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EXHIBIT 10.2
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CREDIT AGREEMENT
dated as of June 1, 2000
among
DELPHI FINANCIAL GROUP, INC.,
THE LENDERS NAMED HEREIN,
FLEET NATIONAL BANK and FIRST UNION NATIONAL BANK
as Co-Syndication Agents
and
BANK OF AMERICA, N.A.,
as Administrative Agent and Collateral Agent
BANC OF AMERICA SECURITIES LLC
as
Sole Lead Arranger and Sole Book Manager
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The following Table of Contents has been inserted for convenience only and does
not constitute a part of this Agreement.
TABLE OF CONTENTS
Page
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SECTION 1. DEFINITIONS AND ACCOUNTING TERMS................................................. 1
SECTION 1.1 Certain Defined Terms............................................................ 1
SECTION 1.2 Other Definitional Provisions.................................................... 22
SECTION 1.3 Accounting and Financial Determinations.......................................... 22
SECTION 2. THE COMMITMENTS AND THE LOANS.................................................... 23
SECTION 2.1 Loan Commitment.................................................................. 23
SECTION 2.2 Types of Loans................................................................... 23
SECTION 2.3 Procedure for Borrowing.......................................................... 24
SECTION 2.4 Funding Reliance................................................................. 25
SECTION 2.5 Continuation and Conversion Elections............................................ 25
SECTION 2.6 Repayment of Loans............................................................... 26
SECTION 2.7 Loan Accounts; Record Keeping; Notes............................................. 26
SECTION 3. INTEREST AND FEES, ETC........................................................... 27
SECTION 3.1 Interest Rates................................................................... 27
SECTION 3.2 Default Interest Rate............................................................ 28
SECTION 3.3 Interest Payment Dates........................................................... 28
SECTION 3.4 Setting and Notice of Rates...................................................... 28
SECTION 3.5 Computation of Fees and Interest................................................. 28
SECTION 3.6 Fees............................................................................. 29
SECTION 4. REDUCTION OR TERMINATION OF THE COMMITMENTS; PAYMENTS AND PREPAYMENTS;........... 29
SECTION 4.1 Voluntary Reduction or Termination of the Commitments............................ 29
SECTION 4.2 Voluntary Prepayments............................................................ 30
SECTION 4.3 Mandatory Prepayments............................................................ 30
SECTION 4.4 Mandatory Reduction in the Commitments........................................... 32
SECTION 4.5 Payments by the Borrower......................................................... 32
SECTION 4.6 Sharing of Payments.............................................................. 33
SECTION 4.7 Setoff........................................................................... 33
SECTION 4.8 Net Payments..................................................................... 34
SECTION 5. CHANGES IN CIRCUMSTANCES......................................................... 34
SECTION 5.1 Increased Costs.................................................................. 34
SECTION 5.2 Change in Rate of Return......................................................... 35
SECTION 5.3 Basis for Determining Interest Rate Inadequate or Unfair......................... 36
SECTION 5.4 Changes in Law Rendering Certain Loans Unlawful.................................. 36
SECTION 5.5 Funding Losses................................................................... 37
SECTION 5.6 Right of Lenders to Fund Through Other Offices................................... 37
SECTION 5.7 Discretion of Lenders as to Manner of Funding.................................... 37
SECTION 5.8 Conclusiveness of Statements; Survival of Provisions............................. 37
SECTION 5.9 Replacement of Lenders........................................................... 37
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SECTION 6. COLLATERAL AND OTHER SECURITY.................................................... 38
SECTION 6.1 Borrower......................................................................... 38
SECTION 6.2 Further Assurances............................................................... 38
SECTION 7. REPRESENTATIONS AND WARRANTIES................................................... 39
SECTION 7.1 Organization, etc................................................................ 39
SECTION 7.2 Authorization.................................................................... 39
SECTION 7.3 No Conflict...................................................................... 39
SECTION 7.4 Governmental Consents............................................................ 39
SECTION 7.5 Validity......................................................................... 40
SECTION 7.6 Financial Statements............................................................. 40
SECTION 7.7 Material Adverse Change.......................................................... 42
SECTION 7.8 Litigation and Contingent Obligations............................................ 42
SECTION 7.9 Liens............................................................................ 42
SECTION 7.10 Subsidiaries..................................................................... 42
SECTION 7.11 Pension and Welfare Plans........................................................ 42
SECTION 7.12 Investment Company Act........................................................... 43
SECTION 7.13 Public Utility Holding Company Act............................................... 43
SECTION 7.14 Margin Regulation................................................................ 43
SECTION 7.15 Collateral....................................................................... 43
SECTION 7.16 Taxes............................................................................ 43
SECTION 7.17 Accuracy of Information.......................................................... 44
SECTION 7.18 Environmental Warranties......................................................... 44
SECTION 7.19 Proceeds......................................................................... 45
SECTION 7.20 Insurance........................................................................ 46
SECTION 7.21 Securities Laws.................................................................. 46
SECTION 7.22 Governmental Authorizations...................................................... 46
SECTION 7.23 Representations in Other Agreements True and Correct............................. 46
SECTION 7.24 Business Locations; Trade Names.................................................. 46
SECTION 7.25 Solvency......................................................................... 46
SECTION 7.26 Insurance Licenses............................................................... 46
SECTION 7.27 Compliance with Laws............................................................. 47
SECTION 7.28 No Default....................................................................... 47
SECTION 7.29 Pledged Shares................................................................... 47
SECTION 7.30 Indebtedness Permitted........................................................... 47
SECTION 7.31 Replacement of Schedules......................................................... 47
SECTION 8. AFFIRMATIVE COVENANTS............................................................ 48
SECTION 8.1 Reports, Certificates and Other Information...................................... 48
SECTION 8.2 Corporate Existence; Foreign Qualification....................................... 54
SECTION 8.3 Books, Records and Inspections................................................... 54
SECTION 8.4 Insurance........................................................................ 55
SECTION 8.5 Taxes and Liabilities............................................................ 55
SECTION 8.6 Pension Plans and Welfare Plans.................................................. 55
SECTION 8.7 Compliance with Laws............................................................. 55
SECTION 8.8 Maintenance of Permits........................................................... 56
SECTION 8.9 Environmental Compliance......................................................... 56
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SECTION 8.10 Dividends........................................................................ 56
SECTION 9. NEGATIVE COVENANTS............................................................... 56
SECTION 9.1 Liens............................................................................ 56
SECTION 9.2 Consolidation, Merger, etc....................................................... 57
SECTION 9.3 Asset Disposition, etc........................................................... 58
SECTION 9.4 Dividends, etc................................................................... 59
SECTION 9.5 Investments...................................................................... 59
SECTION 9.6 Other Senior Indebtedness; Subsidiary Senior Notes; Trust Documents;
Master Letter of Credit Agreement; Pari Passu Credit Agreement................... 61
SECTION 9.7 Take or Pay Contracts............................................................ 61
SECTION 9.8 Regulations U.................................................................... 61
SECTION 9.9 Subsidiaries..................................................................... 61
SECTION 9.10 Other Agreements................................................................. 61
SECTION 9.11 Business Activities.............................................................. 62
SECTION 9.12 Change of Location or Name....................................................... 62
SECTION 9.13 Transactions with Affiliates..................................................... 62
SECTION 9.14 Books of Business................................................................ 62
SECTION 9.15 Ownership of RSL, SIG Holdings and Safety National............................... 63
SECTION 10. FINANCIAL COVENANTS.............................................................. 63
SECTION 10.1 Minimum Surplus.................................................................. 63
