and payable on said returns
or on any assessments made against it or any of its property and all other
material taxes, fees or other charges imposed on it or any of its property by
any Governmental Authority (other than any the amount or validity of which is
currently being contested in good faith by appropriate proceedings and with
respect to which reserves have been provided on the books of the Borrower and
its Subsidiaries in accordance with GAAP).
4.12 Federal Regulations. No part of the proceeds of any Loan will be
used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U. Neither the making,
conversion into or continuation of any Loan nor the use of the proceeds of any
Loan will violate or be inconsistent with the provisions of Regulation U or
Regulation X. If requested by any Lender or the Administrative Agent, the
Borrower will furnish to the Administrative Agent and each Lender a statement to
the foregoing effect in conformity with the requirements of FR Form U-1 referred
to in Regulation U.
4.13 ERISA.
(a) Plans. Other than as listed on Schedule 4.13, none of the
Borrower, any Subsidiary of the Borrower or any Commonly Controlled Entity
sponsors, maintains, administers, contributes to, is required to contribute to
or may incur any liability with respect to any Plan. None of the Borrower, any
Subsidiary of the Borrower or any Commonly Controlled Entity has at any time
sponsored, maintained, administered, contributed to or was required to
contribute to any Plan with respect to which Borrower, any of its Subsidiaries
or any Commonly Controlled Entity may incur any liability that, individually or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect. None of the Borrower, any of its Subsidiaries or any Commonly Controlled
Entity sponsors, maintains, administers (except pursuant to administration
services that constitute a part of the ordinary course of the business of any
Subsidiary of the Borrower or any Commonly Controlled Entity, which services are
covered by liability insurance coverage customary for similar entities engaged
in the plan administration services business), contributes to, is required to
contribute to, or may incur any liability with respect to a Multiemployer Plan.
None of the Borrower, any Subsidiary of the Borrower or any Commonly Controlled
Entity sponsors, maintains, administers (except
54
pursuant to administration services that constitute a part of the ordinary
course of the business of any Subsidiary of the Borrower or any Commonly
Controlled Entity, which services are covered by liability insurance coverage
customary for similar entities engaged in the plan administration services
business), contributes to or is required to contribute to any employee benefit
plan subject to Title IV of ERISA, Section 412 of the Code, Section 302 of ERISA
or the minimum funding requirements of ERISA or the Code, or may incur any
liability with respect to any such Plan that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect. None of the
Borrower, any Subsidiary of the Borrower or any Commonly Controlled Entity has
at any time sponsored, maintained, administered (except pursuant to
administration services that constitute a part of the ordinary course of the
business of any Subsidiary of the Borrower or any Commonly Controlled Entity,
which services are covered by liability insurance coverage customary for similar
entities engaged in the plan administration services business), contributed to
or was required to contribute to any employee benefit plan subject to Title IV
of ERISA, Section 412 of the Code, Section 302 of ERISA or the minimum funding
requirements of ERISA or the Code with respect to which Borrower, any of its
Subsidiaries or any Commonly Controlled Entity may incur any liability that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. None of Borrower, any of its Subsidiaries or any
Commonly Controlled Entity has engaged in a "prohibited transaction", as such
term is defined in Section 4975 of the Code or in a transaction subject to
Sections 406 or 407 of ERISA except for any such prohibited transaction or
transaction that is disclosed on Schedule 4.13 that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect. Each
of the Plans and related trust agreements intended to be qualified and
tax-exempt under the provisions of Code Sections 401(a) and 501(a) is so
qualified and tax-exempt and has been so qualified and tax-exempt during the
period from its adoption to date.
(b) Compliance. The Borrower, each of its Subsidiaries, each of its
Commonly Controlled Entities and each Plan has been, and are, in compliance in
all material respects with ERISA and the Code and the rules and regulations
thereunder. No ERISA Event has occurred except for any such event that is
disclosed on Schedule 4.13 that, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect. None of the Borrower,
any Subsidiary of the Borrower or any Commonly Controlled Entity has any
liability for post-retirement medical or other welfare benefits. There are no
pending or, to the best knowledge of the Borrower or any of its Subsidiaries,
threatened claims, actions or lawsuits, other than routine claims for benefits
in the usual and ordinary course, asserted or instituted against (i) any Plan,
(ii) the Borrower, any of its Subsidiaries or any Commonly Controlled Entity
with respect to any Plan, or (iii) any other fiduciary with respect to any Plan
for which the Borrower, any of its Subsidiaries or any Commonly Controlled
Entity may be directly or indirectly liable, through indemnification obligations
or otherwise. None of Borrower, any of its Subsidiaries or any Commonly
Controlled Entity has or may incur any liability under ERISA or the Code with
respect to any "employee benefit plan" (within the meaning of Section 3(3) of
ERISA) which any of Borrower, any Subsidiary of Borrower or any Commonly
Controlled Entity administers that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect. The Borrower qualifies
as an "operating company" within the meaning of 29 C.F.R. Section 2510.3-101(c).
55
(c) No Prohibited Transaction. Assuming that none of the amounts used
by the Lenders to fund the Loans constitute assets of an "employee benefit plan"
within the meaning of Section 3(3) of ERISA or a "plan" within the meaning of
Section 4975(e)(1) of the Code, the execution, delivery or performance of the
Loan Documents, the funding and maintenance of the Loans or the exercise of
either Agent's or any Lender's rights in connection therewith will not
constitute a prohibited transaction under ERISA or the Code or otherwise result
in any of either Agent or any Lender being deemed in violation of Sections 404
or 406 of ERISA or Section 4975 of the Code or in either Agent or any Lender
being a fiduciary or party in interest under ERISA or a "disqualified person" as
defined in Section 4975(e)(2) of the Code with respect to an "employee benefit
plan" within the meaning of Section 3(3) of ERISA or a "plan" within the meaning
of Section 4975(e)(1) of the Code. No assets of the Borrower or any of its
Subsidiaries constitute "assets" (within the meaning of ERISA or Section 4975 of
the Code, including 29 C.F.R. Section 2510.3-101 or any successor regulation
thereto) of an "employee benefit plan" within the meaning of Section 3(3) of
ERISA or a "plan" within the meaning of Section 4975(e)(1) of the Code.
4.14 Investment Company Act; Other Regulations. Neither the Borrower
nor any Subsidiary of the Borrower (a) is required to register as an "investment
company," or a company "controlled" by a Person required to register as an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or (b) is subject to regulation under any federal or state statute
or regulation that limits its ability to borrow, guarantee or secure the Loans
or incur, guarantee or secure any other Indebtedness.
4.15 Corporate Structure. The Persons listed on Schedule 4.15
constitute all Subsidiaries of the Borrower at the date of this Agreement.
Schedule 4.15 identifies the state or country of incorporation of each such
Subsidiary, the outstanding Capital Stock of each such Subsidiary and the
registered holders thereof and, if the Subsidiary is not directly owned by the
Borrower, the ownership chain for each such Subsidiary. Except as set forth in
Schedule 4.15, each Subsidiary of the Borrower is a Wholly Owned Subsidiary of
the Borrower. Schedule 1.1 (b) accurately states the principal amount of all
Indebtedness of each Subsidiary of the Borrower outstanding on the Closing Date.
4.16 Environmental and Other Matters. Each of the Borrower and its
Subsidiaries has conducted its businesses so as to comply in all material
respects with all applicable federal, state or local environmental laws,
regulations, directions, ordinances, criteria and guidelines, including
environmental, land use, occupational safety or health laws, regulations,
directions, ordinances, criteria, guidelines, requirements or permits in all
jurisdictions in which it is or may at any time be doing business, except to the
extent it is contesting, in good faith by appropriate legal proceedings, any
such law, regulation, direction, ordinance, criteria, guideline, or
interpretation thereof or application thereof; and in such event it has complied
with any order of any court or other Governmental Authority relating to such
laws unless it is currently prosecuting an appeal or proceedings for review and
has secured a stay of enforcement or execution postponing enforcement or
execution pending such appeal or proceedings for review. No Lien has been
imposed or is overtly threatened to be imposed by any Governmental Authority on
any of property of the Borrower or any of its
56
Subsidiaries based on or arising out of or related to any environmental matter.
At the request of either Agent, and at the sole cost and expense of the
Borrower, the Borrower shall provide the Agents with (a) any additional
information or reports relating to environmental matters and any potential
related liability resulting therefrom as the Agents or Required Lenders may
reasonably request and (b) copies of any environmental audits, surveys or
reports conducted in connection with the purchase or sale of any real property
by the Borrower or any of its Subsidiaries.
4.17 Security Documents. The security interests purported to be
granted in the Borrower Pledge and Security Agreement and the Subsidiary Pledge
and Security Agreement, as executed by the Borrower and each Guarantor,
respectively, and delivered to the Administrative Agent, create in favor of the
Administrative Agent, for the ratable benefit of the Lenders and the other
holders of obligations secured thereby, a legal, valid and enforceable security
interest in all property of the Borrower and each Guarantor, except Excluded
Assets, and such security interest constitutes a perfected first lien on, and
security interest in, all right, title and interest of the Borrower and each
Guarantor in such property subject, in the case of any such Collateral not
delivered to the Administrative Agent in pledge, to any Permitted Prior and Pari
Passu Liens. Security certificates representing all outstanding Capital Stock of
USIS and security certificates representing all Capital Stock of any Subsidiary
of the Borrower owned directly (and not through a Subsidiary) by the Borrower or
by any Guarantor, promissory notes representing all outstanding Indebtedness of
any Subsidiary of the Borrower owed to the Borrower or to USIS, and all other
instruments and security certificates constituting property of the Borrower or
of any Guarantor have been delivered to the Administrative Agent in pledge, duly
endorsed. Financing statements covering the Collateral in form sufficient to
perfect a security interest therein, to the extent that, under applicable law, a
security interest therein can be perfected by filing, have been signed by the
Borrower and by each Guarantor and have been filed, and under applicable law are
effective so to perfect such security interest, in each filing office specified
by applicable law in each jurisdiction in which the Borrower or any Guarantor or
any of their respective properties are located.
4.18 Accuracy of Information. All of the written information relating
to the Borrower and its Subsidiaries that has been given to either Agent or any
Lender was, as of the date that such information was given or filed or the dates
otherwise specified therein, accurate in all material respects and does not
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading. The assumptions
and estimates used in the preparation of any projections or budgets provided to
the Agents and the Lenders (a) have been prepared in good faith on a basis
consistent with the Borrower's financial statements, and (b) are based on
estimates and assumptions believed by the Borrower's management, at the time so
provided and, in the case of projections or budgets provided prior to the
Closing Date, on the Closing Date, to be reasonable and achievable.
4.19 Insurance. Schedule 4.19 lists all property and business
interruption insurance maintained by the Borrower and its Subsidiaries as of the
date of this Agreement.
57
4.20 Solvency. Each of the Borrower and its Subsidiaries is Solvent
immediately prior to, and after giving effect to, the Loans to be made on the
Closing Date and each subsequent date on which any Loan is funded.
4.21 Labor Relations. Neither the Borrower nor any of its Subsidiaries
is engaged in any unfair labor practice and there is (i) no unfair labor
practice complaint pending against the Borrower or any of its Subsidiaries or,
to the best knowledge of the Borrower, threatened against any of them, before
the National Labor Relations Board, and no material grievance or arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against the Borrower or any of its Subsidiaries or, to the best
knowledge of the Borrower, threatened against any of them, (ii) no strike, labor
dispute, slow down or stoppage pending against the Borrower or any of its
Subsidiaries or, to the best knowledge of the Borrower, threatened against any
of them, and (iii) to the best knowledge of the Borrower, no union
representation proceeding is pending with respect to the employees of the
Borrower or any of its Subsidiaries.
4.22 Indebtedness. Schedule 1.1(b) sets forth accurately and
completely all Indebtedness (other than (i) the Loans and (ii) Indebtedness
between or among the Borrower and its Subsidiaries) of the Borrower and its
Subsidiaries that is outstanding on the Closing Date after giving effect to
funding and use of proceeds of the Loans made on the Closing Date, in each case
showing the aggregate principal amount, the maturity date, the interest rate, a
description of any property securing such Indebtedness and the name of the
borrower and the lender and each other Person that has directly or indirectly
guaranteed or secured such Indebtedness or any guaranty. Schedule 4.22 sets
forth a true and complete list of all lines of credit that will be available to
the Borrower or any of its Subsidiaries (other than pursuant to this Agreement)
as of the Closing Date after giving effect to the Loans to be made on the
Closing Date, in each case showing the aggregate principal amount outstanding,
the maximum principal amount that may be borrowed under such line of credit, the
maturity date, the interest rate, a description of any property securing any
borrowing under such line of credit and the name of the borrower and the lender,
and any other Person that has directly or indirectly guaranteed the repayment of
any borrowing under such line of credit.
4.23 Real Property. The address and description of all real property
owned or leased by the Borrower and its Subsidiaries as of the Closing Date is
set forth on Schedule 4.23.
4.24 Representations and Warranties in Loan Documents. All
representations and warranties set forth in any of the Loan Documents are
correct and complete in all material respects at the time such representations
and warranties are made (or deemed made).
4.25 Year 2000 Solution. The Borrower has reviewed, or caused a review
to be conducted of, its operations and those of its Subsidiaries, with a view to
assessing whether the business or operations of the Borrower or any of its
Subsidiaries (or, to the extent their failure to do so would materially and
adversely affect the Borrower or any of its Subsidiaries, the business or
operations of any of their material suppliers or vendors) require and have
58
achieved a Year 2000 Solution. Based on such reviews, the Borrower has
determined that the Borrower and its Subsidiaries (and, to such extent, their
suppliers or vendors) will have achieved a Year 2000 Solution no later than
October 31, 1999.
SECTION 5
CONDITIONS PRECEDENT
5.1 Closing Conditions. The agreement of each Lender to make any Loan
requested to be made by it, and the obligation of the Issuing Bank to issue any
Letter of Credit requested to be issued by it, in each case on or at any time
after the Closing Date is subject to the satisfaction of the following
conditions precedent on the Closing Date:
(a) Loan Documents. The Agents shall have received:
(i) this Agreement, executed and delivered by the Borrower, with
a counterpart for each Lender, and by each Lender (by telecopy transmission
of an executed counterpart of the signature page hereto or otherwise);
(ii) for the account of each Revolving Credit Lender, a Revolving
Credit Note conforming to the requirements of this Agreement and executed
and delivered by the Borrower;
(iii) for the account of each Term Loan Lender, a Term Loan Note
conforming to the requirements of this Agreement and executed and delivered
by the Borrower;
(iv) the Subsidiary Guaranty, executed and delivered by USIS;
(v) the Borrower Pledge and Security Agreement, including all
schedules thereto, executed and delivered by the Borrower, and the
Subsidiary Pledge and Security Agreement, executed and delivered by USIS,
accompanied by (A) the Collateral identified therein, endorsed to the
Administrative Agent in blank, and (B) financing statements covering the
Collateral naming the Borrower as debtor and the Administrative Agent as
secured party in form suitable for filing in each filing office in which
the Administrative Agent or any Lender may request that a financing
statement be filed; and
(vi) copies of all Shared Subsidiary Security Documents in effect
on the Closing Date and delivery, in pledge, of all promissory notes (other
than promissory notes constituting Permitted Seller Debt) secured thereby.
(b) Closing Certificates. The Agents shall have received, with a
counterpart for each Lender, certificates of the Borrower, dated as of the
Closing Date, substantially in the form of Exhibit H-1 and Exhibit H-2 executed
by a Responsible Officer and the Secretary or any Assistant Secretary of the
Borrower. The Agents shall have received, with a counterpart for each Lender,
certificates of USIS, dated the Closing Date, substantially
59
in the form of Exhibit I-1 and Exhibit I-2 executed by a Responsible Officer and
the Secretary or any Assistant Secretary of USIS.
(c) Corporate Proceedings. The Agents shall have received, with a
counterpart for each Lender, a copy of resolutions, in form and substance
satisfactory to the Administrative Agent, of the board of directors of the
Borrower and USIS authorizing (i) the execution, delivery and performance of the
Loan Documents to which it is a party and the transactions contemplated hereby
and thereby, (ii) the incurrence of indebtedness pursuant to this Agreement, and
(iii) the granting of Liens created pursuant to this Agreement and the Security
Documents, accompanied by a certificate dated as of the Closing Date, in form
and substance satisfactory to the Agents and executed by a Responsible Officer
and the Secretary or an Assistant Secretary of the Borrower and USIS (as
applicable), stating that such resolutions were duly adopted and have not been
amended, modified, revoked or rescinded.
(d) Incumbency Certificate. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate dated as of the
Closing Date, in form and substance satisfactory to the Agents and executed by a
Responsible Officer and the Secretary or an Assistant Secretary of the Borrower
and USIS (as applicable), as to the incumbency and signature of the officers of
the Borrower and USIS executing any Loan Document.
(e) Corporate Documents. The Agents shall have received, with a copy
for each Lender, true and complete copies of the certificate of incorporation of
the Borrower and USIS, certified as of a recent date by the Secretary of State
of Delaware, certificates of good standing as to the Borrower and USIS,
certified as of a recent date by the Secretary of State of Delaware and each
state in which the Borrower or USIS is qualified to do business, and the by-laws
of the Borrower and USIS, certified as of the Closing Date by the corporate
Secretary or Assistant Secretary.
(f) Financial Statements. The Lenders shall have received copies of
the audited consolidated financial statements of the Borrower for the year ended
December 31, 1998 and the unaudited consolidated financial statements of the
Borrower for the six-month period ended June 30, 1999, all of which shall have
been prepared on a consistent basis in accordance with GAAP. The Lenders shall
have received copies of the Borrower's consolidated projections, dated as of the
Closing Date, for the period commencing July l, 1999 and ending December 31,
2005, which shall have been prepared in good faith on a basis consistent with
the Borrower's financial statements previously delivered to the Agents by the
Borrower, based on information available to the Borrower's management as of the
Closing Date and assumptions and estimates believed by such management to be
reasonable as of the Closing Date, and such projections shall be in form and
substance satisfactory to the Agents and the Lenders.
(g) Consents, Approvals, etc. The Agents shall have received, with a
copy for each Lender, a certificate of a Responsible Officer of the Borrower
attaching a true and correct copy of each governmental and third party approval
necessary in connection with the transactions contemplated by this Agreement and
the other Loan Documents, or certifying that true and correct copies of all such
approvals have been delivered by the Borrower to the
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Agents, with a copy for each of the Lenders, and that such approvals have not
been rescinded, amended or modified in any manner. Each such approval shall have
been obtained, be in full force and effect and no action shall have been taken
or threatened by any Governmental Authority or other party that would restrain,
prevent or otherwise impose materially adverse conditions on the transactions
contemplated by the Loan Documents.
(h) Lien Searches. The Agents shall have received the results of a
recent search by a Person satisfactory to the Administrative Agent of the
Uniform Commercial Code, judgment and tax lien filings that may have been filed
with respect to personal property of each Loan Party, and the results of such
search shall reveal no Liens on any property of the Borrower or such Guarantor
other than Permitted Liens and those in favor of the agent under the Existing
Credit Agreement.
(i) Existing Credit Agreement. The Agents shall have received a letter
from the agent under the Existing Credit Agreement setting forth the aggregate
amount of principal, interest, fees, expense reimbursements and other
obligations outstanding under the Existing Credit Agreement on the Closing Date
and confirming that, upon receipt of such amount on the Closing Date, such
obligations will be paid in full (except for indemnities and any other
contingent unsecured surviving obligations) and all Liens at any time granted as
security for any such obligations will be discharged and released; and at least
such amount shall be available for payment from proceeds of Loans requested to
be made on the Closing Date and permitted to be used for the payment of such
obligations pursuant to Section 2.10(a).
(j) Equity Offering. The Borrower shall have consummated the Equity
Offering and shall have received at least $125,000,000 in gross proceeds from
the Equity Offering.
(k) Seller Debt Repayment. The Agents shall have received all payout
letters, estoppel letters, payment authorizations, lien and covenant release
agreements and releases and other documents requested by it or any Lender to
confirm the amount required to pay in full all Seller Debt that is to be repaid
from the proceeds of the Loans and to confirm the discharge and release of all
covenants, guaranties, Liens, pledged collateral and other rights and interests
relating thereto.
(1) Insurance. The Agents shall have received evidence in form and
substance reasonably satisfactory to it that all of the requirements of Section
6.5 have been satisfied.
(m) Legal Opinions. The Agents shall have received, with a counterpart
for each Lender, (i) the executed legal opinion of Xxxxxx Xxxxxx & Xxxxxxx,
counsel to the Borrower, in substantially the form of Exhibit J-1, and (ii) the
executed legal opinion of Morea & Xxxxxxxx, P.C., counsel to the Loan Parties,
in substantially the form of Exhibit J-2, and such other opinions of counsel as
either Agent or the Required Lenders may reasonably request.
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(n) Fee Letters; Expenses. The Agents shall have received payment of
all fees and expense reimbursements and other amounts required to be paid or
delivered to the Agent on or prior to the Closing Date pursuant to the Fee
Letters or this Agreement.
Any borrowing or issuance of a Letter of Credit on the Closing Date by the
Borrower under this Agreement shall constitute a representation and warranty by
the Borrower that, except as set forth in a written waiver delivered by the
Required Lenders, the conditions set forth in this Section 5.1 have been
satisfied.
5.2 Additional Conditions to Each Credit Event. The agreement of each
Lender to make any Loan requested to be made by it, and the obligation of the
Issuing Bank to issue any Letter of Credit requested to be issued by it, on the
Closing Date or at any time after the Closing Date is further subject to the
satisfaction of the following conditions precedent on the date such Credit Event
is requested by the Borrower and on the date such Credit Event is to be made:
(a) Representations and Warranties. Each of the representations and
warranties made by the Borrower or any of its Subsidiaries in or pursuant to
this Agreement or in the other Loan Documents shall be correct and complete in
all material respects on and as of such date as if made on and as of such date
(except that any such representation or warranty that is expressly stated as
being made only as of a specified earlier date shall be correct and complete in
all material respects as of such earlier date).
(b) No Material Adverse Change. There shall have occurred no material
adverse change, and no development involving a prospective material adverse
change at any time after December 31, 1998, in the business, condition
(financial or otherwise), operations, performance, properties or prospects of
the Borrower and its Subsidiaries, taken as a whole, and no circumstance shall
exist or event shall have occurred at any time after December 31, 1998 that has
had, or could reasonably be expected to have, a Material Adverse Effect;
(c) No Default. No Default shall have occurred and be continuing on
such date or shall result after giving effect to the funding of such Loan and
the use of the proceeds thereof or the issuance of such Letter of Credit;
(d) Solvency. The Borrower and each of its Subsidiaries shall be
Solvent immediately prior to, and after giving effect to, the funding of such
Loan;
(e) Notice of Borrowing. The Administrative Agent shall have received
a timely notice of borrowing in the form of Exhibit D in the case of any Loan,
and the Issuing Bank shall have received a Letter of Credit Request in
accordance with Section 2.13 in the case of any Letter of Credit;
(f) Notes. In case of a borrowing of Term Loans, the Administrative
Agent shall have received Notes executed by the Borrower as set forth in Section
2.7(c); and
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(g) Acquisition Funding. In case of a borrowing of Acquisition
Revolving Loans, the Agents and Lenders shall have received such certificates
and documents as the either Agent or Required Lenders may have requested to
confirm that such acquisition is a Permitted Acquisition and that such
Acquisition Revolving Loans will be used for the purpose of paying Acquisition
Consideration payable in cash at the consummation of an acquisition.
Each borrowing by the Borrower under this Agreement shall constitute a
representation and warranty by the Borrower that, except as set forth in a
written waiver delivered by the Required Lenders, the conditions set forth in
this Section 5.2 have been satisfied.
SECTION 6
AFFIRMATIVE COVENANTS
The Borrower hereby covenants and agrees that on and after the date of
this Agreement and until (a) the Commitments have terminated, (b) all Letter of
Credit have been terminated or have expired, (c) the principal of and interest
on the Loans and the Notes have been paid in full, and (d) all fees, expense
reimbursements, indemnities and other Obligations due and payable under the Loan
Documents at the time the Loans and Notes are paid in full have likewise been
paid in full:
6.1 Financial Statements. The Borrower shall deliver to the
Administrative Agent, with a copy for each Lender:
(a) Audited Financial Statements. As soon as available, but in any
event within 90 days after the end of each fiscal year of the Borrower, a copy
of the consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as at the end of such year and the related consolidated and
consolidating statements of income and retained earnings and of cash flows for
such year, setting forth in each case in comparative form the figures for the
previous year, reported on by Ernst & Young LLP, or other independent certified
public accountants of nationally recognized standing acceptable to the Agents,
without a "going concern" or like qualification or exception or any
qualification arising out of the scope of the audit.
(b) Quarterly Financial Statements. As soon as available, but in any
event not later than 45 days after the end of each of the first three quarterly
periods of each fiscal year of the Borrower, the unaudited consolidated balance
sheet of the Borrower and its Subsidiaries as at the end of such quarter and the
related unaudited consolidated statements of income and retained earnings and of
cash flows of the Borrower and its Subsidiaries for such quarter and the portion
of the fiscal year through the end of such quarter, setting forth in, each case
in comparative form the figures for such periods during the previous year,
certified by a Responsible Officer of the Borrower as fairly presenting the
financial condition and results of operations of the Borrower and its
Subsidiaries (subject to normal year-end audit adjustments and the absence of
footnote disclosure).
(c) Projections. As soon as available, but in any event not later than
60 days after the end of each fiscal quarter of the Borrower, consolidated
projections for the
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Borrower and its Subsidiaries for the next 12 months that have been prepared in
good faith on a basis consistent with the Borrower's financial statements and
that are based on estimates and assumptions believed by the Borrower's
management to be reasonable.
(d) Acquisition Agreements. Promptly upon the request of either Agent
or any Lender, a copy of each agreement entered into by the Borrower or any
Subsidiary or Affiliate of the Borrower in connection with the acquisition of
any Person, or the business or assets of any Person, and all amendments to any
such document or agreement, the financial statements of, and any other financial
information relating to, such Person, and all other agreements and documents
entered into in connection with such acquisition.
(e) Preparation of Statements and Projections. The financial
statements to be delivered to the Administrative Agent pursuant to Section 6.1
(a) and Section 6.1 (b) shall be prepared in accordance with GAAP (subject, in
the case of interim financial statements, to normal year-end audit adjustments
and the absence of footnote disclosure) applied consistently throughout the
periods reflected therein and with prior periods (except as approved by such
accountants or Responsible Officer and disclosed therein). The projections to be
delivered to the Lenders pursuant to Section 6.1(c) shall be in form and
substance satisfactory to the Agents; it being presently contemplated that such
projections shall be in a format consistent with the financial models delivered
by the Borrower to the Agents prior to the Closing Date. The financial
statements for any Person delivered to the Agents pursuant to Section 6.1 (d)
may be prepared in accordance with the historical practice of such Person and,
as a result, may not be in conformity with GAAP.
6.2 Certificates; Other Information. The Borrower shall deliver to the
Administrative Agent, with a copy for each Lender:
(a) Auditor's Statement. Concurrently with the delivery of the
financial statements that are required to be delivered pursuant to Section
6.1(a), a written statement of the independent certified public accountants
reporting on such financial statements (unless such accountants are prohibited
by law or the Financial Accounting Standards Board, or any successor, from
providing such statement) to the effect that in the course of the audit upon
which their certification of such financial statements was based (but without
any special or additional audit procedures for the purpose) they obtained no
knowledge of any condition or event relating to financial matters that
constitutes a Default or an Event of Default or, if in the course of such audit
the accountants obtained knowledge of any Default or Event of Default,
disclosing in such written statement the nature and period of existence thereof,
it being understood that such accountants shall be under no liability, directly
or indirectly, to the Lenders for failure to obtain knowledge of any such
condition or event.
(b) Default Certificate. Concurrently with the delivery of the
financial statements referred to in Section 6.1(a) and Section 6.1(b), a
certificate of a Responsible Officer of the Borrower certifying that, except as
specified in such certificate, during such period the Borrower and each of its
Subsidiaries has observed or performed all of its covenants and other
agreements, and satisfied every condition, contained in this Agreement and the
other Loan Documents that is required to be observed, performed or satisfied by
the Borrower or
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any of its Subsidiaries and that such Responsible Officer has no knowledge of
the occurrence, at any time during such period (whether or not then continuing)
of any Default or Event of Default;
(c) Compliance Certificate. Concurrently with the delivery of the
financial statements that are required to be delivered pursuant to Section 6.1
(a) and Section 6.1(b), a certificate of a Responsible Officer of the Borrower,
substantially in the form of Exhibit D (a "Compliance Certificate"), showing in
detail satisfactory to the Agents compliance by the Borrower with the financial
covenants contained in Section 7.1 (including, to the extent not otherwise
required to be delivered pursuant to Section 6.1 or Section 6.2, statements of
the Borrower's and its Subsidiaries' cash flows for the periods covered by such
covenants with respect to which compliance is to be demonstrated in such
Compliance Certificate and a computation of the amount of the Borrower's and its
Subsidiaries' capital expenditures made during such period and during the
portion of the fiscal year through the end of the period covered by such
Compliance Certificate) and setting forth the other information provided for
therein.
(d) Other Reports. Within ten days after being sent, copies of all
financial statements and other financial information, proxy materials, press
releases and other information and reports that the Borrower (a) issues to the
public or files with the SEC or any securities exchange on which the Borrower's
common stock is traded, (b) delivers to any holder of any of its Indebtedness
(or any trustee, agent or other representative therefor) or any holder of any of
its Capital Stock.
(e) Management Letters. Promptly after the receipt by the Borrower or
any of its Subsidiaries of any "management letter" from their certified public
accountants, the Borrower shall promptly deliver a copy of such management
letter to the Agents and, promptly after being sent, the Borrower shall promptly
deliver to the Agents any response sent by it to such management letter.
(f) Additional Information. Promptly, such additional financial and
other information that any Lender or the either Agent may from time to time
reasonably request.
6.3 Payment of Taxes and Other Obligations. The Borrower will, and
will cause each of its Subsidiaries to, pay, discharge or otherwise satisfy all
of its taxes and other obligations of whatever nature at or before maturity or
before they become delinquent, except (a) those currently being contested in
good faith by appropriate proceedings, if a reserve with respect thereto has
been provided on its books in conformity with GAAP, and (b) other pastdue or
delinquent taxes and obligations outstanding at any time in an aggregate amount
of less than $100,000.
6.4 Conduct of Business; Maintenance of Existence. The Borrower will,
and will cause each of its Subsidiaries to, (a) engage solely in the USI
Businesses, (b) renew and keep in full force and effect its corporate existence,
(c) maintain all of its rights, privileges and franchises necessary or desirable
in the normal conduct of its business except as otherwise permitted pursuant to
Section 7.5, and (d) comply with all Requirements of Law and any
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indenture, agreement or other instrument to which it is a party or by which it
or any of its property is bound, except for any failure to comply therewith
that, individually or in the aggregate, could not reasonably be expected to have
a Material Adverse Effect.
6.5 Maintenance of Property and Insurance. The Borrower will, and will
cause each of its Subsidiaries to, (a) keep all property useful and necessary in
its business in good working order and condition, normal wear and tear excepted,
(b) maintain with financially sound and reputable insurance companies insurance
on all its property in at least such amounts and against at least such risks
(but including in any event public liability and business interruption) as are
usually insured against in the same general area by companies engaged in the
same or a similar business, and (c) furnish to each Lender that so requests full
information as to the insurance carried by it.
6.6 Inspection of Property, Books and Records; Discussions. The
Borrower will, and will cause each of its Subsidiaries to,(a) keep proper books
of records and account in conformity with GAAP and applicable regulatory
standards, and (b) permit representatives of either Agent or any Lender to (i)
visit and inspect any of its properties and examine and make copies of or
abstracts from any of its books and records at such reasonable times as may be
requested by either Agent or any Lender, and (ii) discuss its business,
operations, properties and condition (financial or otherwise) with its officers
at such times as may be reasonably requested by either Agent or any Lender.
6.7 Notices. The Borrower shall promptly give written notice to the
Agents and each Lender of:
(a) Loan Document Defaults. The occurrence of any Default or Event of
Default.
(b) Other Defaults. Any default or event of default under any
indenture, agreement or other instrument to which the Borrower or any of its
Subsidiaries is a party or by which any of them or any of their property is
bound that if not cured could, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(c) Loss Contingencies. Any pending or overtly threatened claim or
litigation, investigation or proceeding involving the Borrower or any of its
Subsidiaries in which (i) the amount claimed may exceed $500,000 and is not
covered by insurance, or (ii) injunctive or similar relief is sought that, if
granted, could reasonably be expected to have a Material Adverse Effect or any
event constituting a loss contingency as to which footnote disclosure or a
reserve is required under GAAP.
(d) Material Adverse Effects. Any condition or event that has had, or
could reasonably be expected to have, a Material Adverse Effect.
(e) ERISA Contingencies. Any of the following events: (i) the
institution of proceedings or the taking of any other action by the Borrower,
any Subsidiary of Borrower or any Commonly Controlled Entity with respect to the
withdrawal from, or the termination
66
of, any Plan that is not an "employee welfare benefit plan" (within the meaning
of Section 3(1) of ERISA) (other than the merger of a Plan of a Subsidiary of
Borrower or a Commonly Controlled Entity into the USI Insurance Services Corp.
401(k) Plan); (ii) the occurrence or expected occurrence of any ERISA Event (but
notice of the ERISA Events described on Schedule 4.13 is deemed given to the
extent the details of such events and Borrower's actions with respect thereto
are fully set forth therein); (iii) any amendment of any Plan that is not an
"employee welfare benefit plan" (within the meaning of Section 3(1) of ERISA)
which will result in a material increase in the benefits under such Plan (other
than an increase in discretionary matching contributions or increases required
in order to comply with changes in applicable law); (iv) receipt by Borrower or
any of its Subsidiaries, or any Commonly Controlled Entity of an unfavorable
determination letter from the Internal Revenue Service regarding the
qualification or tax-exempt status of a Plan or related trust agreement under
Sections 401(a) or 501(a) of the Code; (v) the occurrence of any event which
could cause Borrower, any of its Subsidiaries or any Commonly Controlled Entity
to incur any liability under ERISA of the Code that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect; or
(vi) the occurrence of an event which could cause a Plan or related trust
agreement that is intended to be qualified and tax-exempt under Sections 401(a)
and 501(a) of the Code to fail to be so qualified or tax-exempt or to lose its
qualification or tax-exempt status.
Each notice provided to the Agents and the Lenders pursuant to this
Section 6.7 shall be accompanied by a statement of a Responsible Officer of the
Borrower setting forth reasonable details of the occurrence or event referred to
therein and stating what action the Borrower proposes to take with respect
thereto. Upon receipt of any request from either Agent for any additional
information with respect to any notice provided to either Agent pursuant to this
Section 6.7, the Borrower shall promptly provide such additional information to
such Agent.
6.8 Environmental Law. The Borrower will, and will cause each of its
Subsidiaries to, comply in all material respects with all applicable
environmental laws and obtain and comply in all material respects with and
maintain any and all licenses, approvals, notifications, registrations or
permits required by all applicable environmental laws.
6.9 Maintenance of Security.
(a) Additional Subsidiary Guarantors. If any Subordinated Indebtedness
is incurred by the Borrower at any time after the Closing Date with the approval
of the Required Lenders as set forth in Section 7.2(d), and if any Subsidiary of
the Borrower at any time guarantees such Subordinated Indebtedness on a
subordinated basis pursuant to Section 7.4(b), then concurrently with the
issuance of such guarantee the Borrower shall (i) cause such Subsidiary to
become party to the Subsidiary Guaranty and the Subsidiary Pledge and Security
Agreement and (ii) deliver to the Agents an opinion of independent counsel and
other documentation satisfactory to the Agents confirming, as to such
Subsidiary, each and all of the legal opinions and factual matters confirmed as
to USIS in the opinion of counsel and other documentation delivered on the
Closing Date pursuant to Section 5.1.
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(b) Collateral. The Borrower agrees to take all actions necessary or
appropriate at any time to ensure that the principal of and interest on the
Loans and Notes and all obligations of the Borrower or any Guarantor for payment
of fees, expense reimbursements, indemnities and other liabilities at any time
arising under any of the Loan Documents (collectively, the "Obligations") are at
all times secured by lawful, duly authorized, granted and perfected first and
prior Liens (except only for Permitted Prior and Pari Passu Liens) enforceable
by the Administrative Agent, for the benefit of the Lenders and other holders of
the Obligations, upon all property now owned or at any time hereafter acquired
by the Borrower and each Guarantor, including all accounts, general intangibles,
equipment, fixtures inventory, documents, chattel paper, instruments and
investment securities (as those terms are used in the UCC) and all bank deposits
and Cash Equivalents and other property of every type and description, except
(A) owned and leased real property (but without excepting fixtures), (B)
licenses granted by Governmental Authorities upon which a Lien may not lawfully
be granted (but, to the extent lawful, without excepting the proceeds of the
sale, sublicense, use, transfer or other exploitation or disposition of any such
license), (C) Fiduciary Cash, (D) assets which are subject to Permitted Prior
and Pari Passu Liens to the extent that the documents creating such Liens
contain a negative pledge restriction applicable to such assets, and (E) other
property not, in the aggregate at any one time, having a Fair Market Value
greater than $2,500,000 (the property so excepted constitutes the "Excluded
Assets").
(c) Bank Deposits. Except as to Excluded Assets, the Borrower will,
and will cause each Guarantor to, (i) maintain any and all of its bank deposits
and bank deposit accounts, other than those maintained for deposits of Fiduciary
Cash, at a bank selected by it that either (A) is located in a state under the
laws of which a security interest in bank deposits and deposit accounts may be
created under the Uniform Commercial Code and perfected by the giving of a
notice to the depositary bank and the receipt of any required consent thereto
from the depositary bank, without any requirement that the holder of such
security interest maintain dominion or control over such bank deposits and
deposit accounts, or (B) has entered into a restricted account agreements with
respect to such deposits and accounts on terms generally consistent with the
practice of commercial finance lenders within the United States for agreements
of such type; (ii) give notice of the existence of the Administrative Agent's
security interest in each such deposit account and any and all present and
future deposits therein, except deposits of Fiduciary Cash and deposit accounts
to which such deposits are made, by delivering a perfection notice to the
depositary bank and obtaining any and all required consents and agreements from
the depositary bank or as otherwise required under such laws to perfect the
Administrative Agent's security interest therein, at or within 30 days after the
opening of such deposit account; and (iii) grant and permit no other Lien on any
such bank deposits or deposit accounts.
(d) Cash Investments. Except as to Excluded Assets, the Borrower will,
and will cause each Guarantor to, maintain any and all Cash Equivalents other
than bank deposits in such manner as may be required to ensure that the
Administrative Agent at all times holds a duly perfected first and sole security
interest therein as security for the Obligations.
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(e) Unpledged Assets. If at any time the Administrative Agent does not
hold a duly created, enforceable and perfected Lien as security for the
Obligations upon any property of the Borrower or any Guarantor other than
Excluded Assets, the Borrower will notify the Agents and the Lenders thereof and
will take such action as may be necessary to cause all property of the Borrower
and each Guarantor (except Excluded Assets) to be subjected to a duly created,
enforceable and perfected Lien in favor of the Administrative Agent as security
for the Obligations and will take, and cause each other Loan Party to take, such
actions as shall be necessary or reasonably requested by either Agent or
Required Lenders to grant and perfect such Liens, including actions described in
Section 6.9(f), all at the expense of the Borrower.
(f) Further Assurances. The Borrower will, and will cause each
Guarantor to, from time to time upon the request of either Agent or the Required
Lenders through either Agent, at the expense of the Borrower, execute, deliver
and acknowledge all instruments, assignments, security agreements, financing
statements or other documents and take all other actions as either Agent or such
Required Lenders may reasonably deem necessary or appropriate to create,
perfect, ensure the priority of, protect or (if an Event of Default is
continuing at the time) lawfully enforce a Lien in favor of the Administrative
Agent for the ratable benefit of the holders of the Obligations upon any
property in which the Borrower or any Guarantor has or may have any interest,
except Excluded Assets.
(g) Notice. The Borrower will, and will cause each Guarantor to, from
time to time promptly notify the Agents in writing of any change (A) in its
corporate name or in any trade name used to identify it in the conduct of its
business or in the ownership of its properties, (B) in the location of its chief
executive office, its principal place of business, any office in which it
maintains books or records relating to Collateral or any office or facility at
which Collateral is located (including the establishment of any such new office
or facility), (C) in its identity or corporate structure, (D) resulting in any
tangible Collateral being located in any jurisdiction in which a financing
statement must be, but has not been, filed in order to perfect the
Administrative Agent's Liens, (E) resulting in any promissory note, issued and
outstanding share of Capital Stock or other instrument constituting Collateral
not being held by the Administrative Agent in pledge accompanied by an
enforceable endorsement or assignment in blank, or (F) in its federal taxpayer
identification number.