SECTION 10.2 Consolidated Equity of the Borrower.............................................. 63
SECTION 10.3 Debt to Capital.................................................................. 63
SECTION 10.4 Risk-Based Capital............................................................... 63
SECTION 10.5 Cash Coverage Ratio.............................................................. 63
SECTION 11. CONDITIONS....................................................................... 63
SECTION 11.1 Effectiveness of Agreement; Initial Borrowing.................................... 64
SECTION 11.2 Acquisition Loans................................................................ 65
SECTION 11.3 All Loans........................................................................ 66
SECTION 12. EVENTS OF DEFAULT AND THEIR EFFECT............................................... 67
SECTION 12.1 Events of Default................................................................ 67
SECTION 12.2 Effect of Event of Default....................................................... 69
SECTION 13. THE ADMINISTRATIVE AGENT AND COLLATERAL AGENT.................................... 69
SECTION 13.1 Authorization and Action......................................................... 69
SECTION 13.2 Liability of the Agents.......................................................... 70
SECTION 13.3 Bank of America and Affiliates................................................... 70
SECTION 13.4 Lender Credit Decision........................................................... 70
SECTION 13.5 Indemnification.................................................................. 71
SECTION 13.6 Successor Agents................................................................. 71
SECTION 13.7 Collateral Matters............................................................... 71
SECTION 13.8 Co-Agents........................................................................ 72
SECTION 14. ASSIGNMENTS AND PARTICIPATIONS................................................... 72
SECTION 14.1 Assignments...................................................................... 72
SECTION 14.2 Participations................................................................... 74
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SECTION 14.3 Disclosure of Information........................................................ 75
SECTION 14.4 Foreign Transferees.............................................................. 75
SECTION 15. MISCELLANEOUS.................................................................... 75
SECTION 15.1 Waivers and Amendments........................................................... 75
SECTION 15.2 Notices.......................................................................... 76
SECTION 15.3 Regulation U..................................................................... 76
SECTION 15.4 Payment of Costs and Expenses.................................................... 77
SECTION 15.5 Indemnity........................................................................ 77
SECTION 15.6 Subsidiary References............................................................ 78
SECTION 15.7 Captions......................................................................... 78
SECTION 15.8 GOVERNING LAW.................................................................... 78
SECTION 15.9 Counterparts..................................................................... 78
SECTION 15.10 SUBMISSION TO JURISDICTION; WAIVER OF VENUE...................................... 78
SECTION 15.11 Service of Process............................................................... 79
SECTION 15.12 Successors and Assigns........................................................... 79
SECTION 15.13 WAIVER OF JURY TRIAL............................................................. 79
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SCHEDULES AND EXHIBITS
SCHEDULES
SCHEDULE 2.1 Lenders and Percentages
SCHEDULE 7.6 Dividends
SCHEDULE 7.8 Litigation & Contingent Obligations
SCHEDULE 7.10 Subsidiaries
SCHEDULE 7.11 ERISA
SCHEDULE 7.16 Taxes
SCHEDULE 7.18 Environmental Matters
SCHEDULE 7.20 Insurance
SCHEDULE 7.24 Business Locations; Trade Names
SCHEDULE 7.26 Licenses
SCHEDULE 9.1 Liens
EXHIBITS
EXHIBIT A Form of Note
EXHIBIT B Form of Notice of Borrowing
EXHIBIT C Form of Continuation/Conversion Notice
EXHIBIT D Form of Compliance Certificate
EXHIBIT E-1 Form of Opinion of Xxxx Xxxxxxx, counsel to the
Borrower and SIG Holdings and general counsel to the
Reliance Standard Insurance Companies
EXHIBIT E-2 Form of Opinion of Xxxxxxx Xxxx, general counsel to Safety
National
EXHIBIT F Form of Officer's Certificate
EXHIBIT G Form of Assignment Agreement
EXHIBIT H Form of Borrower Pledge Agreement
EXHIBIT I Form of SIG Holdings Pledge Agreement
EXHIBIT J Form of Preliminary Financing Request
EXHIBIT K Form of Confidentiality Letter
EXHIBIT L Form of Request for Increase of Commitments
EXHIBIT M Form of Collateral Sharing Agreement
EXHIBIT N Form of Intercreditor Agreement
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of June 1, 2000, among DELPHI FINANCIAL
GROUP, INC., a Delaware corporation (herein, called the "Borrower"), the lenders
party hereto (herein, together with any Eligible Assignees thereof, collectively
called the "Lenders" and each individually called a "Lender"), Fleet National
Bank and First Union National Bank, as co-syndication agents for the Lenders
(herein, collectively called the "Co-Agents" and each individually called a
"Co-Agent"), and BANK OF AMERICA, N.A. (herein, called "Bank of America"), as
administrative agent for the Lenders (herein in such capacity, together with any
successors thereto in such capacity, called the "Administrative Agent"), and as
collateral agent for the Lenders (herein in such capacity, together with any
successors thereto in such capacity, called the "Collateral Agent").
Recitals
WHEREAS, the Borrower desires that the Lenders make revolving loans to
the Borrower from time to time in an aggregate principal amount not to exceed
$70,000,000 at any one time (subject to increase as provided herein), on the
terms and subject to the conditions set forth in this Agreement;
WHEREAS, the Lenders are willing to make revolving loans to the
Borrower on the terms and subject to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual promises herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Acquired Person" shall mean any Person acquired upon the consummation
of an Acquisition permitted by the terms of this Agreement.
"Acquisition" shall mean any transaction or series of transactions for
the purpose of or resulting, directly or indirectly, in (a) the acquisition of
all or substantially all of the assets of a Person, or of any business or
division of a Person, (b) the acquisition of in excess of 50% of the capital
stock, partnership interests, membership interests or equity securities (or
warrants, options, or other rights to acquire any of the foregoing) of any
Person, or otherwise causing any Person to become a Subsidiary of the Borrower,
or (c) a merger or consolidation or any other combination of the Borrower or one
of its Subsidiaries with another Person (other than a Person that is a
Subsidiary of the Borrower immediately prior to such merger or consolidation);
provided that the Borrower or such Subsidiary is the surviving entity, in each
case subject to and to the extent permitted by the terms of this Agreement.
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"Adjusted Capital" shall mean, as to any of the Reliance Standard
Insurance Companies as of any date, the total amount shown on line 27, page 22,
column 1 of the Annual Statement of each of the Reliance Standard Insurance
Companies and, as to Safety National as of any date, the total amount shown on
line 25, page 21, column 1 of the Annual Statement of Safety National, or, in
each case, an amount determined in a consistent manner for any date other than
one as of which an Annual Statement is prepared.
"Administrative Agent" - see Preamble.
"Administrative Agent's Office" shall mean 000 Xxxxx XxXxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000, or such other address designated by the Administrative
Agent (or any successor agent) to the Borrower and the Lenders from time to
time.
"Affected Lender" - see Section 5.4.
"Affiliate" shall mean, as to any Person, any other Person which,
directly or indirectly, owns, holds, controls, is controlled by or is under
common control with such Person (including all beneficial control as a trustee,
guardian or other fiduciary). A Person shall be deemed to be "controlled by" any
other Person if such other Person possesses, directly or indirectly, power (a)
to vote 10% or more of the securities (on a fully diluted basis) having ordinary
voting power for the election of directors or managing general partners of such
Person; or (b) to direct or cause the direction of the management and policies
of such Person whether through the ownership of voting securities, membership
interests, by contract or otherwise.
"Agent-Related Persons" shall mean the Administrative Agent and the
Collateral Agent (including any successor agent), together with their Affiliates
(including in the case of Bank of America in its capacity as Administrative
Agent and Collateral Agent, the Arranger), and officers, directors, employees,
agents and attorneys-in-fact of such Persons and Affiliates.
"Agreement" shall mean this Credit Agreement, as the same may be
amended or modified from time to time in whole or in part.
"Amounts Available for Dividends" shall mean, as to any Person, the
maximum amount of dividends such Person is or eventually would be permitted to
pay without necessitating approval of the Department under the then-current
rules regulating such dividends whether or not such dividends are taken at such
time.
"Annual Statement" shall mean, as to any insurance company, the annual
financial statement of such insurance company as required to be filed with the
Department, together with all exhibits or schedules filed therewith, prepared in
conformity with SAP. References to amounts on particular exhibits, schedules,
lines, pages and columns of the Annual Statement are based on the format
promulgated by the NAIC for 1999 Life, Accident and Health Insurance Company
Annual Statements or 1999 Property and Casualty Insurance Company Annual
Statements, as applicable. If such format is changed in future years so that
different information is contained in such items or they no longer exist, it is
understood that the reference is to
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information consistent with that reported in the referenced item in the 1999
Annual Statement of such insurance company.