(h) No Changes. The Borrower will not, and will not cause, permit or
suffer any Guarantor to, effect or permit any change referred to in Section
6.9(g) unless all deliveries and filings have been made under the Uniform
Commercial Code or otherwise that are required in order for the Administrative
Agent to continue at all times following such change to have a valid, legal and
perfected security interest in all property of the Borrower and each Guarantor,
except Excluded Assets.
(i) Casualty Losses. The Borrower will promptly notify the Agents in
the event of any Casualty Loss that might reasonably be expected to exceed, or
affect property having a Fair Market Value exceeding, $100,000.
6.10 Corporate Structure. The Borrower will cause:
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(a) Subsidiaries Wholly Owned. Each Subsidiary of the Borrower at all
times to be a Wholly Owned Subsidiary of the Borrower, except as set forth on
Schedule 6.10(a).
(b) Subsidiaries Owned through USIS. Each Subsidiary of the Borrower,
other than USIS, to be a Wholly Owned Subsidiary of USIS, except as set forth on
Schedule 6.10(b).
(c) Conduct of Permitted Businesses. The Borrower and its Subsidiaries
to engage solely in Permitted Businesses conducted under the sole control of the
Borrower by USIS or a Wholly Owned Subsidiary of the Borrower that is also a
Wholly Owned Subsidiary of USIS.
(d) Seller Debt Guarantors. Each Subsidiary of the Borrower that has
guaranteed any Permitted Seller Debt to conduct no business and to own no
assets, except the business acquired in the transaction in which such Permitted
Seller Debt was incurred and any other businesses conducted by such Subsidiary
as of the Closing Date, and the assets acquired in such acquisition and any
other assets owned by such Subsidiary as of the Closing Date, other current
assets resulting from the conduct of such business in the ordinary course, and
other immaterial assets; provided that if any Subsidiary merges, consolidates
with or liquidates into another Subsidiary in accordance with Section 7.5, then
the surviving Subsidiary may conduct the business and own the assets conducted
and owned by the Subsidiary merged into it.
6.11 Compliance with ERISA and the Code. The Borrower will, and will
cause each of its Subsidiaries and each Commonly Controlled Entity to, at all
times and with respect to each Plan, comply with all applicable provisions of
ERISA and the Code and the rules and regulations thereunder in all material
respects.
6.12 Interest Rate Protection. Within 180 days following the Closing
Date, the Borrower will enter into, and thereafter will for a period of 3 years
following the Closing Date maintain, Interest Rate Protection Agreements on
terms and conditions reasonably satisfactory to the Agents (including the
absence of any restriction on the creation or enforcement of a security interest
in the rights of the Borrower thereunder) and in an amount equal to 50% of the
initial principal amount of the Term Loans.
6.13 Year 2000 Solution. The Borrower will diligently pursue any
reprogramming, upgrading or maintenance of computer hardware, software or
equipment required in order to achieve a Year 2000 Solution no later than
October 31, 1999.
6.14 Fiduciary Cash. The Borrower will, and will cause each of its
Subsidiaries to, (a) duly and punctually comply with and perform and observe
each and all of its obligations in respect of the receipt, deposit, retention,
segregation or disbursement of Fiduciary Cash, whether such obligations are
imposed by law or assumed by contract, and (b) not, in breach of any such
obligation, pay or deliver any Fiduciary Cash to either Agent or
70
any Lender or cause or permit any Fiduciary Cash to be applied to the payment of
any of the Obligations.
6.15 Obligations under Fee Letter. The Borrower will duly and
punctually perform and observe each of its obligations under the Fee Letter.
SECTION 7
NEGATIVE COVENANTS
The Borrower hereby covenants and agrees that on and after the date of
this Agreement and until (a) the Commitments have terminated, (b) all Letters of
Credit have been terminated or have expired, (c) the principal of and interest
on the Loans and the Notes have been paid in full, and (d) all fees, expense
reimbursements, indemnities and other Obligations due and payable under the Loan
Documents at the time the Loans and Notes are paid in full have likewise been
paid in full:
7.1 Financial Covenants.
(a) Consolidated Total Debt Ratio. The Borrower will not permit the
Consolidated Total Debt Ratio determined as of any date set forth below to
exceed the ratio set out opposite such date below:
Date Ratio
---- -----
September 30, 1999 4.75
December 31, 1999 4.75
March 31, 2000 4.25
June 30, 2000 4.25
September 30, 2000 4.25
December 31, 2000 4.25
March 31, 2001 3.50
June 30, 2001 3.50
September 30, 2001 3.50
December 31, 2001 3.50
March 31, 2002 3.25
June 30, 2002 3.25
September 30, 2002 3.25
December 31, 2002 3.25
March 31, 2003 3.25
June 30, 2003 3.25
September 30, 2003 3.25
December 31, 2003 3.25
March 31, 2004 3.25
June 30, 2004 3.25
September 30, 2004 3.25
71
(b) Interest Expense Coverage Ratio. The Borrower will not permit the
ratio of (i) its Consolidated EBITDA for the twelve-month period (taken as a
single period) ending on any date set forth below to (ii) its Consolidated Net
Interest Expense for such period to be less than the ratio set out opposite such
date below:
Date Ratio
---- -----
September 30, 1999 1.65
December 31, 1999 1.75
March 31, 2000 2.00
June 30, 2000 2.00
September 30, 2000 2.50
December 31, 2000 2.50
March 31, 2001 3.00
June 30, 2001 3.00
September 30, 2001 3.00
December 31, 2001 3.00
March 31, 2002 3.00
June 30, 2002 3.00
September 30, 2002 3.00
December 31, 2002 3.00
March 31, 2003 3.00
June 30, 2003 3.00
September 30, 2003 3.00
December 31, 2003 3.00
March 31, 2004 3.00
June 30, 2004 3.00
September 30, 2004 3.00
(c) Fixed Charge Coverage Ratio. The Borrower will not permit the
ratio of (i) its Consolidated EBITDA for the twelve-month period (taken as a
single period) ending on any date set forth below to (ii) its Consolidated Fixed
Charges for such period to be less than the ratio set out opposite such date
below:
Date Ratio
---- -----
September 30, 1999 no test
December 31, 1999 no test
March 31, 2000 no test
June 30, 2000 no test
September 30, 2000 1.10
December 31, 2000 1.10
March 31, 2001 1.25
June 30, 2001 1.25
September 30, 2001 1.25
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Date Ratio
---- -----
December 31, 2001 1.25
March 31, 2002 1.25
June 30, 2002 1.25
September 30, 2002 1.25
December 31, 2002 1.25
March 31, 2003 1.35
June 30, 2003 1.35
September 30, 2003 1.35
December 31, 2003 no test
March 31, 2004 no test
June 30, 2004 no test
September 30, 2004 no test
(d) Stockholders' Equity. The Borrower will not permit its
Stockholders' Equity on the last day of any fiscal quarter set forth below to be
less than the amount set out opposite such fiscal quarter below:
Fiscal Quarter Amount
-------------- ------
September 30, 1999 $200,000,000
December 31, 1999 $200,000,000
March 31, 2000 $205,000,000
June 30, 2000 $205,000,000
September 30, 2000 $210,000,000
December 31, 2000 $210,000,000
March 31, 2001 $215,000,000
June 30, 2001 $215,000,000
September 30, 2001 $215,000,000
December 31, 2001 $215,000,000
March 31, 2002 $225,000,000
June 30, 2002 $225,000,000
September 30, 2002 $225,000,000
December 31, 2002 $225,000,000
March 31, 2003 $250,000,000
June 30, 2003 $250,000,000
September 30, 2003 $250,000,000
December 31, 2003 $250,000,000
March 31, 2004 $250,000,000
June 30, 2004 $250,000,000
September 30, 2004 $250,000,000
(e) Limitation on Capital Expenditures. The Borrower will not, and
will not cause, permit or suffer any of its Subsidiaries to, make Capital
Expenditures except in the ordinary course of business and then only in an
amount not exceeding (i) during fiscal year
73
1999, $16,000,000, (ii) during fiscal year 2000, 4.0% of the Borrower's
consolidated total revenues (determined in accordance with GAAP) for its 1999
fiscal year, (iii) during fiscal year 2001, 3.75% of the Borrower's consolidated
total revenues (determined in accordance with GAAP) for its 2000 fiscal year and
(iv) during each subsequent fiscal year, 3.5% of the Borrower's consolidated
total revenues (determined in accordance with GAAP) for its immediately
preceding fiscal year.
7.2 Limitation on Indebtedness. The Borrower will not, and will not
cause, permit or suffer any of its Subsidiaries to, create, incur, assume or
suffer to exist any Indebtedness, except:
(a) Indebtedness of the Loan Parties under this Agreement and the
other Loan Documents;
(b) Permitted Subsidiary Bank Debt, if the aggregate outstanding
principal amount of Permitted Subsidiary Bank Debt at any time owed (i) by any
one Subsidiary of the Borrower does not exceed $500,000 and (ii) by any and all
Subsidiaries of the Borrower does not exceed $3,500,000;
(c) Permitted Seller Debt;
(d) Subordinated Indebtedness of the Borrower issued after the date of
this Agreement, if (i) the amount, structure and terms thereof have been
approved in writing by the Agents and the Required Lenders, such approval not to
be unreasonably withheld, and (ii) the Net Proceeds from the issuance and sale
thereof are received in cash on the date of such issuance and sale and on such
date are applied as provided in Section 3.1(b);
(e) Indebtedness of any Subsidiary of the Borrower that is payable to
the Borrower or USIS, if such Indebtedness (i) is evidenced by one or more
promissory notes, payable on demand (unless issued in connection with the
incurrence of any Seller Debt), and delivered to the Administrative Agent in
pledge as security for the Obligations and (ii) is permitted under Section
7.8(c);
(f) Capital Lease Obligations and purchase money Indebtedness incurred
to pay for Capital Expenditures, if the aggregate outstanding principal amount
thereof during any fiscal year of the Borrower set forth below does not exceed
the amount set forth opposite such fiscal year below:
Fiscal Year Amount
----------- ------
1999 $14,000,000
2000 16,000,000
2001 17,000,000
2002 17,000,000
2003 19,000,000
Thereafter 21,500,000
74
(g) Guarantee Obligations permitted under Section 7.4;
(h) Existing Debt;
(i) Stock Appreciation Rights; and
(j) Other Indebtedness in an aggregate principal amount not exceeding
$4,000,000 at any time outstanding.
7.3 Limitation on Liens. The Borrower will not, and will not cause,
permit or suffer any of its Subsidiaries to, create, incur, assume or suffer to
exist any Lien upon any of its property or revenues, whether now owned or
hereafter acquired, other than Permitted Liens.
7.4 Limitation on Guarantee Obligations. The Borrower will not, and
will not cause, permit or suffer any of its Subsidiaries to, create, incur,
assume or suffer to exist any Guarantee Obligation other than:
(a) the Subsidiary Guaranty;
(b) any guarantee of Subordinated Indebtedness permitted under Section
7.2(d), if (i) the obligors on such guarantee consist solely of Subsidiaries of
the Borrower that have executed and delivered, and have not been released and
discharged from, the Subsidiary Guaranty and (ii) such guarantees are issued and
subordinated to the payment of all Obligations on terms approved in writing by
the Agents and the Required Lenders, each acting individually in its sole
discretion;
(c) Guarantee Obligations in existence on the date of this Agreement
and identified on Schedule 1.1(b) or Schedule 4.22;
(d) Guarantee Obligations of the Borrower relating to Indebtedness
permitted under Section 7.2(f);
(e) Guarantee Obligations of the Borrower relating solely to an
operating lease or trade account payable incurred in the ordinary course of
business by a Wholly Owned Subsidiary of the Borrower; and
(f) Guarantee Obligations constituting Permitted Seller Debt.
7.5 Limitation on Fundamental Changes. The Borrower will not, and will
not cause, permit or suffer any of its Subsidiaries to, enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), except that (a) a Wholly Owned
Subsidiary of the Borrower that is not an Excluded Subsidiary may merge or
consolidate with, or liquidate into, any other Wholly Owned Subsidiary of the
Borrower except an Excluded Subsidiary and (b) a newly-formed Wholly Owned
Subsidiary of the Borrower that has no material assets, business or operations
may consummate a Permitted
75
Acquisition by merging or consolidating with a Person being acquired in such
Permitted Acquisition.
7.6 Limitation on Transfer of Assets. The Borrower will not, and will
not cause, permit or suffer any of its Subsidiaries to, convey, sell, lease,
assign, transfer or otherwise dispose of any of its property, assets or
business, except:
(a) sales of obsolete or worn-out equipment in the ordinary course of
its business;
(b) dispositions of assets by a Wholly Owned Subsidiary of the
Borrower that is not an Excluded Subsidiary to any other Wholly Owned Subsidiary
of the Borrower that is not an Excluded-Indebted Subsidiary, and
(c) other dispositions of assets to any Person that is not a
Subsidiary of the Borrower, so long as the gross revenues attributable to such
assets or (except in the case of equipment) the business for which such assets
are used, do not exceed (i) 3% of the consolidated gross revenues of the
Borrower and its Subsidiaries for the preceding fiscal year, in the case of all
such dispositions made by the Borrower or any of its Subsidiaries in any one
fiscal year, or (ii) 5% of the consolidated gross revenues of the Borrower and
its Subsidiaries for the preceding fiscal year, in the case of all such
dispositions made by the Borrower or any of its Subsidiaries at any time after
the date of this Agreement.
7.7 Restricted Payments. The Borrower will not, and will not cause,
permit or suffer any of its Subsidiaries to, (x) declare or pay any dividend
(other than dividends payable solely in Capital Stock of the Borrower that does
not constitute Disqualified Stock and dividends payable solely to the Borrower
or any of its Wholly Owned Subsidiaries) on, or offer or make any payment on
account of, or offer or set apart assets for a sinking or other analogous fund
for the purchase, redemption, defeasance, retirement or other acquisition of,
any shares of any class of Capital Stock of the Borrower or any of its
Subsidiaries, whether now or hereafter outstanding, or make any other
distribution in respect thereof, in whole or in part or (y) offer or make any
payment, purchase, defeasance or redemption in respect of, or otherwise acquire
or retire, any Subordinated Indebtedness (all such declarations, payments,
setting apart, purchases, redemptions, defeasances, retirements, acquisitions,
distributions and prepayments are collectively referred to as "Restricted
Payments"), either directly or indirectly, whether in cash or property or in
obligations of the Borrower or any of its Subsidiaries or otherwise, except
that:
(a) the Borrower may pay interest when due on any Subordinated
Indebtedness, if such payment is permitted to be made at the time under the
subordination provisions applicable to such Subordinated Indebtedness; and
(b) the Borrower may make any Permitted Stock Payment if no Default
has occurred and is continuing or would result from, or exist immediately after
giving effect to, such Permitted Stock Payment.
76
7.8 Limitation on Investments. The Borrower will not, and will not
cause, permit or suffer any of its Subsidiaries to, make, acquire, hold or own
any advance, loan, extension of credit or capital contribution to, or purchase,
hold or own any stock, bonds, notes, debentures or other securities of or any
assets constituting a business unit of, or make any other investment in or
acquisition from, any Person (collectively, "Investments"), except:
(a) advances of premium payments on behalf of customers under
insurance premium financing arrangements established for brokerage clients in
the ordinary course of business on terms customary for insurance brokers,
accounts receivable generated in the ordinary course of business and deposits
for utilities, security deposits for leases of real property and expense
prepayments made in the ordinary course of business;
(b) Investments in Cash Equivalents;
(c) any loan by the Borrower or USIS to any Wholly Owned Subsidiary of
the Borrower, if (i) such loan is evidenced by a promissory note executed by
such Subsidiary and payable upon demand (unless issued in connection with the
incurrence of any Seller Debt) and delivered and endorsed in pledge to the
Administrative Agent as security for the Obligations and (ii) the aggregate
amount of all such loans at any time outstanding to all Excluded Subsidiaries,
when taken together with the aggregate amount of all Investments therefore made
in Excluded Subsidiaries pursuant to Section 7.8(d) and the aggregate
outstanding principal amount of all Non-Recourse Seller Debt, does not exceed
$15,000,000;
(d) Investments in Capital Stock of any Wholly Owned Subsidiary of the
Borrower that became a Subsidiary of the Borrower after the date of this
Agreement, if the aggregate amount of all such Investments at any time
outstanding as to (x) all Subsidiaries other than Excluded Subsidiaries does not
exceed $5,000,000 and (y) all Excluded Subsidiaries, when taken together with
the aggregate outstanding principal amount of all Investments made pursuant to
Section 7.8(c) and the aggregate outstanding principal amount of all
Non-Recourse Seller Debt, does not exceed $15,000,000;
(e) Permitted Acquisitions and, if granted to the Borrower or a
Subsidiary of the Borrower without payment or delivery of a separate
consideration, an option or right to make a Permitted Acquisition, subject to
the terms and provisions of Section 7.14;
(f) Permitted Stock Payments;
(g) non-cash loans used to purchase Capital Stock of the Borrower made
by the Borrower to employees of the Borrower or any of its Subsidiaries, but
only if (i) the aggregate outstanding principal amount of any such loan to any
employee shall not exceed $200,000 at any time, and (ii) such loan is evidenced
by a promissory note, executed and payable on demand by such employee and
delivered and endorsed to the Administrative Agent in pledge as security for the
Obligations;
(h) Investments received in settlement of claims against any Person or
in any capital restructuring or reorganization of any Person; and
77
(i) Investments disclosed on Schedule 7.8.
7.9 Limitation on Optional Payments and Modifications of Indebtedness.
The Borrower will not, and will not cause, permit or suffer any of its
Subsidiaries to, (a) make any optional payment or prepayment or any purchase or
redemption of any of its outstanding Indebtedness, except Permitted Prepayments,
or (b) amend, modify or change, or consent or agree to any amendment,
modification or change to any of the terms of any of its outstanding
Indebtedness, except so as to (i) extend the maturity or reduce the amount of
any payment of principal thereof, or (ii) reduce the rate or extend the date for
payment of interest thereon.
7.10 Limitation on Transactions with Affiliates. The Borrower will
not, and will not cause, permit or suffer any of its Subsidiaries to, enter into
any transaction (including any purchase, sale, lease or exchange of property or
the rendering of any service) with any Affiliate of the Borrower unless such
transaction is upon fair and reasonable terms no less favorable to it than it
would obtain in a comparable arm's-length transaction with a Person that is not
an Affiliate of the Borrower.
7.11 Limitation on Changes in Fiscal Year. The Borrower shall not
cause, permit or suffer the fiscal year of the Borrower or any of its
Subsidiaries to end on a day other than December 31.
7.12 Limitation on Negative Pledges. The Borrower will not, and will
not cause, permit or suffer any of its Subsidiaries to, enter into any agreement
after the date of this Agreement that prohibits or limits its ability to create,
incur, assume or suffer to exist any Lien upon any of its property or revenues,
whether now owned or hereafter acquired, other than (a) restrictions set forth
in any agreement governing Capital Lease Obligations or purchase money
Indebtedness permitted under Section 7.2(g), if applicable solely to the
property financed thereby, (b) restrictions set forth in any Security Document
and (c) restrictions set forth in the documents governing any Permitted Prior
and Pari Passu Liens (to the extent applicable only to the assets subject to
such Liens).
7.13 Limitation on Payment Restrictions Affecting Subsidiaries. The
Borrower will not, and will not cause, permit or suffer any of its Subsidiaries
to, directly or indirectly enter into any agreement or arrangement after the
date of this Agreement that prohibits or limits, or that may at any time in the
future prohibit or limit, the ability of any Subsidiary of the Borrower to
declare or pay dividends on its Capital Stock or to purchase assets or services
from or sell assets or services to, or to make loans to or obtains loans from,
the Borrower or any other Subsidiary of the Borrower, except (in each case)
restrictions applicable solely to an Excluded Subsidiary and enforceable solely
by the holders of Non-Recourse Seller Debt issued by such Excluded Subsidiary.
7.14 Limitation on Business and Acquisitions. The Borrower will not,
and will not cause, permit or suffer any of its Subsidiaries to, (a) enter into
or acquire or conduct any business, directly or, indirectly, other than the USI
Businesses or engage in any business activities outside of the United States or
(b) acquire any property, Person or business other than (i) the outstanding
Capital Stock of Persons engaged in the USI Businesses, (ii) the
78
equipment and other assets necessary to operate its USI Businesses in the
ordinary course, and (iii) Permitted Acquisitions.
7.15 ERISA Matters.
(a) No Use of Plan Assets. The Borrower will not, and will not cause,
permit or suffer any of its Subsidiaries to, use any "assets" (within the
meaning of ERISA or Section 4975 of the Code, including 29 C.F.R. Section
2510.3-101 or any successor regulations thereto) of an "employee benefit plan"
within the meaning of Section 3(3) of ERISA or a "plan" within the meaning of
Section 4975(e)(1) of the Code to repay or secure the Loans. or any of the Loan
Documents.
(b) No Plans. The Borrower will not, and will not cause, permit or
suffer any of its Subsidiaries or any Commonly Controlled Entity to, adopt,
maintain, administer (except pursuant to administration services that constitute
a part of the ordinary course of the business of any Subsidiary of the Borrower
or any Commonly Controlled Entity, which services are covered by liability
insurance coverage customary for similar entities engaged in the plan
administration services business), contribute to, or become required to
contribute to any Muitiemployer Plan or any employee benefit plan subject to
Title IV of ERISA, Section 412 of the Code, Section 302 of ERISA or the minimum
funding requirements of ERISA or the Code or incur any liability for
post-retirement medical or other welfare benefits unless this Agreement is
amended, in form and substance satisfactory to the Agents and the Lenders, to
insert the customary provisions with respect thereto.
(c) No ERISA Events. The Borrower will not, and will not cause or
suffer any of its Subsidiaries or any Commonly Controlled Entity to, permit any
ERISA Event to occur.
(d) No ERISA Liens. The Borrower will not, and will not cause, permit
or suffer any of its Subsidiaries or any Commonly Controlled Entity to,
terminate any Plan in a manner that could result in the imposition of a lien or
the property of the Borrower, any of its Subsidiaries or any Commonly Controlled
Entity or incur any liability or suffer the existence of any lien on the
property of the Borrower, any of its Subsidiaries or any Commonly Controlled
Entity pursuant to Title 1 of ERISA or the penalty or excise tax or security
provisions of the Code.
(e) Section 515 of ERISA. The Borrower will not, and will not cause,
permit or suffer any of its Subsidiaries or any Commonly Controlled Entity to,
fail to make any payment required by Section 515 of ERISA.
SECTION 8
EVENTS OF DEFAULT
If any of the following events shall occur and be continuing (each, an
"Event of Default"):
79
(a) Payment Default. The Borrower fails to pay (i) any principal of
any Loan when due in accordance with the terms of this Agreement, or (ii) any
interest on any Loan, or any fee or other amount payable under this Agreement or
any other Loan Document, within three Business Days after any such interest,
fees or other amount becomes due in accordance with the terms hereof or thereof;
or
(b) Representations and Warranties. Any representation or warranty
made or deemed made by the Borrower or any of its Subsidiaries in this Agreement
or in any other Loan Document or that is contained in any certificate, document
or financial or other statement furnished by it pursuant to this Agreement or
any other Loan Document proves to have been false or misleading in any material
respect on or as of the date made or deemed made; or
(c) Certain Covenants. The Borrower or any of its Subsidiaries fails
to observe or perform any agreement contained in Sections 6.7(a), 6.7(d) or 6.10
or Section 7 or contained in Section 2.2, 2.3, 2.5, 3.2, 3.3, 3.4, 3.7, 3.8 or
3.9 of the Borrower Pledge and Security Agreement or Section 2.2, 2.3, 2.5, 3.2,
3.3, 3.4, 3.7, 3.8 or 3.9 of the Subsidiary Pledge and Security Agreement; or
(d) Certain Other Covenants. The Borrower or any of its Subsidiaries
fails to observe or perform any agreement contained in Sections 6.1, 6.2, 6.4,
6.5, 6.6 or 6.9 and such default shall continue unremedied for a period of 15
days after either (i) such default is acknowledged in writing by the Borrower or
(ii) notice thereof has been given to the Borrower by either Agent or any
Lender; or
(e) Other Loan Document Obligations. The Borrower or any of its
Subsidiaries fails to observe or perform any other agreement contained in this
Agreement or any other Loan Document (other than as provided in Sections 8(a),
8(b), 8(c) and 8(d)), and such default shall continue unremedied for a period of
30 days after either (i) such default is acknowledged in writing by the Borrower
or (ii) notice thereof has been given to the Borrower by either Agent or any
Lender; or
(f) Other Debt. The Borrower or any of its Subsidiaries (i) fails to
pay when due any payment of principal of or interest on any Indebtedness (other
than the Loans), or in the payment of any Guarantee Obligation, when such
payment is due after any applicable grace period, if the aggregate amount of the
Indebtedness and Guarantee Obligations in respect of which such default or
defaults have occurred is at least $2,000,000, or (ii) fails to observe or
perform any other agreement or condition relating to any Indebtedness or
Guarantee Obligation in such aggregate amount or contained in any instrument or
agreement evidencing, securing or relating thereto or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
or beneficiary or beneficiaries of such Guarantee Obligation (or a trustee or
agent on behalf of such holder or holders or beneficiary or beneficiaries) to
cause, with the giving of notice or lapse of time (or both) if required, such
Indebtedness to become due (whether by acceleration or otherwise) prior to its
stated maturity or such Guarantee Obligation to become payable; or
80
(g) Bankruptcy and Insolvency Proceedings. Either (i) the Borrower or
any of its Subsidiaries commences any case, proceeding or other action (A) under
any existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or the Borrower or any of its Subsidiaries shall
make a general assignment for the benefit of its creditors; or (ii) there is
commenced against the Borrower or any of its Subsidiaries any case, proceeding
or other action of a nature referred to in clause (i) above that (x) results in
the entry of an order for relief or any such adjudication or appointment or (y)
remains undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there is commenced against the Borrower or any of its Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, restraint or similar process against all or any substantial part of
its property that results in the entry of an order for any such relief that
shall not have been vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof; or (iv) the Borrower or any of its
Subsidiaries takes any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause (i), (ii),
or (iii) above; or (v) the Borrower or any of its Subsidiaries generally is not,
or is unable to, or admits its inability to, pay its debts as they become due;
or
(h) Judgments. One or more judgments or decrees are entered against
the Borrower or any of its Subsidiaries involving in the aggregate a liability
(to the extent not paid or covered by insurance) of $2,000,000 or more, and all
such judgments or decrees are not vacated, discharged, stayed or bonded pending
appeal within 60 days from the entry thereof; or
(i) Security. Any of the Security Documents ceases, for any reason, to
be in full force and effect, or the Borrower or any of its Subsidiaries so
asserts; or any Lien created by any Security Document ceases to be enforceable
on the terms therein set forth as to any property of the Borrower or USIS,
except Excluded Assets, or the Borrower or any of its Subsidiaries so asserts;
or
(j) Subsidiary Guaranty and Subsidiary Notes. The Subsidiary Guaranty
or any promissory note of any Subsidiary pledged under the Security Documents is
not in full force and effect or does not constitute a lawful and enforceable
obligation or the Borrower or any of its Subsidiaries so asserts; or
(k) ERISA. Either (i) any property of the Borrower or any of its
Subsidiaries constitutes "assets" (within the meaning of ERISA or Section 4975
of the Code, including 29 C.F.R. Section 2510.3-101 or any successor regulation
thereto) of an "employee benefit plan" within the meaning of Section 3(3) or
ERISA or a "plan" within the meaning of Section 4975(e)(1) of the Code; or (ii)
any of the Loans or any Loan Document, or the exercise of any of the
Administrative Agent's or any Lender's rights in connection therewith,
81
constitutes a prohibited transaction under ERISA or the Code (except for a
prohibited transaction that results from the Lender's use of assets of an
"employee benefit plan" within the meaning of Section 3(3) of ERISA or a "plan"
within the meaning of Section 4975(e)(1) of the Code to fund the Loans); or
(iii) the occurrence of any ERISA Event; or (iv) a Plan or related trust
agreement that is intended to be qualified and tax-exempt under Sections 401(a)
and 501(a) of the Code fails to be so qualified or tax-exempt or shall lose its
qualification or tax-exempt status; or (v) the Borrower, any of its Subsidiaries
or any Commonly Controlled Entity incurs or is expected to incur any liability
under ERISA with respect to any "employee benefit plan" (within the meaning of
Section 3(3) of ERISA) which any of Borrower, any subsidiary of Borrower or any
Commonly Controlled Entity administers or with respect to any Plan; or (vi) any
other similar event or condition occurs or exists with respect to a Plan; and in
each case in clauses (iii) through (vi) above, such event or condition, together
with all other such events or conditions, if any, could reasonably be expected
to have a Material Adverse Effect; or
then, and in any such event and at any time thereafter during the continuation
of such an Event of Default, (A) if such event is an Event of Default specified
in Section 8(g) that occurs with respect to the Borrower or USIS, automatically
the Commitments shall immediately terminate and the Loans under this Agreement
(with accrued and unpaid interest thereon) and all other amounts owing under
this Agreement and the Notes shall immediately become due and payable, and (B)
if such event is any other Event of Default, either or both of the following
actions may be taken: (i) with the consent of the Required Lenders the
Administrative Agent may, or upon the request of the Required Lenders the
Administrative Agent shall, by written notice to the Borrower declare the
Commitments to be terminated whereupon the Commitments shall immediately
terminate; and (ii) with the consent of the Required Lenders, the Administrative
Agent may, or upon the request of the Required Lenders, the Administrative Agent
shall, by written notice to the Borrower, declare the Loans (with accrued
interest thereon) and all other amounts owing under this Agreement to be due and
payable whereupon the Loans and all such other amounts shall immediately become
due and payable. Except as expressly provided above in this Section 8,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived.
SECTION 9
THE AGENTS
9.1 Appointment. Each Lender hereby irrevocably designates and
appoints Credit Lyonnais as the administrative agent of such Lender under this
Agreement and the other Loan Documents, and each Lender hereby irrevocably
designates and appoints Chase as the syndication agent of such Lender under this
Agreement and the other Loan Documents. Each Lender irrevocably authorizes each
Agent, as the agent for such Lender, to take such action on its behalf under the
provisions of this Agreement and the other Loan Documents and to exercise such
powers and perform such duties as are expressly delegated to such Agent by the
terms of this Agreement and the other Loan Documents, together with such other
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary elsewhere in
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this Agreement, (i) neither Agent shall have any duties or responsibilities
other than those expressly set forth in this Agreement, (ii) neither Agent shall
have any fiduciary relationship with any Lender, and (iii) no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against either
Agent.
9.2 Delegation of Duties. Each Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Neither Agent shall be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
9.3 Exculpatory Provisions. Neither Agent nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or any Affiliates of
either Agent shall be (i) liable for any action taken or omitted to be taken by
it or any other Person under or in connection with this Agreement or any other
Loan Document (except for its own gross negligence or willful misconduct as
determined in a final, non-appealable judgment by a court of competent
jurisdiction), or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Borrower or any
officer thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by either Agent under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of the Borrower to perform its obligations hereunder or
thereunder. Neither Agent shall be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrower.
9.4 Reliance by Agents. Each Agent shall be entitled to rely, and
shall be fully protected in relying, upon any Note, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including counsel to
the Borrower), independent accountants and other experts selected by such Agent.
Each Agent shall treat the payee of any Note as the owner thereof for all
purposes unless the assignment or transfer shall have been recorded in the
Register. Each Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders as it deems
appropriate and/or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. Each Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement and the other Loan Documents in accordance with a request of the
Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders and their successors
and assigns.
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9.5 Notice of Default. Neither Agent shall be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default under this
Agreement unless such Agent has received notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default." In the event that either
Agent receives any such notice, such Agent shall promptly give notice thereof to
the Lenders. Each Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders;
provided that unless and until such Agent shall have received such directions,
such Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem in the best interests of the Lenders.
9.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that neither Agent nor any of their respective officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representations
or warranties to it and that no act by either Agent hereinafter taken, including
any review of the affairs of the Borrower, shall be deemed to constitute any
representation or warranty by such Agent to any Lender. Each Lender represents
to each Agent that it has, independently and without reliance upon either Agent
or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Borrower and made its own decision to make its Loans
under this Agreement and enter into this Agreement. Each Lender also represents
that it will, independently and without reliance upon either Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action under this Agreement and the other Loan
Documents, and to make such investigation as it deems necessary to inform itself
as to the business, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the Agents under
this Agreement, neither Agent shall have any duty or responsibility to provide
any Lender with any credit or other information concerning the business,
operations, property, condition (financial, or otherwise), prospects or
creditworthiness of the Borrower that may come into the possession of such Agent
or any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
9.7 Indemnification. The Lenders severally (and not jointly) agree to
indemnify each Agent in its capacity as such (to the extent not reimbursed by
the Borrower and without limiting the obligation of the Borrower to do so),
ratably according to their respective Pro Rata Shares in effect on the date on
which indemnification is sought under this Section 9.7 (or, if indemnification
is sought after the Commitments have terminated and the Loans have been paid in
full, ratably in accordance with their respective Pro Rata Shares on the last
day prior to such payment in full on which no Default or Event of Default had
occurred and was continuing), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever that may at any time (including
at any time following the payment of the Notes) be imposed on, incurred by or
asserted against the either Administrative Agent in any way relating to or
arising out of
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this Agreement, any of the other Loan Documents or any documents (including any
intercreditor agreement entered into by either Agent, on behalf of the Lenders,
in connection with this Agreement or any other Loan Document) contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by either Agent under or in connection with any
of the foregoing; provided, however, that no Lender shall be liable for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
solely from either Agent's gross negligence or willful misconduct (as determined
in a final, nonappealable judgment by a court of competent jurisdiction). The
agreements of the Lenders in this Section 9.7 shall survive the payment of the
Loans and all other amounts payable under this Agreement and shall be binding on
such Lenders and their successors and assigns.
9.8 Agents In Their Individual Capacity. Each Agent and its Affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with the Borrower and its Subsidiaries as though such Agent were not an
Agent under this Agreement and the other Loan Documents. With respect to its
Loans made or renewed by it, each Agent shall have the same rights and powers
under this Agreement as any Lender and may exercise the same as though it were
not an Agent, and the terms "Lender" and "Lenders" shall include each Agent in
its individual capacity.
9.9 Successor Agents. Either Agent may resign as an Agent upon 30
days' written notice to the Lenders. If either Agent shall resign as an Agent
under this Agreement and the other Loan Documents, then the Required Lenders
shall appoint from among the Lenders a successor agent, as the case may be, for
the Lenders, whereupon such successor agent, shall succeed to the rights, powers
and duties of the Administrative Agent or the Syndication Agent, as the case may
be, and the term "Administrative Agent" or "Syndication Agent" shall mean such
successor agent effective upon such appointment and approval, and the former
Agent's rights, powers and duties as Administrative Agent or Syndication Agent,
as the case may be, shall be terminated, without any other or further act or
deed on the part of such former Agent or any of the parties to this Agreement or
any holders of the Notes. Notwithstanding the resignation of any Agent, the
provisions of this Section 9.9 shall continue to its benefit as to any actions
taken or omitted to be taken by it as the Administrative Agent or Syndication
Agent, as the case may be, under this Agreement and/or any of the other Loan
Documents.
9.10 SubAgents; Co-Collateral Agents. Either Agent may at any time
appoint one or more of the Lenders, any trust company or any other Person, to
act as a subagent or co-collateral agent in respect of any of the functions,
duties, powers, interests, rights, privileges and remedies of the Administrative
Agent or Syndication Agent, as the case may be, under any of the Loan Documents.
Neither Agent shall have any duty whatsoever to control or supervise, or
otherwise undertake any responsibility in respect of any Person appointed by it
as subagent or co-collateral agent and shall not be in any respect liable for
any act or omission of such Person. Each such Person shall, nevertheless, be
subject to the direction of the Required Lenders and shall, in acting as
subagent or co-collateral agent, be entitled to the benefit of all of the
rights, privileges, powers, interests, indemnities, immunities
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and remedies of the Administrative Agent or Syndication Agent, as the case may
be, in respect of the matters as to which such Person has been empowered by the
Administrative Agent or Syndication Agent, as the case may be, to act. Either
Agent or Required Lenders may at any time, with or without cause, restrict or
terminate the power of any such Person so to act. The appointment of any such
Person as subagent or co-collateral agent shall not restrict, affect or impair
any of rights, privileges, powers, interests, indemnities, immunities and
remedies of the Administrative Agent or the Syndication Agent. The Borrower
agrees to pay the reasonable fees and expenses of each such subagent or
co-collateral agent.
9.11 Concerning the Collateral.
(a) Security Documents. Each of the Lenders hereby irrevocably
authorizes and directs the Administrative Agent to enter into and act under the
Security Documents, to accept, maintain, hold and enforce on behalf of the
Lenders and other holders of Obligations all interest created thereby, and to
maintain and enforce its rights, privileges, powers, interests and remedies
under the Security Documents for the benefit of the Lenders and to perform all
obligations of the Administrative Agent thereunder, including obligations to
release Collateral. Any action taken by the Required Lenders (or, where required
by the express terms of this Agreement, a greater or lesser proportion of the
Lenders) in accordance with the provisions of this Agreement or the Security
Documents, and the exercise by the Required Lenders (or, where so required, such
greater or lesser proportion) of the powers set forth herein or therein,
together with such other powers as are reasonably incidental thereto, shall be
authorized and binding upon all of the holders of Obligations secured by any
Collateral.
(b) Release of Liens. Each Lender hereby agrees that it will, upon
request of the Borrower or the Administrative Agent, confirm the Administrative
Agent's authority to release, or direct the Administrative Agent to release, any
Lien held by the Administrative Agent:
(i) against all of the Collateral, upon expiration or termination
of the obligations of the Lenders under this Agreement, payment of the
principal of and interest on all Loans and payment of all other Obligations
as to which, no later than the fifth Business Day prior to payment in full
of such principal and interest, the Administrative Agent has received
written notice that such Obligation is then due and payable;
(ii) against any part of the Collateral sold or disposed of by
the Borrower or any Subsidiary of the Borrower, if such sale or disposition
is permitted by and is made in accordance with this Agreement;
(iii) against any Collateral which the Administrative Agent is
required to release pursuant to the Security Documents or applicable law;
and
(iv) pursuant to any Shared Subsidiary Security Document executed
by any Subsidiary or against property encumbered thereby or any obligation
secured
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thereby, when such Shared Subsidiary Security Document is released upon the
consummation of any restructuring of the Permitted Seller Debt of such
Subsidiary permitted hereunder.
(c) Not Accountable or Liable. The Administrative Agent shall not be
accountable or liable for any release of Collateral which (i) the Administrative
Agent in good faith believes is required under the Security Documents or any
other Loan Document, (ii) results from any failure of the Borrower to perform or
observe, or cause a Subsidiary of the Borrower to perform or observe, any
agreement or obligation set forth in or arising under this Agreement, the
Security Documents or any other Loan Document, or (iii) results from any failure
to give, or delay in giving, any notice of termination of any rights of the
Borrower pursuant to the Security Documents or any other Loan Document or from
any other omission of the Administrative Agent, whether or not deemed negligent.
The Administrative Agent shall have no duty, responsibility or liability
whatsoever as to the existence, value, protection or other assurance of any
property that may constitute Collateral or as to the authorization, creation,
perfection, priority, protection, retention, value, enforceability or
sufficiency of any Lien that may be granted, or purported or intended to be
granted, pursuant to this Agreement or any Security Document or otherwise, it
being expressly agreed by each Lender that, in respect of any and all risks
related in any respect to such matters, such Lender is relying and will rely
solely on (x) such independent inquiry into such matters and risks as such
Lender may elect to make and (y) its rights and powers as a Lender, including
the rights and powers granted or available to it under the Loan Documents if,
with the support of other Lenders sufficient to constitute the Required Lenders,
it acts as one of the Required Lenders.
(d) Shared Subsidiary Security Documents. The Borrower, for itself and
for each of its Subsidiaries, and each Lender acknowledges and agrees that, in
holding and maintaining or taking or omitting to take any action in respect of
the collateral security granted in any Shared Subsidiary Security Document or
any right, power, privilege, interest or remedy conferred thereby, (i) Credit
Lyonnais Cayman Island Branch is acting solely as Administrative Agent under
this Agreement and, as such, shall be entitled in respect thereof to each and
all of the rights, privileges, powers, interests, indemnities, immunities,
benefits and remedies of the Administrative Agent under this Agreement and (ii)
neither Credit Lyonnais Cayman Island Branch nor any other branch or Affiliate
of Credit Lyonnais is acting in any capacity for, and shall have no duty
whatsoever to, the Borrower or any other holder of any liability secured
thereby. The Borrower represents and warrants to each and all of the branches
and Affiliates of Credit Lyonnais that it has so notified each holder of any
liability secured by any Shared Subsidiary Security Document. Credit Lyonnais
may at any time, at its sole option, (x) appoint a subagent or co-collateral
agent pursuant to Section 9.10 to take and hold any or all collateral security
granted in any Shared Subsidiary Security Document and perform any or all duties
and exercise any or all rights, privileges, powers, interests, indemnities,
immunities, benefits and remedies conferred upon Credit Lyonnais thereby or (y)
resign as collateral agent under any Shared Subsidiary Security Document,
without thereby in any way restricting, resigning or impairing its rights,
privileges, powers, interests, indemnities, immunities, benefits and remedies as
Administrative Agent under this Agreement and under the other Loan Documents,
and require the Borrower to appoint, and pay all reasonable fees and expenses
of,
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an independent collateral agent to take and hold any or all collateral security
granted in any Shared Subsidiary Security Document and perform any or all duties
and exercise any or all rights, privileges, powers, interests, indemnities,
immunities, benefits and remedies conferred upon Credit Lyonnais thereby.