"Applicable Base Rate Margin" - see Section 3.1(d).
"Applicable Insurance Codes" shall mean, as to any insurance company,
the insurance code of any state where such insurance company is domiciled or
doing insurance business and any successor statute of similar import, together
with the regulations thereunder, as amended or otherwise modified and in effect
from time to time. References to sections of the Applicable Insurance Code shall
be construed to also refer to successor sections.
"Applicable Offshore Rate Margin" - see Section 3.1(c).
"Arranger" shall mean Banc of America Securities LLC, in its capacity
as sole lead arranger and sole book manager.
"Assignment Agreement" - see Section 14.1.
"Average Life" shall mean, as of the date of determination, with
respect to any Indebtedness, the quotient obtained by dividing (a) the sum of
the products of the numbers of years from the date of determination to the dates
of each successive scheduled principal payment of such Indebtedness multiplied
by the amount of such scheduled principal payment by (b) the sum of all such
scheduled principal payments.
"Bank of America" - see Preamble.
"Base Rate" shall mean, for any day, the higher of (a) 0.50% per annum
above the latest Federal Funds Effective Rate and (b) the rate of interest in
effect for such day as publicly announced from time to time by Bank of America,
as its "prime rate." The "prime rate" is a rate set by Bank of America based
upon various factors including Bank of America's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in the prime rate announced by Bank of America shall take
effect at the opening of business on the date specified in the public
announcement of such change.
"Base Rate Loan" shall mean a Loan that bears interest based on the
Base Rate.
"Borrower" - see Preamble.
"Borrower Pledge Agreement" - see Section 6.1(a).
"Borrowing" shall mean a borrowing hereunder consisting of Loans of the
same type made to the Borrower on the same day by the Lenders pursuant to
Section 2, and, with respect to Offshore Rate Loans, having the same Interest
Period.
"Borrowing Date" shall mean any date on which a Borrowing occurs under
Section 2.3.
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"Breakage Costs" - see Section 5.5.
"Business Day" shall mean any day other than a Saturday, Sunday or
other day on which commercial banks in the state where the Administrative
Agent's Office is located are authorized or required by law to close and, if the
applicable Business Day relates to any Offshore Rate Loan, shall mean such a day
on which dealings are carried on in the applicable offshore dollar interbank
market.
"Calculation Period" shall mean, with respect to any ratio or
calculation, the period for which such ratio or calculation is being calculated.
"Capital and Surplus" shall mean, as to any of the Reliance Standard
Insurance Companies as of any date, the total amount shown on line 38, page 3,
column 1 of the Annual Statement of each of the Reliance Standard Insurance
Companies and, as to Safety National as of any date, the total amount shown on
line 25, page 3, column 1 of the Annual Statement of Safety National, or, in
each case, an amount determined in a consistent manner for any date other than
one as of which an Annual Statement is prepared.
"Capitalized Lease Liabilities" shall mean, with respect to any Person,
all monetary obligations of such Person under any leasing or similar arrangement
which, in accordance with GAAP, would be classified as a capitalized lease, and,
for purposes of this Agreement, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP, and the stated
maturity thereof shall be the date of the last payment of rent or any other
amount due under such lease prior to the first date upon which such lease may be
terminated by the lessee without payment of a penalty.
"Cash Coverage Ratio" shall mean, for any Calculation Period, the ratio
of (a) (i) Amounts Available for Dividends of RSL-Texas and Safety National,
plus (ii) Consolidated Non-Insurance EBITDA; provided that Consolidated
Non-Insurance Net Income shall only include the Net Income of any Subsidiary of
the Borrower to the extent (and solely to the extent) of the aggregate amount of
cash actually distributed or which could have been distributed without
restriction by such Subsidiary during such period to the Borrower (including
without limitation cash amounts which could have been generated as of the end of
the Calculation Period from the liquidation of Investments held during such
period by such Subsidiary; provided, that for purposes of this clause (ii) only,
such amounts shall be determined without regard to any requirement of prior
notice that would have been applicable to the liquidation by the Borrower or any
such Subsidiary of any such Investment, so long as, except in the case of the
Tersk Investment, such prior notice requirement did not entail a notice period
of longer than ninety (90) days), plus (iii) without duplication, cash revenues
of the Borrower, and plus (iv) cash interest expense of the Borrower and on the
SIG Notes, multiplied by the Borrower's federal marginal income tax rate, less
(v) without duplication, unreimbursed cash operating expenses of the Borrower;
provided any such reimbursement shall have been made in cash to the Borrower, in
each case calculated for the four consecutive Fiscal Quarters immediately
preceding the date of calculation, to (b) the cash interest expense on
Consolidated Funded Debt of the Borrower and its Non-Insurance Subsidiaries for
the next succeeding four consecutive Fiscal Quarters (excluding
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cash interest expense of the Borrower on Preferred Securities and on the
Indebtedness of the type issued in connection with such Preferred Securities).
"Cash Equivalents" shall mean (a) securities with maturities of six (6)
months or less from the date of acquisition issued or fully guaranteed or
insured by the United States Government or any agency thereof, (b) certificates
of deposit, eurodollar time deposits, overnight bank deposits, bankers'
acceptances and repurchase agreements of any Lender or any other commercial bank
whose unsecured long-term debt obligations are rated at least BBB- by Standard &
Poor's or Baa3 by Xxxxx'x having maturities of six (6) months or less from the
date of acquisition, and (c) commercial paper rated at least "A-2" by Standard &
Poor's or "P-2" by Xxxxx'x, or carrying an equivalent rating by a nationally
recognized rating agency, if both of the two named rating agencies cease
publishing ratings of investments.
"CERCLA" shall mean the Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended.
"CERCLIS" shall mean the Comprehensive Environmental Response
Compensation Liability Information System List.
"Change in Control" shall be deemed to have occurred at such times as:
(a) the Borrower ceases to own, free and clear of all Liens (other than Liens
created under the Borrower Pledge Agreement and the Pari Passu Borrower Pledge
Agreement), at least 100% of the outstanding shares of voting stock and voting
power of RSL-Texas on a fully diluted basis (other than as a result of any (i)
merger of RSL-Texas into, or consolidation of RSL-Texas with, RSL or (ii)
liquidation or dissolution of RSL-Texas whereby all of the capital stock and
other equity interests of RSL owned by RSL-Texas immediately prior to such
liquidation or dissolution are distributed to the Borrower); (b) except for the
Persons referenced in clause (c) of this definition, any Person, or two or more
Persons, acting in concert, acquire beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended) of 40% or more of the voting power of the
outstanding voting stock of the Borrower on a fully diluted basis, (c) the
Parent and Xxxxxx Xxxxxxxxxx, together with their respective Affiliates, cease
to beneficially own (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended) at
least 33-1/3% of the voting power of the outstanding voting stock of the
Borrower on a fully diluted basis; or (d) individuals who as of the Effective
Date constitute the Borrower's Board of Directors (together with any new
director whose election by the Borrower's Board of Directors or whose nomination
for election by the Borrower's stockholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of such period or whose election or nomination for election was
previously so approved), for any reason, cease to constitute a majority of the
directors at any time then in office.
"Charges" - see Section 4.8.
"Closing Date" shall mean June 1, 2000.
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"Co-Agents" or "Co-Agent" - see Preamble.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
the regulations promulgated thereunder, or, as the context requires, applicable
provisions of prior laws.
"Collateral" shall mean all of the collateral security described or
provided for in Section 6 together with all property and/or rights on or in
which a Lien is now or hereafter granted by any Person to the Collateral Agent
(or to any agent, trustee or other party acting on behalf of the Collateral
Agent) for the benefit of the Lenders, pursuant to the Pledge Agreements or any
other instruments or documents provided for herein or delivered hereunder or in
connection herewith.