9.12 Arranger and Syndication Agent. The parties acknowledge and agree
that Credit Lyonnais and Chase Securities Inc. shall be credited as, and may
publicize that they are, Joint Book Managers and Lead Arrangers of the financing
contemplated hereby. Without in any respect limiting the rights, privileges,
powers, immunities, indemnities and other benefits granted to Credit Lyonnais as
Administrative Agent or granted to Credit Lyonnais and Chase as Lenders, the
parties further acknowledge and agree that (a) Credit Lyonnais and Chase
Securities Inc., shall not have, by reason of their designation as Joint Book
Managers and Lead Arrangers, any power, duty, responsibility or liability
whatsoever under this Agreement or any other Loan Document or in respect of the
financing transaction contemplated hereby and (b) each of them shall
nevertheless be entitled to each and all of the protections and immunities
granted to the Agents under Sections 9.3, 9.4, 9.6, 9.8 and 9.11, as fully as if
each of them were therein expressly referred to.
SECTION 10
MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement, any Note or any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 10. The Required Lenders may, from time to time, (a) enter into with the
Borrower or any applicable Loan Party written amendments, supplements or
modifications hereto and to the other Loan Documents for the purpose of adding
any provisions to this Agreement or the other Loan Documents or changing in any
manner the rights of the Lenders or of the Borrower or any applicable Loan Party
hereunder or thereunder or otherwise amending the terms of the Agreement or any
other Loan Document or (b) waive, on such terms and conditions as the Required
Lenders may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver, and no such amendment,
supplement or modification shall (i) reduce the amount or extend the scheduled
date of maturity of any Loan or of any installment thereof, or reduce the stated
rate of any interest or fee payable hereunder or extend the scheduled date of
any payment thereof or increase the aggregate amount or extend the expiration
date of any Lender's Commitments, in each case without the consent of each
Lender affected thereby, (ii) release, other than as set forth in Section
9.11(b), any substantial part of the Collateral or reduce the percentage
specified in the definition of "Required Lenders", or consent to the assignment
or transfer by the Borrower of any of its rights and obligations under this
Agreement and the other Loan Documents or release all or substantially all of
the Collateral in each case without the written consent of all the Lenders,
(iii) amend, modify or waive any provision of Section 2 or the order of
application of commitment reductions and prepayments in Section 3.1 without the
written consent of Lenders having a majority in Pro Rata Shares for each Tranche
of
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Commitments and Loans adversely affected thereby, (iv) amend, modify or waive
any provision of Section 9 with respect to the rights or obligations of either
Agent without the written consent of such Agent (provided that the rights of any
prior Agent shall not be adversely affected thereby) or (v) amend, modify or
waive any provision with respect to the rights or obligations of the Issuing
Bank without the written consent of the Issuing Bank. Any such waiver and any
such amendment, supplement or modification shall apply equally to each of the
Lenders, and shall be binding upon the Borrower, or any applicable Loan Party,
the Lenders, and the Agents. In the case of any waiver, the Borrower, or any
applicable Loan Party, the Lenders and the Agents shall be restored to their
former position and rights hereunder and under the outstanding Notes any other
Loan Documents, and any Default or Event of Default waived shall be deemed to
be cured and not continuing; but no such waiver shall extend to any subsequent
or other Default or Event of Default, or impair any right consequent thereon.
10.2 Notices. All notices, requests and demands to or upon the parties
to this Agreement shall be in writing (including by telecopy) and, unless
otherwise expressly provided in this Agreement, shall be deemed to have been
duly given or made when delivered by hand, or five Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Borrower and the
Administrative Agent, or to such other address as may be hereafter notified by
the respective parties to this Agreement and any future holders of the Notes:
The Borrower:
U.S.I. Holdings Corporation
00 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
with a copy to General Counsel
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Administrative Agent:
Credit Lyonnais Cayman Island Branch
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Leveraged Finance (Xxxx LeGoulven)
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
provided, however, that any notice, request or demand to or upon the
Administrative Agent or the Lenders pursuant to Sections 2.2, 2.9, 3.1, 3.2 or
3.7 shall not be effective until received.
10.3 No Waiver; Remedies Cumulative. No failure to exercise and no
delay in exercising, on the part of either Agent or any Lender, any right,
remedy, power or privilege
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under this Agreement or any other Loan Document shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege under this Agreement or any other Loan Document preclude any other or
further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges under this Agreement are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
10.4 Survival of Representations and Warranties. All representations
and warranties made under this Agreement, each of the other Loan Documents and
each document, certificate or statement delivered pursuant to this Agreement or
in connection with this Agreement or any other Loan Document, shall survive (i)
the execution and delivery of this Agreement, and (ii) the making of the Loans
under this Agreement and the Notes.
10.5 Payment of Expenses and Taxes; Indemnification. The Borrower
agrees:
(a) Closing and Administration Expenses. To pay or reimburse the
Administrative Agent for all reasonable out-of-pocket costs and expenses
incurred in connection with the preparation and execution of, and all amendment,
supplement, modification or waiver to, this Agreement and the other Loan
Documents and all other documents prepared in connection herewith or therewith
(including the reasonable fees and disbursements of White & Case LLP, special
counsel to the Administrative Agent and the Syndication Agent, as well as local
and foreign counsel to the Administrative Agent),
(b) Post-Default Expenses. To pay or reimburse each Lender and each
Agent for all their costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Agreement, the other Loan
Documents and all such other documents (including the reasonable fees and
disbursements of counsel to Agents and counsel to the Lenders),
(c) Certain Costs. To pay, indemnify, and hold each Lender and each
Agent harmless from and against any and all recording and filing fees and any
and all liabilities with respect to, or resulting from any delay in paying,
documentary stamp, excise and other taxes, if any, which may be payable or
determined to be payable by reason of the execution and delivery of this
Agreement and the other Loan Documents and any such other documents, or any
amendment, supplement or modification of, or any waiver or consent under or in
respect thereof, and
(d) General Indemnity. To defend, indemnify and hold each Lender and
each Agent and their respective Affiliates, officers, directors, employees,
attorneys, agents and advisors (each, an "Indemnified Party") harmless from and
against any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever (including reasonable legal fees and other charges) with
respect to the execution, delivery, performance and consummation of this
Agreement, the other Loan Documents and all such other documents (including any
of the foregoing relating to, or arising out of (i) the preparation for a
defense of, or participation in,
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any investigation, litigation, proceeding or other action related to or arising
out of the Loan Documents or any other such documents (whether or not such
Indemnified Party is a party to such proceeding or other action and whether any
such investigation, litigation or proceeding or other action is brought by the
Borrower, its stockholders or creditors or by any other Person), or (ii) the
violation of, noncompliance with or liability under, any Requirement of Law
applicable to the Borrower or any of its Subsidiaries (all the foregoing in this
clause (d), collectively, the "indemnified liabilities"); provided, however,
that the Borrower shall have no obligation under this Agreement to an
Indemnified Party with respect to any indemnified liabilities that arise from
the gross negligence or willful misconduct of such Indemnified Party (as
determined in a final non-appealable judgment by a court of competent
jurisdiction), and
(e) ERISA Indemnity. To defend, indemnify and hold each Lender and
each Agent harmless from and against all losses, costs (including reasonable
attorneys' fees and expenses), expenses, taxes, and damages that either Agent or
any Lender may suffer or incur by reason of the investigation, defense and
settlement of claims and in obtaining any prohibited transaction exemption under
ERISA or the Code necessary in such Agent's or Lender's reasonable judgment by
reason of the inaccuracy of the representations and warranties set forth in
Section 4.13(b) or a breach of the provisions set forth in Section 7.15.
The agreements of the Borrower in this Section 10.5 shall survive repayment of
the Loans and all other amounts payable under this Agreement.
10.6 Successors and Assigns; Participations and Assignments.
(a) Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the Borrower, the Lenders, the Administrative Agent, the
Syndication Agent and their respective successors and assigns; provided,
however, that the Borrower may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of each
Lender.
(b) Participations. Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time sell to one or more
other Persons (each, a "Participant") participating interests in any Loan owing
to such Lender, any Commitment of such Lender or any other interest of such
Lender under this Agreement and the other Loan Documents. In the event of any
such sale by a Lender of a participating interest to a Participant, such
Lender's obligations under this Agreement to the other parties to this Agreement
shall remain unchanged, such Lender shall remain solely responsible to the other
parties for the performance of such obligations, such Lender shall remain the
holder of any such Loan for all purposes under this Agreement and the other Loan
Documents, and the Borrower and each Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. The Borrower also
agrees that each Participant shall be entitled to the benefits of Sections 3.9,
3.10 and 3.11 with respect to its participation in the Commitments and the Loans
outstanding from time to time as if it was a Lender.
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(c) Assignments. Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time and from time to
time assign to any Lender or, with the consent of the Agents (which shall not be
unreasonably withheld), to one or more other Persons (each, an "Assignee") all
or any part of its rights and obligations under this Agreement and the other
Loan Documents pursuant to an Assignment and Acceptance executed by the
Assignee, the assigning Lender (and, in the case of an Assignee that is not then
a Lender, by the Agents) and delivered to the Administrative Agent for its
acceptance and recording in the Register. Unless such assignment is of all of
the rights and obligations of the assigning Lender, the sum of the aggregate
outstanding principal amount of the Loans and the aggregate amount of the
unfunded and unexpired Commitments that are assigned and that remain with the
assigning Lender shall be at least $5,000,000 or any amount that the Agents in
their sole discretion may determine. Upon such execution, delivery, acceptance
and recording, from and after the effective date of such Assignment and
Acceptance, (x) the Assignee thereunder shall be a party to this Agreement and,
to the extent provided in such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement with a Commitment as set forth
therein, and (y) the assigning Lender thereunder shall, to the extent provided
in such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and obligations under this
Agreement, such assigning Lender shall cease to be a party to this Agreement).
The Borrower shall issue Notes payable to the Assignee to reflect the
Assignment, if so requested at any time by either Agent or the Assignee, but the
assignment shall be enforceable upon compliance with the conditions set forth in
this Section 10.6(c) whether or not any such request is ever made or honored.
(d) Register. The Administrative Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register (the "Register") for
the recordation of the names and addresses of the Lenders and the Commitments
of, and principal amounts of the Loans payable to, each Lender from time to
time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, each Agent and the Lenders shall treat each
Person whose name is recorded in the Register as the owner of a Loan or other
obligation under this Agreement as the owner thereof for all purposes of this
Agreement and the other Loan Documents notwithstanding any notice to the
contrary. Any assignment of any Loan or other obligation under this Agreement
shall be effective only upon appropriate entries with respect thereto being made
in 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.
(e) Assignment Fee; Registration of Assignment. Upon its receipt of an
Assignment and Acceptance executed by an assigning Lender and an Assignee (and,
in the case of an Assignee that is not then a Lender, by the Agents) together
with payment by the Assignee or the assigning Lender to the Administrative Agent
of a registration and processing fee of $5,000, the Administrative Agent shall
(i) promptly accept such Assignment and Acceptance, and (ii) on the effective
date determined pursuant thereto record the information contained therein in the
Register and give notice of such acceptance and recordation to the Lenders and
the Borrower. No payment of any such fee shall be required in connection with
92
an assignment of Loans from any Lender to any of its Affiliates, or from any
Lender to any other Lender.
(f) Disclosure. Subject to the provisions of Section 10.16, the
Borrower authorizes each Lender to disclose to any Participant or Assignee
(each, a "Transferee") and any prospective Transferee any and all financial and
other information in such Lender's possession concerning the Borrower and its
Subsidiaries and Affiliates that has been delivered to such Lender by or on
behalf of the Borrower pursuant to any of the Loan Documents or that has been
delivered to such Lender by or on behalf of the Borrower in connection with such
Lender's credit evaluation of the Borrower and its Subsidiaries and Affiliates
prior to the Closing Date.
(g) Pledges. The provisions of this Section 10.6 do not prohibit or
restrict pledges, collateral assignments or other grants of security interests,
including any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank or any other Person. No such pledge, collateral assignment
or grant shall release a Lender from any of its obligations under this
Agreement.
10.7 Set-off; Adjustments.
(a) Set-Off. In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrower (any such notice being expressly waived by the Borrower to the extent
permitted by applicable law), upon any amount becoming due and payable by the
Borrower under this Agreement (whether at the stated maturity, by acceleration
or otherwise) to set-off and appropriate and apply against such amount any and
all deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower. Each Lender that
exercises any right of setoff for credit to its Loans or Notes shall notify the
Borrower and each Agent promptly after it does so, but the failure to give such
notice shall not affect the validity of such set-off and application and shall
not put such Lender under any liability or disability whatsoever.
(b) Sharing. If any Lender (a "Benefited Lender") shall at any time
receive any payment of all or part of its Loans, or interest thereon, or receive
any collateral in respect thereof (whether voluntarily or involuntarily, by
set-off or otherwise), in a greater proportion than any such payment to, or
collateral received by, any other Lender in respect of such other Lender's
Loans, such Benefited Lender shall purchase for cash from the other Lenders a
participating interest in such portion of each such other Lender's Loan, or
shall provide such other Lenders with the benefits of any such collateral, or
the proceeds thereof, as shall be necessary to cause such Benefited Lender to
share the excess payment or benefits of such collateral or proceeds ratably with
each of the other Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such Benefited Lender,
any such purchase shall be rescinded and the purchase price and benefits
returned to the extent of such recovery, but without interest.
93
10.8 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by telecopy), all of which shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be delivered to the Borrower and the Administrative Agent.
10.9 Severability. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
10.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrower and the other Loan Parties, the
Administrative Agent, the Syndication Agent and the Lenders with respect to the
subject matter of this Agreement, and there are no promises, undertakings,
representations or warranties made by any party to this Agreement relative to
subject matter of this Agreement not expressly set forth or referred to in this
Agreement or the other Loan Documents. Any previous agreement with respect to
the subject matter of this Agreement is superseded by this Agreement and the
other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE INTERNAL LAW OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PROVISIONS THEREOF.
10.12 Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:
(a) Submission. Submits for itself and its property in any legal
action or proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts of the
State of New York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof;
(b) Venue. Consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) Process. Agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to it at its
address set forth in Section 10.2 or at such other address of the Borrower that
the Administrative Agent shall have been notified pursuant thereto;
94
(d) Not Exclusive. Agrees that nothing in this Agreement shall affect
the right to effect service of process in any other manner permitted by law or
shall limit the right to xxx in any other jurisdiction; and
(e) Release of Consequential and Punitive Damages. Absolutely,
unconditionally, irrevocable and forever waives and releases, and covenants and
agrees never to xxx upon, any right it might otherwise have (on any theory of
liability, whether founded on contract, tort, equitable principles, statutory
duties or otherwise, whether known or unknown and whether now existing or
hereafter arising) for recovery of any special, indirect, consequential,
exemplary and punitive damages on any claim at any time arising in its favor
against any Lender or any other Indemnified Person based upon, arising from or
in any respect related to this Agreement or any of the Loan Documents or the
transactions contemplated thereby or any breach of contract, breach of duty,
wrongful conduct, act, omission, condition, event or circumstance in any respect
related thereto.
10.13 Acknowledgments. The Borrower hereby acknowledges that:
(a) Advice of Counsel. It has been advised by counsel in the
negotiation, execution and delivery of this Agreement and the other Loan
Documents;
(b) No Fiduciary Duty. Neither Agent nor any Lender has any fiduciary
relationship with or duty to it arising out of or in connection with this
Agreement or any of the other Loan Documents, and the relationship between the
Agents and Lenders, on one hand, and Borrower, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(c) No Joint Venture. No joint venture is created by this Agreement or
by any other Loan Document or otherwise exists by virtue of the transactions
contemplated by this Agreement or any other of the Loan Document among the
Lenders or among the Borrower and the Lenders. No Lender has any responsibility
or liability whatsoever for any act or omission of the Borrower or any other
Lender.
10.14 WAIVERS OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
10.15 Interest Rate Limitation. Notwithstanding anything in this
Agreement or any of the other Loan Documents to the contrary, if at any time the
applicable interest rate, together with all fees and charges that are treated as
interest under applicable law (collectively, the "Charges"), required to be paid
by the Borrower under this Agreement or in any other Loan Document, or Charges
otherwise contracted for, charged, received, taken or reserved by any Lender,
shall exceed the maximum lawful rate (the "Maximum Rate") that may be contracted
for, charged, taken, received or reserved by such Lender in accordance with
applicable law, the rate of interest payable under the Loan Documents and the
Note held by
95
such Lender, together with all Charges payable to such Lender, shall be limited
to the Maximum Rate.
10.16 Confidentiality. The Lenders shall hold in confidence all
non-public information obtained pursuant to the requirements of this Agreement
that has been identified as such in writing by the Borrower; provided, however,
that any Lender may disclose any such information (a) to any Transferee or
prospective Transferee pursuant to Section 10.6 (subject to the execution by
such Transferee or prospective Transferee of a confidentiality letter of the
same scope as this Section 10.16), (b) as required or requested by any
governmental agency or representative thereof or required by law, rule or
regulation, or (c) pursuant to legal process. In no event shall any Lender be
obligated or required to return any materials furnished by the Borrower.
10.17 Generally Accepted Accounting Principles. The financial
statements to be furnished to the Lenders by the Borrower pursuant to this
Agreement shall be made and prepared in accordance with generally accepted
accounting principles in the United States consistently applied throughout the
periods involved (except as set forth in the notes thereto or as otherwise
disclosed in writing by the Borrower to the Agents); provided, however, that (i)
Quarterly Financial Statements may be subject to year-end adjustments and will
generally not contain footnotes, and (ii) except as otherwise specifically
provided in this Agreement, all computations determining compliance with the
financial covenants in Section 7.1 shall utilize accounting principles and
policies in conformity with those used to prepare the historical financial
statements delivered to the Lenders for the fiscal year of the Borrower ended on
December 31, 1998 (such generally accepted accounting principles, subject to the
preceding proviso and exceptions, are referred to as "GAAP").
[intentionally left blank]
96
IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
U.S.I. HOLDINGS CORPORATION
By: /s/ Xxxxxxx Xxxxxxx
---------------------------------------
Title: Senior Vice President and Chief
Financial Officer
CREDIT LYONNAIS
CAYMAN ISLAND BRANCH,
as Administrative Agent and a Lender
By: /s/ W. Xxxxxxx Xxxxxx
---------------------------------------
Title: Authorized Signatory
THE CHASE MANHATTAN BANK,
as Syndication Agent and a Lender
By: /s/ Xxxxxxxxx Xxxxxxx
---------------------------------------
Title: Vice President
S-1
EXHIBIT A TO
CREDIT AGREEMENT
----------------
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement, dated as of September 17,
1999 (as the same may be amended, supplemented or otherwise modified from time
to time, the "Credit Agreement"), by and among U.S.I. Holdings Corporation (the
"Borrower"), the several banks and other financial institutions from time to
time that are party thereto (collectively, the "Lenders"), Credit Lyonnais
Cayman Island Branch, as administrative agent for the Lenders (the
"Administrative Agent") and The Chase Manhattan Bank, as syndication agent (the
"Syndication Agent"). Unless otherwise defined herein, capitalized terms shall
have the meanings given to them in the Credit Agreement.
(the "Assignor") and (the "Assignee") agree as
----------- -----------
follows:
l. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Effective Date (as defined below), all of the Assignor's interest (the "Assigned
Interest") in and to the Assignor's rights and obligations under the Credit
Agreement as set forth on Schedule 1 (the "Assigned Facility"), in a principal
amount for such Assigned Facility as set forth on Schedule 1.
2. The Assignor: (a) makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement, any other Loan Document or any other document made, delivered or
given in connection with any Loan Document, other than that it has not created
any adverse claim upon the interest being assigned by it under this Assignment
and Acceptance and that such interest is free and clear of any such adverse
claim; (b) makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrower or any of its
Subsidiaries or the performance or observance by the Borrower or any of its
Subsidiaries of any of their respective obligations under the Credit Agreement
or any of the other Loan Documents; and (c) attaches the Note, if any, held by
it evidencing the Assigned Facility, and (i) requests that the Administrative
Agent, upon request by the Assignee, exchange the attached Note for a new Note
payable to the Assignee, and (ii) if the Assignor has retained any interest in
the Assigned Facility, requests that the Administrative Agent exchange the
attached Note for a new Note payable to the Assignor, in each case in amounts
that reflect the assignment being made hereby (and after giving effect to any
other assignments which have become effective prior to such date).
3. The Assignee: (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received a copy of the Credit Agreement together with such other documents
and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this Assignment and
Acceptance; (c) agrees that it will, independently and without reliance upon the
Assignor, the Administrative Agent, the Syndication Agent or any other Lender
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Agreement and the other Loan Documents; (d) appoints and
authorizes the Administrative Agent and the Syndication Agent to take such
action as agent on its behalf and to exercise such powers and discretion under
the Credit Agreement and the other Loan Documents as are delegated to the
Administrative Agent or the Syndication Agent, as the case may be, by the terms
thereof together with such powers as are incidental thereto; (e) agrees that it
will be bound by the provisions of the Credit Agreement and the other Loan
Documents and it will perform all of the obligations that are required to be
performed by it as a Lender under the Credit Agreement and the other Loan
Documents; and (f) represents and warrants that none of the amounts used to fund
the Assigned Facility and none of the amounts which will be provided by the
Assignee to the Borrower with respect to the Loans constitute assets of an
"employee benefit plan" within the meaning of Section 3(3) of ERISA or a "plan"
within the meaning of Section 4975(e)(1) of the Internal Revenue Code.
4. The effective date of this Assignment and Acceptance shall be
, (the "Effective Date"). Following the execution of
---------------- -- -----
this Assignment and Acceptance by the Assignor and the Assignee, it will be
delivered to the Administrative Agent and the Syndication Agent for acceptance
by them and recorded by the Administrative Agent pursuant to Section 10.6(e) of
the Credit Agreement, effective as of the Effective Date (which shall not,
unless otherwise agreed to by the Administrative Agent, be earlier than five
Business Days after the date of receipt hereof by the Administrative Agent).
5. Upon such acceptance and recording, from and after the Effective
Date, the Administrative Agent shall make all payments in respect of the
Assigned Interest (including payments of principal, interest, fees and other
amounts) to the Assignee whether such amounts have accrued prior to the
Effective Date or accrue subsequent to the Effective Date. The Assignor and the
Assignee shall make all appropriate adjustments in payments by the
Administrative Agent for periods prior to the Effective Date or with respect to
the making of this assignment directly between themselves.
6. From and after the Effective Date, (a) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender under the Credit
Agreement and all of the other Loan Documents and the Assignee shall be bound by
the provisions thereof, and (b) the Assignor shall to the extent provided in
this Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement and other Loan Documents.
7. This Assignment and Acceptance shall be governed by, and construed
and interpreted in accordance with, the internal law of the State of New York
without giving effect to the conflict of laws provisions thereof.
2
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their respective
duly authorized officers on Schedule 1 hereto.
3
Schedule I To Assignment And Acceptance
Relating To The Credit Agreement,
Dated As Of September 17, 1999,
Among
U.S.I. Holdings Corporation,
The Lenders Named Therein,
Credit Lyonnais Cayman Island Branch, As Administrative Agent For The Lenders
And The Chase Manhattan Bank, As Syndication Agent
--------------------------------------------------------------------------------
Name of Assignor:
------------------------------------
Name of Assignee:
------------------------------------
Effective Date of Assignment:
------------------------
Principal Commitment
Amount Assigned Percentage Assigned
--------------- -------------------
Revolving Loan $ %
------------ ------------
Term Loan $ %
------------ ------------
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By: By:
------------------------ ------------------------
Name: Name:
Title: Title:
Accepted:
CREDIT LYONNAIS CAYMAN ISLAND BRANCH, as Administrative Agent
By:
------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
as Syndication Agent
By:
------------------------
Name:
Title:
-2-
EXHIBIT B-1
[CONFORMED AS EXECUTED]
================================================================================
BORROWER PLEDGE AND SECURITY AGREEMENT
dated as of
September 17, 1999
U.S.I. HOLDINGS CORPORATION,
as Grantor
and
CREDIT LYONNAIS CAYMAN ISLAND BRANCH,
as Secured Party
================================================================================
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I.
DEFINITIONS...............................................................1
Section 1.1. Certain Terms...............................................1
Section 1.2. Terms Defined in Credit Agreement...........................3
Section l.3. Terms Defined in the Uniform Commercial Code................4
Section 1.4. Terms Generally.............................................4
ARTICLE II.
THE SECURITY INTERESTS....................................................5
Section 2.1. Grant of Security Interests.................................5
Section 2.2. Delivery of Instruments, Notes and Securities...............7
Section 2.3. Investment Property.........................................7
Section 2.4. Registration of Pledge......................................7
Section 2.5. Financing Statements........................................8
Section 2.6. Secured Party Filing........................................8
Section 2.7. Further Assurances..........................................8
Section 2.8. Power of Attorney...........................................8
Section 2.9. Survival of Security Interests.............................10
Section 2.10. Reinstatement of Security Interests........................10
Section 2.11. Grantor Remains Liable.....................................10
ARTICLE III.
REPRESENTATIONS, WARRANTIES AND COVENANTS................................10
Section 3.1. The Collateral.............................................10
Section 3.2. Maintenance of Perfection..................................12
Section 3.3. Defense of Collateral......................................12
Section 3.4. Transfer or Encumbrance....................................12
Section 3.5. Payments, Dividends and Distributions......................12
Section 3.6. Voting Rights..............................................12
Section 3.7. Maintenance of Collateral..................................13
Section 3.8. Concerning Equipment and Inventory.........................14
Section 3.9. Concerning Accounts, Instruments and other Claims..........14
Section 3.10. Substituted Performance....................................15
ARTICLE IV.
DEFAULT; REMEDIES........................................................15
Section 4.1. Default....................................................15
Section 4.2. Remedies upon Default......................................15
(i)
Page
----
Section 4.3. Waivers by Grantor.........................................17
Section 4.4. Standard of Care...........................................17
Section 4.5. Application of Proceeds....................................17
Section 4.6. Indemnity and Expenses.....................................18
Section 4.7. Surplus, Deficiency........................................18
Section 4.8. Information Related to the Collateral......................18
Section 4.9. Sale Exempt from Registration..............................19
Section 4.10. Rights and Remedies Cumulative.............................19
Section 4.11. No Direct Enforcement by Beneficiaries.....................19
ARTICLE V.
CONCERNING THE SECURED PARTY.............................................19
Section 5.1. Agent for Holders..........................................19
Section 5.2. Administrative Agent shall be the Secured Party............19
Section 5.3. No Assurances or Liability.................................20
Section 5.4. Holders Bound..............................................20
ARTICLE VI.
MISCELLANEOUS PROVISIONS.................................................20
Section 6.1. Continuing Security Interests; Release.....................20
Section 6.2. Statute of Limitations.....................................21
Section 6.3. Amendments; Etc............................................21
Section 6.4. Failure or Indulgence Not Waiver; Remedies Cumulative......21
Section 6.5. Notices....................................................21
Section 6.6. Severability...............................................21
Section 6.7. Headings...................................................21
Section 6.8. Governing Law; Terms.......................................21
Section 6.9. Consent to Jurisdiction and Service of Process.............22
Section 6.10. Waiver of Jury Trial.......................................22
Section 6.11. Counterparts...............................................23
(ii)
SCHEDULES
Schedule 3.1(b)- Interest Owned in Subsidiaries
Schedule 3.1(c)- Intellectual Property
Schedule 3.1(d)- Investment Property
Schedule 3.1(e)- Location of Equipment and Inventory
Schedule 3.1(g)- Location of Borrower
Schedule 3.1(h)- Legal Name of Borrower
Schedule 3.1(i)- Taxpayer ID Number
(i)
BORROWER PLEDGE AND SECURITY AGREEMENT
This BORROWER PLEDGE AND SECURITY AGREEMENT (as amended, supplemented
or otherwise modified from time to time, this "Agreement") is dated as of
September 17, 1999 and entered into by and between U.S.I. HOLDINGS CORPORATION,
a Delaware corporation ("Grantor"), and CREDIT LYONNAIS CAYMAN ISLAND BRANCH, in
its capacity as Administrative Agent under the Credit Agreement referred to
below ("Secured Party"), for the benefit of the Persons that now are or at any
time hereafter become party as a Lender to the Credit Agreement described herein
(the "Lenders"), CREDIT LYONNAIS CAYMAN ISLAND BRANCH, in its individual
capacity, as Administrative Agent and Lender, THE CHASE MANHATTAN BANK, as
Syndication Agent and Lender (the "Syndication Agent") and all other present and
future Holders of any of the Secured Obligations described herein (all,
collectively, including the Lenders, Administrative Agent and the Syndication
Agent, the "Beneficiaries").
Recitals
The Grantor has requested that credit be extended to the Grantor on
terms and conditions set forth in that certain Credit Agreement dated as of
September 17, 1999, among Grantor, Secured Party and the other Beneficiaries
party thereto.
To induce the Beneficiaries to enter into the Credit Agreement, and in
consideration thereof and of any and all credit at any time extended thereunder,
the Grantor has agreed to grant to Secured Party, for the benefit of the
Beneficiaries, the collateral security described herein as security for the
payment of the Secured Obligations on the terms herein set forth.
Accordingly, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Grantor hereby agrees with Secured Party for the benefit of the
Beneficiaries as follows:
ARTICLE 1.
DEFINITIONS
Section 1.1. Certain Terms As used in this Agreement, the following
terms have the meanings specified below:
"Bankruptcy Code" means Title 11 of the United States Code, as from
time to time amended.
"Claim" has the meaning set forth in the Bankruptcy Code.
"Collateral" has the meaning set forth in Section 2.1
"Credit Agreement" means the Credit Agreement described above, as such
agreement from time to time may be modified, amended, restated, extended,
refinanced or replaced in any manner or in any respect (including so as to
reduce or increase the amount or cost of credit extended thereunder or to
shorten or extend the time of payment thereunder or in any other manner change
the amount or terms of credit extended to the Borrower or the identity, rights
or obligations of any party thereto).
"Discharge of the Credit Agreement" means that all obligations of the
Lenders to extend credit under the Credit Agreement (including any obligation to
issue Letters of Credit) have expired or been terminated and have been
absolutely, unconditionally and irrevocably discharged and all Obligations at
any time created, incurred or outstanding (except Obligations for
indemnification which are then contingent and in respect of which no claim or
demand has then been made) have been fully and finally paid in cash.
"Equity Interests" means, with respect to any Person, any capital
stock of such Person or membership interests, partnership interests (whether
general or limited) or other equity interests in such Person, regardless of
type, class, preference or designation, and all warrants, options, purchase
rights, conversion or exchange rights, voting rights, calls or claims of any
character with respect thereto, in each case whether outstanding on the date of
this Agreement or issued or granted at any time thereafter.
"Holder" means, in respect of any Secured Obligation, the Person
entitled to enforce payment thereof and specifically includes each Lender and
Administrative Agent.
"Notes" means any and all intercompany notes and all other promissory
notes from time to time issued to, or held by, the Grantor.
"Obligations" means all direct or indirect debts, liabilities and
obligations of the Borrower or any other Loan Party of any and every type and
description at any time arising under or in connection with the Credit Agreement
or any other Loan Document, to Administrative Agent, Syndication Agent, any
Lender, any Person entitled to indemnification pursuant to the Credit Agreement
or any other Loan Document or to any other Person, in each case whether now
outstanding or hereafter created or incurred, whether or not the right of such
Person to payment in respect of any such debts, liabilities or obligations is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured and
whether or not such claim is discharged, stayed or otherwise affected by any
bankruptcy case or insolvency, reorganization, receivership, dissolution or
liquidation proceeding, and shall include (a) all liabilities of the Borrower
for principal of, and interest on, any and all Loans at any time outstanding
under the Credit Agreement, (b) all liabilities of the Borrower under the Loan
Documents for any fees, costs, taxes, expenses, indemnification and other
amounts payable thereunder, (c) all reimbursement obligations and Unpaid
Drawings with respect to Letters of Credit under the Credit Agreement, (d) all
liabilities of the Borrower under or in respect of Interest Rate Protection
Agreements entered into with a Lender or any affiliate of a Lender (whether or
not such Lender later ceases to be a Lender under the Credit Agreement), (e) all
liabilities of the Guarantor under the Subsidiary Guaranty, and (f) all other
liabilities of the Borrower or any other Loan Party under or in respect of any
of the Loan Documents or any of
2
the transactions contemplated thereby and specifically includes any and all
present and future "Obligations" as such term is defined in the Credit
Agreement.
"Perfected" means, as to the security interests granted to Secured
Party in Section 2.1, that (a) a creditor on a simple contract cannot acquire a
judicial lien that is superior to such security interests and (b) if a case were
pending under the Bankruptcy Code in which Grantor is the debtor, such security
interests would be a Lien that is Perfected in such bankruptcy case; and
"Perfect" and "Perfection" have correlative meanings.
"Post-Petition Interest and Expense Claims" means any and all claims
of any Holder (a) for interest on any Obligations determined for any period of
time occurring after the commencement of any case under the Bankruptcy Code or
any other insolvency, reorganization, receivership, dissolution or liquidation
proceeding at the contract rate (including any applicable post-default increase
therein) set forth in the Credit Agreement or any other Loan Document or (b) for
cost and expense reimbursements or indemnification on the terms set forth in the
Credit Agreement or any other Loan Document relating to costs and expenses
incurred and indemnification rights accrued at any time after the commencement
of any such case or proceeding, in each case to the extent such claim accrues or
becomes payable in accordance with the provisions of the Credit Agreement or
other Loan Documents (or would have accrued or become payable if enforceable or
allowable in such case or proceeding), whether or not such claim is enforceable,
allowable or allowed in such case or proceeding and even if such claim is
disallowed therein.
"Secured Obligations" is defined in Section 2.1.
Section 1.2. Terms Defined in Credit Agreement. Unless the context
otherwise requires, the following terms used in this Agreement are used as
defined in the Credit Agreement:
Borrower
Business Day
Capital Stock
Default
Event of Default
Excluded Assets
Existing Investments
Governmental Authority
Guarantors
Lien
Loan Documents
Loan Parties
Loans
Material Adverse Effect
Net Proceeds
Person
Required Lenders
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Security Documents
Subsidiary
Subsidiary Guaranty
Subsidiary Pledge and Security Agreement
Transfer
In addition, any other capitalized terms not otherwise defined herein shall have
the meaning given such terms in the Credit Agreement.
Section 1.3. Terms Defined in the Uniform Commercial Code. When
capitalized, the following terms used in this Agreement or the other Security
Documents have the meanings given to them in the Uniform Commercial Code, as in
effect in the State of New York on the date of this Agreement:
Accounts
Certificated Security
Chattel Paper
Commodity Account
Commodity Contract
Commodity Intermediary
Control
Documents
Equipment
Financial Asset
Fixtures
General Intangibles
Goods
Instruments
Inventory
Investment Property
Securities Account
Securities Intermediary
Security
Security Certificate
Security Entitlement
Uncertificated Security
Section 1.4. Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include," "includes" and "including" shall
be deemed to be followed by the phrase "without limitation." The word "will"
shall be construed to have the same meaning and effect as the word "shall."
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument
4
or other document as from time to time amended, supplemented or otherwise
modified (subject to any restrictions on such amendments, supplements or
modifications set forth herein), (b) any reference herein to any Person shall be
construed to include such Person's successors, transferees and assigns, (c) the
words "herein," "hereof" and "hereunder," and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (d) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement, and (e) the words "asset" and "property" shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, whether real, personal or mixed
and of every type and description.
ARTICLE II.
THE SECURITY INTERESTS
Section 2.1. Grant of Security Interests. As security for the payment
of the Obligations and all Post-Petition Interest and Expense Claims
(collectively, the "Secured Obligations"), Grantor hereby assigns to Secured
Party for the benefit of the Beneficiaries, and grants Secured Party for the
benefit of the Beneficiaries security interests in, all of Grantor's right,
title and interest in and to the following types or items of property, in each
case whether now or hereafter existing or owned by Grantor or in which Grantor
now owns or hereafter acquires an interest and wherever the same may be located
(collectively, the "Collateral"):
(i) all Inventory, including specifically all raw materials,
work-in-process, finished goods, supplies, materials, spare parts, Goods held
for sale or on lease or for lease or furnished or to be furnished under
contracts of service, merchandise inventory, rental inventory, and returned or
repossessed Goods and all rights to enforce return or repossession by
reclamation, stoppage in transit or otherwise,
(ii) all Equipment, including specifically all manufacturing,
printing, distribution, delivery, retailing, vending, data processing,
communications, office and other equipment in all of its forms, all vehicles,
all tools, dies, and molds, all Fixtures, all other Goods used or bought for use
primarily in a business and all other Goods except Inventory,
(iii) all Accounts,
(iv) all Chattel Paper,
(v) all Documents,
(vi) all Instruments and all other Claims that are in any respect
evidenced or represented by any writing, including any promissory notes and all
other notes and all other writings evidencing or representing a Claim against
any Subsidiary of the Grantor or any other Person,
5
(vii) all Securities, whether constituting Certificated Securities or
Uncertificated Securities, all Notes, all Financial Assets, all Security
Entitlements, all Securities Accounts, all Commodity Contracts, all Commodity
Accounts, and all other Investment Property, including specifically the Security
Certificates described in Schedule 3.1(b) and all other Equity Interests and all
Existing Investments; provided, however, that only 65% of the issued and
outstanding capital stock of foreign subsidiaries of the Grantor shall be
pledged,
(viii) all money, cash and cash equivalents, including specifically
all deposit accounts and all certificates of deposit,
(ix) all General Intangibles, including specifically (a) the property
described on Schedule 3.1(c), (b) all registered and unregistered trademarks and
service marks and all trademark and service xxxx license agreements to which
Grantor is a party (whether as licensor or licensee) and all Claims (including
infringement claims) relating thereto, (c) all patents and patent applications
and all patent license agreements to which Grantor is a party (whether as
licensor or licensee) and all Claims (including infringement claims) relating
thereto, (d) all registered and unregistered copyrights and all copyright
license agreements to which Grantor is a party (whether as licensor or licensee)
and Claims (including infringement claims) relating thereto, (e) all other
intellectual property in which Grantor has an interest, including proprietary
research and development, know-how, trade secrets, trade names, trade styles,
license agreements and user rights and Claims (including infringement claims)
relating thereto, (f) all customer lists and agreements, (g) all supplier lists
and agreements, (h) all employee and consultant lists, rights, and agreements,
(i) all computing, data and information processing and communications programs,
discs, designs, and information and the data and other entries thereon, (j) all
books, records, catalogs, back issues, library rights and all manifestations and
embodiments thereof, (k) all rights and Claims arising under or in respect of
the Credit Agreement or any Loan Document, including rights and Claims against
Secured Party or any other Beneficiary, (l) all Net Proceeds, (m) all tax
refunds, (n) all policies of insurance and condemnation awards of every type and
description and the proceeds thereof, (o) all loans receivable, letters of
credit, bonds and undertakings, deferred purchase price or deferred purchase
consideration, consulting or non-competition payments and other Indebtedness,
liabilities and obligations receivable not constituting an Account and not
evidenced or represented by any Instrument, Chattel Paper or Security, (p) all
rights of recoupment, recourse, reimbursement, subrogation, indemnity or
contribution (including those arising under any Guaranty or any payment thereon,
and those arising on account of any other agreement, transaction or event), (q)
all other causes of action and Claims of every type and description, whether
fixed or contingent, liquidated or not liquidated, accrued or not accrued, and
all judgments, orders and recoveries thereon, (r) all other agreements and
contract rights of every type and description and Claims thereon or relating in
any manner thereto, (s) all other rights, privileges, benefits, entitlements,
franchises, licenses and expectancies of every type and description, (t) all
other intangible property of every type and description, and (u) all goodwill
associated with any of the foregoing,
(x) all property that is at any time delivered to, or that is at any
time in the Control of, Secured Party,
6
together, in each case, with (a) all accessions thereto and products
and replacements thereof, (b) all guaranties, Liens and other forms of
collateral security therefor, and (c) all dividends, distributions, and payments
received thereon or in exchange or substitution therefor or upon Transfer
thereof, and (d) all other proceeds thereof;
except and excluding, however, each item of property that is an
Excluded Asset, for as long as it remains an Excluded Asset. All references in
this Agreement to any type of collateral described above in this Section 2.1
shall be deemed to exclude any Excluded Assets that would otherwise be included
therein.