"Collateral Agent" - see Preamble.
"Collateral Sharing Agreement" shall mean that certain Collateral
Sharing Agreement, dated as of the date hereof, among the Borrower, the
Collateral Agent, and Bank of America in its capacity as collateral agent under
the Pari Passu Credit Agreement, as the same may be amended or modified from
time to time.
"Commitments" - see Section 2.1.
"Compliance Certificate" - see Section 8.1.5.
"Consolidated Equity" shall mean, with respect to the Borrower, the sum
of (a) stockholders' equity of the Borrower and its Subsidiaries calculated on a
consolidated basis in accordance with GAAP, but excluding any unrealized gains
(losses) on securities as determined in accordance with FAS 115 and (b) the
component of the capitalization reflected on the Borrower's consolidated balance
sheet constituting Preferred Securities, so long as such Preferred Securities,
the Indebtedness of the Borrower issued in connection with such Preferred
Securities, and the Contingent Obligation, if any, of the Borrower incurred in
connection with the issuance of the Preferred Securities would not, in any case,
be included as a liability on the Borrower's consolidated balance sheet in
accordance with GAAP.
"Consolidated Funded Debt" shall mean, without duplication, the sum of
(a) all Borrowings hereunder, (b) all Indebtedness under the Other Senior
Indebtedness, (c) all drawn and unreimbursed Letters of Credit under the Master
Letter of Credit Agreement, (d) all Indebtedness under the Pari Passu Credit
Agreement and (e) Indebtedness as defined under clauses (a) and (b) of the
definition thereof, all as calculated on a consolidated basis in accordance with
GAAP.
"Consolidated Non-Insurance EBITDA" shall mean, for any Calculation
Period, Consolidated Non-Insurance Net Income for such period plus, to the
extent deducted in calculating Consolidated Non-Insurance Net Income for such
period, (i) interest expense on Consolidated Funded Debt of the Borrower's
Non-Insurance Subsidiaries, (ii) income taxes, (iii) depreciation and (iv)
amortization.
"Consolidated Non-Insurance Net Income" shall mean, for any Calculation
Period, the consolidated Net Income of the Borrower's Non-Insurance
Subsidiaries.
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"Contingent Obligation" shall mean any agreement, undertaking or
arrangement by which any Person guarantees, endorses or otherwise becomes or is
contingently liable upon (by direct or indirect agreement, contingent or
otherwise, to provide funds for payment, to supply funds to, or otherwise to
invest in, a debtor, or otherwise to assure a creditor against loss), the debt,
obligation or other liability of any other Person (other than by endorsements of
instruments in the course of collection), or guarantees the payment of dividends
or other distributions upon the shares of any other Person. The amount of any
Person's obligation under any Contingent Obligation shall (subject to any
limitation set forth therein) be deemed to be the outstanding principal amount
(or maximum outstanding principal amount, if larger) of the debt, obligation or
other liability outstanding thereunder as to which such Contingent Obligation
applies.
"Continuation/Conversion Date" shall mean any date on which, under
Section 2.5, the Borrower (a) converts Loans of one Type to another Type, or (b)
continues as Offshore Rate Loans of the same Type, but with a new Interest
Period, Offshore Rate Loans having Interest Periods expiring on such date.
"Continuation/Conversion Notice" - see Section 2.5(b).
"Controlled Group" shall mean all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with the
Borrower, are treated as a single employer under section 414(b) or section
414(c) of the Code or section 4001 of ERISA. For purposes of this definition,
the term Borrower shall be deemed to include, but not be limited to, any and all
Subsidiaries of the Borrower.
"Debt to Capital Ratio" shall mean, at any date of determination, the
ratio of (a) Consolidated Funded Debt to (b)(i) Consolidated Funded Debt, plus
(ii) Consolidated Equity of the Borrower.
"Default" shall mean any condition or event, which has not been cured
or waived, which constitutes an Event of Default or, which with the giving of
notice or lapse of time, or both, would become an Event of Default.
"Department" see Section 7.6(a)(i).
"Disposition" - see Section 4.3(a).
"Dollars" and the sign "$" shall mean lawful money of the United States
of America.
"Effective Date" shall mean the date on which all conditions precedent
set forth in Section 11 are satisfied or waived by all Lenders or with respect
to the payment of any fee payable hereunder, waived by the Person entitled to
receive such payment.
"Eligible Assignee" shall mean (a) a financial institution organized
under the laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $100,000,000; (b) a commercial bank organized
under the laws of any other country which is a member of the Organization for
Economic Cooperation and Development, or a political
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subdivision of any such country, and having a combined capital and surplus of at
least $100,000,000, provided that such bank is acting through a branch or agency
located in the United States; (c) a Person that is primarily engaged in the
business of commercial banking and that is (i) a Subsidiary of a Lender, (ii) a
Subsidiary of a Person of which a Lender is a Subsidiary, or (iii) a Person of
which a Lender is a Subsidiary; (d) another Lender; (e) any other entity which
is an "accredited investor" (as defined in Regulation D under the Securities Act
of 1933, as amended) which extends credit or buys loans as one of its
businesses, including but not limited to, insurance companies, mutual funds and
lease financing companies; or (f) other lenders or institutional investors
consented to in writing in advance by Administrative Agent and Borrower (which
consent shall not be unreasonably withheld). No Affiliate of the Borrower shall
be an Eligible Assignee.
"Environmental Claims" shall mean all claims, complaints, notices or
inquiries by any Governmental Authority or other Person alleging potential
liability or responsibility for violation of any Environmental Law, or for
release or injury to the environment or threat to public health, personal injury
(including sickness, disease or death), property damage, natural resources
damage, or otherwise alleging liability or responsibility for damages (punitive
or otherwise), cleanup, removal, remedial or response costs, restitution, civil
or criminal penalties, injunctive relief, or other type of relief, resulting
from or based upon the presence, placement, discharge, emission or release
(including intentional or unintentional, negligent or non-negligent, sudden or
non-sudden, accidental or non-accidental, placement, spills, leaks, discharges,
emissions or releases) of any Hazardous Material at, in, or from property,
whether or not owned by any of the Borrower or any of the Borrower's
Subsidiaries.
"Environmental Laws" shall mean all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances, codes and
guidelines (including common law, consent decrees and administrative orders),
together with all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental
Authorities, in each case relating to environmental, health, safety and land use
matters; including, without limitation, CERCLA, the Clean Air Act, the Federal
Water Pollution Control Act of 1972, the Solid Waste Disposal Act, the Federal
Resource Conservation and Recovery Act, the Toxic Substances Control Act, and
the Emergency Planning and Community Right-to-Know Act.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"Eurocurrency Reserve Percentage" shall mean, for any day for any
Interest Period, the maximum reserve percentage (expressed as a decimal, rounded
upward to the next 1/100th of 1%) in effect on such day (whether or not
applicable to any Lender) under regulations issued from time to time by the FRB
for determining the maximum reserve required (including any emergency,
supplemental or other marginal reserve requirement) with respect to Eurocurrency
funding (currently referred to as "Eurocurrency liabilities"). Without limiting
the effect of the foregoing, the Eurocurrency Reserve Percentage shall reflect
any other reserves required to be maintained by the Administrative Agent against
(a) any category of liabilities that includes deposits by reference to which the
Offshore Rate (Reserve Adjusted) is to be determined, or (b)
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15
any category of extensions of credit or other assets that includes Offshore Rate
Loans. For purposes of this Agreement, any Offshore Rate Loans hereunder shall
be deemed to be "Eurocurrency liabilities," as defined in Regulation D, and, as
such, shall be deemed to be subject to such reserve requirements without the
benefit of, or credit for, proration, exceptions or offsets which may be
available to the Administrative Agent from time to time under Regulation D. The
Offshore Rate (Reserve Adjusted) shall be adjusted automatically as to all
Offshore Rate Loans then outstanding as of the effective date of any change in
the Eurocurrency Reserve Percentage.
"Event of Default" - see Section 12.1.
"Facility Amount" - see Section 2.1.
"FAS" shall mean any statement or pronouncement of the Financial
Accounting Standards Board.
"Federal Funds Effective Rate" shall mean, for any day, the rate per
annum (rounded upwards to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds
Effective Rate for such day shall be such rate on such transactions on the next
preceding Business Day as so published on the next succeeding Business Day, and
(b) if no such rate is so published on such next succeeding Business Day, the
Federal Funds Effective Rate for such day shall be the average rate charged to
Bank of America on such day on such transactions as determined by Administrative
Agent.
"Fee Letter" shall mean that certain Fee Letter, sent to the Borrower
on April 4, 2000, by Bank of America and the Arranger and accepted by the
Borrower.
"Fiscal Quarter" or "FQ" shall mean any fiscal quarter of a Fiscal
Year.
"Fiscal Year" or "FY" shall mean any period of twelve consecutive
calendar months ending on December 31; references to a Fiscal Year with a number
corresponding to any calendar year (e.g., the "1999 Fiscal Year") refer to the
Fiscal Year ending on December 31 occurring during such calendar year.
"FRB" shall mean the Board of Governors of the Federal Reserve System,
and any Governmental Authority succeeding to any of its principal functions.
"FRSL" shall mean First Reliance Standard Life Insurance Company, a New
York insurance company.
"GAAP" shall mean generally accepted accounting principles set forth
from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and
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authority within the U.S. accounting profession), which are applicable to the
circumstances as of the date of determination.
"Governmental Authority" shall mean any nation or government, any state
or other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Hazardous Material" shall mean: (a) any "hazardous substance," as
defined by CERCLA; (b) any "hazardous waste," as defined by the Resource
Conservation and Recovery Act, as amended; (c) any petroleum product; or (d) any
pollutant or contaminant or hazardous, dangerous or toxic chemical, material or
substance within the meaning of any other applicable federal, state or local
law, regulation or ordinance (including consent decrees and administrative
orders binding upon the Borrower or any of its Subsidiaries) relating to or
imposing liability or standards of conduct concerning any hazardous, toxic or
dangerous waste, substance or material, all as amended or hereafter amended.
"IBOR" shall mean, with respect to any Interest Period, the rate of
interest per annum determined by the Administrative Agent as the rate at which
dollar deposits in the approximate amount of Bank of America's Offshore Rate
Loan for such Interest Period would be offered by Bank of America's Grand Cayman
Branch, Grand Cayman B.W.I. (or such other office as may be designated for such
purpose by Bank of America), to major banks in the offshore dollar interbank
market at their request at approximately 10:00 A.M. (Chicago time) two (2)
Business Days prior to the commencement of such Interest Period.
"IMR/AVR" shall mean, as to any of the Reliance Standard Insurance
Companies at a particular date, the interest maintenance reserve of such
Reliance Standard Insurance Companies, computed in accordance with SAP as
reported on line 11.4, page 3, column 1 of the Annual Statement, plus the asset
valuation reserve of such Reliance Standard Insurance Companies, computed in
accordance with SAP as reported on line 24.1, page 3, column 1 of the Annual
Statement.
"Income Taxes" shall mean any Taxes in which the base is measured by
Net Income.
"Indebtedness" shall mean, with respect to any Person at any date,
without duplication: (a) all obligations of such Person for borrowed money or in
respect of loans, (b) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments; (c) all obligations in respect
of letters of credit, whether or not drawn, and bankers' acceptances issued for
the account of such Person; (d) all Capitalized Lease Liabilities of such
Person; (e) all Interest Rate and Currency Exchange Agreement Obligations of
such Person; (f) all obligations of such Person secured by a contractual Lien;
(g) all trade payables of such Person; (h) as to the Borrower only, all other
items (exclusive of negative goodwill) which, in accordance with GAAP, would be
included as liabilities on the liability side of the balance sheet of such
Person; (i) whether or not so included as liabilities in accordance with GAAP,
all obligations of such Person to pay the deferred purchase price of property or
services, and Indebtedness secured by a Lien on property owned or being
purchased by such Person (including Indebtedness arising
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under conditional sales or other title retention agreements) whether or not such
Indebtedness shall have been assumed by such Person or is limited in recourse;
(j) any Indebtedness of another Person secured by a Lien on any assets of such
first Person, whether or not such Indebtedness is assumed by such first Person;
(k) any Indebtedness of a partnership in which such Person is a general partner;
and (l) all Contingent Obligations of such Person whether or not in connection
with the foregoing; provided, that Indebtedness of any Person shall not include
Permitted Transactions of such Person; and provided, further, that to the extent
the calculation of the consolidated Indebtedness of any Person would include
both the amount of any Contingent Obligation of such Person and the amount of
the underlying Indebtedness to which such Contingent Obligation relates, such
calculation shall be made including such amount only once.
"Indemnified Parties" - see Section 15.5.
"Indenture" shall mean the Indenture, dated as of October 8, 1993,
between the Borrower and State Street Bank and Trust Company of Connecticut,
N.A. (successor to Shawmut Bank Connecticut, N.A.), as trustee, as the same may
be amended from time to time in accordance with the terms of this Agreement.
"Intercreditor Agreement" shall mean that certain Intercreditor
Agreement, dated as of the date hereof, between The Chase Manhattan Bank and the
Collateral Agent, as the same may be amended or modified from time to time.
"Interest Payment Date" shall mean, as to any Offshore Rate Loan, the
last day of each Interest Period applicable to such Loan and each date such Loan
is converted into another Type of Loan and, as to any Base Rate Loan, the last
Business Day of each calendar month; provided, however, that if any Interest
Period for an Offshore Rate Loan exceeds three months, the date that falls three
months after the beginning of such Interest Period and after each Interest
Payment Date thereafter is also an Interest Payment Date.
"Interest Period" shall mean, as to any Offshore Rate Loan, the period
commencing on the Borrowing Date of such Loan or on the Continuation/Conversion
Date on which such Loan is converted into or continued as an Offshore Rate Loan,
and ending on the date one, two, three, six or, if available, twelve months
thereafter as selected by the Borrower in its Notice of Borrowing or
Continuation/Conversion Notice; provided 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
following Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month, in which event
such Interest Period shall end on the preceding Business Day;
(b) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the
end of such Interest Period; and
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(c) no Interest Period for any Loan shall extend beyond the
Termination Date.
"Interest Rate and Currency Exchange Agreement Obligations" shall mean,
with respect to any Person, all net liabilities of such Person under interest
rate swap agreements, foreign currency exchange agreements, interest rate cap
agreements, interest rate collar agreements, options or futures contracts or
agreements or arrangements related to interest rates or currency exchange rates.
"Investment" shall mean, as to any Person, any investment in any
Person, whether by means of share purchase, capital contribution, loan, time
deposit or otherwise (other than investments by separate accounts of the
Reliance Standard Insurance Companies in the ordinary course of business).
"Investment Grade Preferred Stocks" shall mean preferred stocks which
are rated at least "NAIC P2" by the NAIC, "BBB-" by Standard & Poor's, "baa3" by
Moody's, "BBB-" by Fitch Investor Services, Inc., "BBB-" by Duff & Xxxxxx Credit
Rating Co., Inc., or carrying an equivalent rating by a nationally recognized
rating agency, if each of the named rating agencies cease publishing ratings of
investments.
"Investment Grade Securities" shall mean non-equity securities which
are rated at least "NAIC 2" by the NAIC, "BBB-" by Standard & Poor's, "Baa3" by
Moody's, "BBB-" by Fitch Investor Services, Inc., "BBB-" by Duff & Xxxxxx Credit
Rating Co., Inc., or carrying an equivalent rating by a nationally-recognized
rating agency, if each of the named rating agencies cease publishing ratings of
investments.
"Investment Subsidiaries" shall mean the Investment Subsidiaries as
such term is defined in the Master Letter of Credit Agreement.
"LC Administrative Agent" shall mean the Administrative Agent as such
term is defined in the Master Letter of Credit Agreement.