Section 2.2. Delivery of Instruments, Notes and Securities. On the
date hereof or, if hereafter acquired, immediately upon acquisition thereof by
Grantor, without any notice from or demand by Secured Party, (a) Grantor shall
deliver to Secured Party Security Certificates and Notes described in Schedule
3.1(b) and all other Instruments (except checks received and collected in the
ordinary course of business) evidencing Indebtedness in excess of $10,000 and
Security Certificates at any time constituting Collateral, in each case in
suitable form for transfer by delivery or accompanied by duly executed
instruments of transfer, assignments in blank or with appropriate endorsements,
in form and substance reasonably satisfactory to Secured Party, and (b) Grantor
shall cause the issuer of each Uncertificated Security constituting Collateral
to take all actions required to give Secured Party "control" (as defined in the
applicable UCC) thereof, either upon original issuance or by registration of
transfer and shall executed and deliver all writings necessary to cause such
issuer to do so.
Section 2.3. Investment Property. Grantor will cause Secured Party's
security interests in Investment Property to be and remain continuously
Perfected by Control and, in addition, will cause such security interests to be
Perfected by filing. Grantor will not grant or permit any other security
interest or Lien upon any Investment Property constituting Collateral. If so
requested at any time by Secured Party or the Required Lenders as to any
Security Entitlement or Securities Account or any Commodity Contract or
Commodity Account that constitutes Collateral, Grantor will promptly cause each
Person who is a Securities Intermediary as to any such Security Entitlement or
Securities Account and each Person who is a Commodity Intermediary as to any
such Commodity Contract or Commodity Account to deliver a written agreement
enforceable by Secured Party for the benefit of the Beneficiaries waiving and
releasing, and agreeing not to create, grant, accept or hold, any priority, pari
passu or junior security interest or Lien therein, except for Permitted Prior
and Pari Passu Liens. Grantor will not cause or permit any Equity Interest in
any Subsidiary to be outstanding as an Uncertificated Security or to constitute
a Security Entitlement or be held in a Securities Account.
Section 2.4. Registration of Pledge. Secured Party may at any time
when any Event of Default is continuing and without any notice to any Loan Party
or any other Person, transfer to and register in Secured Party's name, as
pledgee, any and all Instruments and Investment Property constituting
Collateral. Such transfer and registration shall not foreclose or otherwise
affect any rights or interests of any Loan Party and shall not increase,
restrict or reduce any of Secured Party's rights and remedies. If after any such
transfer and registration Grantor remains entitled under Section 3.6 to exercise
voting rights with respect to Equity Interests included in such Investment
Property, Secured Party shall, at the written request of Grantor,
7
deliver to Grantor a revocable proxy or other instrument sufficient to permit
Grantor to exercise such voting rights to the extent permitted under Section
3.6.
Section 2.5. Financing Statements. Grantor will duly execute, deliver
and (subject to execution by Secured Party, where required by law) file duly
completed financing statements naming Grantor as debtor, naming Secured Party as
secured party, and covering the property described in Section 2.1, in the proper
filing office in each jurisdiction in which a financing statement is required
from time to time to be filed in order to ensure that the security interests
granted to Secured Party in Section 2.1 are at all times continuously Perfected,
to the extent that, under applicable law, such security interests can be
Perfected by the filing of a financing statement.
Section 2.6. Secured Party Filing. Secured Party is hereby authorized
to file one or more financing statements and continuations thereof and
amendments thereto, relative to all or any part of the Collateral, without the
signature of Grantor where permitted by law.
Section 2.7. Further Assurances. Grantor will promptly (and in any
event within three Business Days after request by Secured Party or the Required
Lenders) execute and deliver, and use its reasonable and diligent efforts to
obtain from other Persons, all instruments and documents (including security
agreements, security assignments, Lien releases, Lien waivers, transfer
documents and transfer notices, financing statements and other lien notices), in
form and substance reasonably satisfactory to Secured Party or the Required
Lenders, and take all other actions which are necessary or, in the reasonable
judgment of Secured Party or the Required Lenders, desirable or appropriate in
order to create, maintain, Perfect, ensure the agreed priority of, protect or
enforce Secured Party's security interests in the Collateral, to enable Secured
Party to exercise and enforce its rights and remedies hereunder with respect to
any Collateral, to protect the Collateral against the rights, claims or
interests of third persons, or to effect or to assure further the purposes and
provisions of this Agreement, and Grantor agrees to pay all reasonable costs
related thereto and all reasonable expenses incurred by Secured Party in
connection therewith.
Section 2.8. Power of Attorney. Grantor hereby irrevocably constitutes
and appoints Secured Party and any officer, agent or nominee of Secured Party,
with full power of substitution, as its true and lawful attorney-in-fact with
full power and authority, in the name of Grantor or in its own name, if and
whenever Grantor is in default under this Agreement as set forth in Section 4.1
to take any and all actions and to execute and deliver any and all agreements,
documents, notices, instruments and writings that Secured Party or the Required
Lenders may determine to be necessary or desirable to create, Perfect or ensure
the agreed priority of the security interests granted in Section 2.1 or to
enforce such security interests in any lawful and commercial reasonable manner
or otherwise to protect Secured Party's interest in the Collateral in any lawful
and commercially reasonable manner, including the power and right on behalf of
Grantor, without notice to or assent by Grantor:
(i) to ask for, demand, xxx for, collect, settle and give acquittance
for any and all moneys due or to become due with respect to any or all of the
Collateral and otherwise to demand and enforce payment and collection of any and
all Claims constituting Collateral,
8
(ii) to sign and file in any office in any jurisdiction financing
statements, lien notices, collateral assignments and any other instruments or
writings that may be required or, in the opinion of Secured Party or the
Required Lenders, appropriate to create or Perfect a security interest in or
Lien upon any of the Collateral as security for the Secured Obligations,
(iii) to accept, hold, collect, endorse, transfer and deliver any and
all checks, notes, drafts, acceptances, documents and other negotiable and
nonnegotiable Instruments, Securities, Documents and Chattel Paper constituting
Collateral that may be delivered to Secured Party in accordance with the
provisions of this Agreement, whether made payable to Grantor or otherwise,
(iv) to commence, file, prosecute, defend, settle, compromise or
adjust any claim, suit, action or proceeding with respect to any or all of the
Collateral or otherwise to enforce the rights of Secured Party with respect to
any of the Collateral,
(v) to obtain, contest, enforce, adjust and settle Claims for
insurance proceeds or condemnation awards constituting proceeds of Collateral or
required to be paid to Secured Party pursuant to this Agreement or the Credit
Agreement,
(vi) to do, at its option and at the expense and for the account of
Grantor, at any time and from time to time, all lawful and commercially
reasonable acts and things that Secured Party or the Required Lenders may deem
reasonably necessary or desirable to protect or preserve the Collateral or to
realize upon the Collateral,
(vii) to contest, settle, pay or discharge taxes or Liens (other than
Liens permitted under this Agreement or the Credit Agreement) levied or placed
upon or threatened against any of the Collateral, and for such purposes (A) the
legality or validity thereof and amounts necessary to settle or discharge the
same may be determined by Secured Party or the Required Lenders in its or their
commercially reasonable discretion and (B) Grantor agrees immediately upon
demand to reimburse Secured Party for any payments made by Secured Party on
account of any such taxes or Liens, as part of the Obligations secured hereby,
(viii) to sign and endorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with the Accounts and other
documents relating to the Collateral, and
(ix) generally to sell, Transfer, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral as fully and completely
as though Secured Party were the absolute owner thereof for all purposes, and to
do, at Secured Party's option and at Grantor's expense, at any time or from time
to time, all acts and things that Secured Party or the Required Lenders
reasonably deem necessary to protect, preserve or realize upon the Collateral
and Secured Party's security interests therein in order to effect the intent of
this Agreement, all as fully and effectively as Grantor might do.
The power granted in this Section 2.8 is a power coupled with an interest, is
irrevocable and shall be discharged only upon Discharge of the Credit Agreement.
9
Section 2.9. Survival of Security Interests. The security interests
granted hereby shall, unless released in writing by Secured Party, (a) remain
enforceable as security for all Secured Obligations now outstanding or created
or incurred at any future time (whether or not created or incurred pursuant to
any agreement presently in effect or hereafter made and notwithstanding any
subsequent repayment of any of the Secured Obligations or any other act,
occurrence or event), until Discharge of the Credit Agreement, (b) survive the
Discharge of the Credit Agreement to the same extent that any contingent
Obligation survives, and (c) survive any sale or other Transfer of any
Collateral and remain enforceable against each transferee and subsequent owner
thereof, even if such sale or other Transfer is permitted at the time under the
Credit Agreement, except in the case of inventory, used or surplus equipment and
Permitted Investments sold in the ordinary course of business and rights granted
to a licensee under a trademark license granted in the ordinary course of
business and any other Collateral that is expressly and specifically released
from the security interests created hereby pursuant to a written release signed
by Secured Party.
Section 2.10. Reinstatement of Security Interests. If at any time any
payment on any Secured Obligation is set aside, avoided or rescinded or must
otherwise be restored or returned, this Agreement and the security interests
granted to Secured Party herein and all other obligations of Grantor hereunder
shall remain in full force and effect and, if previously released or terminated,
shall be automatically and fully reinstated, without any necessity for any act,
consent or agreement of Grantor, as fully as if such payment had never been made
and as fully as if any such release or termination had never become effective.
Section 2.11. Grantor Remains Liable. Anything contained herein to the
contrary notwithstanding, (a) Grantor shall remain liable under all contracts
and agreements included in the Collateral, to the extent set forth therein, to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by Secured Party of any
of its rights hereunder shall not release Grantor from any of its duties or
obligations under any contract or agreement included in the Collateral, (c)
Secured Party shall not have any obligation or liability under any contract or
agreement included in the Collateral by reason of this Agreement or the grant to
Secured Party of any security interest in such contract or agreement, and (d)
Secured Party shall not be obligated to perform any of the obligations or duties
of Grantor under any contract or agreement included in the Collateral or to take
any action to collect or enforce any claim for payment assigned hereunder.
ARTICLE III.
REPRESENTATIONS, WARRANTIES AND COVENANTS
Grantor represents and warrants to Secured Party and agrees with
Secured Party that:
Section 3.1. The Collateral.
(a) Ownership. Except as otherwise expressly permitted under the
Credit Agreement, (i) Grantor owns the Collateral free and clear of any and all
Liens and (ii) no effective
10
financing statement or other instrument similar in effect covering all or any
part of the Collateral is on file in any filing or recording office, except
those in favor of Secured Party.
(b) Interests in and Claims against Subsidiaries. Schedule 3.1(b) sets
forth accurately and exhaustively all Equity Interests directly owned by Grantor
in any Subsidiary of Grantor, all other Equity Interests owned by Grantor and
all Notes issued to or held by the Grantor. All such Equity Interests are
represented by Security Certificates that have been duly authorized and validly
issued, are fully paid and non-assessable and were not issued in breach or
derogation of preemptive rights of any Person.
(c) Intellectual Property. Schedule 3.1(c) sets forth accurately and
exhaustively (i) all registered trademarks and servicemarks owned by Grantor,
all material trademark and service xxxx license agreements to which Grantor is a
party (whether as licensor or licensee), and all pending or overtly threatened
infringement claims by or against Grantor and other litigation relating to any
such trademarks, servicemarks or trademark or servicemark license agreements,
(ii) all patents and patent applications owned by Grantor, all material patent
license agreements to which Grantor is a party (whether as licensor or
licensee), and all pending or overtly threatened infringement claims by or
against Grantor and other litigation relating to any such patents, patent
applications or patent license agreements, and (iii) all registered copyrights
owned by Grantor, all material copyright license agreements to which Grantor is
a party (whether as licensor or licensee) and all pending or overtly threatened
infringement claims by or against Grantor or other litigation relating to any
such copyrights or copyright license agreements.
(d) Other Investment Property. Schedule 3.1 (d) sets forth accurately
and exhaustively all other Investment Property of Grantor having a value of
$10,000 or more.
(e) Location of Equipment and Inventory. All Equipment and Inventory
are located and intended to be kept at one of the collateral locations specified
on Schedule 3.1(e).
(f) No Consumer Goods or Farm Products. Grantor does not own any
assets that are, as to it, consumer goods or farm products.
(g) Location of Grantor. The Grantor's chief place of business, chief
executive office and office or offices where the Grantor keeps its records
regarding its Accounts and all originals of its Chattel Paper are located, and
during the preceding four months were located, at the Grantor locations
specified on Schedule 3.1(g).
(h) Names. The correct legal name of Grantor is set forth in the
preamble to this Agreement. Grantor does not conduct business or hold itself out
under, and in the past five years has not conducted business or held itself out
under, any other name (including any tradename or fictitious business name)
except any name listed on Schedule 3.1(h).
(i) Taxpayer ID Number. The proper taxpayer identification number for
each Loan Party is accurately set forth on Schedule 3.1(i).
11
(j) Perfection. The security interests granted to Secured Party in
Section 2.1 are lawful, valid and enforceable security interests that at all
times have been, and remain, duly and continuously Perfected.
(k) Amendment of Schedule 3.1. Grantor may at any time unilaterally
amend Schedule 3.1 in any respect required by the occurrence of any event that
does not constitute or give rise to a Default, by giving written notice thereof
to Secured Party. To be effective, such notice must state conspicuously that it
constitutes an amendment to certain factual matters relating to the Collateral
set forth in Section 3.1 of this Agreement.
Section 3.2. Maintenance of Perfection. Grantor will not (a) cause,
permit or suffer any voluntary or involuntary change in its name, identity or
corporate structure, or in the location of its chief executive office, or (b)
keep any tangible Collateral (other than mobile goods and in transit items) or
any records relating to its Accounts at any location other than a location set
forth in Schedule 3.l, unless (in each case) (i) Schedule 3.1 has first been
appropriately supplemented with respect thereto, and (ii) an appropriate
financing statement has been filed in the proper office and in the proper form,
and all other requisite actions have been taken, to Perfect and continue the
Perfection (without loss of priority) of Secured Party's security interests in
the Collateral.
Section 3.3. Defense of Collateral. Grantor will defend the Collateral
against all claims and demands of all Persons at any time claiming any interest
therein.
Section 3.4. Transfer or Encumbrance. Grantor will not encumber or
Transfer any item of Collateral or any interest therein, or permit or suffer any
item of Collateral to be encumbered or Transferred, unless (a) such action is
permitted at the time under the Credit Agreement and (ii) each Loan Party makes
all payments on account of the Secured Obligations required to be made therefrom
and takes all other actions required to be taken in connection therewith under
the Credit Agreement or any other Loan Document.
Section 3.5. Payments, Dividends and Distributions. Grantor shall be
entitled to receive all payments on Accounts, Instruments and Claims and all
dividends and distributions on Equity Interests and other Investment Property
constituting Collateral, so long as (a) Grantor is not in default under this
Agreement as set forth in Section 4.1 and no such default would result from any
such payment, dividend or distribution, (b) Grantor ensures that Secured Party's
security interests in any and all such payments, dividends and distributions
remain continuously Perfected and (c) each Loan Party makes all payments on
account of the Secured Obligations required to be made therefrom and takes all
other actions required to be taken in connection therewith under the Credit
Agreement or any other Loan Document. Any amounts received by Grantor at a time
when it is not entitled to receive them pursuant to the preceding sentence shall
be turned over to the Secured Party pursuant to Section 3.9(iv) or Section 4.2,
as applicable
Section 3.6. Voting Rights. So long as Grantor is not in default under
this Agreement as set forth in Section 4.1, Grantor shall have and may exercise
all voting rights with respect to any and all Equity Interests constituting
Collateral, except that:
12
(a) No Breach. Grantor shall not act or vote in favor of any action
that would constitute or cause a breach of any obligations of any Loan Party
under the Credit Agreement or under any other Loan Document;
(b) No Capital Structure Changes. Grantor shall not act or vote in
favor of (i) the authorization or issuance of any Capital Stock, options,
warrants, voting rights, or preference shares or additional shares not permitted
by the Credit Agreement, or (ii) any reclassification, readjustment,
reorganization, merger, consolidation, sale or disposition of assets, or
dissolution not permitted by the Credit Agreement;
(c) Material Adverse Changes. Grantor shall not act or vote in favor
of any action that has or is reasonably likely to have a material adverse effect
on the value of any of the Collateral or that has, or would reasonably be
expected to result in, a Material Adverse Effect; and
(d) Termination of Voting Rights. At any time when Grantor is in
default under this Agreement as set forth in Section 4.1, Secured Party may
terminate any or all of Grantor's voting rights with respect to any or all
Equity Interests constituting Collateral, either by giving written notice of
such termination to Grantor or by transferring such Equity Interests into
Secured Party's name, and Secured Party shall thereupon have the sole right and
power to exercise such voting rights.
Section 3.7. Maintenance of Collateral. Grantor shall:
(i) not use or permit any Collateral to be used unlawfully or in
violation of any provision of this Agreement or any other Loan Document or any
applicable statute, regulation or ordinance or any policy of insurance covering
any such Collateral;
(ii) notify Secured Party of any change in Grantor's name, identity or
corporate structure at least 30 days prior to such change;
(iii) give Secured Party at least 30 days prior written notice of any
change in Grantor's chief place of business, chief executive office, places of
business, collateral locations or federal taxpayer ID) number or the office
where Grantor keeps its Chattel Paper and its records regarding any Accounts;
(iv) if the Lenders give value to enable Grantor to acquire rights in
or the use of any Collateral, use such value for such purposes; and
(v) pay promptly when due all material property and other taxes,
assessments and governmental charges or levies imposed upon any Collateral and
all Claims that are or might become secured by any Lien upon any Collateral,
except to the extent the same is being contested as permitted under the Credit
Agreement; provided, that, notwithstanding any other provision in the Loan
Documents, Grantor shall in any event pay such taxes, assessments, charges,
levies and Claims not later than five days prior to the date of any proposed
sale under any judgment, writ or warrant of attachment or other legal process
entered or filed against Grantor or any Collateral as a result of the failure to
make such payment.
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Section 3.8. Concerning Equipment and Inventory. Grantor will:
(i) cause the Equipment to be maintained and preserved in the same
condition, repair and working order as when new (ordinary wear and tear and
wornout and surplus equipment excepted) and in accordance with Grantor's past
practices and make or cause to be made all repairs, replacements and other
improvements in connection therewith that are necessary or desirable to such
end;
(ii) notify Secured Party of any loss or damage to any Equipment in an
amount exceeding $10,000;
(iii) keep correct and accurate records of the Inventory, itemizing
and describing the kind, type and quantity of Inventory, Grantor's cost therefor
and (where applicable) the current list prices for the Inventory, in the
ordinary course of Grantor's business;
(iv) if any Inventory is in possession or control of any agent,
carrier, warehouseman, bailee, consignee or processor, at any time when Grantor
is in default under this Agreement as set forth in Section 4.1, instruct such
Person to hold all such Inventory for the account of Secured Party and subject
to the instructions of Secured Party; and
(v) if so requested at any time by Secured Party or the Required
Lenders, promptly endorse and deliver to Secured Party each and all negotiable
Documents constituting Collateral.
Section 3.9. Concerning Accounts, Instruments and other Claims.
Grantor
(i) maintain accurate and complete records concerning the Accounts,
Instruments and all other Claims and the identity, name and address of each
account debtor or obligor thereon, hold and preserve such records in
safekeeping, permit representatives of Secured Party at any time during normal
business hours to inspect, copy and make abstracts from such records, and render
to Secured Party, at Grantor's cost and expense, such clerical and other
assistance as may be reasonably requested with regard thereto,
(ii) if so requested at any time by Secured Party or the Required
Lenders, certify and deliver to Secured Party complete and correct copies of
each contract or agreement constituting Collateral,
(iii) continue to collect, at Grantor's expense, all amounts due or to
become due to Grantor under Accounts, Instruments and other Claims and, in
connection therewith take such action as Grantor (or, whenever Grantor is in
default under this Agreement as set forth in Section 4.1, as Secured Party or
the Required Lenders) may reasonably deem necessary or advisable to enforce
collection of amounts due or to become due to thereunder; provided, that Secured
Party shall have the right at any time when Grantor is in default under this
Agreement as set forth in Section 4.1 (A) to notify the account debtors or
obligors under any or all Accounts, Instruments or other Claims of the
assignment of such Accounts, Instruments or Claims to Secured Party and to
direct such account debtors or obligors to make payment of all amounts due
14
or to become due to Grantor thereunder directly to Secured Party, (B) to notify
each Person maintaining a lockbox or similar arrangement to which account
debtors or obligors under any Accounts, Instruments or other Claims have been
directed to make payment to remit all amounts representing collections on checks
and other payment items from time to time sent to or deposited in such lockbox
or other arrangement directly to Secured Party and (C) at the expense of
Grantor, to demand payment of any Accounts, Instruments and Claims and enforce
collection thereof by legal proceedings in any lawful manner and to extend,
renew adjust, settle or compromise the amount or payment thereof, in the same
manner and to the same extent as Grantor might have done, and
(iv) if Secured Party at any time exercises any of the rights
described in Section 3.5 or the proviso in Section 3.9(iii), (A) segregate from
all other funds and hold in trust for Secured Party and immediately deliver to
Secured Party (in the identical form received) all amounts and proceeds
(including checks and other instruments) received by Grantor in respect of any
and all Accounts, Instruments and other Claims, and (B) not adjust, settle or
compromise the amount or payment of any Account or Claim, or release wholly or
partly any account debtor or obligor thereon, or allow any credit or discount
thereon.
Section 3.10. Substituted Performance. Secured Party may at any time
(but shall not be obligated to) (a) perform any of the obligations of Grantor
under this Agreement if Grantor fails to perform such obligation within three
Business Days (or, in the case of insurance, within one Business Day) after
written demand by Secured Party and (b) make any payments and do any other acts
which Secured Party or the Required Lenders may deem reasonably necessary or
desirable to protect Secured Party's security interests in the Collateral,
including the right to pay, purchase, contest or compromise any Lien that
attaches or is asserted against any Collateral, to procure insurance, and to
appear in and defend any action or proceeding relating to any Collateral, and
Grantor agrees promptly to reimburse Secured Party for all payments made by
Secured Party in doing so, together with interest thereon at the rate then
applicable to the Loans, all reasonable attorneys' fees and disbursements
incurred by Secured Party in connection therewith, whether or not suit is
brought, and all other reasonable costs and expenses related thereto.
ARTICLE IV.
DEFAULT; REMEDIES
Section 4.1. Default. Grantor shall be in default under this Agreement
(a) whenever any Event of Default has occurred and is continuing (without regard
to whether or to what degree Grantor individually may have caused, participated
in, or had any knowledge of the occurrence of such Event of Default) and (b) at
all times after the Loans have become due and payable, whether at maturity, upon
acceleration pursuant to Section 8 of the Credit Agreement or otherwise.
Section 4.2. Remedies upon Default. At any time when Grantor is in
default under this Agreement as set forth in Section 4.1, Secured Party may
exercise and enforce, in any order, (a) each and all of the rights and remedies
available to a secured party upon default under
15
the Uniform Commercial Code or other applicable law, (b) each and all of the
rights and remedies available to it under the Credit Agreement or any other Loan
Document and (c) each and all of the following rights and remedies:
(a) Collection Rights. Without notice to Grantor or any other Loan
Party, Secured Party may notify any or all account debtors and obligors on any
Accounts, Instruments or other Claims constituting Collateral of Secured Party's
security interests therein and may direct, demand and enforce payment thereof
directly to Secured Party.
(b) Taking Possession. Secured Party may (i) enter upon any and all
premises owned or leased by Grantor where Collateral is located (or believed by
Secured Party to be located), with or without judicial process and without any
obligation to pay rent, (ii) prior to the disposition of the Collateral, store,
process, repair or recondition the Collateral or otherwise prepare the
Collateral for disposition in any manner to the extent Secured Party deems
appropriate, (iii) take possession of Grantor's premises or place custodians in
exclusive control thereof, remain on such premises and use the same and any of
Grantor's equipment for the purpose of completing any work in process or
otherwise preparing the Collateral for sale or selling or otherwise Transferring
the Collateral, (iv) take possession of all items of Collateral that are not
then in its possession, either upon such premises or by removal from such
premises, and (v) require Grantor or the Person in possession thereof to deliver
such Collateral to Secured Party at one or more locations designated by Secured
Party and reasonably convenient to it and Grantor.
(c) Foreclosure. Secured Party may sell, lease, license or otherwise
dispose of or Transfer any or all of the Collateral or any part thereof in one
or more parcels at public sale or in private sale or transaction, on any
exchange or market or at Secured Party's offices or on Grantor's premises or at
any other location, for cash, on credit or for future delivery, and may enter
into all contracts necessary or appropriate in connection therewith, without any
notice whatsoever unless required by law. Where permitted by law, one or more of
the Beneficiaries may be the purchasers at any such sale and in such event, if
such bid is made by all of the Lenders or by all of the Holders of Secured
Obligations or otherwise whenever a credit bid is expressly permitted under the
Credit Agreement or approved in writing by the Administrative Agent and all of
the Lenders, the Beneficiaries bidding at such sale may bid part or all of the
Obligations owing to them without necessity of any cash payment on account of
the purchase price, even though any other purchaser at such sale is required to
bid a purchase price payable in cash. Grantor agrees that at least 10 calendar
days' written notice to Grantor of the time and place of any public sale or the
time after which any private sale is to be made shall be commercially
reasonable. The giving of notice of any such sale or other disposition shall not
obligate Secured Party to proceed with the sale or disposition, and any such
sale or disposition may be postponed or adjourned from time to time, without
further notice.
(d) Use of Intellectual Property. Secured Party may, on a royalty free
basis, use and license use of any trademark, trade name, trade style, copyright,
patent or technical knowledge or process owned, held or used by Grantor in
respect of any Collateral as to which any right or remedy of Secured Party is
exercised or enforced. In addition, each Holder of any
16
Secured Obligation may exercise and enforce such rights and remedies for the
collection of such Secured Obligation as may be available to it by law or
agreement.
Section 4.3. Waivers by Grantor. Grantor hereby irrevocably waives, to
the fullest extent permitted by law, (a) all rights of redemption from any
foreclosure sale, (b) the benefit of all valuation, appraisal, exemption and
moratorium laws, (c) all rights to notice or a hearing prior to the exercise by
Secured Party of its right to take possession of any Collateral, whether by self
help or by legal process and any right to object to the Secured Party taking
possession of any Collateral by self help, (d) if Secured Party seeks to obtain
possession of any Collateral by replevin, claim and delivery, attachment, levy
or other legal process, (i) any notice or demand for possession prior to the
commencement of legal proceedings, (ii) the posting of any bond or security in
any such proceedings, and (iii) any requirement that Secured Party retain
possession and not dispose of any Collateral until after a trial or final
judgment in such proceedings.
Section 4.4. Standard of Care. The powers conferred on Secured Party
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the exercise of
reasonable care in the custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, Secured Party shall
have no duty as to any Collateral or as to the taking of any necessary steps to
preserve rights against prior parties or to protect, preserve, vote or exercise
any rights pertaining to any Collateral. Secured Party shall be deemed to have
exercised reasonable care in the custody and preservation of Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which Secured Party accords its own property or if it selects, with reasonable
care, a custodian to hold such Collateral on its behalf.
Section 4.5. Application of Proceeds. Except as expressly provided
elsewhere in this Agreement, all proceeds received by Secured Party in respect
of any sale of, collection from, or other realization upon all or any part of
the Collateral may, in the discretion of Secured Party, be held by Secured Party
as Collateral for, or then, or at any other time thereafter, applied in full or
in part by Secured Party against, the Secured Obligations in the following order
of priority:
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, including expenses of Secured Party and
the reasonable fees and disbursements of its agents, consultants and
counsel, and all other expenses, liabilities and advances made or incurred
by Secured Party in connection therewith, and all amounts for which Secured
Party is entitled to indemnification hereunder and all advances made by
Secured Party hereunder for the account of Grantor, and to the payment of
all costs and expenses paid or incurred by Secured Party in connection with
the exercise of any right or remedy hereunder, all in accordance with
Section 4.6;
SECOND: To the payment of all other Secured Obligations (for the
ratable benefit of the holders thereof) then due and payable; and
17
THIRD: To the payment to or upon the order of the Grantor, or to
whomsoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, of any surplus then remaining from such
proceeds.
Section 4.6. Indemnity and Expenses.
(a) Indemnity. Grantor will defend, indemnify and hold harmless
Secured Party and each other Beneficiary from and against any and all claims,
losses and liabilities in any way relating to, growing out of or resulting from
this Agreement and the transactions contemplated hereby (including enforcement
of any interest, right or remedy created hereby), except to the extent such
claims, losses or liabilities are directly attributable to Secured Party's or
such other Beneficiary's gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction.
(b) Expenses. Grantor will pay to Secured Party upon demand the amount
of any and all reasonable costs and expenses, including the reasonable fees and
expenses of its counsel and of any advisors, consultants, experts and agents,
that Secured Party may incur in connection with (i) the administration of this
Agreement, (ii) the custody, preservation, use or operation of, or the sale of,
collection from, or other realization upon, any of the Collateral, (iii) the
exercise or enforcement of any of the interests, rights or remedies of Secured
Party hereunder, (iv) the failure by Grantor to perform or observe any of the
provisions hereof, or (v) the proof, allowance, protection, administration,
treatment, discharge, collection or enforcement of any of the Secured
Obligations or any of the Collateral in any bankruptcy case or insolvency,
reorganization, receivership, dissolution or liquidation proceeding of or
affecting any Loan Party.
Section 4.7. Surplus, Deficiency. Any surplus proceeds of any sale or
other disposition by Secured Party of any Collateral remaining after Discharge
of the Credit Agreement and after all Secured Obligations are paid in full and
in cash shall be paid over to Grantor or to whomever may be lawfully entitled to
receive such surplus or as a court of competent jurisdiction may direct, but
prior to Discharge of the Credit Agreement, such surplus proceeds may be
retained by Secured Party and held as Collateral until Discharge of the Credit
Agreement. The Borrower and each Guarantor shall be and remain liable for any
deficiency.
Section 4.8. Information Related to the Collateral. If Secured Party
determines to sell or otherwise Transfer any Collateral, Grantor shall, and
shall cause any Person controlled by it to, furnish to Secured Party all
information Secured Party may request that pertains or could pertain to the
value or condition of the Collateral or that would or might facilitate such sale
or Transfer. Secured Party shall have the right, notwithstanding any
confidentiality obligation or agreement otherwise binding upon it, freely to
disclose such information, and any and all other information (including
confidential information) pertaining in any manner to the Collateral or the
assets, liabilities, results of operations, business or prospects of any Loan
Party, to any Person that Secured Party in good faith believes to be a potential
or prospective purchaser in such sale or Transfer, without liability for any
disclosure, dissemination or use that may be made as to such information by any
such Person.
18
Section 4.9. Sale Exempt from Registration. Secured Party shall be
entitled at any such sale or other Transfer, if it deems it advisable to do so,
to restrict the prospective bidders or purchasers to Persons who will provide
assurances satisfactory to Secured Party that the Collateral may be offered and
sold to them without registration under the Securities Act of 1933, as amended,
and without registration or qualification under any other applicable state or
federal law. Upon the consummation of any such sale, Secured Party shall have
the right to assign, transfer and deliver to the purchaser or purchasers thereof
the Collateral so sold. Secured Party may solicit offers to buy the Collateral,
or any part of it, from a limited number of investors deemed by Secured Party,
in its good faith judgment or in good faith reliance upon advice of its counsel,
to meet the requirements to purchase securities under Regulation D promulgated
under the Securities Act of 1933 as then in effect (or any other regulation of
similar import). If Secured Party solicits such offers from such investors, then
the acceptance by Secured Party of the highest offer obtained from any of them
shall be deemed to be a commercially reasonable method of disposition of the
Collateral.
Section 4.10. Rights and Remedies Cumulative. The rights provided for
in this Agreement and the other Loan Documents are cumulative and are not
exclusive of any other rights, powers or privileges or remedies provided by law
or in equity, or under any other instrument, document or agreement. Secured
Party may exercise and enforce each right and remedy available to it either
before or concurrently with or after, and independently of, any exercise or
enforcement of any other right or remedy of Secured Party or any Holder of any
Secured Obligation against any Person or property. All such rights and remedies
shall be cumulative, and no one of them shall exclude or preclude any other.
Section 4.11. No Direct Enforcement by Beneficiaries. Secured Party
may freely exercise and enforce any and all of its rights and remedies
hereunder, for the benefit of the Beneficiaries. No Beneficiary, other than
Secured Party, shall have any independent right to collect, take possession of,
foreclose against or otherwise enforce the security interests granted hereby.
ARTICLE V.
CONCERNING THE SECURED PARTY
Section 5.1. Agent for Holders. Secured Party is executing and
delivering this Agreement, and accepting the security interests, rights,
remedies, powers and benefits conferred upon Secured Party hereby, both for its
own benefit and as agent for all present and future Holders of Secured
Obligations. The provisions of the Credit Agreement and all rights, powers,
immunities and indemnities granted to Secured Party under the Credit Agreement
or any other Loan Document, or under any separate agreement made by or otherwise
binding upon any Holder of Secured Obligations, shall apply in respect of such
execution, delivery and acceptance and in respect of any and all actions taken
or omitted by Secured Party under, in connection with or in respect of this
Agreement.
Section 5.2. Administrative Agent shall be the Secured Party. Secured
Party shall at all times be the same Person that is the Administrative Agent
under the Credit Agreement.
19
Written notice of resignation by the Administrative Agent pursuant to Section
9.9 of the Credit Agreement shall also constitute notice of resignation as
Secured Party under this Agreement; and appointment of a successor
Administrative Agent pursuant to Section 9.9 of the Credit Agreement shall also
constitute appointment of a successor Secured Party under this Agreement. Upon
the acceptance of any appointment as Administrative Agent under Section 9.9 of
the Credit Agreement by a successor Administrative Agent, the successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Secured Party under this
Agreement, and the retiring Secured Party under this Agreement shall promptly
(a) transfer to such successor Secured Party all sums, securities and other
items of Collateral held hereunder, together with all records and other
documents necessary or appropriate in connection with the performance of the
duties of the successor Secured Party under this Agreement, and (b) execute and
deliver to such successor Secured Party such amendments to financing statements,
and take such other actions, as may be necessary or appropriate in connection
with the assignment to such successor Secured Party of the security interests
created hereunder, whereupon such retiring Secured Party shall be discharged
from its duties and obligations under this Agreement. After any retiring
Administrative Agent's resignation hereunder as Secured Party, the provisions of
this Agreement shall inure to its benefit as to any actions taken or omitted to
be taken by it under this Agreement while it was Secured Party hereunder.
Section 5.3. No Assurances or Liability. Secured Party makes no
statement, promise, representation or warranty whatsoever, and shall have no
liability whatsoever, to any Holder of any Secured Obligations as to the
authorization, execution, delivery, legality, enforceability or sufficiency of
this Agreement or as to the creation, Perfection, priority, or enforceability of
any security interests granted hereunder or as to existence, ownership, quality,
condition, value or sufficiency of any Collateral or as to any other matter
whatsoever.
Section 5.4. Holders Bound. Except where the consent of others may be
required pursuant to the express provisions of Section 10.1 of the Credit
Agreement, any modification, amendment, waiver, release, termination or
discharge of any security interest, right, remedy, power or benefit conferred
upon Secured Party that is effectuated in a writing signed by Secured Party
shall be binding upon all Holders of Secured Obligations if it is (i) authorized
pursuant to any provision of the Credit Agreement or any other Loan Document,
(ii) required by law or (iii) authorized or ratified either (A) by the Required
Lenders or (B) by the Holders of at least a majority in outstanding principal
amount of the Secured Obligations (other than contingent or unliquidated Secured
Obligations).
ARTICLE VI.
MISCELLANEOUS PROVISIONS
Section 6.1. Continuing Security Interests; Release. This Agreement
creates continuing security interests in the Collateral and shall (a) remain in
full force and effect until the Discharge of the Credit Agreement, (b) be
binding upon Grantor and its successors and assigns, and (c) inure, together
with the rights and remedies of Secured Party hereunder, to the benefit of and
be enforceable by Secured Party and its successors, transferees and assigns
acting in the capacity of Administrative Agent under the Credit Agreement.
Subject to and upon Discharge of
20
the Credit Agreement, or other release permitted hereunder or under the Credit
Agreement Secured Party shall (within a reasonable time after it receives from
Grantor a written request for release of the Collateral) execute and deliver to
Grantor an instrument in form and substance satisfactory to Grantor releasing
(on a quitclaim basis, without recourse, without warranty (except as to Secured
Party's actions), and without any liability whatsoever) any security interest
Secured Party may then hold in the Collateral and thereupon Secured Party shall,
at Grantor's expense, execute and deliver to Grantor such UCC termination
statements and other like documents as Grantor may reasonably request to
evidence such release.
Section 6.2. Statute of Limitations. Grantor hereby waives the right
to plead any statute of limitations as a defense to any Secured Obligation to
the fullest extent permitted by law.
Section 6.3. Amendments; Etc. No amendment or waiver of any provision
of this Agreement, or consent to any departure by Grantor herefrom, shall in any
event be effective unless the same shall be in writing and signed by Secured
Party, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given.
Section 6.4. Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of Secured Party in the exercise of any power,
right or privilege hereunder 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 any
other or further exercise thereof or of any other power, right or privilege. All
rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
Section 6.5. Notices. Any and all notices and communications to be
given to Grantor or Secured Party may be given by courier service, personal
service, mailing the same, postage prepaid, or by telex, facsimile transmission
or cable to each such party at its address set forth in the Credit Agreement, on
the signature pages hereof or to any other address as any party hereto may
specify by written notice to the other parties, and such communication shall be
deemed to have been given when delivered in person or by courier service, upon
receipt of telefacsimile or telex, or three Business Days after depositing it in
the United States mail with postage prepaid and properly addressed.
Section 6.6. Severability. In case any provision in or obligation
under this Agreement 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.
Section 6.7. 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.
Section 6.8. Governing Law; Terms. THIS AGREEMENT SHALL BE GOVERNED
BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
21
WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE
NEW YORK UNIFORM COMMERCIAL CODE PROVIDES THAT THE PERFECTION OF THE SECURITY
INTERESTS HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
NEW YORK.
Notwithstanding the foregoing, the creation, Perfection, priority and
enforcement of a security interest in any deposit account shall be governed by
the laws of the state in which the depository bank, or branch bank, maintaining
such deposit account is located.
Section 6.9. Consent to Jurisdiction and Service of Process. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST GRANTOR ARISING OUT OF OR RELATING TO THIS
AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION
IN THE STATE OF NEW YORK. BY EXECUTION AND DELIVERY OF THIS AGREEMENT GRANTOR
ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS. Grantor hereby 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 Grantor at its
address provided in Section 6.5, such service being hereby acknowledged by
Grantor to be sufficient for personal jurisdiction in any action against Grantor
in any such court and to be otherwise effective and binding service in every
respect. Nothing herein shall affect the right to serve process in any other
manner permitted by law or shall limit the right of Secured Party to bring
proceedings against Grantor in the courts of any other jurisdiction.
Section 6.10. Waiver of Jury Trial. EACH OF THE PARTIES TO THIS
AGREEMENT HEREBY AGREES TO WAIVE ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. 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 without limitation contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims. Grantor and Secured Party
each acknowledge that this waiver is a material inducement for Grantor and
Secured Party to enter into a business relationship, that Grantor and Secured
Party have 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,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement
may be filed as a written consent to a trial by the court.
22
Section 6.11. Counterparts: This Agreement may be executed in one or
more counterparts and by different parties hereto in separate 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.
Signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
[Remainder of page intentionally left blank]
23
IN WITNESS WHEREOF, Grantor and Secured Party have executed this
Agreement as of the date first written above.