"LC Liabilities" shall mean the Liabilities as such term is defined in
the Master Letter of Credit Agreement.
"LC Obligations" shall mean the LC Obligations as such term is defined
in the Master Letter of Credit Agreement.
"Lenders" or "Lender" - see Preamble.
"Lender Amount" shall mean, at the time of determination, (a) prior to
the termination or expiration of the Commitments under this Agreement, the sum
of (i) the outstanding Liabilities, plus (ii) the aggregate unused Commitments
and (b) after termination or expiration of the Commitments under this Agreement,
the outstanding Liabilities.
"Lender Net Proceeds Portion" shall mean, at the time of determination,
an amount equal to the product of (a) the Lender Portion multiplied by (b) the
amount of such Net Proceeds.
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"Lender Portion" shall mean the quotient of (a) the Lender Amount,
divided by (b) the Total Amount.
"Lending Office" shall mean, with respect to any Lender, any office
designated by such Lender in its sole discretion beneath its signature hereto
(or in an Assignment Agreement) or otherwise from time to time by written notice
to the Borrower and the Administrative Agent, as a Lending Office for purposes
hereunder. A Lender may designate separate Lending Offices for the purposes of
making, maintaining or continuing Base Rate Loans or Offshore Rate Loans and,
with respect to Offshore Rate Loans, such Lending Office may be a foreign branch
or an Affiliate of such Lender or such Lender's holding company.
"Letters of Credit" shall mean the Letters of Credit as such term is
defined in the Master Letter of Credit Agreement.
"Liabilities" shall mean all obligations of the Borrower and/or any of
its Subsidiaries to the Lenders, the Administrative Agent, the Collateral Agent
or the Arranger, howsoever created, arising or evidenced, whether direct or
indirect, joint or several, absolute or contingent, or now or hereafter
existing, or due or to become due, which arise out of or in connection with this
Agreement, the Notes, if any, or the other Related Documents.
"Licenses" - see Section 7.26; individually, a "License".
"Lien" shall mean any security interest, mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), claim or other priority or preferential arrangement of any kind or
nature whatsoever.
"Limited Partnership" shall mean an entity in which any Person holds a
Limited Partnership Investment.
"Limited Partnership Investments" shall mean, as to any Person,
Investments in (a) limited partnership interests by such Person in partnerships
with general partners other than the Borrower or its Affiliates or (b) any other
Person that is managed by an investment manager other than the Borrower or its
Affiliates which is engaged primarily in the business of making Investments and
performing related activities, in each case, excluding Investments by separate
accounts of the Reliance Standard Insurance Companies in such limited
partnership interests in the ordinary course of business. For purposes of this
Agreement, the Structured Notes shall be deemed to be Limited Partnership
Investments.
"Litigation" shall mean any litigation (including, without limitation,
any governmental proceeding or arbitration proceeding), tax audit or
investigative proceeding, claim, lawsuit, and/or investigation pending or
threatened against or involving the Borrower, any of its Subsidiaries or other
Affiliates or any of its or their businesses or operations.
"Loan(s)" - see Section 2.1(a).
"Master Letter of Credit Agreement" shall mean that certain Amended and
Restated Master Letter of Credit Agreement, dated as of June 1, 2000, among the
Borrower, the
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Investment Subsidiaries, the lenders party thereto, and the LC Administrative
Agent, as the same may be further amended or modified from time to time as
permitted by this Agreement.
"Material Adverse Change" or "Material Adverse Effect" shall mean any
change, event, action, condition or effect which individually or in the
aggregate (a) impairs the validity or enforceability of this Agreement, the
Notes, if any, or any other Related Document, or (b) subjects any officer of the
Borrower or any of its Subsidiaries to criminal liability which could reasonably
be expected to materially and adversely affect the Borrower, any of the Reliance
Standard Insurance Companies or Safety National, or the Borrower and its
Subsidiaries taken as a whole, or (c) materially and adversely affects the
consolidated business, operations, prospects or financial condition of the
Borrower and its Subsidiaries taken as a whole, or (d) impairs the ability of
the Borrower or any of its Subsidiaries to perform their respective obligations
under this Agreement or any of the Related Documents.
"Material Litigation" or "Material Litigation Development" shall mean
any Litigation, or development in any Litigation, as the case may be (a) which
involves this Agreement, any Related Document or other transactions contemplated
hereby or thereby, or (b) which could reasonably be expected to have a Material
Adverse Effect.
"Moody's" shall mean Xxxxx'x Investors Service, Inc. and any successor
thereto.
"Multiemployer Pension Plan" shall mean a multiemployer plan as defined
in section 4001(a)(3) of ERISA with respect to which the Borrower or any other
Controlled Group member is or has, within the preceding six years, been required
to contribute.
"NAIC" shall mean the National Association of Insurance Commissioners,
or any successor organization.
"Net Income" shall mean, for any Person for any Calculation Period, the
net income (or loss) of such Person for such Calculation Period as determined in
accordance with GAAP.
"Net Proceeds" shall mean, with respect to any Disposition or Sale by
any Person, the aggregate amount of cash and readily marketable Cash Equivalents
received by such Person in respect of such Disposition or Sale minus the sum of
(a) reasonable costs and expenses (including costs of discontinuance and Taxes
other than Income Taxes) incurred in connection with such Disposition or Sale
and required to be paid in cash and (b) the estimated Income Tax to be paid by
such Person in connection with such Disposition or Sale. Upon calculation of Net
Proceeds, the Borrower shall deliver to the Administrative Agent an accounting
(a copy of which shall promptly be delivered to the Lenders by the
Administrative Agent) of the items deducted from the cash or Cash Equivalents
related to such Disposition or Sale pursuant to clauses (a) and (b). For
purposes of this definition, the Net Proceeds received by any Person in respect
of any Disposition or Sale shall include such cash or Cash Equivalents as may be
received ("subsequent cash proceeds") by such Person at any time or from time to
time, when such subsequent cash proceeds are actually received, in connection
with the sale, transfer, lease or other disposition, or otherwise in respect of
any consideration other than cash or readily marketable Cash Equivalents
received by such Person in respect of such Disposition or Sale, less the
estimated Income Tax to
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be paid in connection with the receipt of such subsequent cash proceeds that
were not theretofore deducted in computing Net Proceeds.
"1999 Annual Statements" - see Section 7.6(a)(ii).
"2000 Quarterly Statements" - see Section 7.6(a)(ii).
"Non-Insurance Subsidiary" shall mean a Subsidiary of the Borrower that
is not engaged in the business of assuming insurance or reinsurance risk, and as
of the date hereof, shall include all Subsidiaries of the Borrower other than
the Reliance Standard Insurance Companies, Safety National and Safety National
Re.
"Non-Use Fee" - see Section 3.6(b).
"Note Exchange Agreement" shall mean that certain Note Exchange
Agreement, dated as of December 30, 1993, between RSL and the Trust pursuant to
which RSL acquired the Trust Notes from the Trust and transferred the Subsidiary
Senior Notes to the Trust in exchange for the Trust Notes, as the same may be
amended or modified from time to time as permitted by this Agreement.
"Notes" shall mean the promissory notes, if any, in favor of the
Lenders, each substantially in the form of Exhibit A, with blanks appropriately
completed in conformity herewith, evidencing the Loans, together with any
promissory notes issued and accepted by any of the Lenders in replacement of or
substitution therefor.
"Notice of Borrowing" shall mean a notice in substantially the form of
Exhibit B hereto.
"Offshore Rate Loans" shall mean any portion of the Loans which bears
interest at a rate determined by reference to the Offshore Rate (Reserve
Adjusted).
"Offshore Rate (Reserve Adjusted)" shall mean, for any Interest Period,
with respect to Offshore Rate Loans comprising part of the same Borrowing, the
rate of interest per annum (rounded upward to the next 1/100th of 1%) determined
by the Administrative Agent as follows:
Offshore Rate = IBOR
-----------------------------
(Reserve Adjusted) 1.00 - Eurocurrency Reserve Percentage
The Offshore Rate (Reserve Adjusted) shall be adjusted automatically as to all
Offshore Rate Loans then outstanding as of the effective date of any change in
the Eurocurrency Reserve Percentage.
"Other Investment Subsidiaries" shall mean DFG Corporation, a Delaware
corporation, APDEL LLC, a Delaware limited liability company, and such other
Subsidiaries of the Borrower from time to time which are engaged primarily in
making Investments for their own account; provided that to the extent required
under the Borrower Pledge Agreement the capital stock of any such Subsidiary has
been pledged to the Administrative Agent and, subject to the terms of
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the Collateral Sharing Agreement, the Administrative Agent has a first priority
perfected Lien with respect thereto.
"Other Senior Indebtedness" shall mean, collectively, the Senior Notes
and the SIG Notes.
"Parent" shall mean Xxxxxxxxxx & Company, a New York limited
partnership.
"Pari Passu Administrative Agent" shall mean the Administrative Agent
as such term is defined under the Pari Passu Credit Agreement.
"Pari Passu Borrower Pledge Agreement" shall mean the Amended and
Restated Borrower Pledge Agreement as defined under the Pari Passu Credit
Agreement.
"Pari Passu Credit Agreement" shall mean that certain Fourth Amended
and Restated Credit Agreement, dated as of June 1, 2000, among Delphi Financial
Group, Inc., the lenders party thereto, the co-agents party thereto and Bank of
America, N.A., as administrative agent and collateral agent, as the same may be
further amended or modified from time to time as permitted by this Agreement.
"Pari Passu Lender Amount" shall mean, at the time of determination,
(a) prior to the termination or expiration of the Commitments (as defined in the
Pari Passu Credit Agreement), the sum of (i) the outstanding Pari Passu
Liabilities, plus (ii) the aggregate unused Commitments (as defined in the Pari
Passu Credit Agreement) and (b) after termination or expiration of the
Commitments under the Pari Passu Credit Agreement, the outstanding Pari Passu
Liabilities.
"Pari Passu Lender Net Proceeds Portion" shall mean, at the time of
determination, an amount equal to the product of (a) the Pari Passu Lender
Portion multiplied by (b) the amount of such Net Proceeds.
"Pari Passu Lender Portion" shall mean the quotient of (a) the Pari
Passu Lender Amount, divided by (b) the Total Amount.
"Pari Passu Liabilities" shall mean the Liabilities as defined under
the Pari Passu Credit Agreement.
"Pari Passu Loans" shall mean the Loans as defined in the Pari Passu
Credit Agreement.
"Pari Passu Pledge Agreements" shall mean, collectively, the Pari Passu
Borrower Pledge Agreement and the Pari Passu SIG Holdings Pledge Agreement.
"Pari Passu SIG Holdings Pledge Agreement" shall mean the Amended and
Restated SIG Holdings Pledge Agreement as defined in the Pari Passu Credit
Agreement.
"Pension Plan" shall mean a Single Employer Pension Plan, or a
Multiemployer Pension Plan to which the Borrower or any other Controlled Group
member may have liability.
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"Percentage" shall mean, relative to any Lender, the percentage set
forth opposite such Lender's name on Schedule 2.1 (or set forth in an Assignment
Agreement, as such Percentage may be adjusted from time to time pursuant to
Assignment Agreement(s) executed by such Lender and its Eligible Assignee) and
delivered pursuant to Section 14.1.
"Permitted Liens" - see Section 9.1.
"Permitted Transactions" shall mean (a) transactions in which an
investor sells U.S. Government Securities or mortgage-backed securities,
including, without limitation, securities issued by the Government National
Mortgage Association and the Federal Home Loan Mortgage Corporation, while
simultaneously contracting to repurchase "substantially the same" (as determined
by the Public Securities Association and in accordance with GAAP) securities for
a later settlement, (b) transactions in which an investor lends cash to a
primary dealer and the primary dealer collateralizes the borrowing of the cash
with certain securities, (c) transactions in which an investor lends securities
to a primary dealer and the primary dealer collateralizes the borrowing of the
securities with cash collateral, and (d) transactions in which an investor makes
loans of securities to a broker dealer under an agreement requiring such loans
to be continuously secured by cash collateral or U.S. Government Securities.
"Person" shall mean any individual, sole proprietorship, partnership,
limited liability company, limited liability partnership, joint venture, trust,
unincorporated organization, association, corporation, institution, public
benefit corporation, entity or government (whether federal, state, county, city,
municipal or otherwise, including, without limitation, any instrumentality,
division, agency, body or department thereof).
"Pledge Agreements" shall mean, collectively, the Borrower Pledge
Agreement and the SIG Holdings Pledge Agreement.
"Preferred Securities" shall mean the 9.31% Capital Securities, Series
A of Delphi Funding L.L.C., and any other preferred securities issued by a
limited liability company, business trust or similar entity, all of the common
securities of which are owned by the Borrower and which is formed solely for the
purpose of issuing such preferred securities and investing the proceeds of such
issuance in debt securities of the Borrower; provided that the Borrower's
repayment obligations under such debt securities relating to any such other
preferred securities shall be subordinated to the Liabilities on terms
satisfactory to the Required Lenders.
"Process Agent" - see Section 15.11.
"Qualification" shall mean, with respect to any certificate covering
any financial statements, a qualification to such certificate or financial
statements (such as a "subject to" or "except for" statement therein) (a)
resulting from a limitation on the scope of examination of such financial
statements or the underlying data, (b) as to the capability of the Person whose
financial statements are certified to continue operations as a going concern, or
(c) which could be eliminated by changes in financial statements or notes
thereto covered by such certificate (such as by the creation of or increase in a
reserve or a decrease in the carrying value of assets) and which if so
eliminated by the making of any such change and after giving effect thereto
would
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occasion a Default; provided, that neither of the following shall constitute a
Qualification: (i) a consistency exception relating to a change in accounting
principles with which the independent public accountants for the Person whose
financial statements are being certified have concurred; or (ii) a qualification
relating to the outcome or disposition of threatened Litigation, pending
Litigation being contested in good faith, pending or threatened claims or
contingencies which cannot be determined with sufficient certainty to permit
such financial statements to be qualified.
"Reference Departments" shall mean the Department of the State of
Illinois, in the case of RSL, the State of Missouri, in the case of Safety
National, the State of New York, in the case of FRSL and the State of Texas, in
the case of RSL-Texas.
"Regulation D" shall mean Regulation D (or any successor regulation)
promulgated by the FRB as from time to time in effect.
"Regulation U" shall mean Regulation U (or any successor regulation)
promulgated by the FRB as from time to time in effect.
"Reinsurance Agreements" shall mean any agreement, contract, treaty,
certificate or other arrangement (other than a Surplus Relief Reinsurance
Agreement) by which any of the Reliance Standard Insurance Companies or Safety
National agrees to transfer or cede to another insurer all or part of the
liability assumed or assets held by any one of the Reliance Standard Insurance
Companies or Safety National under a policy or policies of insurance or under a
reinsurance agreement assumed by any one of the Reliance Standard Insurance
Companies. Reinsurance Agreements shall include, but not be limited to, any
agreement, contract, treaty, certificate or other arrangement (other than a
Surplus Relief Reinsurance Agreement) which is treated as such by the applicable
Department or Reference Department.
"Related Documents" shall mean the Notes, if any, the Pledge
Agreements, the Tax Sharing Agreements, the Collateral Sharing Agreement, the
Intercreditor Agreement and any and all other documents or instruments furnished
or required to be furnished pursuant to Section 6 or Section 11, as the same may
be amended or modified from time to time.
"Release" shall mean a "release," as such term is defined in CERCLA.
"Reliance Standard Insurance Companies" shall mean RSL-Texas, RSL and
FRSL.
"Replaced Lender" - see Section 5.9.
"Replacement Lender" - see Section 5.9.
"Reportable Event" shall have the meaning assigned to such term in
section 4043 of ERISA, except such term shall not include any event as to which
the requirement of giving thirty days notice to the Pension Benefit Guaranty
Corporation or any successor thereto has been waived.