U.S.I. HOLDINGS CORPORATION
By: /s/ Xxxxxxx Xxxxxxx
---------------------------------------
Title: Senior Vice President & Chief
Financial Officer
Accepted as of the day
of September 17, 1999
CREDIT LYONNAIS CAYMAN ISLAND BRANCH,
as Secured Party
By: /s/ W. Xxxxxxx Xxxxxx
-------------------------------
Title: Authorized Signatory
SCHEDULE 3.1(B) TO
BORROWER PLEDGE AGREEMENT
-------------------------
Issuer No. of Shares
Stock Being Pledged
Dallas National Corp. 1,000
USI Insurance Services Corp. 10
Notes:Being Pledged Original Principal Amount
Xxxxxxx X. Xxxxx $150,000.00
Xxxxxxx X. Xxxxx $ 50,000.00
Xxxx Xxxxxx $ 69,834.73
Xxxxx X. Xxxxxxxx $ 49,841.22
Xxxx X. Xxxxxxxx $ 27,934.73
Xxxxxx, Xxxxxx & Xxxxxxx,Inc. amount on Borrower's books
Xxxxxxxx, Galt & Newlands, Inc. amount on Borrower's books
San Jacinto Agency, Inc. $ 1,583,350
San Jacinto Agency, Inc. $ 504,000
X.X. Xxxxxxx & Sons, Inc. $ 1,787,500
X.X. Xxxxxxx & Sons, Inc. $ 325,000
Xxxxxx X. Xxxx,Incorporated $ 529,894
USIS-AWH, INC. $ 4,300,000
Xxxx Insurance Consultants, Inc. amount on Borrower's books
Xxxxxxxxxx Xxxxxx, Inc. $ 150,000
Xxxxxx & Xxxxxxx, Inc. $ 3,886,698
Strategic Benefit Planning Corporation $ 5,292,702
Progressive Plan Administors, Inc. amount on Borrower's books
Xxxxxx Xxxx & Son, Inc. amount on Borrower's books
USI MidAtlanic, Inc. (formerly XxXxxx & Gallen, Inc.) amount on Borrower's books
Benefit Strategies, Inc. amount on Borrower's books
Strategic Benefits Planning Corporation amount on Borrower's books
Advanced Benefits Insurance Marketing Corporation $ 773,950
Bay Benefits and Insurance Marketing, Inc. $ 339,550
USI-C Partnership, L.P. $ 790,000
Xxxxxxxxx and Xxxxxx, Inc. $ 7,000,000
USIS KOL Acquisition, Inc. $ 2,537,500
Xxxxxxxxx-Xxxxxxx, Inc. and Subsidiaries $ 5,696,460
X.X. Xxxxxx & Co., Inc. $ 7,075,000
Coastal Insurance Services, Inc. $ 1,950,000
X.X. Xxxxx Administrative Services, Inc. $ 6,300,000
Select Providers, Inc. $ 4,200,000
Benefits Advisors of New England, Inc. $ 1,800,000
Xxxxxxx Xxxx & Company, Inc. $ 4,213,359
The Hyatt Agency, Inc. $1,198,750
ANCO Corporation $1,596,000
Coastal Insurance Services, Inc. $1,178,000
Coastal Insurance Services, Inc. $1,010,000
Triwest Insurance Services, Inc. $1,090,210
USI Consulting Group of New York, Inc. $5,460,688
Xxxxxxxxx & Xxxxxxxx, Incorporated $ 326,000
Strategic Benefit Planning Corporation $2,162,160
Xxxxxxx, Xxxxxx & Associates Insurance Agency, Inc. $3,852,660
Coastal Insurance Services, Inc. $1,237,000
USI Insurance Services Corp. amount on Borrower's books
Custom Benefit Programs, Inc. $4,047,900
Association Growth Enterprises, Incorporated amount on Borrower's books
Benefit Plan Administrators, Inc. amount on Borrower's books
X.X. Xxxxx Administrative Services, Inc. amount on Borrower's books
Benefit Strategics, Inc. amount on Borrower's books
USI Northeast, Inc. amount on Borrower's books
Xxxxxxxx Galt & Newlands, Inc. amount on Borrower's books
Xxxxxxxxx & Xxxxxxxx, Incorporated amount on Borrower's books
International Benefit Services Corporation amount on Borrower's books
The Insurance Exchange, Inc. amount on Borrower's books
Xxxx Insurance Consultants, Inc. amount on Borrower's books
Kolisch Insurance USI, Inc. amount on Borrower's books
Inline Financial Group-USI, Inc. amount on Borrower's books
USI of Illinois, Inc. amount on Borrower's books
San Jancinto Agency, Inc. amount on Borrower's books
USI California Insurance Services, Inc. amount on Borrower's books
USI of Southern California Insurance Services, Inc. amount on Borrower's books
WRIMS, Corp. amount on Borrower's books
X. X. Xxxxxx & Co., Inc. amount on Borrower's books
USI Prescription Benefits Management Company amount on Borrower's books
Xxxxxx X. Xxxx, Inc. amount on Borrower's books
X.X. Xxxxxxx & Sons, Inc. amount on Borrower's books
SCHEDULE 3.1(C) TO
BORROWER PLEDGE AGREEMENT
-------------------------
INTELLECTUAL PROPERTY
None.
SCHEDULE 3.1(D) TO
BORROWER PLEDGE AGREEMENT
-------------------------
OTHER INVESTMENT PROPERTY
None
SCHEDULE 3.1(E) TO
BORROWER PLEDGE AGREEMENT
-------------------------
LOCATION OF COLLATERAL
00 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
SCHEDULE 3.1(G) TO
BORROWER PLEDGE AGREEMENT
-------------------------
LOCATION OF BORROWER
00 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, XX 00000
SCHEDULE 3.1(H) TO
BORROWER PLEDGE AGREEMENT
-------------------------
Other Names
None.
SCHEDULE 3.1(I) TO
BORROWER PLEDGE AGREEMENT
-------------------------
TAXPAYER ID NUMBER
U.S.I. Holdings Corporation 00-0000000
USI Insurance Services Corp. 00-0000000
EXHIBIT B-2
[CONFORMED AS EXECUTED]
================================================================================
SUBSIDIARY PLEDGE AND SECURITY AGREEMENT
dated as of
September 17, 1999
USI INSURANCE SERVICES CORP.,
as Grantor
and
CREDIT LYONNAIS CAYMAN ISLAND BRANCH,
as Secured Party
================================================================================
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I.
DEFINITIONS...............................................................1
Section 1.1 Certain Terms...............................................1
Section 1.2 Terms Defined in Credit Agreement...........................3
Section l.3 Terms Defined in the Uniform Commercial Code................4
Section 1.4 Terms Generally.............................................4
ARTICLE 11.
THE SECURITY INTERESTS....................................................5
Section 2.1 Grant of Security Interests.................................5
Section 2.2 Delivery of Instruments, Notes and Securities...............7
Section 2.3 Investment Property.........................................7
Section 2.4 Registration of Pledge......................................7
Section 2.5 Financing Statements........................................8
Section 2.6 Secured Party Filing........................................8
Section 2.7 Further Assurances..........................................8
Section 2.8 Power of Attorney...........................................8
Section 2.9 Survival of Security Interests.............................10
Section 2.10 Reinstatement of Security Interests........................10
Section 2.11 Grantor Remains Liable.....................................10
ARTICLE III.
REPRESENTATIONS, WARRANTIES AND COVENANTS................................11
Section 3.1 The Collateral.............................................11
Section 3.2 Maintenance of Perfection..................................12
Section 3.3 Defense of Collateral......................................12
Section 3.4 Transfer or Encumbrance....................................12
Section 3.5 Payments, Dividends and Distributions......................12
Section 3.6 Voting Rights..............................................13
Section 3.7 Maintenance of Collateral..................................13
Section 3.8 Concerning Equipment and Inventory.........................14
Section 3.9 Concerning Accounts, Instruments and other Claims..........14
Section 3.10 Substituted Performance....................................15
ARTICLE IV.
DEFAULT; REMEDIES........................................................16
Section 4.1 Default....................................................16
Section 4.2 Remedies upon Default......................................16
Section 4.3 Waivers by Grantor.........................................17
(i)
Page
----
Section 4.4 Standard of Care...........................................17
Section 4.5 Application of Proceeds....................................17
Section 4.6 Indemnity and Expenses.....................................18
Section 4.7 Surplus, Deficiency........................................18
Section 4.8 Information Related to the Collateral......................18
Section 4.9 Sale Exempt from Registration..............................19
Section 4.10 Rights and Remedies Cumulative.............................19
Section 4.11 No Direct Enforcement by Beneficiaries.....................19
ARTICLE V.
CONCERNING THE SECURED PARTY.............................................19
Section 5.1 Agent for Holders..........................................19
Section 5.2 Administrative Agent shall be the Secured Party............20
Section 5.3 No Assurances or Liability.................................20
Section 5.4 Holders Bound..............................................20
ARTICLE VI.
MISCELLANEOUS PROVISIONS.................................................21
Section 6.1 Continuing Security Interests; Release.....................21
Section 6.2 Statute of Limitations.....................................21
Section 6.3 Amendments; Etc............................................21
Section 6.4 Failure or Indulgence Not Waiver; Remedies Cumulative......21
Section 6.5 Notices....................................................21
Section 6.6 Severability...............................................21
Section 6.7 Headings...................................................22
Section 6.8 Governing Law; Terms.......................................22
Section 6.9 Consent to Jurisdiction and Service of Process.............22
Section 6.10 Waiver of Jury Trial.......................................22
Section 6.11 Counterparts...............................................23
SCHEDULES
Schedule 3.1(b)- Interest Owned in Subsidiaries
Schedule 3.1(c)- Intellectual Property
Schedule 3.1(d)- Investment Property
Schedule 3.1(e)- Location of Equipment and Inventory
Schedule 3.1(g)- Location of Subsidiary
Schedule 3.1(h)- Legal Name of Subsidiary
Schedule 3.1(i)- Taxpayer ID Number
(ii)
SUBSIDIARY PLEDGE AND SECURITY AGREEMENT
This SUBSIDIARY PLEDGE AND SECURITY AGREEMENT (as amended,
supplemented or otherwise modified from time to time, this "Agreement") is dated
as of September 17, 1999 and entered into by and between USI INSURANCE SERVICES
CORP., a Delaware corporation.("Grantor"), and CREDIT LYONNAIS CAYMAN ISLAND
BRANCH, in its capacity as Administrative Agent under the Credit Agreement
referred to below ("Secured Party"), for the benefit of the Persons that now are
or at any time hereafter become party as a Lender to the Credit Agreement
described herein (the "Lenders"), CREDIT LYONNAIS CAYMAN ISLAND BRANCH, in its
individual capacity, as Administrative Agent and Lender, THE CHASE MANHATTAN
BANK, as Syndication Agent and Lender (the "Syndication Agent") and all other
present and future Holders of any of the Secured Obligations described herein
(all, collectively, including the Lenders, the Administrative Agent and
Syndication Agent, the "Beneficiaries").
Recitals
The Grantor has requested that credit be extended to U.S.I. Holdings
Corporation, a Delaware corporation, on terms and conditions set forth in that
certain Credit Agreement dated as of September 17, 1999, among Grantor, Secured
Party and the other Beneficiaries party thereto.
To induce the Beneficiaries to enter into the Credit Agreement, and in
consideration thereof and of any and all credit at any time extended thereunder,
the Grantor has agreed to grant to Secured Party, for the benefit of the
Beneficiaries, the collateral security described herein as security for the
payment of the Secured Obligations on the terms herein set forth.
Accordingly, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Grantor hereby agrees with Secured Party for the benefit of the
Beneficiaries as follows:
ARTICLE I.
DEFINITIONS
Section 1.1 Certain Terms. As used in this Agreement, the following
terms have the meanings specified below:
"Bankruptcy Code" means Title 11 of the United States Code, as from
time to time amended.
"Claim" has the meaning set forth in the Bankruptcy Code.
"Collateral" has the meaning set forth in Section 2.1
"Credit Agreement" means the Credit Agreement described above as such
agreement from time to time may be modified, amended, restated, extended,
refinanced or replaced in any manner or in any respect (including so as to
reduce or increase the amount or cost of credit extended thereunder or to
shorten or extend the time of payment thereunder or in any other manner change
the amount or terms of credit extended to the Subsidiary or the identity, rights
or obligations of any party thereto).
"Discharge of the Credit Agreement" means that all obligations of the
Lenders to extend credit under the Credit Agreement (including any obligation to
issue Letters of Credit) have expired or been terminated and have been
absolutely, unconditionally and irrevocably discharged and all Obligations at
any time created, incurred or outstanding (except Obligations for
indemnification which are then contingent and in respect of which no claim or
demand has then been made) have been fully and finally paid in cash.
"Equity Interests" means, with respect to any Person, any capital
stock of such Person or membership interests, partnership interests (whether
general or limited) or other equity interests in such Person, regardless of
type, class, preference or designation, and all warrants, options, purchase
rights, conversion or exchange rights, voting rights, calls or claims of any
character with respect thereto, in each case whether outstanding on the date of
this Agreement or issued or granted at any time thereafter.
"Holder" means, in respect of any Secured Obligation, the Person
entitled to and enforce payment thereof and specifically includes each Lender
and Administrative Agent.
"Notes" means any and all intercompany notes and all other promissory
notes from time to time issued to, or held by, the Grantor.
"Obligations" means all direct or indirect debts, liabilities and
obligations of the Subsidiary or any other Loan Party of any and every type and
description at any time arising under or in connection with the Credit Agreement
or any other Loan Document, to Administrative Agent, Syndication Agent, any
Lender, any Person entitled to indemnification pursuant to the Credit Agreement
or any other Loan Document or to any other Person, in each case whether now
outstanding or hereafter created or incurred, whether or not the right of such
Person to payment in respect of any such debts, liabilities or obligations is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured and
whether or not such claim is discharged, stayed or otherwise affected by any
bankruptcy case or insolvency, reorganization, receivership, dissolution or
liquidation proceeding, and shall include (a) all liabilities of the Subsidiary
for principal of, and interest on, any and all Loans at any time outstanding
under the Credit Agreement, (b) all liabilities of the Subsidiary under the Loan
Documents for any fees, costs, taxes, expenses, indemnification and other
amounts payable thereunder, (c) all reimbursement obligations of the Borrower
and Unpaid Drawings with respect to Letters of Credit under the Credit
Agreement, (d) all liabilities of the Borrower under or in respect of Interest
Rate Protection Agreements entered into with a Lender or any affiliate of a
Lender (whether or not such Lender later ceases to be a Lender under the Credit
Agreement), (e) all liabilities of the Guarantor under the Subsidiary Guaranty,
and (f) all other liabilities of the Subsidiary or any other Loan Party under or
in respect
-2-
of any of the Loan Documents or any of the transactions contemplated thereby and
specifically includes any and all present and future "Obligations" as such term
is defined in the Credit Agreement.
"Perfected" means, as to the security interests granted to Secured
Party in Section 2.1, that (a) a creditor on a simple contract cannot acquire a
judicial lien that is superior to such security interests and (b) if a case were
pending under the Bankruptcy Code in which Grantor is the debtor, such security
interests would be a Lien that is Perfected in such bankruptcy case; and
"Perfect" and "Perfection" have correlative meanings.
"Post-Petition Interest and Expense Claims" means any and all claims
of any Holder (a) for interest on any Obligations determined for any period of
time occurring after the commencement of any case under the Bankruptcy Code or
any other insolvency, reorganization, receivership, dissolution or liquidation
proceeding at the contract rate (including any applicable post-default increase
therein) set forth in the Credit Agreement or any other Loan Document or (b) for
cost and expense reimbursements or indemnification on the terms set forth in the
Credit Agreement or any other Loan Document relating to costs and expenses
incurred and indemnification rights accrued at any time after the commencement
of any such case or proceeding, in each case to the extent such claim accrues or
becomes payable in accordance with the provisions of the Credit Agreement or
other Loan Documents (or would have accrued or become payable if enforceable or
allowable in such case or proceeding), whether or not such claim is enforceable,
allowable or allowed in such case or proceeding and even if such claim is
disallowed therein.
"Secured obligations" is defined in Section 2.1.
Section 1.2 Terms Defined in Credit Agreement. Unless the context
otherwise requires, the following terms used in this Agreement are used as
defined in the Credit Agreement:
Borrower
Business Day
Capital Stock
Default
Event of Default
Excluded Assets
Existing Investments
Governmental Authority
Guarantors
Lien
Loan Documents
Loan Parties
Loans
Material Adverse Effect
Net Proceeds
Person
Required Lenders
-3-
Security Documents
Subsidiary
Subsidiary Guaranty
Subsidiary Pledge and Security Agreement
Transfer
In addition, any other capitalized terms not otherwise defined herein shall have
the meaning given such terms in the Credit Agreement.
Section 1.3 Terms Defined in the Uniform Commercial Code. When
capitalized, the following terms used in this Agreement or the other Security
Documents have the meanings given to them in the Uniform Commercial Code, as in
effect in the State of New York on the date of this Agreement:
Accounts
Certificated Security
Chattel Paper
Commodity Account
Commodity Contract
Commodity Intermediary
Control
Documents
Equipment
Financial Asset
Fixtures
General Intangibles
Goods
Instruments
Inventory
Investment Property
Securities Account
Securities Intermediary
Security
Security Certificate
Security Entitlement
Uncertificated Security
Section 1.4 Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include," "includes" and "including" shall
be deemed to be followed by the phrase "without limitation." The word "will"
shall be construed to have the same meaning and effect as the word "shall."
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any
-4-
reference herein to any Person shall be construed to include such Person's
successors, transferees and assigns, (c) the words "herein," "hereof" and
"hereunder," and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement, and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, whether real, personal or mixed and of every
type and description.
ARTICLE II.
THE SECURITY INTERESTS
Section 2.1 Grant of Security Interests. As security for the payment
of the Obligations and all Post-Petition Interest and Expense Claims
(collectively, the "Secured Obligations"), Grantor hereby assigns to Secured
Party for the benefit of the Beneficiaries, and grants Secured Party for the
benefit of the Beneficiaries security interests in, all of Grantor's right,
title and interest in and to the following types or items of property, in each
case whether now or hereafter existing or owned by Grantor or in which Grantor
now owns or hereafter acquires an interest and wherever the same may be located
(collectively, the "Collateral"):
(i) all Inventory, including specifically all raw materials,
work-in-process, finished goods, supplies, materials, spare parts, Goods
held for sale or on lease or for lease or furnished or to be furnished
under contracts of service, merchandise inventory, rental inventory, and
returned or repossessed Goods and all rights to enforce return or
repossession by reclamation, stoppage in transit or otherwise,
(ii) all Equipment, including specifically all manufacturing,
printing, distribution, delivery, retailing, vending, data processing,
communications, office and other equipment in all of its forms, all
vehicles, all tools, dies, and molds, all Fixtures, all other Goods used or
bought for use primarily in a business and all other Goods except
Inventory,
(iii) all Accounts,
(iv) all Chattel Paper,
(v) all Documents,
(vi) all Instruments and all other Claims that are in any respect
evidenced or represented by any writing, including any promissory notes and
all other notes and all other writings evidencing or representing a Claim
against any Subsidiary of the Grantor or any other Person,
(vii) all Securities, whether constituting Certificated Securities or
Uncertificated Securities, all Notes, all Financial Assets, all Security
Entitlements, all Securities Accounts, all Commodity Contracts, all
Commodity Accounts, and all other Investment
-5-
Property, including specifically the Security Certificates described in
Schedule 3.1(b) and all other Equity Interests and all Existing
Investments, provided, however, that only 65% of the issued and outstanding
capital stock of foreign subsidiaries of the Grantor shall be pledged;
(viii) all money, cash and cash equivalents, including specifically
all deposit accounts and all certificates of deposit,
(ix) all General Intangibles, including specifically (a) the property
described on Schedule 3.1(c), (b) all registered and unregistered
trademarks and service marks and all trademark and service xxxx license
agreements to which Grantor is a party (whether as licensor or licensee)
and all Claims (including infringement claims) relating thereto, (c) all
patents and patent applications and all patent license agreements to which
Grantor is a party (whether as licensor or licensee) and all Claims
(including infringement claims) relating thereto, (d) all registered and
unregistered copyrights and all copyright license agreements to which
Grantor is a party (whether as licensor or licensee) and Claims (including
infringement claims) relating thereto, (e) all other intellectual property
in which Grantor has an interest, including proprietary research and
development, know-how, trade secrets, trade names, trade styles, license
agreements and user rights and Claims (including infringement claims)
relating thereto, (f) all customer lists and agreements, (g) all supplier
lists and agreements, (h) all employee and consultant lists, rights, and
agreements, (i) all computing, data and information processing and
communications programs, discs, designs, and information and the data and
other entries thereon, (j) all books, records, catalogs, back issues,
library rights and all manifestations and embodiments thereof, (k) all
rights and Claims arising under or in respect of the Credit Agreement or
any Loan Document, including rights and Claims against Secured Party or any
other Beneficiary, (l) all Net Proceeds, (m) all tax refunds, (n) all
policies of insurance and condemnation awards of every type and description
and the proceeds thereof, (o) all loans receivable, letters of credit,
bonds and undertakings, deferred purchase price or deferred purchase
consideration, consulting or non-competition payments and other
Indebtedness, liabilities and obligations receivable not constituting an
Account and not evidenced or represented by any Instrument, Chattel Paper
or Security, (p) all rights of recoupment, recourse, reimbursement,
subrogation, indemnity or contribution (including those arising under any
Guaranty or any payment thereon, and those arising on account of any other
agreement, transaction or event), (q) all other causes of action and Claims
of every type and description, whether fixed or contingent, liquidated or
not liquidated, accrued or not accrued, and all judgments, orders and
recoveries thereon, (r) all other agreements and contract rights of every
type and description and Claims thereon or relating in any manner thereto,
(s) all other rights, privileges, benefits, entitlements, franchises,
licenses and expectancies of every type and description, (t) all other
intangible property of every type and description, and (u) all goodwill
associated with any of the foregoing,
(x) all property that is at any time delivered to, or that is at any
time in the Control of, Secured Party,
-6-
together, in each case, with (a) all accessions thereto and products
and replacements thereof, (b) all guaranties, Liens and other forms of
collateral security therefor, and (c) all dividends, distributions, and payments
received thereon or in exchange or substitution therefor or upon Transfer
thereof, and (d) all other proceeds thereof,
except and excluding, however, each item of property that is an
Excluded Asset, for as long as it remains an Excluded Asset. All references in
this Agreement to any type of collateral described above in this Section 2.1
shall be deemed to exclude any Excluded Assets that would otherwise be included
therein.
Section 2.2 Delivery of Instruments, Notes and Securities. On the date
hereof or, if hereafter acquired, immediately upon acquisition thereof by
Grantor, without any notice from or demand by Secured Party, (a) Grantor shall
deliver to Secured Party Security Certificates and Notes described in Schedule
3.1(b) and all other Instruments (except checks received and collected in the
ordinary course of business) evidencing Indebtedness in excess of $10,000 and
Security Certificates at any time constituting Collateral, in each case in
suitable form for transfer by delivery or accompanied by duly executed
instruments of transfer, assignments in blank or with appropriate endorsements,
in form and substance reasonably satisfactory to Secured Party, and (b) Grantor
shall cause the issuer of each Uncertificated Security constituting Collateral
to take all actions required to give Secured Party "control" (as defined in the
applicable UCC) thereof, either upon original issuance or by registration of
transfer and shall executed and deliver all writings necessary to cause such
issuer to do so.
Section 2.3 Investment Property. Grantor will cause Secured Party's
security interests in Investment Property to be and remain continuously
Perfected by Control and, in addition, will cause such security interests to be
Perfected by filing. Grantor will not grant or permit any other security
interest or Lien upon any Investment Property constituting Collateral. If so
requested at any time by Secured Party or the Required Lenders as to any
Security Entitlement or Securities Account or any Commodity Contract or
Commodity Account that constitutes Collateral, Grantor will promptly cause each
Person who is a Securities Intermediary as to any such Security Entitlement or
Securities, Account and each Person who is a Commodity Intermediary as to any
such Commodity Contract or Commodity Account to deliver a written agreement
enforceable by Secured Party for the benefit of the Beneficiaries waiving and
releasing, and agreeing not to create, grant, accept or hold, any priority, pari
passu or junior security interest or Lien therein, except for Permitted Prior
and Pari-Passu Liens. Grantor will not cause or permit any Equity Interest in
any Subsidiary to be outstanding as an Uncertificated Security or to constitute
a Security Entitlement or be held in a Securities Account.
Section 2.4 Registration of Pledge. Secured Party may at any time when
any Event of Default is continuing and without any notice to any Loan Party or
any other Person, transfer to and register in Secured Party's name, as pledgee,
any and all Instruments and Investment Property constituting Collateral. Such
transfer and registration shall not foreclose or otherwise affect any rights or
interests of any Loan Party and shall not increase, restrict or reduce any of
Secured Party's rights and remedies. If after any such transfer and registration
Grantor remains entitled under Section 3.6 to exercise voting rights with
respect to Equity Interests included in such Investment Property, Secured Party
shall, at the written request of Grantor,
-7-
deliver to Grantor a revocable proxy or other instrument sufficient to permit
Grantor to exercise such voting rights to the extent permitted under Section
3.6.
Section 2.5 Financing Statements. Grantor will duly execute, deliver
and (subject to execution by Secured Party, where required by law) file duly
completed financing statements naming Grantor as debtor, naming Secured Party as
secured party, and covering the property described in Section 2.1, in the proper
filing office in each jurisdiction in which a financing statement is required
from time to time to be filed in order to ensure that the security interests
granted to Secured Party in Section 2.1 are at all times continuously Perfected,
to the extent that, under applicable law, such security interests can be
Perfected by the filing of a financing statement.
Section 2.6 Secured Party Filing. Secured Party is hereby authorized
to file one or more financing statements and continuations thereof and
amendments thereto, relative to all or any part of the Collateral, without the
signature of Grantor where permitted by law.
Section 2.7 Further Assurances. Grantor will promptly (and in any
event within three Business Days after request by Secured Party or the Required
Lenders) execute and deliver, and use its reasonable and diligent efforts to
obtain from other Persons, all instruments and documents (including security
agreements, security assignments, Lien releases, Lien waivers, transfer
documents and transfer notices, financing statements and other lien notices), in
form and substance reasonably satisfactory to Secured Party or the Required
Lenders, and take all other actions which are necessary or, in the reasonable
judgment of Secured Party or the Required Lenders, desirable or appropriate in
order to create, maintain, Perfect, ensure the agreed priority of, protect or
enforce Secured Party's security interests in the Collateral, to enable Secured
Party to exercise and enforce its rights and remedies hereunder with respect to
any Collateral, to protect the Collateral against the rights, claims or
interests of third persons, or to effect or to assure further the purposes and
provisions of this Agreement, and Grantor agrees to pay all reasonable costs
related thereto and all reasonable expenses incurred by Secured Party in
connection therewith.
Section 2.8 Power of Attorney. Grantor hereby irrevocably constitutes
and appoints Secured Party and any officer, agent or nominee of Secured Party,
with full power of substitution, as its true and lawful attorney-in-fact with
full power and authority, in the name of Grantor or in its own name, if and
whenever Grantor is in default under this Agreement as set forth in Section 4.1
to take any and all actions and to execute and deliver any and all agreements,
documents, notices, instruments and writings that Secured Party or the Required
Lenders may determine to be necessary or desirable to create, Perfect or ensure
the agreed priority of the security interests granted in Section 2.1 or to
enforce such security interests in any lawful and commercial reasonable manner
or otherwise to protect Secured Party's interest in the Collateral in any lawful
and commercially reasonable manner, including the power and right on behalf of
Grantor, without notice to or assent by Grantor:
(i) to ask for, demand, xxx for, collect, settle and give acquittance
for any and all moneys due or to become due with respect to any or all of
the Collateral and otherwise
-8-
to demand and enforce payment and collection of any and all Claims
constituting Collateral,
(ii) to sign and file in any office in any jurisdiction financing
statements, lien notices, collateral assignments and any other instruments
or writings that may be required or, in the opinion of Secured Party or the
Required Lenders, appropriate to create or Perfect a security interest in
or Lien upon any of the Collateral as security for the Secured Obligations,
(iii) to accept, hold, collect, endorse, transfer and deliver any and
all checks, notes, drafts, acceptances, documents and other negotiable and
nonnegotiable Instruments, Securities, Documents and Chattel Paper
constituting Collateral that may be delivered to Secured Party in
accordance with the provisions of this Agreement, whether made payable to
Grantor or otherwise,
(iv) to commence, file, prosecute, defend, settle, compromise or
adjust any claim, suit, action or proceeding with respect to any or all of
the Collateral or otherwise to enforce the rights of Secured Party with
respect to any of the Collateral,
(v) to obtain, contest, enforce, adjust and settle Claims for
insurance proceeds or condemnation awards constituting proceeds of
Collateral or required to be paid to Secured Party pursuant to this
Agreement or the Credit Agreement,
(vi) to do, at its option and at the expense and for the account of
Grantor, at any time and from time to time, all lawful and commercially
reasonable acts and things that Secured Party or the Required Lenders may
deem reasonably necessary or desirable to protect or preserve the
Collateral or to realize upon the Collateral,
(vii) to contest, settle, pay or discharge taxes or Liens (other than
Liens permitted under this Agreement or the Credit Agreement) levied or
placed upon or threatened against any of the Collateral, and for such
purposes (A) the legality or validity thereof and amounts necessary to
settle or discharge the same may be determined by Secured Party or the
Required Lenders in its or their commercially reasonable discretion and (B)
Grantor agrees immediately upon demand to reimburse Secured Party for any
payments made by Secured Party on account of any such taxes or Liens, as
part of the Obligations secured hereby,
(viii) to sign and endorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with the Accounts and
other documents relating to the Collateral, and
(ix) generally to sell, Transfer, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral as fully and
completely as though Secured Party were the absolute owner thereof for all
purposes, and to do, at Secured Party's option and at Grantor's expense, at
any time or from time to time, all acts and things that Secured
-9-
Party or the Required Lenders reasonably deem necessary to protect,
preserve or realize upon the Collateral and Secured Party's security
interests therein in order to effect the intent of this Agreement, all as
fully and effectively as Grantor might do.
The power granted in this Section 2.8 is a power coupled with an
interest, is irrevocable and shall be discharged only upon Discharge of the
Credit Agreement.
Section 2.9 Survival of Security Interests. The security interests
granted hereby shall, unless released in writing by Secured Party, (a) remain
enforceable as security for all Secured Obligations now outstanding or created
or incurred at any future time (whether or not created or incurred pursuant to
any agreement presently in effect or hereafter made and notwithstanding any
subsequent repayment of any of the Secured Obligations or any other act,
occurrence or event), until Discharge of the Credit Agreement, (b) survive the
Discharge of the Credit Agreement to the same extent that any contingent
Obligation survives, and (c) survive any sale or other Transfer of any
Collateral and remain enforceable against each transferee and subsequent owner
thereof, even if such sale or other Transfer is permitted at the time under the
Credit Agreement, except in the case of inventory, used or surplus equipment and
Permitted Investments sold in the ordinary course of business and rights granted
to a licensee under a trademark license granted in the ordinary course of
business and any other Collateral that is expressly and specifically released
from the security interests created hereby pursuant to a written release signed
by Secured Party.
Section 2.10 Reinstatement of Security Interests. If at any time any
payment on any Secured Obligation is set aside, avoided or rescinded or must
otherwise be restored or returned, this Agreement and the security interests
granted to Secured Party herein and all other obligations of Grantor hereunder
shall remain in full force and effect and, if previously released or terminated,
shall be automatically and fully reinstated, without any necessity for any act,
consent or agreement of Grantor, as fully as if such payment had never been made
and as fully as if any such release or termination had never become effective.
Section 2.11 Grantor Remains Liable. Anything contained herein to the
contrary notwithstanding, (a) Grantor shall remain liable under all contracts
and agreements included in the Collateral, to the extent set forth therein, to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by Secured Party of any
of its rights hereunder shall not release Grantor from any of its duties or
obligations under any contract or agreement included in the Collateral, (c)
Secured Party shall not have any obligation or liability under any contract or
agreement included in the Collateral by reason of this Agreement or the grant to
Secured Party of any security interest in such contract or agreement, and (d)
Secured Party shall not be obligated to perform any of the obligations or duties
of Grantor under any contract or agreement included in the Collateral or to take
any action to collect or enforce any claim for payment assigned hereunder.
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ARTICLE III.
REPRESENTATIONS, WARRANTIES AND COVENANTS
Grantor represents and warrants to Secured Party and agrees with
Secured Party that:
Section 3.1 The Collateral.
(a) Ownership. Except as otherwise expressly permitted under the
Credit Agreement, (i) Grantor owns the Collateral free and clear of any and all
Liens and (ii) no effective financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file in any filing or
recording office, except those in favor of Secured Party.
(b) Interests in and Claims against Subsidiaries. Schedule 3.1(b) sets
forth accurately and exhaustively all Equity Interests directly owned by Grantor
in any Subsidiary of Grantor, all other Equity Interests owned by Grantor and
all Notes issued to or held by the Grantor. All such Equity Interests are
represented by Security Certificates that have been duly authorized and validly
issued, are fully paid and non-assessable and were not issued in breach or
derogation of preemptive rights of any Person.
(c) Intellectual Property. Schedule 3.1(c) sets forth accurately and
exhaustively (i) all registered trademarks and servicemarks owned by Grantor,
all material trademark and service xxxx license agreements to which Grantor is a
party (whether as licensor or licensee), and all pending or overtly threatened
infringement claims by or against Grantor and other litigation relating to any
such trademarks, servicemarks or trademark or servicemark license agreements,
(ii) all patents and patent applications owned by Grantor, all material patent
license agreements to which Grantor is a party (whether as licensor or
licensee), and all pending or overtly threatened infringement claims by or
against Grantor and other litigation relating to any such patents, patent
applications or patent license agreements, and (iii) all registered copyrights
owned by Grantor, all material copyright license agreements to which Grantor is
a party (whether as licensor or licensee) and all pending or overtly threatened
infringement claims by or against Grantor or other litigation relating to any
such copyrights or copyright license agreements.
(d) Other Investment Property. Schedule 3.1(d) sets forth accurately
and exhaustively all other Investment Property of Grantor having a value of
$10,000 or more.
(e) Location of Equipment and Inventory. All Equipment and Inventory
are located and intended to be kept at one of the collateral locations specified
on Schedule 3.1(e).
(f) No Consumer Goods or Farm Products. Grantor does not own any
assets that are, as to it, consumer goods or farm products.
(g) Location of Grantor. The Grantor's chief place of business, chief
executive office and office or offices where the Grantor keeps its records
regarding its Accounts and all originals of its Chattel Paper are located, and
during the preceding four months were located, at the Grantor locations
specified on Schedule 3.1(g).
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(h) Names. The correct legal name of Grantor is set forth in the
preamble to this Agreement. Grantor does not conduct business or hold itself out
under, and in the past five years has not conducted business or held itself out
under, any other name (including any tradename or fictitious business name)
except any name listed on Schedule 3.1(h).
(i) Taxpayer ID Number. The proper taxpayer identification number for
each Loan Party is accurately set forth on Schedule 3.1(i).
(j) Perfection. The security interests granted to Secured Party in
Section 2.1 are lawful, valid and enforceable security interests that at all
times have been, and remain, duly and continuously Perfected.
(k) Amendment of Schedule 3.1. Grantor may at any time unilaterally
amend Schedule 3.1 in any respect required by the occurrence of any event that
does not constitute or give rise to a Default, by giving written notice thereof
to Secured Party. To be effective, such notice must state conspicuously that it
constitutes an amendment to certain factual matters relating to the Collateral
set forth in Section 3.1 of this Agreement.
Section 3.2 Maintenance of Perfection. Grantor will not (a) cause,
permit or suffer any voluntary or involuntary change in its name, identity or
corporate structure, or in the location of its chief executive office, or (b)
keep any tangible Collateral (other than mobile goods and in transit items) or
any records relating to its Accounts at any location other than a location set
forth in Schedule 3.l, unless (in each case) (i) Schedule 3.1 has first been
appropriately supplemented with respect thereto, and (ii) an appropriate
financing statement has been filed in the proper office and in the proper form,
and all other requisite actions have been taken, to Perfect and continue the
Perfection (without loss of priority) of Secured Party's security interests in
the Collateral.
Section 3.3 Defense of Collateral. Grantor will defend the Collateral
against all claims and demands of all Persons at any time claiming any interest
therein.
Section 3.4 Transfer or Encumbrance. Grantor will not encumber or
Transfer any item of Collateral or any interest therein, or permit or suffer any
item of Collateral to be encumbered or Transferred, unless (a) such action is
permitted at the time under the Credit Agreement and (ii) each Loan Party makes
all payments on account of the Secured Obligations required to be made therefrom
and takes all other actions required to be taken in connection therewith under
the Credit Agreement or any other Loan Document.
Section 3.5 Payments, Dividends and Distributions. Grantor shall be
entitled to receive all payments on Accounts, Instruments and Claims and all
dividends and distributions on Equity Interests and other Investment Property
constituting Collateral, so long as (a) Grantor is not in default under this
Agreement as set forth in Section 4.1 and no such default would result from any
such payment, dividend or distribution, (b) Grantor ensures that Secured Party's
security interests in any and all such payments, dividends and distributions
remain continuously Perfected and (c) each Loan Party makes all payments on
account of the Secured Obligations required to be made therefrom and takes all
other actions required to be taken in connection therewith under the
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Credit Agreement or any other Loan Document. Any amounts received by Grantor at
a time when it is not entitled to receive them pursuant to the preceding
sentence shall be turned over to the Secured Party pursuant to Section 3.9(iv)
or Section 4.2, as applicable
Section 3.6 Voting Rights. So long as Grantor is not in default under
this Agreement as set forth in Section 4.1, Grantor shall have and may exercise
all voting rights with respect to any and all Equity Interests constituting
Collateral, except that:
(a) No Breach. Grantor shall not act or vote in favor of any action
that would constitute or cause a breach of any obligations of any Loan Party
under the Credit Agreement or under any other Loan Document;
(b) No Capital Structure Changes. Grantor shall not act or vote in
favor of (i) the authorization or issuance of any Capital Stock, options,
warrants, voting rights, or preference shares or additional shares not permitted
by the Credit Agreement, or (ii) any reclassification, readjustment,
reorganization, merger, consolidation, sale or disposition of assets, or
dissolution not permitted by the Credit Agreement;
(c) Material Adverse Changes. Grantor shall not act or vote in favor
of any action that has or is reasonably likely to have a material adverse effect
on the value of any of the Collateral or that has, or would reasonably be
expected to result in, a Material Adverse Effect; and
(d) Termination of Voting Rights. At any time when Grantor is in
default under this Agreement as set forth in Section 4.1, Secured Party may
terminate any or all of Grantor's voting rights with respect to any or all
Equity Interests constituting Collateral, either by giving written notice of
such termination to Grantor or by transferring such Equity Interests into
Secured Party's name, and Secured Party shall thereupon have the sole right and
power to exercise such voting rights.
Section 3.7 Maintenance of Collateral. Grantor shall:
(a) not use or permit any Collateral to be used unlawfully or in
violation of any provision of this Agreement or any other Loan Document or any
applicable statute, regulation or ordinance or any policy of insurance covering
any such Collateral;
(b) notify Secured Party of any change in Grantor's name, identity or
corporate structure at least 30 days prior to such change;
(c) give Secured Party at least 30 days prior written notice of any
change in Grantor's chief place of business, chief executive office, places of
business, collateral locations or federal taxpayer ID number or the office where
Grantor keeps its Chattel Paper and its records regarding any Accounts;
(d) if the Lenders give value to enable Grantor to acquire rights in
or the use of any Collateral, use such value for such purposes; and
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(e) pay promptly when due all material property and other taxes,
assessments and governmental charges or levies imposed upon any Collateral and
all Claims that are or might become secured by any Lien upon any Collateral,
except to the extent the same is being contested as permitted under the Credit
Agreement; provided, that, notwithstanding any other provision in the Loan
Documents, Grantor shall in any event pay such taxes, assessments, charges,
levies and Claims not later than five days prior to the date of any proposed
sale under any judgment, writ or warrant of attachment or other legal process
entered or filed against Grantor or any Collateral as a result of the failure to
make such payment.
Section 3.8 Concerning Equipment and Inventory. Grantor will:
(i) cause the Equipment to be maintained and preserved in the same
condition, repair and working order as when new (ordinary wear and tear and
wornout and surplus equipment excepted) and in accordance with Grantor's
past practices and make or cause to be made all repairs, replacements and
other improvements in connection therewith that are necessary or desirable
to such end;
(ii) notify Secured Party of any loss or damage to any Equipment in an
amount exceeding $10,000;
(iii) keep correct and accurate records of the Inventory, itemizing
and describing the kind, type and quantity of Inventory, Grantor's cost
therefor and (where applicable) the current list prices for the Inventory,
in the ordinary course of Grantor's business;
(iv) if any Inventory is in possession or control of any agent,
carrier, warehouseman, bailee, consignee or processor, at any time when
Grantor is in default under this Agreement as set forth in Section 4.1,
instruct such Person to hold all such Inventory for the account of Secured
Party and subject to the instructions of Secured Party; and
(v) if so requested at any time by Secured Party or the Required
Lenders, promptly endorse and deliver to Secured Party each and all
negotiable Documents constituting Collateral.
Section 3.9 Concerning Accounts, Instruments and other Claims. Grantor
will:
(i) maintain accurate and complete records concerning the Accounts,
Instruments and all other Claims and the identity, name and address of each
account debtor or obligor thereon, hold and preserve such records in
safekeeping, permit representatives of Secured Party at any time during
normal business hours to inspect, copy and make abstracts from such
records, and render to Secured Party, at Grantor's cost and expense, such
clerical and other assistance as may be reasonably requested with regard
thereto,
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(ii) if so requested at any time by Secured Party or the Required
Lenders, certify and deliver to Secured Party complete and correct copies
of each contract or agreement constituting Collateral,
(iii) continue to collect, at Grantor's expense, all amounts due or to
become due to Grantor under Accounts, Instruments and other Claims and, in
connection therewith take such action as Grantor (or, whenever Grantor is
in default under this Agreement as set forth in Section 4.1, as Secured
Party or the Required Lenders) may reasonably deem necessary or advisable
to enforce collection of amounts due or to become due to thereunder;
provided, that Secured Party shall have the right at any time when Grantor
is in default under this Agreement as set forth in Section 4.1 (A) to
notify the account debtors or obligors under any or all Accounts,
Instruments or other Claims of the assignment of such Accounts, Instruments
or Claims to Secured Party and to direct such account debtors or obligors
to make payment of all amounts due or to become due to Grantor thereunder
directly to Secured Party, (B) to notify each Person maintaining a lockbox
or similar arrangement to which account debtors or obligors under any
Accounts, Instruments or other Claims have been directed to make payment to
remit all amounts representing collections on checks and other payment
items from time to time sent to or deposited in such lockbox or other
arrangement directly to Secured Party and and (C) at the expense of
Grantor, to demand payment of any Accounts, Instruments and Claims and
enforce collection thereof by legal proceedings in any lawful manner and to
extend, renew adjust, settle or compromise the amount or payment thereof,
in the same manner and to the same extent as Grantor might have done, and
(iv) if Secured Party at any time exercises any of the rights
described in Section 3.5 or the proviso in Section 3.9(iii), (A) segregate
from all other funds and hold in trust for Secured Party and immediately
deliver to Secured Party (in the identical form received) all amounts and
proceeds (including checks and other instruments) received by Grantor in
respect of any and all Accounts, Instruments and other Claims, and (B) not
adjust, settle or compromise the amount or payment of any Account or Claim,
or release wholly or partly any account debtor or obligor thereon, or allow
any credit or discount thereon.
Section 3.10 Substituted Performance. Secured Party may at any time
(but shall not be obligated to) (a) perform any of the obligations of Grantor
under this Agreement if Grantor fails to perform such obligation within three
Business Days (or, in the case of insurance, within one Business Day) after
written demand by Secured Party and (b) make any payments and do any other acts
which Secured Party or the Required Lenders may deem reasonably necessary or
desirable to protect Secured Party's security interests in the Collateral,
including the right to pay, purchase, contest or compromise any Lien that
attaches or is asserted against any Collateral, to procure insurance, and to
appear in and defend any action or proceeding relating to any Collateral, and
Grantor agrees promptly to reimburse Secured Party for all payments made by
Secured Party in doing so, together with interest thereon at the rate then
applicable to the Loans, all reasonable attorneys' fees and disbursements
incurred by Secured Party in connection therewith, whether or not suit is
brought, and all other reasonable costs and expenses related thereto.
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ARTICLE IV.
DEFAULT; REMEDIES
Section 4.1 Default. Grantor shall be in default under this Agreement
(a) whenever any Event of Default has occurred and is continuing (without regard
to whether or to what degree Grantor individually may have caused, participated
in, or had any knowledge of the occurrence of such Event of Default) and (b) at
all times after the Loans have become due and payable, whether at maturity, upon
acceleration pursuant to Section 8 of the Credit Agreement or otherwise.
Section 4.2 Remedies upon Default. At any time when Grantor is in
default under this Agreement as set forth in Section 4.1, Secured Party may
exercise and enforce, in any order, (a) each and all of the rights and remedies
available to a secured party upon default under the Uniform Commercial Code or
other applicable law, (b) each and all of the rights and remedies available to
it under the Credit Agreement or any other Loan Document and (c) each and all of
the following rights and remedies:
(a) Collection Rights. Without notice to Grantor or any other Loan
Party, Secured Party may notify any or all account debtors and obligors on any
Accounts, Instruments or other Claims constituting Collateral of Secured Party's
security interests therein and may direct, demand and enforce payment thereof
directly to Secured Party.
(b) Taking Possession. Secured Party may (i) enter upon any and all
premises owned or leased by Grantor where Collateral is located (or believed by
Secured Party to be located), with or without judicial process and without any
obligation to pay rent, (ii) prior to the disposition of the Collateral, store,
process, repair or recondition the Collateral or otherwise prepare the
Collateral for disposition in any manner to the extent Secured Party deems
appropriate, (iii) take possession of Grantor's premises or place custodians in
exclusive control thereof, remain on such premises and use the same and any of
Grantor's equipment for the purpose of completing any work in process or
otherwise preparing the Collateral for sale or selling or otherwise Transferring
the Collateral, (iv) take possession of all items of Collateral that are not
then in its possession, either upon such premises or by removal from such
premises, and (v) require Grantor or the Person in possession thereof to deliver
such Collateral to Secured Party at one or more locations designated by Secured
Party and reasonably convenient to it and Grantor.
(c) Foreclosure. Secured Party may sell, lease, license or otherwise
dispose of or Transfer any or all of the Collateral or any part thereof in one
or more parcels at public sale or in private sale or transaction, on any
exchange or market or at Secured Party's offices or on Grantor's premises or at
any other location, for cash, on credit or for future delivery, and may enter
into all contracts necessary or appropriate in connection therewith, without any
notice whatsoever unless required by law. Where permitted by law, one or more of
the Beneficiaries may be the purchasers at any such sale and in such event, if
such bid is made by all of the Lenders or by all of the Holders of Secured
Obligations or otherwise whenever a credit bid is expressly permitted under the
Credit Agreement or approved in writing by the Administrative Agent and all of
the Lenders, the Beneficiaries bidding at such sale may bid part or all of the
Obligations owing
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to them without necessity of any cash payment on account of the purchase price,
even though any other purchaser at such sale is required to bid a purchase price
payable in cash. Grantor agrees that at least 10 calendar days' written notice
to Grantor of the time and place of any public sale or the time after which any
private sale is to be made shall be commercially reasonable. The giving of
notice of any such sale or other disposition shall not obligate Secured Party to
proceed with the sale or disposition, and any such sale or disposition may be
postponed or adjourned from time to time, without further notice.
(d) Use of Intellectual Property. Secured Party may, on a royalty free
basis, use and license use of any trademark, trade name, trade style, copyright,
patent or technical knowledge or process owned, held or used by Grantor in
respect of any Collateral as to which any right or remedy of Secured Party is
exercised or enforced. In addition, each Holder of any Secured Obligation may
exercise and enforce such rights and remedies for the collection of such Secured
Obligation as may be available to it by law or agreement.
Section 4.3 Waivers by Grantor. Grantor hereby irrevocably waives, to
the fullest extent permitted by law, (a) all rights of redemption from any
foreclosure sale, (b) the benefit of all valuation, appraisal, exemption and
moratorium laws, (c) all rights to notice or a hearing prior to the exercise by
Secured Party of its right to take possession of any Collateral, whether by self
help or by legal process and any right to object to the Secured Party taking
possession of any Collateral by self help, (d) if Secured Party seeks to obtain
possession of any Collateral by replevin, claim and delivery, attachment, levy
or other legal process, (i) any notice or demand for possession prior to the
commencement of legal proceedings, (ii) the posting of any bond or security in
any such proceedings, and (iii) any requirement that Secured Party retain
possession and not dispose of any Collateral until after a trial or final
judgment in such proceedings.
Section 4.4 Standard of Care. The powers conferred on Secured Party
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the exercise of
reasonable care in the custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, Secured Party shall
have no duty as to any Collateral or as to the taking of any necessary steps to
preserve rights against prior parties or to protect, preserve, vote or exercise
any rights pertaining to any Collateral. Secured Party shall be deemed to have
exercised reasonable care in the custody and preservation of Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which Secured Party accords its own property or if it selects, with reasonable
care, a custodian to hold such Collateral on its behalf.
Section 4.5 Application of Proceeds. Except as expressly provided
elsewhere in this Agreement, all proceeds received by Secured Party in respect
of any sale of, collection from, or other realization upon all or any part of
the Collateral may, in the discretion of Secured Party, be held by Secured Party
as Collateral for, or then, or at any other time thereafter, applied in full or
in part by Secured Party against, the Secured Obligations in the following order
of priority:
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, including expenses of Secured Party and
the reasonable fees and disbursements
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of its agents, consultants and counsel, and all other expenses, liabilities
and advances made or incurred by Secured Party in connection therewith, and
all amounts for which Secured Party is entitled to indemnification
hereunder and all advances made by Secured Party hereunder for the account
of Grantor, and to the payment of all costs and expenses paid or incurred
by Secured Party in connection with the exercise of any right or remedy
hereunder, all in accordance with Section 4.6;
SECOND: To the payment of all other Secured Obligations (for the
ratable benefit of the holders thereof) then due and payable; and
THIRD: To the payment to or upon the order of the Grantor, or to
whomsoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, of any surplus then remaining from such
proceeds.
Section 4.6 Indemnity and Expenses.
(a) Indemnity. Grantor will defend, indemnify and hold harmless
Secured Party and each other Beneficiary from and against any and all claims,
losses and liabilities in any way relating to, growing out of or resulting from
this Agreement and the transactions contemplated hereby (including enforcement
of any interest, right or remedy created hereby), except to the extent such
claims, losses or liabilities are directly attributable to Secured Party's or
such other Beneficiary's gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction.
(b) Expenses. Grantor will pay to Secured Party upon demand the amount
of any and all reasonable costs and expenses, including the reasonable fees and
expenses of its counsel and of any advisors, consultants, experts and agents,
that Secured Party may incur in connection with (i) the administration of this
Agreement, (ii) the custody, preservation, use or operation of, or the sale of,
collection from, or other realization upon, any of the Collateral, (iii) the
exercise or enforcement of any of the interests, rights or remedies of Secured
Party hereunder, (iv) the failure by Grantor to perform or observe any of the
provisions hereof, or (v) the proof, allowance, protection, administration,
treatment, discharge, collection or enforcement of any of the Secured
Obligations or any of the Collateral in any bankruptcy case or insolvency,
reorganization, receivership, dissolution or liquidation proceeding of or
affecting any Loan Party.
Section 4.7 Surplus, Deficiency. Any surplus proceeds of any sale or
other disposition by Secured Party of any Collateral remaining after Discharge
of the Credit Agreement and after all Secured Obligations are paid in full and
in cash shall be paid over to Grantor or to whomever may be lawfully entitled to
receive such surplus or as a court of competent jurisdiction may direct, but
prior to Discharge of the Credit Agreement, such surplus proceeds may be
retained by Secured Party and held as Collateral until Discharge of the Credit
Agreement. The Subsidiary and each Guarantor shall be and remain liable for any
deficiency.
Section 4.8 Information Related to the Collateral. If Secured Party
determines to sell or otherwise Transfer any Collateral, Grantor shall, and
shall cause any Person controlled by it to, furnish to Secured Party all
information Secured Party may request that pertains or could
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pertain to the value or condition of the Collateral or that would or might
facilitate such sale or Transfer. Secured Party shall have the right,
notwithstanding any confidentiality obligation or agreement otherwise binding
upon it, freely to disclose such information, and any and all other information
(including confidential information) pertaining in any manner to the Collateral
or the assets, liabilities, results of operations, business or prospects of any
Loan Party, to any Person that Secured Party in good faith believes to be a
potential or prospective purchaser in such sale or Transfer, without liability
for any disclosure, dissemination or use that may be made as to such information
by any such Person.
Section 4.9 Sale Exempt from Registration. Secured Party shall be
entitled at any such sale or other Transfer, if it deems it advisable to do so,
to restrict the prospective bidders or purchasers to Persons who will provide
assurances satisfactory to Secured Party that the Collateral may be offered and
sold to them without registration under the Securities Act of 1933, as amended,
and without registration or qualification under any other applicable state or
federal law. Upon the consummation of any such sale, Secured Party shall have
the right to assign, transfer and deliver to the purchaser or purchasers thereof
the Collateral so sold. Secured Party may solicit offers to buy the Collateral,
or any part of it, from a limited number of investors deemed by Secured Party,
in its good faith judgment or in good faith reliance upon advice of its counsel,
to meet the requirements to purchase securities under Regulation D promulgated
under the Securities Act of 1933 as then in effect (or any other regulation of
similar import). If Secured Party solicits such offers from such investors, then
the acceptance by Secured Party of the highest offer obtained from any of them
shall be deemed to be a commercially reasonable method of disposition of the
Collateral.
Section 4.10 Rights and Remedies Cumulative. The rights provided for
in this Agreement and the other Loan Documents are cumulative and are not
exclusive of any other rights, powers or privileges or remedies provided by law
or in equity, or under any other instrument, document or agreement. Secured
Party may exercise and enforce each right and remedy available to it either
before or concurrently with or after, and independently of, any exercise or
enforcement of any other right or remedy of Secured Party or any Holder of any
Secured Obligation against any Person or property. All such rights and remedies
shall be cumulative, and no one of them shall exclude or preclude any other.
Section 4.11 No Direct Enforcement by Beneficiaries. Secured Party
may freely exercise and enforce any and all of its rights and remedies
hereunder, for the benefit of the Beneficiaries. No Beneficiary, other than
Secured Party, shall have any independent right to collect, take possession of,
foreclose against or otherwise enforce the security interests granted hereby.
ARTICLE V.
CONCERNING THE SECURED PARTY
Section 5.1 Agent for Holders. Secured Party is executing and
delivering this Agreement, and accepting the security interests, rights,
remedies, powers and benefits conferred upon Secured Party hereby, both for its
own benefit and as agent for all present and future
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Holders of Secured Obligations. The provisions of the Credit Agreement and all
rights, powers, immunities and indemnities granted to Secured Party under the
Credit Agreement or any other Loan Document, or under any separate agreement
made by or otherwise binding upon any Holder of Secured Obligations, shall apply
in respect of such execution, delivery and acceptance and in respect of any and
all actions taken or omitted by Secured Party under, in connection with or in
respect of this Agreement.
Section 5.2 Administrative Agent shall be the Secured Party. Secured
Party shall at all times be the same Person that is the Administrative Agent
under the Credit Agreement. Written notice of resignation by the Administrative
Agent pursuant to Section 9.9 of the Credit Agreement shall also constitute
notice of resignation as Secured Party under this Agreement; and appointment of
a successor Administrative Agent pursuant to Section 9.9 of the Credit Agreement
shall also constitute appointment of a successor Secured Party under this
Agreement. Upon the acceptance of any appointment as Administrative Agent under
Section 9.9 of the Credit Agreement by a successor Administrative Agent, the
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Secured Party
under this Agreement, and the retiring Secured Party under this Agreement shall
promptly (a) transfer to such successor Secured Party all sums, securities and
other items of Collateral held hereunder, together with all records and other
documents necessary or appropriate in connection with the performance of the
duties of the successor Secured Party under this Agreement, and (b) execute and
deliver to such successor Secured Party such amendments to financing statements,
and take such other actions, as may be necessary or appropriate in connection
with the assignment to such successor Secured Party of the security interests
created hereunder, whereupon such retiring Secured Party shall be discharged
from its duties and obligations under this Agreement. After any retiring
Administrative Agent's resignation hereunder as Secured Party, the provisions of
this Agreement shall inure to its benefit as to any actions taken or omitted to
be taken by it under this Agreement while it was Secured Party hereunder.
Section 5.3 No Assurances or Liability. Secured Party makes no
statement, promise, representation or warranty whatsoever, and shall have no
liability whatsoever, to any Holder of any Secured Obligations as to the
authorization, execution, delivery, legality, enforceability or sufficiency of
this Agreement or as to the creation, Perfection, priority, or enforceability of
any security interests granted hereunder or as to existence, ownership, quality,
condition, value or sufficiency of any Collateral or as to any other matter
whatsoever.
Section 5.4 Holders Bound. Except where the consent of others may be
required pursuant to the express provisions of Section 10.1 of the Credit
Agreement, any modification, amendment, waiver, release, termination or
discharge of any security interest, right, remedy, power or benefit conferred
upon Secured Party that is effectuated in a writing signed by Secured Party
shall be binding upon all Holders of Secured Obligations if it is (i)
authorized pursuant to any provision of the Credit Agreement or any other Loan
Document, (ii) required by law or (iii) authorized or ratified either (A) by the
Required Lenders or (B) by the Holders of at least a majority in outstanding
principal amount of the Secured Obligations (other than contingent or
unliquidated Secured Obligations).
-20-
ARTICLE VI.
MISCELLANEOUS PROVISIONS
Section 6.1 Continuing Security Interests; Release. This Agreement
creates continuing security interests in the Collateral and shall (a) remain in
full force and effect until the Discharge of the Credit Agreement, (b) be
binding upon Grantor and its successors and assigns, and (c) inure, together
with the rights and remedies of Secured Party hereunder, to the benefit of and
be enforceable by Secured Party and its successors, transferees and assigns
acting in the capacity of Administrative Agent under the Credit Agreement.
Subject to and upon Discharge of the Credit Agreement or other release
permitted hereunder or under the Credit Agreement, Secured Party shall (within a
reasonable time after it receives from Grantor a written request for release of
the Collateral) execute and deliver to Grantor an instrument in form and
substance satisfactory to Grantor releasing (on a quitclaim basis, without
recourse, without warranty (except as to Secured Party's actions), and without
any liability whatsoever) any security interest Secured Party may then hold in
the Collateral and thereupon Secured Party shall, at Grantor's expense, execute
and deliver to Grantor such UCC termination statements and other like documents
as Grantor may reasonably request to evidence such release.
Section 6.2 Statute of Limitations. Grantor hereby waives the right
to plead any statute of limitations as a defense to any Secured Obligation to
the fullest extent permitted by law.
Section 6.3 Amendments; Etc. No amendment or waiver of any provision
of this Agreement, or consent to any departure by Grantor herefrom, shall in any
event be effective unless the same shall be in writing and signed by Secured
Party, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given.
Section 6.4 Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of Secured Party in the exercise of any power,
right or privilege hereunder 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 any
other or further exercise thereof or of any other power, right or privilege. All
rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
Section 6.5 Notices. Any and all notices and communications to be
given to Grantor or Secured Party may be given by courier service, personal
service, mailing the same, postage prepaid, or by telex, facsimile transmission
or cable to each such party at its address set forth in the Credit Agreement, on
the signature pages hereof or to any other address as any party hereto may
specify by written notice to the other parties, and such communication shall be
deemed to have been given when delivered in person or by courier service, upon
receipt of telefacsimile or telex, or three Business Days after depositing it in
the United States mail with postage prepaid and properly addressed.
Section 6.6 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and
-21-
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.
Section 6.7 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.
Section 6.8 Governing Law; Terms. THIS AGREEMENT SHALL BE GOVERNED
BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE NEW YORK UNIFORM COMMERCIAL
CODE PROVIDES THAT THE PERFECTION OF THE SECURITY INTERESTS HEREUNDER, OR
REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE
LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
Notwithstanding the foregoing, the creation, Perfection, priority and
enforcement of a security interest in any deposit account shall be governed by
the laws of the state in which the depository bank, or branch bank, maintaining
such deposit account is located.
Section 6.9 Consent to Jurisdiction and Service of Process. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST GRANTOR ARISING OUT OF OR RELATING TO THIS
AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION
IN THE STATE OF NEW YORK. BY EXECUTION AND DELIVERY OF THIS AGREEMENT GRANTOR
ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS. Grantor hereby 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 Grantor at its
address provided in Section 6.5, such service being hereby acknowledged by
Grantor to be sufficient for personal jurisdiction in any action against Grantor
in any such court and to be otherwise effective and binding service in every
respect. Nothing herein shall affect the right to serve process in any other
manner permitted by law or shall limit the right of Secured Party to bring
proceedings against Grantor in the courts of any other jurisdiction.
Section 6.10 Waiver of Jury Trial. EACH OF THE PARTIES TO THIS
AGREEMENT HEREBY AGREES TO WAIVE ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. 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 without limitation contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims. Grantor and Secured Party
each acknowledge that this waiver is a material inducement for Grantor and
Secured Party to enter into a business relationship, that Grantor and Secured
Party have 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
-22-
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, AND THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS AGREEMENT. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
Section 6.11 Counterparts. This Agreement may be executed in one or
more counterparts and by different parties hereto in separate 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.
Signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
[Remainder of page intentionally left blank]
-23-
IN WITNESS WHEREOF, Grantor and Secured Party have executed this
Agreement as of the date first written above.
USI INSURANCE SERVICES CORP.
By: /s/ Xxxxxxx Xxxxxxx
----------------------------------
Title: Vice President and
Chief Executive Officer
Accepted as of the day
of September 17, 1999
CREDIT LYONNAIS CAYMAN ISLAND BRANCH,
as Secured Party
By: /s/ W. Xxxxxxx Xxxxxx
----------------------------
Title: Authorized Signatory
SCHEDULE 3.1(B) TO
GUARANTOR PLEDGE AGREEMENT
--------------------------
%
Issuer # of Shares Cert.# Ownership
----- ----------- ------ ---------
Stock Being Pledged
USI MidAtlantic, Inc. 1,000 1-5 100%
USI of Southern California Insurance Services, Inc.
(formerly TriWest Insurance Services, Inc. 5,613 27 100%
Managed Strategies, Inc. 100 1 100%
USI California Insurance Services, Inc. 24,664 6 100%
USI Insurance Services of Connecticut, Inc. 100 1 100%
El Camino Insurance Agency 4,114.75 10 100%
Association Growth Enterprises, Inc. 100 8 100%
USI Securities, Inc. 100 1 100%
USI of Illinois, Inc. 100 1 100%
Xxxxxxx Xxxxxx & Associates Insurance Agency, Inc. 1,875 R-7 100%
Benefit Plan Administrators, Inc.(formerly USI of
New York, Inc.) 200 1 100%
X.X. Xxxxxx & Co., Inc. 200 2 100%
Xxxxxxxx-Xxxxxxxxx & Xxxxxxx Insurancc Services,
Inc. 240 3 100%
Xxxxxxxx, Galt & Newlands, Inc. 1,242 32 100%
Coastal Insurance Services, Inc. 205 14 100%
Xxxxxxxxx & Company Insurance Brokers, Inc. 100 1 100%
Xxxxxx, Xxxxxx & Xxxxxxx, Inc. 1,933 58 100%
The Insurance Exchange (formerly USIS of
New Hampshire) 100 1 100%
Xxxx Insurance Consultants, Inc. (d/b/a USI Florida)
(formerly USIS of Plantation, Inc.) 1,000 1 100%
Progressive Plan Administrators, Inc. (formerly USIS
of New York, Inc.) 1,000 1 100%
Riverside Insurance Associates, Inc. 318 6 100%
Sponsored Marketing Insurance Administrators, Inc. 3,084 21 100%
USI Northeast, Inc. (formerly Xxxxxxxxx & Xxxxxx,
Inc.) 211.5 4 100%
USI of New York, Inc. (incorporated in May 6, 1996) 200 2 100%
USI Care Management of New York, Inc. 200 1 100%
Wrims Corp. 1,000 184 100%
Premier-USI Insurance Group,Inc. 100 1 100%
Kisco Partners, Inc. 100 5 100%
Acquisition Risk Management Services, Inc. 50 4 100%
Xxxxx, Hill & Mercer Employee Benefits, Inc. 1000 1 100%
Xxxxxx Xxxx & Son, Inc. 100 1 100%
Benefit Concept of Connecticut, Inc. 908 A-15 100%
USI Insurance Brokers, Inc. 100 100%
USI Prescription Benefits Management Company 100%
SCHEDULE 3.1(B) TO
GUARANTOR PLEDGE AGREEMENT
--------------------------
Page 2
%
Issuer # of Shares Cert.# Ownership
------ ----------- ------ ---------
Moselle Insurance, Inc. 17 100%
Xxxxxx X. Xxxx, Inc. 1,000 100%
Excluded Assets
Xxxxxxxxx & Xxxxxxxx, Incorporated 1,000 72 100%
Texas Professional Administrators, Inc. 31,076 100%
SCHEDULE 3.1(C) TO
GUARANTOR PLEDGE AGREEMENT
--------------------------
INTELLECTUAL PROPERTY
None.
SCHEDULE 3.1(D) TO
GUARANTOR PLEDGE AGREEMENT
--------------------------
OTHER INVESTMENT PROPERTY
None.
SCHEDULE 3.1(E) TO
GUARANTOR PLEDGE AGREEMENT
--------------------------
LOCATION OF COLLATERAL
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
00 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
000 Xxx Xxxxxx
Xxxxxxxxxx, XX 00000
SCHEDULE 3.1(G) TO
GUARANTOR PLEDGE AGREEMENT
--------------------------
LOCATION OF GUARANTOR
00 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, XX 00000
SCHEDULE 3.1(H) TO
GUARANTOR PLEDGE AGREEMENT
--------------------------
Other Names
None.
SCHEDULE 3.1(I) TO
GUARANTOR PLEDGE AGREEMENT
--------------------------
TAXPAYER ID NUMBER
U.S.I. Holdings Corporation 00-0000000
USI Insurance Services Corp. 00-0000000
EXHIBIT C TO
CREDIT AGREEMENT
----------------
FORM OF CERTIFICATE FOR PERMITTED ACQUISITIONS
Pursuant to the definition of "Permitted Acquisition" under Section 1.1 of
the Credit Agreement, dated as of September 17, 1999 (as amended, supplemented
or otherwise modified from time to time, the "Credit Agreement"), by and among
U.S.I. Holdings Corporation (the "Borrower"), the banks and other financial
institutions from time to time party thereto (the "Lenders"), Credit Lyonnais
Cayman Island Branch, as Administrative Agent (the "Administrative Agent") and
The Chase Manhattan Bank, as Syndication Agent (the "Syndication Agent") for the
Lenders, I, the undersigned, a Responsible Officer of the Borrower, do hereby
certify on behalf of the Borrower the statements and information contained
below. Unless otherwise defined herein, capitalized terms used herein shall have
the meanings set forth in the Credit Agreement. This Certificate is intended
only to implement and not expand or detract from the provisions of the Credit
Agreement. In the event of any inconsistency between this document and the
Credit Agreement, the Credit Agreement shall control.
1. This Certificate relates to the acquisition of
(the "Permitted Acquisition"), which was
------------------------------
consummated on [date].
2. The aggregate Acquisition Consideration for the Permitted Acquisition
not counting potential Look-Back Liabilities and counting, in the case of any
Retention Liability, an amount equal to the Accrued Retention Liability,
determined as of the effective date of the Permitted Acquisition in which such
Retention Liability is incurred, was $ .
---------------
3. On a pro forma basis, as if the Permitted Acquisition to which this
Certificate applies had been completed, and all Indebtedness (which, in the case
of any Retention Liability, shall be an amount equal to the Accrued Retention
Liability, determined as of the effective date of the Permitted Acquisition in
which such Retention Liability is incurred) acquired by the Borrower and its
Subsidiaries in connection with the Permitted Acquisition to which this
Certificate applies had been incurred or acquired, on the first day of the
12-month period ending on the last day of the fiscal quarter of the Borrower
most recently ended prior to the date of consummation of the Permitted
Acquisition, the Borrower would have been in compliance with the covenants
contained in Section 7.1 as of the last day of such fiscal quarter, as evidenced
by the following:
A. Section 7.1 (a) - Consolidated Total Debt Ratio
-----------------------------------------------
(a) Consolidated Debt/1/ of the Borrower and its
Subsidiaries as of the relevant date
---------
----------
/1/ Consolidated Debt to be calculated in accordance with the definition of
"Consolidated Debt" in the Credit Agreement.
(b) Adjusted Pro Forma EBITDA/2/ for the
relevant twelve-month period
---------
Actual Consolidated Total Debt
Ratio (Consolidated Debt divided by
Adjusted Pro Forma EBITDA)
=========
Maximum Consolidated Debt Ratio /3/
---------
B. Section 7.1 (b) - Interest Expense Coverage Ratio
-------------------------------------------------
(a) Consolidated EBITDA of the Borrower and its Subsidiaries for the relevant
twelve-month period calculated as follows:
-------------------------------------------------------------
Consolidated Net Income/4/
---------
+Consolidated Income Tax Expense/5/
---------
+Consolidated Net Interest Expense/6/
---------
+non-cash charges for amortization
and depreciation determined on a
consolidated basis in accordance
with GAAP/7/
---------
----------
/2/ Adjusted Pro Forma EBITDA to be calculated in accordance with the
definition of "Adjusted Pro Forma EBITDA" in the Credit Agreement.
/3/ Insert applicable maximum ratio from Section 7.1(a).
/4/ Consolidated Net Income to be calculated in accordance with the definition
of "Consolidated Net Income" in the Credit Agreement.
/5/ To the extent, and only to the extent, deducted in the computation of such
Consolidated Net Income. Consolidated Income Tax Expense to be calculated
in accordance with the definition of "Consolidated Income Tax Expense" in
the Credit Agreement.
/6/ To the extent, and only to the extent, deducted in the computation of such
Consolidated Net Income. Consolidated Net Interest Expense to be calculated
in accordance with the definition of "Consolidated Net Interest Expense" in
the Credit Agreement.
/7/ To the extent, and only to the extent, deducted in the computation of such
Consolidated Net Income.
-2-
+compensation expense accrued in respect of
Stock Appreciation Rights/8/
---------
-cash payments made in such period to
honor, redeem or discharge Stock
Appreciation Rights
---------
---------------------------------------
Consolidated EBITDA
(b) Consolidated Net Interest Expense of the Borrower and its Subsidiaries for
the relevant twelve-month period calculated as follows:
--------------------------------------------------------------------------
Consolidated Income Tax Expene/9/
---------
-Consolidated Interest Income/10/
---------
---------------------------------
Consolidated Net Interest Expense /11/
=========
Actual Interest Expense Coverage Ratio
(Consolidated EBITDA divided by
Consolidated Net Interest Expense)
---------
Minimum Interest Expense Coverage Ratio /12/
---------
----------
/8/ To the extent, and only to the extent, deducted in the computation of
Consolidated Net Income.
/9/ To the extent, and only to the extent, deducted in the computation of such
Consolidated Net Income. Consolidated Income Tax Expense to be calculated
in accordance with the definition of "Consolidated Income Tax Expense" in
the Credit Agreement.
/10/ Consolidated Interest Expense to be calculated in accordance with the
definition of "Consolidated Interest Expense" in the Credit Agreement.
/11/ If this number is equal to or less than l, Consolidated Interest Expense
shall be deemed equal to 1.
/12/ Insert applicable minimum ratio from Section 7.1(b).
-3-
C. Section 7.l(c) - Fixed Charge Coverage Ratio
--------------------------------------------
(a) Consolidated EBITDA of the Borrower and
its Subsidiaries (see 3 above) for the
relevant twelve-month period
---------
(b) Consolidated Fixed Charges for the relevant twelve-month period calculated
--------------------------------------------------------------------------
as follows:
-----------
Debt Service of the Borrower and its
Subsidiaries for such period
---------
---------------------------------------
Consolidated Fixed Charges
=========
Actual Fixed Charge Coverage Ratio
(Consolidated EBITDA divided by
Consolidated Fixed Charges)
---------
Minimum Fixed Charge Coverage Ratio /13/
---------
D. Section 7.1(d) - Stockholder's Equity
-------------------------------------
(a) Stockholders' Equity/14/
---------
(b) Minimum Stockholders' Equity /15/
---------
E. Section 7.1(e) - Capital Expenditures
------------------------------------- ---------
(a) Capital Expenditures during relevant period
---------
(b) Maximum Permitted Capital Expenditures /16/
---------
4. Either (a) the aggregate Acquisition Consideration for the Permitted
Acquisition to which this Certificate applies does not exceed a multiple of 6.50
(or, in the case of a Permitted
----------
/13/ Insert applicable minimum ratio from Section 7.1(c).
/14/ Stockholders' Equity to be calculated in accordance with the definition of
"Stockholders' Equity" in the Credit Agreement.
/15/ Insert applicable minimum Stockholders' Equity from Section 7.1(d).
/16/ Insert applicable maximum Capital Expenditures from Section 7.1(e).
-4-
Acquisition in which any Retention Liability is incurred, a multiple of 6.00)
times the Pre-Acquisition Adjusted EBITDA of the business acquired in the
acquisition (so adjusted) or (b) the Acquisition Consideration for the Permitted
Acquisition to which this Certificate applies is greater than such multiple but
does not, when added to all Acquisition Consideration for all other acquisitions
consummated by the Borrower or any of its Subsidiaries in the same calendar year
for an Acquisition Consideration greater than such multiple, exceed $6,000,000.
Aggregate Acquisition Consideration: $
--------------
Pre-Acquisition Adjusted EBITDA of
the acquired business/17/: $
--------------
Retention Liabilities [were][were not] incurred in connection with the
Permitted Acquisition.
Pre-Acquisition Adjusted EBITDA
multiplied by [6.50][6.00] $
--------------
5. The agreements governing or relating to the Permitted Acquisition to
which this Certificate applies do not prohibit or restrict the grant of a
security interest in the rights and interests of the Borrower or any of its
Subsidiaries arising thereunder or the enforcement of any such security interest
by foreclosure, notice to pay and collection or otherwise, except with respect
to assets subject to Permitted Prior and Pari Passu Liens and Excluded Assets.
6. Upon consummation of the Permitted Acquisition to which this Certificate
applies, the business acquired will be operated as part of the USI Businesses.
7. On the date of consummation of the Permitted Acquisition, no Default or
Event of Default had occurred and was continuing or resulted from, or existed
after giving effect to, the Permitted Acquisition to which this Certificate
applies.
----------
/17/ Pre Acquisition Consolidated EBITDA to be calculated in accordance with the
definition of "Pre Acquisition Consolidated EBITDA" in the Credit
Agreement.
-5-
IN WITNESS WHEREOF, the undersigned has executed and delivered this
certificate as of the day and year set forth below.
U.S.I. HOLDINGS CORPORATION
By:
------------------------
Name:
Title:
Date:
EXHIBIT D TO
CREDIT AGREEMENT
----------------
FORM OF COMPLIANCE CERTIFICATE
Pursuant to Section 6.2(c) of the Credit Agreement, dated as of
September 17, 1999 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement")/1/, by and among U.S.I. Holdings Corporation (the
"Borrower"), the banks and other financial institutions (the "Lenders") from
time to time that are party thereto, Credit Lyonnais, Cayman Island Branch, as
administrative agent for the Lenders (the "Administrative Agent") and The Chase
Manhattan Bank, as syndication agent, the undersigned,
------------------------,
the /2/ of the Borrower, does hereby certify in the
-------------------------
name and on behalf of the Borrower that, as of the date of the Financial
Statements as of and for the period ended /3/ (the
-------------------------
"Financial Statements") being delivered herewith in accordance with Section 6.1
(a) and Section 6.1(b) of the Credit Agreement, the Borrower was in compliance
with all of the covenants set forth in Section 7.1 of the Credit Agreement/4/,
and that the following calculations of such covenant compliance are based upon
such Financial Statements and are correct and complete in all material respects:
1. Section 7.1(a) - Consolidated Total Debt Ratio
----------------------------------------------
(a) Consolidated Debt/5/ of the Borrower and
its Subsidiaries for the relevant twelve-
month period
(b) Adjusted Pro Forma EBITDA/6/ for the
relevant twelve-month period
----------
/1/ Unless otherwise defined herein, capitalized terms shall have the meaning
given them in the Credit Agreement.
/2/ Insert title of officer.
/3/ Insert date.
/4/ In the event of any inconsistency between this Compliance Certificate and
the main body of the Credit Agreement, the main body of the Credit
Agreement shall control.
/5/ Consolidated Debt to be calculated in accordance with the definition of
"Consolidated Debt" in the Credit Agreement.
/6/ Adjusted Pro Forma EBITDA to be calculated in accordance with the
definition of "Adjusted Pro Forma EBITDA" in the Credit Agreement.
Consolidated Total Debt Ratio (Consolidated Debt
divided by Adjusted Pro Forma EBITDA) /7/
========
2. Section 7.1(b) - Interest Expense Coverage Ratio
------------------------------------------------
Consolidated EBITDA of the Borrower and its Subsidiaries for the relevant
twelve-month period calculated as follows:
-----------------------------
Consolidated Net Income/8/
+Consolidated Income Tax Expense/9/
+Consolidated Net Interest Expense/10/
+non-cash charges for amortization and
depreciation determined on a
consolidated basis in accordance with
GAAP/11/
+compensation expense accrued in
respect of Stock Appreciation Rights/12/
----------
/7/ Section 7.1(a) provides that the Consolidated Total Debt Ratio shall range
from [_________] to [________].
/8/ Consolidated Net Income to be calculated in accordance with the definition
of "Consolidated Net Income" in the Credit Agreement.
/9/ To the extent, and only to the extent, deducted in the computation of such
Consolidated Net Income. Consolidated Income Tax Expense to be calculated
in accordance with the definition of "Consolidated Income Tax Expense" in
the Credit Agreement.
/10/ To the extent, and only to the extent, deducted in the computation of such
Consolidated Net Income. Consolidated Net Interest Expense to be calculated
in accordance with the definition of "Consolidated Net Interest Expense" in
the Credit Agreement.
/11/ To the extent, and only to the extent, deducted in the computation of such
Consolidated Net Income.
/12/ To the extent, and only to the extent, deducted in the computation of
Consolidated Net Income.
-2-
-cash payments made in such period to
honor, redeem or discharge Stock
Appreciation Rights
-------------------------------------
Consolidated EBITDA
(b) Consolidated Net Interest Expense of the Borrower and its Subsidiaries for
the relevant twelve-month period calculated as follows:
-----------------------------------------
Consolidated Interest Expense/13/
-Consolidated Interest Income/14/
---------------------------------
Consolidated Net Interest Expense /15/
========
Interest Expense Coverage Ratio (Consolidated
EBITDA divided by Consolidated Net Interest
Expense)
Minimum Interest Expense Coverage Ratio /16/
--------
3. Section 7.1(c) - Fixed Charge Coverage Ratio
--------------------------------------------
(a) Consolidated EBITDA of the Borrower and its Subsidiaries(see
3 above) for the relevant twelve-month period
(b) Consolidated Fixed Charges for the relevant twelve-month
--------------------------------------------------------
period
------
--------
----------
/13/ Consolidated Interest Expense to be calculated in accordance with the
definition of "Consolidated Interest Expense" in the Credit Agreement.
/14/ Consolidated Interest Income to be calculated in accordance with the
definition of "Consolidated Interest Income" in the Credit Agreement.
/15/ If this number is equal to or less than 1, Consolidated Interest Expense
shall be deemed equal to 1.
/16/ Subsection 7.1(b) of the Credit Agreement provides that the Minimum
Interest Expense Coverage Ratio will range from [________] to [_______].
-3-
(Debt Service of the Borrower and its Subsidiaries for such
period)
--------
Fixed Charge Coverage Ratio (Consolidated EBITDA divided by
Consolidated Fixed Charges) /17/
--------
4. Section 7.1(d) - Stockholder's Equity
------------------------------------
(a) Stockholders' Equity/18/
(b) Minimum Stockholders' Equity /19/
--------
5. Section 7.1(e) - Capital Expenditures
------------------------------------
(a) Capital Expenditures during relevant period
(b) Capital Expenditures in preceding
relevant period
--------
(c) Maximum Permitted Capital Expenditues /20/
========
IN WITNESS WHEREOF, the undersigned has executed and delivered this
certificate as of the day and year set forth below.
----------
/17/ Subsection 7.1(c) of the Credit Agreement provides that the Fixed Charge
Ratio shall range from [_______] to [_______].
/18/ Stockholders' Equity to be calculated in accordance with the definition of
"Stockholders' Equity" in the Credit Agreement.
/19/ Subsection 7.1(d) of the Credit Agreement provides that the minimum
required Stockholders' Equity shall range from $[_______] to [$________].
/20/ Subsection 7.1(e) of the Credit Agreement provides that Capital
Expenditures (i) during fiscal year 1999, shall not exceed $ ,
------------
(ii) during fiscal year 2000, shall not exceed % of the Borrower's
--
consolidated total revenues for its 1999 fiscal year, (iii) during fiscal
year 2001, shall not exceed % of the Borrower's consolidated total
--
revenues for its 2000 fiscal year, and (iv) during each subsequent fiscal
year, shall not exceed % of the Borrower's consolidated total revenues
---
for its immediately preceding fiscal year.
-4-
U.S.I. HOLDINGS CORPORATION
By:
------------------------
Name:
Title:
Date:
-5-
EXHIBIT E
[CONFORMED AS EXECUTED]
================================================================================
GUARANTY, INDEMNITY AND SUBORDINATION AGREEMENT
dated as of
September 17, 1999
U.S.I. HOLDINGS CORPORATION,
as Borrower
USI INSURANCE SERVICES CORP.,
as Guarantor
and
CREDIT LYONNAIS CAYMAN ISLAND BRANCH,
as Administrative Agent
================================================================================
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I.
DEFINITIONS ........................................................................1
Section 1.1. Certain Terms .......................................................1
Section 1.2. Terms defined in Credit Agreement ...................................3
Section 1.3. Terms Generally......................................................3
ARTICLE 11.
GUARANTY AND INDEMNITY .............................................................4
Section 2.1. Guaranty.............................................................4
Section 2.2. Indemnity............................................................4
Section 2.3. Acceleration of Payment .............................................5
Section 2.4. Guaranty of Payment, Independently Enforceable.......................5
Section 2.5. Fraudulent Transfer Limitation.......................................5
ARTICLE III.
SUBORDINATION ......................................................................6
Section 3.1. Subordinated Liabilities.............................................6
Section 3.2. Prohibited Payments .................................................6
Section 3.3. Prohibited Liens.....................................................6
Section 3.4. Prohibited Actions ..................................................6
Section 3.5. Bankruptcy and Insolvency Proceedings ...............................6
Section 3.6. Held in Trust........................................................7
ARTICLE IV.
REIMBURSEMENT AND CONTRIBUTION RIGHTS...............................................8
Section 4.1. Reimbursement and Contribution Rights ...............................8
Section 4.2. Release of all other Reimbursement, Subrogation, and Contribution
Rights ...........................................................8
Section 4.3. No Claims............................................................9
Section 4.4. Subordination of Section 4.1 Rights .................................9
(i)
Page
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ARTICLE V.
GENERAL PROVISIONS ................................................................ 9
Section 5.1. The Liability of the Guarantor ..................................... 9
Section 5.2. Certain Waivers by Guarantor .......................................11
Section 5.3. Waiver of Benefit of Anti-Deficiency Laws ..........................12
Section 5.4. Reinstatement.......................................................12
Section 5.5. Authority of Guarantor or Borrower .................................13
Section 5.6. Condition of the Borrower...........................................13
Section 5.7. Acceptance and Notice...............................................13
Section 5.8. Rights Cumulative...................................................13
Section 5.9. Expenses ...........................................................13
Section 5.10. Notice of Events ...................................................14
Section 5.11. Set Off ............................................................14
Section 5.12. Representations and Warranties .....................................14
Section 5.13. Survival of Warranties .............................................15
Section 5.14. Notices ............................................................15
Section 5.15. Severability........................................................15
Section 5.16. Amendments and Waivers..............................................15
Section 5.17. Headings............................................................16
Section 5.18. Applicable Law .....................................................16
Section 5.19. Successors and Assigns .............................................16
Section 5.20. Consent to Jurisdiction and Service of Process .....................16
Section 5.21. Waiver of Trial by Jury ............................................16
Section 5.22. No Other Writing ...................................................17
Section 5.23. Further Assurances .................................................17
Section 5.24. Counterparts; Effectiveness.........................................17
Section 5.25. Statute of Limitations .............................................17
(ii)
GUARANTY,
INDEMNITY
AND
SUBORDINATION AGREEMENT
This Guaranty, Indemnity and Subordination Agreement (as amended,
supplemented or otherwise modified from time to time, this "Agreement") dated as
of September 17, 1999, is made by USI INSURANCE SERVICES CORP., a Delaware
corporation (the "Guarantor"), and, solely for the purposes of Section 4.1
hereof, U.S.I. HOLDINGS CORPORATION, a Delaware corporation (the "Borrower"), in
each case for the benefit of the Persons that now are or at any time hereafter
become party as a Lender to the Credit Agreement described herein (the
"Lenders"), Credit Lyonnais Cayman Island Branch as Administrative Agent for the
Lenders (in such capacity, the "Administrative Agent") and in its individual
capacity, The Chase Manhattan Bank, as Syndication Agent (in such capacity, the
"Syndication Agent") and all other present and future Holders of any of the
Guaranteed Obligations described herein (all, collectively, including the
Lenders, the Administrative Agent and the Syndication Agent, the
"Beneficiaries").
Recitals
The Guarantor is a Subsidiary of the Borrower.
The Borrower has requested that credit be extended to the Borrower on
terms and conditions set forth in the Credit Agreement, and the Beneficiaries
are willing to extend such credit on such terms and conditions only if Guarantor
executes and delivers this Agreement.
To induce the Beneficiaries to enter into the Credit Agreement, and in
consideration thereof and of any and all credit at any time extended thereunder,
the Guarantor has offered to issue the guaranties and indemnities and enter into
the agreements set forth herein.
Accordingly, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Guarantor hereby agrees for the direct and enforceable benefit of
each and all of the Beneficiaries as follows:
ARTICLE I.
DEFINITIONS
Section 1.1. Certain Terms. As used in this Agreement, the following
terms have the meanings specified below:
"Bankruptcy Code" means Title 11 of the United States Code, as from
time to time amended.
"Credit Agreement" means the Credit Agreement dated as of September
17, 1999 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement") among the Borrower, the Lenders parties thereto, the
Administrative Agent and the Syndication Agent, as such agreement from time to
time may be modified, amended, restated, extended, refinanced or replaced in any
manner or in any respect (including so as to reduce or increase the amount or
cost of credit extended thereunder or to shorten or extend the time of payment
thereunder or in any other manner change the amount or terms of credit extended
to the Borrower or the identity, rights or obligations of any party thereto).
"Discharge of the Credit Agreement" means that all obligations of the
Lenders to extend credit under the Credit Agreement (including. any obligation
to issue Letters of Credit) have expired or been terminated and have been
absolutely, unconditionally and irrevocably discharged and all Obligations at
any time created, incurred or outstanding (except Obligations for
indemnification which are then contingent and in respect of which no claim or
demand has then been made) have been fully and finally paid in cash.
"Guaranteed Obligations" has the meaning set forth in Section 2.1.
"Holder" means, in respect of any Guaranteed Obligation, the Person
entitled to enforce payment thereof and specifically includes each Lender and
the Administrative Agent.
"Obligations" means all direct or indirect debts, liabilities and
obligations of the Borrower or any other Loan Party of any and every type and
description at any time arising under or in connection with the Credit Agreement
or any other Loan Document, to the Administrative Agent, the Syndication Agent,
any Lender, any Person entitled to indemnification pursuant to the Credit
Agreement or any other Loan Document or any other Person, in each case whether
now outstanding or hereafter created or incurred, whether or not the right of
such Person to payment in respect of any such debts, liabilities or obligations
is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured and
whether or not such claim is discharged, stayed or otherwise affected by any
bankruptcy case or insolvency, reorganization, receivership, dissolution or
liquidation proceeding, and shall include (a) all liabilities of the Borrower
for principal of, and interest on, any and all Loans at any time outstanding
under the Credit Agreement, (b) all liabilities of the Borrower under the Loan
Documents for any fees, costs, taxes, expenses, indemnification and other
amounts payable thereunder, (c) all reimbursement obligations of the Borrower
and Unpaid Drawings with respect to Letters of Credit under the Credit
Agreement, (d) all liabilities of the Borrower under or in respect of Interest
Rate Protection Agreements entered into with a Lender or any affiliate of a
Lender (whether or not such Lender later ceases to be a Lender under the Credit
Agreement), (e) all liabilities of the Guarantor under the Subsidiary Guaranty
and (f) all other liabilities of the Borrower or any other Loan Party under or
in respect of any of the Loan Documents or any of the transactions contemplated
thereby, and specifically includes any and all present and future "Obligations"
as such term is defined in the Credit Agreement.
"Permitted Payment" means any payment by the Borrower or its
Subsidiaries on account of Subordinated Liabilities permitted under the Credit
Agreement.
2
"Post-Petition Interest and Expense Claims" means any and all claims
of any Holder (a) for interest on any Obligations determined for any period of
time occurring after the commencement of any case under the Bankruptcy Code or
any other insolvency, reorganization, receivership, dissolution or liquidation
proceeding at the contract rate (including any applicable post-default increase
therein) set forth in the Credit Agreement or any other Loan Document or (b) for
cost and expense reimbursements or indemnification on the terms set forth in the
Credit Agreement or any other Loan Document relating to costs and expenses
incurred and indemnification rights accrued at any time after the commencement
of any such case or proceeding, in each case to the extent such claim accrues or
becomes payable in accordance with the provisions of the Credit Agreement or
other Loan Documents (or would have accrued or become payable if enforceable or
allowable in such case or proceeding), whether or not such claim is enforceable,
allowable or allowed in such case or proceeding and even if such claim is
disallowed therein.
"Subordinated Liabilities" has the meaning set forth in Section 3.1.
Section 1.2. Terms defined in Credit Agreement. Unless the context
otherwise requires, the following terms used in this Agreement are used as
defined in the Credit Agreement:
Affiliate
Business Days
Change of Control
Consolidated EBITDA
Default
Event of Default
Lenders
Lien
Loan Documents
Loan Parties
Material Adverse Effect
Subsidiary
Person
Required Lenders
Security Documents
Subsidiary
Transfer
In addition, any other capitalized terms not otherwise defined herein
shall have the meaning given in the Credit Agreement.
Section 1.3. Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include," "includes" and "including" shall
be deemed to be followed by the phrase "without limitation." The word "will"
shall be construed to have the same meaning and effect as the word "shall."
Unless the context requires otherwise (a) any definition of or reference to any
agreement,
3
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors,
transferees and assigns, (c) the words "herein," "hereof" and "hereunder," and
words of similar import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision hereof, (d) all references herein
to Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e)
the words "asset" and "property" shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, whether real, personal or mixed and of every type and description.
ARTICLE II.
GUARANTY AND INDEMNITY
Section 2.1. Guaranty. The Guarantor hereby absolutely and
unconditionally guarantees the punctual payment when due, whether at stated
maturity, by acceleration or otherwise, of (a) all Obligations now outstanding
or hereafter arising under or in connection with the Credit Agreement or any
other Loan Document, whether for principal of or the interest thereon or for the
principal of or interest on any other credit extended by any Lender or any of
their respective successors, assigns or participants to the Borrower or to any
other Person for the account of the Borrower or for fees, taxes, additional
compensation, expense reimbursements, indemnification or otherwise, (b) each
other debt, liability or obligation of the Borrower or the Guarantor now
outstanding or hereafter arising under any of the Loan Documents, and (c) any
and all Post-Petition Interest and Expense Claims arising in respect of any of
the foregoing (such Obligations, other debts, liabilities and obligations, and
Post-Petition Interest and Expense Claims, collectively, are the "Guaranteed
Obligations").
Section 2.2. Indemnity. The Guarantor hereby agrees to pay and assume
all risk of, and to defend, indemnify and hold harmless each Beneficiary and all
of its Affiliates from and against, any and all claims, damages, liabilities,
losses, costs and expenses (including all fees and disbursements of legal
counsel, whether or not suit is brought) arising from, based on or relating in
any manner to (a) any inaccuracy in or breach of any of the representations and
warranties set forth in the Credit Agreement or any other Loan Document or any
failure by any Loan Party to perform or observe, or any breach of, any of the
covenants and agreements set forth in the Credit Agreement or any other Loan
Document, in each case whether or not such inaccuracy, failure or breach was
caused by the Borrower or the Guarantor or any other Person or resulted from an
Act of God or otherwise and whether or not such inaccuracy, failure or breach is
otherwise within the control of the Borrower or the Guarantor or any other
Person, or (b) any and all Post-Petition Interest and Expense Claims, whether or
not allowed or enforceable in any bankruptcy case or insolvency, reorganization,
receivership, dissolution or liquidation proceeding and even if disallowed or
not enforceable therein.
4
Section 2.3. Acceleration of Payment. If (a) the Guarantor fails to
make any payment due and demanded of the Guarantor hereunder, (b) the Guarantor
becomes a debtor in any bankruptcy case or the subject of any insolvency,
reorganization, receivership, dissolution or liquidation proceeding commenced
voluntarily by the Guarantor or (if it remains pending for more than 60 days or
the Guarantor consents to entry of an order for relief therein) commenced
involuntarily against the Guarantor, or (c) payment of any of the Obligations
becomes due or is demanded from the Borrower after the occurrence of any Change
of Control or Event of Default, then (in each such event) all liability of the
Guarantor under this Agreement that is not then due and payable shall thereupon
become and be immediately due and payable, without notice or demand.
Section 2.4. Guaranty of Payment, Independently Enforceable. The
Guarantor (a) guarantees that the Guaranteed Obligations will be paid in
accordance with the terms of the Credit Agreement and the other Loan Documents,
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights and claims of any Holder
of Guaranteed Obligations against the Borrower or any other Guarantor with
respect thereto and even if any such rights or claims are modified, reduced or
discharged in any bankruptcy case or insolvency or liquidation proceeding or
otherwise and (b) agrees that such guaranty is a guaranty of payment when due
and not of collectibility. The obligations of the Guarantor under this Agreement
are independent of the Guaranteed Obligations, and a separate action or actions
may be brought and prosecuted against the Guarantor to enforce this Agreement,
whether or not any action is brought against the Borrower or any other guarantor
liable for any of the Guaranteed Obligations and whether or not the Borrower or
any other guarantor liable for any of the Guaranteed Obligations is joined in
any such action or actions.
Section 2.5. Fraudulent Transfer Limitation. The Guarantor represents
and warrants that, on the date it becomes bound as the Guarantor hereunder and
after giving effect to the liability incurred by it under this Agreement and the
rights granted to it in Article IV, (a) the fair value of the assets of each
Loan Party, at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise; (b) the present fair saleable value of
the property of each Loan Party will be greater than the amount that will be
required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (c) each Loan Party, on a going concern basis, will
be able to pay its debts and liabilities, subordinated, contingent or otherwise,
as such debts and liabilities become absolute and matured; and (d) each Loan
Party will not have unreasonably small capital with which to conduct the
business in which it is engaged as such business is now conducted and is
proposed to be conducted following such date. If, notwithstanding the foregoing,
enforcement of the liability of the Guarantor under this Agreement for the full
amount of the Guaranteed Obligations would be an unlawful or voidable transfer
under any applicable fraudulent conveyance or fraudulent transfer law or any
comparable law, then the liability of the Guarantor hereunder shall be reduced
to the highest amount for which such liability may then be enforced without
giving rise to an unlawful or voidable transfer under any such law.
5
ARTICLE III.
SUBORDINATION
Section 3.1. Subordinated Liabilities. Except to the extent permitted
by the Credit Agreement, the Guarantor hereby agrees that any and all present
and future debts, liabilities and obligations of every type and description
(whether for money borrowed, on intercompany accounts, for provision of goods or
services, under cash management arrangements or tax sharing, management or
contribution agreements, for reimbursement, contribution or otherwise on account
of this Agreement or any other agreement of the Guarantor by which any
indebtedness or other liability is guaranteed or on account of any payment made
under this Agreement or any such other agreement, or on account of any other
transaction, agreement, occurrence or event and whether absolute or contingent,
direct or indirect, matured or unmatured, liquidated or unliquidated, created
directly or acquired from another, or sole, joint, several or joint and several)
now outstanding or hereafter incurred, arising or owed to the Guarantor by the
Borrower, or by any Subsidiary of the Borrower (collectively, the "Subordinated
Liabilities") shall be, and hereby are, postponed and subordinated to the prior
payment of all Guaranteed Obligations in full and in cash.
Section 3.2. Prohibited Payments. Until Discharge of the Credit
Agreement, the Guarantor will not demand, xxx for, accept or receive, or cause
or permit any other Person to make, any payment on or transfer of property on
account of any Subordinated Liabilities, except a Permitted Payment.
Section 3.3. Prohibited Liens. Except to the extent permitted under
the Credit Agreement, the Guarantor will not demand, accept or hold any Lien
upon any property of the Borrower or any Subsidiary of the Borrower as security
for any of the Subordinated Liabilities, and any such Lien shall be void.
Section 3.4. Prohibited Actions. Until Discharge of the Credit
Agreement, the Guarantor will not, without the prior written consent of the
Required Lenders, commence or join with any other Person in commencing any
bankruptcy case or insolvency, reorganization, receivership, dissolution or
liquidation proceeding of or against the Borrower or any Subsidiary of the
Borrower.
Section 3.5. Bankruptcy and Insolvency Proceedings. In any case under
the Bankruptcy Code in which any Loan Party or any other Subsidiary of the
Borrower is the debtor, and in each other insolvency, reorganization,
receivership, dissolution or liquidation proceeding by, against or affecting any
Loan Party or any other Subsidiary of the Borrower:
(a) Priority of Payment. The Holders of Guaranteed Obligations shall
be entitled to receive payment of all amounts due or to become due on or in
respect of the Guaranteed Obligations (including all Post-Petition Interest and
Expense Claims), in full and in cash, before the Guarantor is entitled to
receive any payment or distribution of any kind or
6
character, whether in cash, property or securities or otherwise, on account of
any of the Subordinated Liabilities; and
(b) Turnover of Payments and Distributions. The Holders of Guaranteed
Obligations (including Post-Petition Interest and Expense Claims) and other
Beneficiaries shall be entitled to receive, for application to the payment
thereof, all payments and distributions of any kind or character, whether in
cash, property or securities or otherwise (including any such payment or
distribution which may be payable or deliverable by reason of the payment of any
other debt or liability of any Loan Party or any other Subsidiary of the
Borrower or the Guarantor being subordinated to the payment of the Subordinated
Liabilities), which may be payable or deliverable in respect of the Subordinated
Liabilities in any such case or proceeding.
(c) Disallowed Post-Petition Interest and Expense Claims. The
Guarantor expressly acknowledges and agrees that, pursuant to the provisions of
Section 3.5(b), any such payment or distribution payable or deliverable in
respect of Subordinated Liabilities will be turned over to, and will become the
property of, the Beneficiaries until the Beneficiaries have received payment in
full and in cash of all Guaranteed Obligations, including any and all
Post-Petition Interest and Expense Claims that are not enforceable, allowable or
allowed in such case or proceeding and as to which, as a consequence, the
Guarantor will not have any subrogation claim in such case or proceeding. The
Guarantor acknowledges and agrees that all such Post-Petition Interest and
Expense Claims shall be included in the Guaranteed Obligations and shall be paid
from any such payment or distribution because it is the intention of the
Guarantor and Beneficiaries that the Guaranteed Obligations shall be determined
and shall be guaranteed and paid by the Guarantor without regard to any rule of
law or order which may relieve Borrower or any other obligor, or the estate in
any such case or proceeding, of liability therefor.
(d) Claims in Bankruptcy. The Guarantor will file all claims against
any Loan Party or any other Subsidiary of the Borrower in any case under the
Bankruptcy Code and in each other insolvency, reorganization, receivership,
dissolution or liquidation proceeding in which the filing of claims is required
or permitted by law upon any of the Subordinated Liabilities and will assign to
the Agent, for the benefit of the Beneficiaries, all rights of the Guarantor
thereunder. If the Guarantor does not file any such claim at least 30 days prior
to any applicable claims bar date, each Beneficiary is hereby authorized (but
shall not be obligated), as attorney-infact for the Guarantor with full power of
substitution, either to file such claim or proof thereof in the name of the
Guarantor or, at the option of such Beneficiary upon consent by the
Administrative Agent, to assign such claim to the Administrative Agent, in trust
for the benefit of the Beneficiaries, or its nominee, and cause such claim or
proof thereof to be filed by such Beneficary's agent in the name of the
Administrative Agent or its nominee, as such trustee.
Section 3.6. Held in Trust. If any payment, transfer or distribution
is made to the Guarantor upon any Subordinated Liabilities that is not permitted
to be made under this Article III or that the Beneficiaries are entitled to
receive under this Article III, the Guarantor shall receive and hold the same in
trust, as trustee for the benefit of the Beneficiaries, and shall forthwith
transfer and deliver the same to the Administrative Agent, for account of the
7
Beneficiaries, in precisely the form received (except for any required
endorsement), for application to the payment of Guaranteed Obligations.
ARTICLE IV.
REIMBURSEMENT AND CONTRIBUTION RIGHTS
Section 4.1. Reimbursement and Contribution Rights. The Guarantor and
the Borrower desire to agree upon and allocate among themselves, in a fair and
equitable manner, their rights of reimbursement and contribution when any
payment is made by the Guarantor under this Agreement. Accordingly:
(a) Reimbursement by the Borrower. Subject to and upon Discharge of
the Credit Agreement and the payment of all Guaranteed Obligations in full and
in cash, the Borrower will reimburse the Guarantor the amount of any payment
made by the Guarantor on account of Guaranteed Obligations pursuant to this
Agreement.
(b) Payments by the Borrower are Capital Contributions. The Borrower
agrees that each payment made by the Borrower on account of Guaranteed
Obligations pursuant to this Agreement made by it to reimburse the Guarantor for
any such payment made by the Guarantor, shall constitute a contribution by the
Borrower to the common equity capital of the Guarantor. Accordingly, the
Borrower hereby waives, releases and discharges, absolutely, unconditionally,
irrevocably and forever, all rights of recourse, reimbursement, contribution or
indemnity and all other claims that the Borrower might otherwise have or acquire
against the Guarantor or any other Person liable for the payment of any of the
Guaranteed Obligations (including, without limitation, the owner of any interest
in collateral subject to a Lien securing any of the Guaranteed Obligations) and
all rights of subrogation that the Borrower might otherwise have or acquire
against any Beneficiary by reason of any such payment or otherwise as a result
of or in connection with this Agreement, whether such rights or claims are
conferred by agreement, implied or created by law or otherwise.
(c) Reimbursement and Contribution Rights Unsecured. The reimbursement
and contribution rights set forth in this Section 4.1 are unsecured obligations
of the Borrower.
Section 4.2. Release of all other Reimbursement, Subrogation, and
Contribution Rights. The Guarantor hereby waives, releases and discharges,
absolutely, unconditionally, irrevocably and forever, all rights of recourse,
reimbursement, contribution or indemnity and all other claims that the Guarantor
might otherwise have or acquire against the Borrower or any other Person liable
for the payment of any of the Guaranteed Obligations (including, without
limitation, the owner of any interest in collateral subject to a Lien securing
any of the Guaranteed Obligations) and all rights of subrogation that the
Guarantor might otherwise have or acquire against any Beneficiary by reason of
any payment made by the Guarantor under
8
this Agreement or otherwise as a result of or in connection with this Agreement,
whether such rights or claims are conferred by agreement, implied or created by
law or otherwise.
Section 4.3. No Claims. Neither the execution and delivery of this
Agreement by the Guarantor nor any payment by the Guarantor under this Agreement
shall give rise to any claim (as that term is defined in the Bankruptcy Code) in
favor of the Guarantor against the Borrower or any Subsidiary of the Borrower,
except as set forth in Section 4.1
Section 4.4. Subordination of Section 4.1 Rights. All rights and
claims reserved in or arising under Section 4.1 shall be included among the
Subordinated Liabilities.
ARTICLE V.
GENERAL PROVISIONS
Section 5.1. The Liability of the Guarantor. (a) Liability Absolute
and Unconditional. The liability of the Guarantor under this Agreement shall be
absolute and unconditional.
(b) Liability not Limited. Subject only to Section 2.5, the liability
of the Guarantor under this Agreement shall be unlimited in amount.
(c) Liability Irrevocable and Continuing. The liability of the
Guarantor under this Agreement shall constitute an irrevocable and continuing
offer and agreement guaranteeing payment of any and all Guaranteed Obligations
and granting indemnification and subordination as herein set forth and shall
extend to all Guaranteed Obligations and indemnified matters and Subordinated
Liabilities whether now outstanding or created or incurred at any future time,
whether or not created or incurred pursuant to any agreement presently in effect
or hereafter made, until Discharge of the Credit Agreement. To the extent any
contingent Obligation survives the expiration or termination of the Loan
Documents and the repayment of the Obligations that are then due, the
Guarantor's liability under this Agreement shall likewise survive.
(d) Liability not Affected or Impaired. The liability of the Guarantor
under this Agreement shall not be affected or impaired in any manner by, (i) the
failure of any Beneficiary to preserve, protect or enforce any right to require
any Person to become or remain a Guarantor hereunder, (ii) any lack of validity
or enforceability of the Credit Agreement or any other Loan Document or any
other agreement, instrument or document relating thereto, (iii) any change in
the time, manner or place of payment of, or in any other term of, any of the
Guaranteed Obligations, or any other amendment or waiver of or any consent to
departure from the terms of any Loan Document, including any extension or
renewal of the Guaranteed Obligations (whether or not for longer than the
original period) and any increase in the Guaranteed Obligations resulting from
the extension of additional credit to the Borrower or otherwise, (iv) any
taking, failure to take, failure to create, perfect or ensure the priority of,
or exchange, release or termination or lapse of any Lien securing any Guaranteed
Obligations, or any taking, failure to
9
take, release or amendment or waiver of or consent to departure from any other
guaranty of, any of the Guaranteed Obligations, (v) any manner or order of sale
or other enforcement of any Lien securing any of the Guaranteed Obligations or
any manner or order of application of the proceeds of any such Lien to the
payment of the Guaranteed Obligations or any failure to enforce any Lien or to
apply any proceeds thereof, (vi) any change, restructuring or termination of the
corporate structure or existence of the Borrower or any of its Subsidiaries or
Affiliates, the Guarantor, or any other Person, or (vii) any other circumstance
which might otherwise constitute a defense (except the defense of payment)
available to, or a discharge of, a surety or guarantor.
(e) Liability Remains Valid and Enforceable. The liability of the
Guarantor under this Agreement shall remain valid and enforceable and shall not
be subject to any reduction, limitation, impairment, discharge or termination
for any reason (other than indefeasible payment in full of the Guaranteed
Obligations), including the occurrence of any of the following, whether or not
the Guarantor shall have had notice or knowledge of any of them: (i) any failure
or omission to assert or enforce or agreement or election not to assert or
enforce, or the stay or enjoining, by order of court, by operation of law or
otherwise, of the exercise or enforcement of, any claim or demand or any right,
power or remedy (whether arising under the Loan Documents, at law, in equity or
otherwise) with respect to the Guaranteed Obligations or any agreement relating
thereto, or with respect to any other guaranty of or security for the payment of
the Guaranteed Obligations; (ii) any rescission, waiver, amendment or
modification of, or any consent to departure from, any of the terms or
provisions (including provisions relating to events of default) of the Credit
Agreement, any of the other Loan Documents or any agreement or instrument
executed pursuant thereto, or of any other guaranty or security for the
Guaranteed Obligations, in each case whether or not in accordance with the terms
of the Credit Agreement, such Loan Document or any agreement relating to such
other guaranty or security; (iii) the Guaranteed Obligations, or any agreement
relating thereto, at any time being found to be illegal, invalid or
unenforceable in any respect; (iv) the application of payments received from any
source to the payment of any liability other than the Guaranteed Obligations,
even though any Beneficiary might have elected to apply such payment to any part
or all of the Guaranteed Obligations; (v) any Beneficiary's consent to the
change, reorganization or termination of the corporate structure or existence of
the Borrower or any of its Subsidiaries and to any corresponding restructuring
of the Guaranteed Obligations; (vi) any failure to perfect or continue
perfection of a security interest in any collateral which secures any of the
Guaranteed Obligations; and (vii) any defenses, set-offs or counterclaims which
the Borrower or any other Loan Party may allege or assert against any
Beneficiary in respect of the Guaranteed Obligations, including, for example,
failure of consideration, breach of warranty, payment, statute of frauds,
statute of limitations, accord and satisfaction and usury.
(f) Liability Released only by a Signed Writing. The liability of the
Guarantor under this Agreement and each right, remedy, interest or power granted
herein or arising hereunder may be released only by a writing signed by each
Beneficiary against which enforcement of such release is sought.
10
Section 5.2. Certain Waivers by Guarantor. The Guarantor hereby waives
and agrees not to assert or take advantage of:
(a) Prior Resort to any Other Person, Property or Right. Any right to
require any Beneficiary to proceed against or exhaust its recourse against the
Borrower, or any other Person liable for any of the Guaranteed Obligations or
against any Lien securing any of the Guaranteed Obligations or against any other
Person or property, before demanding and enforcing payment of the Guaranteed
Obligations from the Guarantor under this Agreement;
(b) Certain Defenses. Any defense that may arise by reason of (i) the
incapacity, lack of authority, death or disability of the Borrower, or any other
Person, (ii) the revocation or repudiation of any of the Loan Documents,
including Section 4.1 of this Agreement, by the Borrower, or any other Person,
(iii) the unenforceability in whole or in part of the Loan Documents, including
Section 4.1 of this Agreement, or any other instrument, document or agreement,
(iv) the failure of any Beneficiary to file or enforce a claim against any
Person liable for any of the Obligations or in any bankruptcy case or
insolvency, receivership, dissolution or liquidation proceeding, (v) any
election made by any Holder of Guaranteed Obligations as to any right or remedy
granted or available to it under the Bankruptcy Code, or (vi) any other
borrowing or grant of a security interest under Section 364 of the Bankruptcy
Code;
(c) Notices and Demands. Presentment, demand for payment, protest,
notice of discharge, notice of acceptance of this Agreement, notice of the
incurrence of, or any default in respect of, any Guaranteed Obligation, and all
other indulgences and notices of every type or nature, including, to the maximum
extent permitted by law, notice of the disposition of any collateral security;
(d) Election of Remedies. Any defense based upon an election of
remedies (including, if available, an election to proceed by non-judicial
foreclosure) or any other act or omission of any Beneficiary or any other Person
which destroys or otherwise impairs any right that the Guarantor might otherwise
have for subrogation, recourse, reimbursement, indemnity, exoneration,
contribution or otherwise against the Borrower, or any other Person
(e) Collateral Security. Any defense based upon any grant of, any
failure to demand, take, perfect, protect or enforce, or any modification or
release of any Lien securing, or guaranty of, any or all of the Guaranteed
Obligations, or any failure to create or perfect or ensure the priority or
enforceability of any security interest in any collateral for any of the
Guaranteed Obligations or any act or omission related thereto;
(f) Recoupment and Setoff. Any right to recoup from or offset against
any of the Guaranteed Obligations any claim that may be held or asserted by or
available to (i) the Borrower or any other Person liable for any of the
Guaranteed Obligations against any Beneficiary or (ii) the Guarantor against the
Borrower, any other Beneficiary or any other Person; and
11
(g) Other Matters. Any other claim, right or defense (including, by
way of illustration and without limitation, such matters as failure or
insufficiency of consideration, statute of limitations, breach of contract,
tortious conduct, accord and satisfaction, and discharge by agreement or conduct
or in any bankruptcy case or other insolvency or liquidation proceeding), except
the defense of payment, that may be held or asserted by or available to (1) the
Borrower or any other Person liable for any of the Guaranteed Obligations
against any Beneficiary or (ii) the Guarantor against the Borrower, any other
Beneficiary or any other Person.
Section 5.3. Waiver of Benefit of Anti-Deficiency Laws. If, in the
exercise of any rights and remedies, any Beneficiary shall forfeit any of its
rights or remedies, including its right to obtain a deficiency judgment against
the Borrower or any other Person, whether because of any applicable laws
pertaining to recourse to collateral security or election of remedies or barring
claims for a deficiency following foreclosure of any Lien or the like, the
Guarantor hereby consents to such action by such Holder and, to the maximum
extent permitted by applicable law, waives any claim or defense based upon such
recourse to collateral security, election of remedies, loss of claims for a
deficiency or the like, even if such action by such Holder shall result in a
full or partial loss of any rights of subrogation, recourse, reimbursement,
contribution or indemnification which the Guarantor might otherwise have had but
for such action by such Holder or but for the provisions of this Section 5.3.
Furthermore, the Guarantor waives all rights and defenses arising out of any
recourse to collateral security or election of remedies by any Beneficiary, even
though such recourse to collateral security or election of remedies, such as a
nonjudicial foreclosure with respect to security for any Guaranteed Obligation,
has destroyed the Guarantor's rights of subrogation, recourse, reimbursement,
contribution or indemnification against the Borrower or any other Person by the
operation of applicable law or otherwise. Any election of remedies which results
in the denial or impairment of the right of any Beneficiary to seek a deficiency
judgment against the Borrower shall not, to the maximum extent permitted by
applicable law, impair the Guarantor's obligation to pay the full amount of the
Guaranteed Obligations. In the event any Beneficiary shall bid at any
foreclosure or trustee's sale or at any private sale permitted by law or the
Loan Documents, such Holder may bid all or less than the amount of the
Guaranteed Obligations and (if expressly permitted under the Loan Documents or
approved in writing by the Agent and Required Lenders) the amount of such bid
need not be paid by such Holder but shall be credited against the Guaranteed
Obligations. To the extent permitted by applicable law, the amount of the
successful bid at any such sale, whether any Beneficiary or any other Person is
the successful bidder, shall be conclusively deemed to be the fair market value
of the property being sold and the difference between such bid amount and the
remaining balance of the Guaranteed Obligations shall be conclusively deemed to
be the amount of the Guaranteed Obligations guaranteed under this Agreement,
notwithstanding that any present or future law or court decision or ruling may
have the effect of reducing the amount of any deficiency claim to which any
Beneficiary might otherwise be entitled if no Holder had bid at any such sale.
Section 5.4. Reinstatement. If at any time any payment on any
Guaranteed Obligation is set aside, avoided or rescinded or must otherwise be
restored or returned, this Agreement and the liability of the Guarantor under
this Agreement and the indemnification and subordination granted hereby and all
other liabilities of the Guarantor hereunder shall remain in full force and
effect and, if previously released or terminated, shall be automatically and
fully reinstated, without any necessity for any act, consent or agreement of the
Guarantor, as fully as if
12
such payment had never been made and as fully as if any such release or
termination had never become effective.
Section 5.5. Authority of Guarantor or Borrower. It is not necessary
for any Beneficiary to inquire into the capacity or powers of the Guarantor or
Borrower or the officers, directors or any agents acting or purporting to act on
behalf of any of them.
Section 5.6. Condition of the Borrower. The Guarantor is fully aware
of the financial condition of the Borrower and is executing and delivering this
Agreement based solely upon the Guarantor's own independent investigation of all
matters pertinent hereto and is not relying in any manner upon any
representation or statement by any Beneficiary. The Guarantor represents and
warrants that it is in a position to obtain, and the Guarantor hereby assumes
full responsibility for obtaining, any additional information concerning the
financial condition of the Borrower or any of its subsidiaries or their
respective properties, financial condition and prospects and any other matter
pertinent hereto as the Guarantor may desire, and the Guarantor is not relying
upon or expecting any Beneficiary to furnish to the Guarantor any information
now or hereafter in the possession of any Beneficiary concerning the same or any
other matter. By executing this Agreement, the Guarantor knowingly accepts the
full range of risks encompassed within a contract of this type, which risks the
Guarantor acknowledges. The Guarantor shall not have the right to require any
Beneficiary to obtain or disclose any information with respect to the Guaranteed
Obligations, the financial condition or prospects of the Borrower or any
Subsidiary of the Borrower, the ability of the Borrower to pay or perform the
Guaranteed Obligations, the existence, perfection, priority or enforceability of
any collateral security for any or all of the Guaranteed Obligations, the
existence or enforceability of any other guaranties of all or any part of the
Guaranteed Obligations, any action or non-action on the part of any Beneficiary,
the Borrower, any Subsidiary of the Borrower, or any other Person, or any other
event, occurrence, condition or circumstance whatsoever.
Section 5.7. Acceptance and Notice. The Guarantor acknowledges
acceptance hereof and reliance hereon by the Administrative Agent and each other
Beneficiary and waives, irrevocably and forever, all notice thereof.
Section 5.8. Rights Cumulative. The rights, powers and remedies given
to the Beneficiaries by this Agreement are cumulative and shall be in addition
to and independent of all rights, powers and remedies given to any Beneficiary
by virtue of any statute or rule of law or in any of the other Loan Documents or
any agreement between the Guarantor and one or more of the Beneficiaries or
between the Borrower and one or more of the Beneficiaries. Any forbearance or
failure to exercise, and any delay by any Beneficiary 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.
Section 5.9. Expenses. The Guarantor agrees to pay, or cause to be
paid, on demand, and to save each Beneficiary harmless against costs of and
liability for, any and all reasonable costs and expenses (including reasonable
fees and disbursements of counsel) incurred
13
or expended by any Beneficiary in connection with the enforcement of or
preservation of any rights under this Agreement.
Section 5.10. Notice of Events. As soon as the Guarantor obtains
knowledge thereof, unless the Borrower has given Beneficiaries written notice
thereof, the Guarantor shall give Beneficiaries written notice of any condition
or event which has resulted in (a) a material adverse change in the financial
condition of the Guarantor or the Borrower, or (b) any Default or Event of
Default.
Section 5.11. Set Off. In addition to all other rights any Beneficiary
may have under law or in equity, if any amount shall at any time be due and
payable by the Guarantor to any Beneficiary under this Agreement, such
Beneficiary is authorized at any time or from time to time, without notice (any
such notice being hereby expressly waived), to set off and to appropriate and to
apply any and all deposits (general or special, including but not limited to
indebtedness evidenced by certificates of deposit, whether matured or unmatured)
and any other indebtedness of any such Beneficiary owing to the Guarantor and
any other property of the Guarantor held by any Beneficiary to or for the credit
or the account of the Guarantor against and on account of the Guaranteed
Obligations and liabilities of the Guarantor to any Beneficiary under this
Agreement.
Section 5.12. Representations and Warranties. In order to induce
Beneficiaries to accept this Agreement and to enter into the Credit Agreement
and to make and maintain the loans and other extensions of credit thereunder, as
the case may be, the Guarantor hereby represents and warrants to the
Beneficiaries that the following statements are true and correct:
(a) Corporate Existence. The Guarantor is duly organized, validly
existing and in good standing under the laws of the state of Delaware, has the
corporate power to own its assets and to transact the business in which it is
now engaged and is duly qualified as a foreign corporation and in good standing
under the laws of each jurisdiction where its ownership or lease of property or
the conduct of its business requires such qualification, except for failures to
be so qualified, authorized or licensed that in the aggregate do not, and could
not reasonably be expected to, have a Material Adverse Effect.
(b) Corporate Power; Authorization; Enforceable Obligations. The
Guarantor has the corporate power, authority and legal right to execute, deliver
and perform this Agreement and all Security Documents and other Loan Documents
to which it is a party and to undertake and pay and perform all of its
liabilities and obligations hereunder and has taken all necessary corporate
action to authorize the execution, delivery, payment and performance hereof and
thereof on the terms and conditions set forth herein and therein. No consent of
any other Person (including, without limitation, stockholders, licensors or
creditors of the Guarantor), that has not been obtained and no license, permit,
approval or authorization of, exemption by, notice or report to, or
registration, filing or declaration with, any governmental authority is required
by the Guarantor in connection herewith or therewith. This Agreement and each
such Security Document and other Loan Document has been duly executed and
delivered by a duly authorized officer of the Guarantor and constitutes the
legally valid and binding obligation of the Guarantor, enforceable against the
Guarantor in accordance with its terms, except as enforcement may be
14
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws or equitable principles relating to or limiting creditors'
rights generally.
(c) No Legal Bar. The execution, delivery and performance of this
Agreement and all Security Documents and other Loan Documents to which the
Guarantor is a party, and the use of the proceeds of the borrowings and other
extensions of credit under the Credit Agreement, will not violate any provision
of any existing law or regulation binding on the Guarantor, or any order,
judgment, award or decree of any court, arbitrator or governmental authority
binding on the Guarantor, or the certificate of incorporation or bylaws of the
Guarantor or any securities issued by the Guarantor, or any mortgage, indenture,
debt agreement or other material agreement, instrument or undertaking to which
the Guarantor is a party or by which the Guarantor or any of its assets may be
bound and will not result in, or require, the creation or imposition of any Lien
on any of its property, assets or revenues.
(d) Consolidated EBITDA. The Consolidated EBITDA for the most recent
12 months of the Guarantor and its Subsidiaries is greater than or equal to 90%
of the Consolidated EBITDA of the Borrower and its Subsidiaries for such 12
month period.
Section 5.13. Survival of Warranties. All agreements, representations
and warranties made herein shall survive the execution and delivery of this
Agreement and the other Loan Documents and any increase in the amount of credit
that is or may be extended under the Credit Agreement.
Section 5.14. Notices. Any and all notices and communications to be
given to the Guarantor or any Beneficiary may be given by courier service,
personal service, mailing the same, postage prepaid, or by telex, facsimile
transmission or cable to each such party at its address set forth in the Credit
Agreement, on the signature pages hereof or to such other addresses as each such
party may in writing hereafter indicate, and such communication shall be deemed
to have been given when delivered in person or by courier service, upon receipt
of telefacsimile or telex, or three Business Days after depositing it in the
United States mail with postage prepaid and properly addressed; provided, that
notice to any Beneficiary shall not be effective until received by such
Beneficiary and by the Administrative Agent.
Section 5.15. Severability. In case any provision in or obligation
under this Agreement 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. Without
limiting the generality of the foregoing, the Guarantor shall be and remain
liable hereunder even if Section 4.1 is or becomes unenforceable as against the
Borrower.
Section 5.16. Amendments and Waivers. No amendment, modification,
termination or waiver of any provision of this Agreement, or consent to any
departure by the Guarantor therefrom, shall in any event be effective without
the written concurrence of the Required Lenders. Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given.
15
Section 5.17. 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.
Section 5.18. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
Section 5.19. Successors and Assigns. This Agreement is binding upon
the Guarantor and its successors and assigns and shall inure to the benefit of,
and be enforceable by, the Beneficiaries and their respective successors and
assigns. The Guarantor shall not assign this Agreement or any of the rights or
obligations of the Guarantor hereunder without the prior written consent of all
Lenders. Any Lender may, without notice or consent, assign its interest in this
Agreement in whole or in part in connection with an assignment permitted under
Section 10.6 of the Credit Agreement. The terms and provisions of this Agreement
shall inure to the benefit of any transferee or assignee in any such assignment
and the rights and privileges herein conferred upon such Beneficiary shall
automatically extend to and be vested in any assignee therein and all other
successors, transferees and assigns of each Beneficiary, subject to the terms
and conditions hereof.
Section 5.20. Consent to Jurisdiction and Service of Process. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST THE GUARANTOR ARISING OUT OF OR RELATING TO
THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK. BY EXECUTION AND DELIVERY OF THIS
AGREEMENT THE GUARANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS. The Guarantor
hereby 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 Guarantor at its address set forth in the Credit Agreement, such service
being hereby acknowledged by the Guarantor to be sufficient for personal
jurisdiction in any action against the Guarantor in any such court and to be
otherwise effective and binding service in every respect. Nothing herein shall
affect the right to serve process in any other manner permitted by law or shall
limit the right of any Beneficiary to bring proceedings against the Guarantor in
the courts of any other jurisdiction.
Section 5.21. Waiver of Trial by Jury. THE GUARANTOR AND, BY ITS
ACCEPTANCE OF THE BENEFITS HEREOF, EACH BENEFICIARY HEREBY AGREES TO WAIVE ITS
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT. 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. The
Guarantor and, by its acceptance of the benefits hereof, each Beneficiary (i)
acknowledges that this waiver is a material inducement for the Guarantor and the
Beneficiaries to enter into a business relationship, that the
16
Guarantor and Beneficiaries have already relied on this waiver in entering into
this Agreement or accepting the benefits thereof, as the case may be, and that
each will continue to rely on this waiver in its related future dealings and
(ii) further warrant and represent 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, AND THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS AGREEMENT. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
Section 5.22. No Other Writing. This writing is intended by the
Guarantor and Beneficiaries as the final expression of this Agreement and is
also intended as a complete and exclusive statement of the terms of their
agreement with respect to the matters covered hereby. No course of dealing,
course of performance or trade usage, and no parol evidence of any nature, shall
be used to supplement or modify any terms of this Agreement. There are no
conditions to the full effectiveness of this Agreement.
Section 5.23. Further Assurances. At any time or from time to time,
upon the request of the Administrative Agent or the Required Lenders, the
Guarantor shall execute and deliver such further documents and do such other
acts and things as the Administrative Agent of the Required Lenders may
reasonably request in order to effect fully the purposes of this Agreement.
Section 5.24. Counterparts; Effectiveness. This Agreement may be
executed in any number of counterparts and by the different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original for all purposes; but all such counterparts together
shall constitute but one and the same instrument. This Agreement shall become
effective as to the Guarantor upon the execution of a counterpart hereof by the
Guarantor and delivery of such counterpart to the Administrative Agent.
Section 5.25. Statute of Limitations. The Guarantor hereby waives the
right to plead any statute of limitations as a defense to any Guaranteed
Obligation to the fullest extent permitted by law.
[Remainder of page intentionally left blank]
17
IN WITNESS WHEREOF, the undersigned Guarantor has caused this
Agreement to be duly executed and delivered by its officer thereunto duly
authorized as of the date first written above.
Acknowledged and Agreed,
as of the last date first written above:
U.S.I. HOLDINGS CORPORATION U.S.I. INSURANCE SERVICES CORP.
By: /s/ Xxxxxxx Xxxxxxx By: /s/ Xxxxxxx Xxxxxxx
---------------------------------- ----------------------------------
Title: Vice President & Title: Vice President &
Chief Financial Officer Chief Financial Officer
CREDIT LYONNAIS CAYMAN
ISLAND BRANCH, as Administrative
Agent
By: /s/ G. Xxxxxxx Xxxxxx
-------------------------------
Title: Authorized Signatory
EXHIBIT F TO
CREDIT AGREEMENT
----------------
FORM OF
BORROWING NOTICE
,199
--------------- ------
Credit Lyonnais Cayman Island Branch, as Administrative Agent
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Le Goulven
Ladies and Gentlemen:
The undersigned, U.S.I. HOLDINGS CORPORATION (the "Borrower"), refers
to the Credit Agreement, dated as of September 17, 1999 (as the same may be
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement") by and among the Borrower, the banks and other financial
institutions from time to time that are party thereto (the "Lenders"), Credit
Lyonnais Cayman Island Branch, as administrative agent for the Lenders (the
"Administrative Agent") and The Chase Manhattan Bank, as syndication agent.
Capitalized terms used herein shall have the meanings given in the Credit
Agreement.
The Borrower hereby gives you irrevocable notice of its request for a
borrowing under the Credit Agreement (the "Proposed Borrowing") as follows:
(a)The requested date of the Proposed Borrowing is .
-----------,-----
(b) The Type of Loans comprising the Proposed Borrowing are:
[ ] Base Rate Loans in the aggregate amount of $ .
---------------
[ ] Eurodollar Rate Loans in the aggregate amount of $ .
----------
[ ] A combination of Base Rate Loan and Eurodollar Loans in the
aggregate amount of $ .
-------------------
(c) The amount and Interest Period of each Eurodollar Loan:
Amount Interest Period
------ ---------------
(d) The aggregate amount of the Proposed Borrowing is $ .
--------------
(e) The Proposed Borrowing consists of
[ ] Term Loans
[ ] Revolving Credit Loans
(f) (i) If the Proposed Borrowing consists of Revolving Credit Loans,
such Revolving Credit Loans shall consist of:
[ ] Acquisition Revolving Loans (briefly describe Acquisition
Funding)
[ ] Revolving Loans, other than Acquisition Revolving Loans
(g) The account at which proceeds of the Proposed Borrowing are to be
made available is as follows:
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties made by the Borrower and its
Subsidiaries in or pursuant to the Credit Agreement or in the other
Loan Documents are correct and complete in all material respects on
and as of the date hereof as if made on and as of the date hereof
(except that any such representation or warranty that is expressly
stated as being made only as of a specified earlier date shall have
been correct and complete in all material respects as of such earlier
date);
(B) no Default or Event of Default has occurred and is continuing on the
date hereof and no Default or Event of Default will exist after giving
effect to the Proposed Borrowing and the use of proceeds of such
Proposed Borrowing;
-2-
(C) the Borrower and each of its Subsidiaries is Solvent immediately prior
to the Proposed Borrowing, and will be Solvent after giving effect to
the Proposed Borrowing;
(D) [this notice is being delivered during the Revolving Credit
Availability Period and the date of the Proposed Borrowing is during
the Revolving Credit Availability Period.]/1/
If notice of this Proposed Borrowing has been given previously by
telephone, this notice should be considered a written confirmation.
U.S.I. HOLDINGS CORPORATION
By:
---------------------------
Name:
Title:
----------
/1/ Include in the case of a Proposed Borrowing of Revolving Credit Loans.
-3-
EXHIBIT G-1 TO
CREDIT AGREEMENT
----------------
FORM OF REVOLVING CREDIT NOTE
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND
PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO BELOW. TRANSFERS OF THIS NOTE
MUST BE RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT
TO THE TERMS OF SUCH CREDIT AGREEMENT.
REVOLVING CREDIT NOTE
---------------------
$ ,
--------------------- ------------- ------
FOR VALUE RECEIVED, the undersigned, U.S.I. HOLDINGS CORPORATION (the
"Borrower"), hereby unconditionally promises to pay to the order of
-------------
(the "Revolving Credit Lender") at the office of Credit Lyonnais Cayman Island
Branch (the "Administrative Agent"), located at [address], or to the
Administrative Agent by wire transfer pursuant to the Administrative Agent's
instructions, in lawful money of the United States of America and in immediately
available funds, on the Revolving Credit Loan Maturity Date the principal amount
of ($ ) or, if less, the aggregate unpaid principal
------------- -------------
amount of all Revolving Credit Loans made or maintained by the Revolving Credit
Lender to the Borrower pursuant to Section 2.1 of the Credit Agreement (as
hereinafter defined). The Borrower further agrees to pay interest in like money
at the Administrative Agent's office, or pursuant to the Administrative Agent's
wire transfer instructions, on the unpaid principal amount of this Note at the
rates and on the dates specified in Section 3.4 of the Credit Agreement.
Unless otherwise defined in this Note, capitalized terms shall have
the meanings given them in the Credit Agreement, dated as of September 17, 1999
(as the same may be amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), by and among the Borrower, the Revolving Credit
Lender, the other banks and financial institutions that are from time to time
party thereto, the Administrative Agent and The Chase Manhattan Bank, as
syndication agent.
The holder of this Note is authorized to record on the schedules to
this Note (or any continuation of such schedules) the date, Type and amount of
each Revolving Credit Loan made by it pursuant to the Credit Agreement and the
date and amount of each payment or prepayment of principal thereof, each
continuation thereof, each conversion of all or a portion thereof to another
Type and, in the case of Eurodollar Rate Loans, the length of each Interest
Period and the Eurodollar Rate with respect thereto; provided that the failure
to make any such recordation (or any error therein) shall not affect the
obligations of the Borrower to repay the Revolving Credit Loans, and all
interest and other amounts payable with respect to the Revolving Credit Loans
and this Note, in accordance with the terms of the Credit Agreement and this
Note. The schedules to this Note (and any continuations thereof) shall be part
of this Note.
This Note is (a) one of the Revolving Credit Notes referred to in the
Credit Agreement, (b) subject to optional and mandatory prepayment in whole or
in part as provided in the Credit Agreement, and (c) secured and guaranteed as
provided in the Loan Documents. Reference is hereby made to the Loan Documents
for a description of the property in which a security interest has been granted,
the nature and extent of the security interests and the guarantee, the terms and
conditions upon which the security interests and the guarantee were granted and
the rights of the holder of this Note with respect to such security interests
and guarantee.
Upon the occurrence of any Event of Default, all amounts then
remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable as provided in the Credit Agreement.
The Borrower hereby waives presentment, demand, protest and all other
notices of any kind (except as otherwise provided in the Credit Agreement).
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE INTERNAL LAW OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT
TO THE CONFLICT OF LAW PROVISIONS THEREOF.
U.S.I. HOLDINGS CORPORATION
By:
--------------------------
Name:
Title:
-2-
Schedule A
to revolving Credit Note
------------------------
LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS
========================================================================================================
Amount of Amount of Base
Date Amount of Amount Principal of Rate Loans Unpaid Principal Notation
Base Rate Loans Converted to Base Rate Loans Converted to Balance of Made By
Base Rate Loans Repaid Eurodollar Base Rate Loans
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
========================================================================================================
Schedule B
to Revolving Credit Note
------------------------
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
========================================================================================================
Amount of
Date Amount of Amount Interest Period Amount of Eurodollar Unpaid
Eurodollar Converted to and Eurodollar Principal of Loans Principal Notation
Loans Eurodollar Rate with Eurodollar Converted to Balance of Made By
Loans Respect Thereto Loans Repaid Base Rate Eurodollar
Loans Loans
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
========================================================================================================
EXHIBIT G-2 TO
CREDIT AGREEMENT
----------------
FORM OF TERM LOAN NOTE
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND
PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO BELOW. TRANSFERS OF THIS NOTE
MUST BE RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT
TO THE TERMS OF SUCH CREDIT AGREEMENT.
TERM LOAN NOTE
--------------
$
--------------------------- ----------, ----
FOR VALUE RECEIVED, the undersigned, U.S.I. HOLDINGS CORPORATION (the
"Borrower"), hereby unconditionally promises to pay to the order of
(the "Term Loan Lender") at the office of Credit Lyonnais
---------------------
Cayman Island Branch (the "Administrative Agent"), located at [address], or to
the Administrative Agent by wire transfer pursuant to the Administrative Agent's
instructions, in lawful money of the United States of America and in immediately
available funds, on the Term Loan Maturity Date the principal amount of
($ ). The Borrower further agrees to pay interest
---------------- --------------
in like money at the Administrative Agent's office, or pursuant to the
Administrative Agent's wire transfer instructions, on the unpaid principal
amount of this Note at the rates and on the dates specified in Section 3.4 of
the Credit Agreement (as hereinafter defined).
Unless otherwise defined in this Note, capitalized terms shall have
the meanings given them in the Credit Agreement, dated as of September 17, 1999
(as the same may be amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), by and among the Borrower, the Term Loan Lender,
the other banks and financial institutions that are from time to time party
thereto, the Administrative Agent and The Chase Manhattan Bank, as syndication
agent.
The holder of this Note is authorized to record on the schedules to
this Note (or any continuation of such schedules) the date, Type and amount of
each Term Loan made by it pursuant to the Credit Agreement and the date and
amount of each payment or prepayment of principal thereof, each continuation
thereof, each conversion of all or a portion thereof to another Type and, in the
case of Eurodollar Rate Loans, the length of each Interest Period and the
Eurodollar Rate with respect thereto; provided that the failure to make any such
recordation (or any error therein) shall not affect the obligations of the
Borrower to repay the Term Loans, and all
interest and other amounts payable with respect to the Term Loans and this Note,
in accordance with the terms of the Credit Agreement and this Note. The
schedules to this Note (and any continuations thereof) shall be part of this
Note.
This Note is (a) one of the Term Loan Notes referred to in the Credit
Agreement, (b) subject to optional and mandatory prepayment in whole or in part
as provided in the Credit Agreement, and (c) secured and guaranteed as provided
in the Loan Documents. Reference is hereby made to the Loan Documents for a
description of the property in which a security interest has been granted, the
nature and extent of the security interests and the guarantee, the terms and
conditions upon which the security interests and the guarantee were granted and
the rights of the holder of this Note with respect to such security interests
and guarantee.
Upon the occurrence of any Event of Default, all amounts then
remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable as provided in the Credit Agreement.
The Borrower hereby waives presentment, demand, protest and all other
notices of any kind (except as otherwise provided in the Credit Agreement).
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE INTERNAL LAW OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT
TO THE CONFLICT OF LAW PROVISIONS THEREOF.
U.S.I. HOLDINGS CORPORATION
By:
------------------------
Name:
Title:
-2-
Schedule A
to Term Note
------------
LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS
=========================================================================================================
Amount of Amount of Base
Date Amount of Amount Principal of Rate Loans Unpaid Principal Notation
Base Rate Loans Converted to Base Rate Loans Converted to Balance of Made By
Base Rate Loans Repaid Eurodollar Base Rate Loans
Loans
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
=========================================================================================================
Schedule B
to Term Note
------------
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
========================================================================================================
Amount of
Date Amount of Amount Interest Period Amount of Eurodollar Unpaid
Eurodollar Converted to and Eurodollar Principal of Loans Principal Notation
Loans Eurodollar Rate with Eurodollar Converted to Balance of Made By
Loans Respect Thereto Loans Repaid Base Rate Eurodollar
Loans Loans
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
========================================================================================================
EXHIBIT H-1 TO
CREDIT AGREEMENT
----------------
OFFICER'S CERTIFICATE OF BORROWER
Pursuant to Section 5.1(b) of the Credit Agreement, dated as of
September 17, 1999 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"/1/; unless otherwise defined herein, all
capitalized terms shall have the meanings given them in the Credit Agreement),
among U.S.I. Holdings Corporation (the "Company"), the banks and other financial
institutions from time to time that are party thereto (the "Lenders"), Credit
Lyonnais Cayman Island Branch as administrative agent for the Lenders (the
"Administrative Agent"), and The Chase Manhattan Bank, as syndication agent, the
undersigned, [name], [title] of the Company, hereby certifies as of the Closing
Date in the name and on behalf of the Company:
l. the representations and warranties of the Company contained in each
Loan Document to which it is a party being delivered on or prior to the Closing
Date are correct and complete in all material respects on and as of the Closing
Date with the same effect as if made on the Closing Date;
2. no Default or Event of Default has occurred and is continuing as of
the Closing Date or after giving effect to the Loans requested to be made, and
Letters of Credit (if any) requested to be issued, on the Closing Date;
3. each schedule and exhibit to the Loan Documents to which the
Company and its Subsidiaries are a party is correct and complete in all material
respects;
4. all of the outstanding shares of Capital Stock or other securities
evidencing equity ownership of the Subsidiaries of the Company have been duly
authorized and validly issued and are fully paid, non-assessable and not subject
to any preemptive or similar rights. Except as specifically disclosed in the
Credit Agreement, there are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or liens related to
or entitling any Person to purchase or otherwise acquire any shares of the
Capital Stock or other interest in the Subsidiaries of the Company; and
5. neither the Company nor any of its Subsidiaries will have any
outstanding Indebtedness as of the Closing Date other than the Loans and other
Indebtedness permited under Section 7.2 of the Credit Agreement.
----------
/1/ Unless otherwise defined herein, all capitalized terms shall have the
meaning given them in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
certificate as of the day and year set forth above.
U.S.I. HOLDINGS CORPORATION
By:
------------------------------------
Name:
Title:
2
EXHIBIT H-2 TO
CREDIT AGREEMENT
----------------
FORM OF SECRETARY'S CERTIFICATE OF BORROWER
Pursuant to Section 5.1 of the Credit Agreement, dated as of September
17, 1999 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement")/1/, among U.S.I. Holdings Corporation (the "Company"), the
banks and other financial institutions from time to time that are party thereto
(the "Lenders"), Credit Lyonnais Cayman Island Branch as administrative agent
for the Lenders (the "Administrative Agent") and The Chase Manhattan Bank, as
syndication agent, the undersigned, , the [Assistant]
-------------------
Secretary of the Company hereby certifies as of the Closing Date as follows in
the name and on behalf of the Company:
1. the Company is a corporation duly incorporated, validly existing
and in good standing under the laws of Delaware;
2. attached hereto as Exhibit A is a true and complete copy of
resolutions duly adopted by the Board of Directors of the Company on
-----------
-------------- -------, 1999; such resolutions have not in any way been amended,
supplemented, modified, revoked or rescinded and have been in full force and
effect since their adoption to and including the Closing Date and are now in
full force and effect; and such resolutions are the only corporate proceedings
of the Company now in force relating to or affecting the matters referred to in
the Credit Agreement and the other Loan Documents;
3. attached hereto as Exhibit B is a true and complete copy of the
by-laws of the Company as in effect on the Closing Date;
4. attached hereto as Exhibit C is a true and complete copy of the
certificate of incorporation of the Company as in effect on the Closing Date;
5. attached hereto as Exhibit D are true and correct copies of all
approvals required by Section 5.1(c) of the Credit Agreement; and
6. the following persons are now duly elected and qualified officers
of the Company holding the offices indicated next to their respective names
below, and such officers have held such offices with the Company at all times
since the date indicated next to their respective titles, to and including the
Closing Date, and the signatures appearing opposite their respective names below
are the true and genuine signatures of such officers, and each of such
----------
/1/ Unless otherwise defined herein, all capitalized terms shall have the
meanings given them in the Credit Agreement.
officers is duly authorized to execute and deliver on behalf of the Company the
Loan Documents to which the Company is a party and any certificate or other
document to be delivered by the Company pursuant to such Loan Documents.
Name Office/Date Elected Signature
---- ------------------- ---------
-------------------- ------------------------------ ----------------------
-------------------- ------------------------------ ----------------------
-------------------- ------------------------------ ----------------------
[SIGNATURES ON NEXT PAGE]
-2-
IN WITNESS WHEREOF, the undersigned has executed and delivered this
certificate as of the day and year set forth below.
U.S.I. Holdings Corporation
By:
-------------------------------------
Name:
Title: [Assistant] Secretary
I, , [Title of Officer] of U.S.I. Holdings
-----------------
Corporation, a Delaware corporation (the "Company") hereby certify that
is a duly elected, qualified and acting [Assistant] Secretary of
-------------
the Company and that the signature appearing above is her genuine signature.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
certificate as of the day and year set forth below.
U.S.I. Holdings Corporation
By:
------------------------------------
Name:
Title:
Date: September 17, 1999
-3-
EXHIBIT A
RESOLUTIONS
EXHIBIT B
BY-LAWS
EXHIBIT C
CERTIFICATE OF INCORPORATION
EXHIBIT D
APPROVALS
EXHIBIT I-1 TO
CREDIT AGREEMENT
----------------
FORM OF OFFICER'S CERTIFICATE OF USIS
Pursuant to Section 5.1(b) of the Credit Agreement, dated as of
September 17, 1999 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"/1/; unless otherwise defined herein, all
capitalized terms shall have the meanings given them in the Credit Agreement),
among U.S.I. Holdings Corporation ("USI"), the banks and other financial
institutions from time to time that are party thereto (the "Lenders"), Credit
Lyonnais Cayman Island Branch, as administrative agent for the Lenders, (the
"Administrative Agent") and The Chase Manhattan Bank, as syndication agent, the
undersigned, [name], [title] of USI Insurance Services Corp. (the "Company"),
hereby certifies as of the Closing Date in the name and on behalf of the
Company:
1. the representations and warranties of the Company contained in each
Loan Document to which it is a party being delivered on or prior to the Closing
Date are correct and complete in all material respects on and as of the Closing
Date with the same effect as if made on the Closing Date;
2. no Default or Event of Default has occurred and is continuing as of
the Closing Date or after giving effect to the Loans requested to be made, and
the Letters of Credit (if any) requested to be issued, on the Closing Date;
3. all of the outstanding shares of Capital Stock or other securities
evidencing equity ownership of the Subsidiaries of the Company have been duly
authorized and validly issued and are fully paid, non-assessable and not subject
to any preemptive or similar rights. There are no outstanding subscriptions,
rights, warrants, options, calls, convertible securities, commitments of sale or
liens (except for Permitted Prior and Pari Passu Liens) related to or entitling
any Person to purchase or otherwise acquire any shares of the Capital Stock or
other interest in any Subsidiary of the Company; and
4. neither the Company nor any of its Subsidiaries will have any
outstanding Indebtedness as of the Closing Date other than the Loans and other
Indebtedness permitted under Section 7.2 of the Credit Agreement.
----------
/1/ Unless otherwise defined herein, all capitalized terms shall have the
meaning given them in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
certificate as of the day and year set forth above,
USI Insurance Services Corp.
By:
--------------------------------
Name
Title:
-2-
EXHIBIT I-2 TO
CREDIT AGREEMENT
----------------
FORM OF SECRETARY'S CERTIFICATE OF USIS
Pursuant to Section 5.1 of the Credit Agreement, dated as of September
17, 1999 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement")/1/, among U.S.I. Holdings Corporation ("USI"), the banks and
other financial institutions from time to time that are party thereto (the
"Lenders"), Credit Lyonnais Cayman Island Branch, as administrative agent for
the Lenders (the "Administrative Agent") and The Chase Manhattan Bank, as
syndication agent, the undersigned, , the [Assistant] Secretary
-----------------
of USI Insurance Services Corp. (the "Company"), hereby certifies as of the
Closing Date as follows in the name and on behalf of the Company:
l. the Company is a corporation duly incorporated, validly existing
and in good standing under the laws of Delaware;
2. attached hereto as Exhibit A is a true and complete copy of
resolutions duly adopted by the Board of Directors of the Company on
, 1999; such resolutions have not in any way been amended,
------------- ------
supplemented, modified, revoked or rescinded and have been in full force and
effect since their adoption to and including the Closing Date and are now in
full force and effect; and such resolutions are the only corporate proceedings
of the Company now in force relating to or affecting the matters referred to in
the Credit Agreement and the other Loan Documents;
3. attached hereto as Exhibit B is a true and complete copy of the
by-laws of the Company as in effect on the Closing Date;
4. attached hereto as Exhibit C is a true and complete copy of the
certificate of incorporation of the Company as in effect on the Closing Date;
and
5, the following persons are now duly elected and qualified officers
of the Company holding the offices indicated next to their respective names
below, and such officers have held such offices with the Company at all times
since the date indicated next to their respective titles, to and including the
Closing Date, and the signatures appearing opposite their respective names below
are the true and genuine signatures of such officers, and each of such officers
is duly authorized to execute and deliver on behalf of the Company the Loan
Documents to which the Company is a party and any certificate or other document
to be delivered by the Company pursuant to such Loan Documents.
----------
/1/ Unless otherwise defined herein, all capitalized terms shall have the
meanings given them in the Credit Agreement.
Name Office/Date Elected Signature
---- ------------------- ---------
-------------------- ---------------------- --------------------
-------------------- ---------------------- --------------------
-------------------- ---------------------- --------------------
[SIGNATURES ON NEXT PAGE]
-2-
IN WITNESS WHEREOF, the undersigned has executed and delivered this
certificate as of the day and year set forth below.
USI Insurance Services Corp.
By:
---------------------------------
Name:
Title: [Assistant] Secretary
I, , [Title of Officer] of USI Insurance Services
------------------
Corp., a Delaware corporation (the "Company), hereby certify
that is a duly elected, qualified and acting [Assistant]
-----------------
Secretary of the Company and that the signature appearing above is her genuine
signature.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
certificate as of the day and year set forth below.
USI Insurance Services Corp.
By:
---------------------------------
Name:
Title:
Date: September 17, 1999
-3-
EXHIBIT A
RESOLUTIONS
EXHIBIT B
BY-LAWS
EXHIBIT C
CERTIFICATE OF INCORPORATION
EXHIBIT D
APPROVALS
Exhibit J-1
[Letterhead of Xxxxxx Xxxxxx & Xxxxxxx]
The Chase Manhattan Bank
Chase Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Credit Lyonnais Cayman Island Branch
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
The Lenders party to the Credit
Agreement referred to below
Re: U.S.I Holdings Corporation
--------------------------
Ladies and Gentlemen:
We have acted as special New York counsel for U.S.I. Holdings
Corporation ("USI") and USI Insurance Services Corp. ("USIS"; together with USI,
the "Loan Parties"), in connection with the execution and delivery of (i) the
Credit Agreement, dated as of the date hereof (the "Credit Agreement"), among
USI, the financial institutions listed on the signature pages thereto (the
"Lenders"), Credit Lyonnais Cayman Island Branch, as administrative agent (in
such capacity, the "Administrative Agent"), The Chase Manhattan Bank, as
syndication agent (the "Syndication Agent"), and Credit Lyonnais Cayman Island
Branch and Chase Securities Inc., as joint book managers and lead arrangers,
(ii) the Borrower Pledge and Security Agreement, dated as of the date hereof,
between USI and the Administrative Agent (the "USI Security Agreement"), (iii)
the Subsidiary Pledge and Security Agree-
-2-
ment, dated as of the date hereof, between USIS and the Administrative Agent
(the "USIS Security Agreement"; together with the USI Security Agreement, the
"Security Agreements"), (iv) the Guaranty, Indemnity and Subordination
Agreement, dated as of the date hereof, among the Loan Parties and the
Administrative Agent (the "Guaranty") and (v) financing statements filed or to
be filed with the Xxx Xxxx Xxxxxxxxxx xx Xxxxx xxx Xxx Xxxx Xxxxxx made by USIS,
as debtor, in favor of the Administrative Agent, as secured party (the
"Financing Statements"; together with the Credit Agreement, the Security
Agreements and the Guaranty, the "Documents"). Capitalized terms not defined
herein and defined in the Credit Agreement are used herein as therein defined.
This opinion is rendered to you at the request of USI and USIS
pursuant to Section 5.1(m) (i) of the Credit Agreement.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments as we have deemed
necessary or advisable for purposes of this opinion. As to questions of fact
relating to the Loan Parties material to this opinion, we have relied upon
certificates of public officials and statements and representations of officers
and other representatives of the Loan Parties.
In rendering this opinion to you, we have assumed without inquiry:
(a) (i) the genuineness of all signatures on original copies of the
Documents; (ii) the conformity to the original documents of all documents
submitted to us as copies and the authenticity of the documents submitted to us
as originals; (iii) the due authorization, execution and delivery of the
Documents by each of the parties thereto; and (iv) the validity and
enforceability of the Documents against each of the parties thereto other than
the Loan Parties;
(b) that any consideration contemplated to be given by any party in
any of the Documents was given at the time of execution and delivery of the
Documents;
(c) that the Collateral (as defined in the Security Agreements) exists
and that the Loan Parties have rights in such Collateral;
(d) that the certificates representing the shares of stock identified
on Schedule 3.1(b) to each Security Agreement (the "Pledged Shares") and stock
---------------
powers in respect of the Pledged Shares endorsed to the Agent or in blank have
been delivered to the Agent in New York and that the Agent is holding and will
continue to hold the Pledged Shares in the State of New York, accompanied by the
stock powers; and
-3-
(e) that the Agent and each Beneficiary (as defined in the Security
Agreements) acquired its interest in the Pledged Shares in good faith and
without notice of any adverse claim (as such term is defined in Section 8-102
(a) (1) of the Uniform Commercial Code as in effect on the date hereof in the
State of New York (the "New York UCC")).
Based upon and subject to the foregoing, and the limitations,
qualifications and exceptions set forth below, we are of the opinion that:
1. Each Document to which each Loan Party is a party constitutes the
legal, valid and binding obligation of such Loan Party, enforceable against such
Loan Party in accordance with its terms, in each case except (i) as limited by
bankruptcy, insolvency, moratorium, fraudulent conveyance or transfer and
similar laws affecting creditors' rights generally and (ii) that rights of
acceleration and the availability of equitable remedies may be limited by
general equitable principles.
2. Each Security Agreement is in proper form under the applicable laws
of the State of New York to create and constitute a valid security interest in
the Pledged Shares listed therein and the proceeds thereof. The security
interests created by the Security Agreements in all of the right, title and
interest of the Loan Parties in the Pledged Shares constitutes a perfected
security interest in the Pledged Shares, free of any adverse claim.
3. Each Security Agreement is in proper form under the applicable laws
of the State of New York to create and constitute (or, with respect to
after-acquired Collateral, to create and constitute as of the time each Loan
Party acquires rights therein) a valid security interest in favor of the
Administrative Agent in that portion of the Collateral (as defined in each
Security Agreement) purported to be covered thereby which is covered by Article
9 of the New York UCC.
4. To the extent that the filing of a financing statement is effective
to perfect a security interest in the Collateral (as defined in the Security
Agreements) under the New York UCC, the security interest granted by USIS in
favor of the Administrative Agent in such Collateral (the "Article 9 Filing
Collateral") will he perfected upon the filing of the Financing Statements with
the filing offices set forth therein.
Our opinions set forth above are subject to the following
qualifications
A. Certain remedial provisions of the Security Agreements may be
unenforceable in whole or in part under the laws of the State of New York, but
the inclusion of such provisions in such Security Agreements does not affect the
validity thereof, taken as a whole, and
-4-
the Security Agreements contain adequate provisions for the practical
realization of the rights and benefits intended to be provided thereby. Without
limiting the foregoing, New York courts or Federal courts applying New York law
may deny or limit the enforceability of clauses or provisions that purport to:
(i) give the right of the appointment of a receiver, (ii) limit or expand the
rights of set-off, (iii) authorize a secured party to take discretionary
independent action for the account of or as an agent or attorney-in-fact for a
debtor or (iv) limit jurisdiction of any courts or establish any exclusive venue
or permissible methods of service of process.
B. We express no opinion as to the existence of, the right, title or
interest of the Loan Parties in, to or under or the validity or enforceability
of any of, the Collateral (as defined in the Security Agreements).
C. Except as expressly provided in paragraphs 2, 3 and 4 above, we
express no opinion as to the attachment or perfection of any security interest
purported to be created in the Collateral (as defined in the Security
Agreements).
D. Except as expressly provided in paragraph 2 above, we express no
opinion as to the priority of any security interest purported to be created in
the Collateral (as defined in the Security Agreements). In addition, we express
no opinion with respect to the creation, perfection or priority of any security
interest in the Collateral (as defined in the Security Agreements) to the extent
that, pursuant to 9-104 of the New York UCC, Article 9 of the New York UCC does
not apply thereto.
E. With respect to the opinion provided in paragraph 2, we express no
opinion as to the priority of the security interest in the Pledged Shares as
against any claims or liens arising under any laws other than the New York UCC,
including, without limitation, liens for the payment of federal, state or local
taxes which may be given priority by operation of law.
F. We express no opinion as to the enforceability of any provision of
the Security Agreements which purports to grant the Administrative Agent the
sole right of disposition with respect to any Collateral (as defined in the
Security Agreements).
G. With respect to the opinion provided in paragraphs 2 and 4,
continuation of perfection of a security interest in proceeds (as defined in the
New York UCC) of the Collateral (as defined in the Security Agreements) is
governed and restricted by Section 9-306 of the New York UCC.
H. In the case of additional shares or other distribution in respect
of Pledged Shares, the security interest of the Administra-
-5-
tive Agent therein will be perfected only if possession thereof is obtained in
accordance with the New York UCC.
I. We express no opinion as to the applicability of Section 548 of the
Federal Bankruptcy Code, Title 11 of the United States Code, or of any
provisions of any state fraudulent conveyance statute or law to the transactions
contemplated by the Documents.
J. We call to your attention the fact that the perfection of the
security interests in the Collateral (as defined in the Security Agreement) may
be limited by Section 552 of the Federal Bankruptcy Code, which limits the
extent to which property acquired by a debtor after the commencement of a case
under the Federal Bankruptcy Code may be subject to a security interest arising
from a security agreement entered into by the debtor before the commencement of
such case.
K. With respect to the opinion in paragraph 4,
(i) in the case of any chattel paper, account or general intangible
which is itself secured by other property, we express no opinion with
respect to the rights of USIS in and to the underlying collateral;
(ii) we have assumed that the representations in the Documents,
including the information on the schedules to the Documents, regarding the
locations of the Collateral (as defined in the Security Agreements) and the
chief executive offices of USIS, are accurate and complete as of the date
of the filing of the Financing Statements; and
(iii) we call to your attention that (A) the perfection of the
security interest in the Article 9 Filing Collateral may be terminated as
to any Article 9 Filing Collateral acquired subsequent to a change in the
name, corporate structure or identity of USIS (to the extent that the
original financing statement is rendered materially misleading) unless a
new appropriate financing statement indicating the new name, corporate
structure or identity of USIS is properly filed before the expiration of
four months after such change and (B) the New York UCC requires the filing
of continuation statements within the period of six months prior to the
expiration of five years from the date of the original filing of the
Financing Statements.
We are qualified to practice in the State of New York and do not
purport to be experts on any laws other than the laws of the United States and
the State of New York. We have made no independent investigation of the laws of
any other jurisdiction and, accordingly, this opinion is rendered only with
respect to the laws of such jurisdictions.
-6-
This opinion is rendered only to, and is solely for the benefit of,
the Administrative Agent, the Syndication Agent and the Lenders. This opinion
may not be relied upon by the Administrative Agent, the Syndication Agent or any
of the Lenders for any other purpose, or by any other person, firm or
corporation for any purpose, in each case without our prior written consent.
Very truly yours,
Exhibit J-2
[Letterhead of Morea & Xxxxxxxx]
The Chase Manhattan Bank
Chase Securities, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Credit Lyonnais Cayman Island Branch
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
The Lenders under the Credit Agreement
Re: U.S.I. Holdings Corporation and USI Insurance Services Corp.
------------------------------------------------------------
Gentlemen:
We have acted as special counsel to U.S.I. Holdings Corporation, a Delaware
Corporation (the "Borrower") and USI Insurance Services Corp., a Delaware
corporation ("USIS"), in connection with the Credit Agreement, dated as of
September 17, 1999 (the "Credit Agreement"), among the Borrower, Credit Lyonnais
Cayman Island Branch, as Administrative Agent ("CLCIB"), The Chase Manhattan
Bank, as Syndication Agent ("Chase") and CLCIB and Chase Securities Inc. ("CSI")
as Joint Book Managers and Lead Arrangers (CLCIB, Chase and CSI being referred
to collectively herein as the "Banks") providing for, among other things,
extensions of credit to be made by the Banks in the form of (i) a $75,000,000
facility for Revolving Credit Loans and (ii) a $125,000,000 Term Loan. This
opinion is being furnished to you at the request of the Borrower pursuant to
Section 5.1(m)(iii) of the Credit Agreement. All capitalized terms used but not
defined herein have the respective meanings given to such terms in the Credit
Agreement.
In rendering the opinions expressed below, we have participated in the
preparation of and reviewed the Loan Documents (including all respective
Schedules and Exhibits thereto). We have also reviewed originals or copies of
the Certificate of Incorporation and By-laws of USIS, resolutions of the board
of directors of USIS, and certificates of public officials concerning the legal
existence and good standing of USIS in its jurisdiction of incorporation, and
other
instruments, documents and records of the Borrower and USIS as we have deemed
necessary or appropriate to express the opinions set forth herein. As to all
factual matters material to the opinions set forth herein, we have relied upon,
and assumed the accuracy of, such certificates, such corporate records and other
documents (including certificates of officers of the Borrower and USIS and
representations and warranties made in or pursuant to the Loan Documents to
which the Borrower and USIS is a party and other instruments and agreements by
the Borrower and USIS and others as to matters of fact) with respect to the
facts stated therein.
Throughout this opinion, the term "to our knowledge" means that after
considering the actual knowledge of those attorneys in our firm who have given
substantive attention to the affairs of the Borrower and USIS, we find no reason
to believe that the opinions expressed herein are factually incorrect. In
rendering this opinion, we have assumed the following to be true and have
conducted no investigation to confirm such assumption or to determine to the
contrary: (a) the authenticity of all documents, instruments and certificates
submitted to us as originals, (b) the conformity with the original documents of
all documents, instruments and certificates submitted to us as certified,
conformed or photostatic copies, and (c) the authenticity of the originals from
which all copies were made.
In our examination, we have assumed the genuineness of all signatures
(other than those of the officers of USIS), the legal capacity of all natural
persons executing documents, the authenticity of all documents submitted to us
as originals, and the conformity to authentic original documents of all
documents submitted to us as copies.
We are opining herein as to the effect on the subject transactions only of
the Federal laws of the United States, the Delaware General Corporation Law, and
the internal laws of the State of New York, and we express no opinion with
respect to the applicability thereto, or the effect thereon, of the laws of any
other jurisdiction or, in the case of Delaware, any other laws or as to any
matters of municipal law or the laws of any other local agencies within any
state.
Based upon and subject to the foregoing, we are of the opinion that:
1. USIS is a corporation duly organized, validly existing and in good
standing, as of the date of the certificate of good standing, under the laws of
the State of Delaware.
2. USIS has (i) the corporate power and authority to execute, deliver and
perform the terms and conditions of each of the Loan Documents to which it is a
party, (ii) taken all necessary corporate action to authorize the execution and
delivery of the Loan Documents to which it is a party and (iii) duly executed
and delivered each Loan Document to which it is a party.
3. Assuming the due authorization, execution and delivery of each of the
Loan Documents by each of the other parties thereto, each of the Loan Documents
to which USIS is a party is a legal, valid and binding agreement of the USIS,
enforceable against USIS in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy,
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insolvency, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally, (ii) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law), (iii) considerations of public policy by a court of competent
jurisdiction and (iv) applicable fraudulent conveyance laws.
4. Neither the execution, delivery or performance by USIS of the Loan
Documents to which it is a party will (i) contravene any applicable provision of
the Delaware General Corporation Law nor any applicable provisions of any law,
statute, rule or regulation of any Federal or New York State Governmental
Authority or any order, writ, injunction or decree of any Federal or New York
State Governmental Authority of which we have knowledge, or (ii) violate any
provision of the Certificate of Incorporation or By-laws of USIS.
5. No notice to, consent or authorization of, approval by, filing with or
other act by or in respect of any Governmental Authority or any other Person is
required in connection with the borrowings under the Credit Agreement or with
the execution, delivery, performance, validity or enforceability of any of the
Loan Documents.
6. The execution and delivery of the Loan Documents, the performance by
each of the Borrower and USIS of its obligations thereunder, the consummation
of the transactions contemplated thereby, the compliance by each of the Borrower
and USIS with the provisions thereof, the borrowings under the Credit Agreement
and the use of proceeds thereof, will not (i) violate, or constitute a default
under, the terms of any indenture, mortgage, deed of trust, loan or credit
agreement or other agreement or instrument of which we have knowledge, to which
any of the Borrower or USIS is a party or by which the Borrower or USIS is
bound, or to which any of their property or assets are subject, except for
certain contractual put rights held by certain employees of the Borrower, to the
extent that the aggregate amount required to be paid by the Borrower in any one
calendar year as a result of the exercise of such put rights exceeds the
Permitted Stock Payments for such year, and (ii) will not result in, or
require, the creation or imposition of any Lien on any of their properties or
revenues, other than the Liens created pursuant to the Loan Documents.
7. Except as set forth on Schedule 4.6 to the Credit Agreement, to our
knowledge, no litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or threatened by or against the
Borrower or any of its Subsidiaries or against any of their properties or
revenues (i) with respect to the Credit Agreement or any other Loan Document or
any of the transactions contemplated thereby, or (ii) that could, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
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This opinion is rendered only to, and is solely for, the benefit of the
addressees hereof. This opinion may not be relied upon by the addresses hereof
or by any other purpose, or by any other person, firm or corporation for any
other purpose, in each case without our prior written consent.
This opinion is given to you as of the date hereof, and we assume no
obligation to advise either of you of changes that may hereafter be brought to
our attention.
Very truly yours,
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