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"Required Lenders" shall mean Lenders having more than 50% of the
Commitments, or if the Commitments have terminated or expired, more than 50% of
the aggregate Loans outstanding at such time.
"Responsible Officer" shall mean, in the case of any corporate Person,
any of the following officers of such Person: the chief executive officer, the
president; the chief financial officer; the chief operating officer; the chief
investment officer; the general counsel, the secretary; the treasurer or any
vice president and, in the case of a partnership, any of the foregoing officers
of its general partner. If any of the titles of the preceding officers of such
corporate Person are changed after the date hereof, the term "Responsible
Officer" shall thereafter mean any officer performing substantially the same
functions as are presently performed by one or more of the officers listed in
the first sentence of this definition.
"Risk Assets" shall mean fixed income securities which are not
Investment Grade Securities, common stock (other than capital stock of any
Federal Home Loan Bank), preferred stock which is not an Investment Grade
Preferred Stock, mortgage loans (other than mortgage loans meeting the
definition of U.S. Government Securities) and real estate (other than the
property at which RSL's primary administrative offices may be located and the
property known as 0000 Xxxxxxxx Xxxxxxx, Xx. Xxxxx, Xxxxxxxx or any other
building and site at which Safety National's primary administrative office may
be located); provided, however that the term "Risk Assets" shall not in any case
include Investments in the Borrower or its Subsidiaries.
"Risk-Based Capital" shall mean, with respect to any insurance company,
the ratio of Adjusted Capital of such insurance company to the Company Action
Level of such insurance company (as determined by the NAIC or the applicable
Reference Department). In the event that there is a conflict between the
Risk-Based Capital formulas adopted by the NAIC and the applicable Reference
Department, the calculation of the Reference Department shall govern.
"RSL" shall mean Reliance Standard Life Insurance Company, an Illinois
insurance company.
"RSL-Texas" shall mean Reliance Standard Life Insurance Company of
Texas, a Texas insurance company.
"Safety National" shall mean Safety National Casualty Corporation, a
Missouri insurance corporation.
"Sale" - see Section 4.3(b).
"SAP" shall mean, as to any insurance company, the statutory accounting
practices prescribed or permitted by the Reference Department.
"Senior Notes" shall mean the $85,000,000 original principal amount of
8% Senior Notes due 2003 issued by the Borrower pursuant to the Indenture, as
such notes may be amended or modified in accordance with the terms of this
Agreement.
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"SIG Holdings" shall mean SIG Holdings, Inc., a Delaware corporation,
formerly known as SIG Holdings Acquisition Corp.
"SIG Holdings Pledge Agreement" - see Section 6.1(c).
"SIG Note Agreement" shall mean that certain SIG Note Agreement, dated
as of May 20, 1994, among SIG Holdings and the Purchasers named in Schedule I
thereto, as the same may be amended or modified in accordance with the terms of
this Agreement.
"SIG Notes" shall mean the $45,000,000 original principal amount 8.50%
Senior Secured Notes due May 20, 2003 issued pursuant to the SIG Note Agreement
and assumed by SIG Holdings, as such notes may be amended or modified in
accordance with the terms of this Agreement.
"SIG Notes Pledge Agreement" shall mean that certain Pledge Agreement,
dated as of May 20, 1994, between SIG Holdings and The Chase Manhattan Bank,
N.A., as collateral agent, as the same may be amended or modified in accordance
with the terms of this Agreement.
"Single Employer Pension Plan" shall mean a pension plan as such term
is defined in section 3(2) of ERISA, other than a multiemployer plan as defined
in section 4001(a)(3) of ERISA, to which the Borrower or any other Controlled
Group member may have liability, including any liability by reason of having
been a substantial employer within the meaning of section 4063 of ERISA at any
time during the preceding five years, or by reason of being deemed to be a
contributing sponsor under section 4069 of ERISA.
"Solvent", as to any Person on a particular date, shall mean that on
such date (a) the fair value of the property of such Person is greater than the
total amount of liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair salable value of the assets of
such Person is not less than the amount that will be required to pay the
probable liabilities of such Person on its debts as they become absolute and
matured, (c) such Person is able to realize upon its assets and pay its debts
and other obligations, Contingent Obligations and other commitments as they
mature in the normal course of business, (d) such Person does not intend to, and
does not believe that it will, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature, (e) such Person is not
engaged in business or a transaction, and is not about to engage in business or
a transaction, for which such Person's property would constitute unreasonably
small capital after giving due consideration to the prevailing practice in the
industry in which such Person is engaged and (f) such Person has not made any
transfer or incurred any obligation, with the intent to hinder, delay or defraud
either present or future creditors of such Person. For the purposes of this
definition, in computing the amount of any Contingent Obligation at any time, it
is intended that such Contingent Obligation will be computed at the amount
which, in light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.
"Standard & Poor's" shall mean Standard & Poor's Ratings Services, a
division of The McGraw Hill Corporation, Inc., and any successor thereto.
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"Statutory Financial Statements" - see Section 7.6(a)(i).
"Statutory Liabilities" shall mean, as to any of the Reliance Standard
Insurance Companies as of any date, the amount reported on line 28, page 3,
column 1 of the Annual Statement of each of the Reliance Standard Insurance
Companies and, as to Safety National as of any date, the amount reported on line
23, page 3, column 1 of the Annual Statement of Safety National, or, in each
case, an amount determined in a consistent manner for any date other than one as
of which an Annual Statement is prepared.
"Structured Notes" shall mean the Secured Portfolio Notes, Series
1998-1 issued in 1998 by Bankers Trust Corporation (formerly Bankers Trust New
York Corporation) to certain Subsidiaries of the Borrower.
"Subsidiary" shall mean, as to any Person, any corporation,
partnership, limited liability company, limited liability partnership, joint
venture, trust, association or other unincorporated organization (other than a
limited partnership or similar entity in which such Person acts solely as a
limited partner or in a similar capacity) of which or in which such Person and
such Person's Subsidiaries own directly or indirectly an aggregate of more than
50% of (a) the combined voting power of all classes of stock having general
voting power under ordinary circumstances to elect a majority of the board of
directors, if it is a corporation, (b) the capital interest or partnership
interest, if it is a partnership, joint venture or similar entity, or (c) the
beneficial interest, if it is a trust, association or other unincorporated
organization; provided, however that the term "Subsidiary" shall not refer to
any Person whose equity interests are held solely by the separate accounts of
the Reliance Standard Insurance Companies in the ordinary course of business.
"Subsidiary Senior Notes" shall mean, collectively, the senior notes of
the Investment Subsidiaries originally issued to RSL and acquired by the Trust
pursuant to the terms of the Note Exchange Agreement, as the same may be amended
or modified from time to time as permitted by this Agreement.
"Surplus Relief Reinsurance Agreements" shall mean any agreement
whereby any of the Reliance Standard Insurance Companies or Safety National
assumes or cedes business under a reinsurance agreement that would be considered
a "financing-type" reinsurance agreement as determined in accordance with the
Statement of Financial Accounting Standards 113 or any successor thereto.
"Tax Claim" - see Section 8.1.23.
"Tax Returns and Reports" shall mean all returns, reports and
information required to be filed with any Governmental Authority with regard to
Taxes.
"Tax Sharing Agreements" shall mean that certain Tax Preparation and
Allocation Agreement, dated February 7, 1990, between RSL and RSL-Texas, and
that certain Tax Preparation and Allocation Agreement, dated April 4, 1990,
among the Borrower and its Subsidiaries party thereto, as amended, certified
copies of which have been delivered to the
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Administrative Agent, and any other similar agreement entered into by the
Borrower, any of the Reliance Standard Insurance Companies or Safety National
from time to time with the approval of the Administrative Agent, as such
agreements may be amended or modified or superseded from time to time as
permitted by this Agreement.
"Taxes" or "Tax" shall mean all taxes of any nature whatsoever and
however denominated, including, without limitation, retaliatory, income,
premium, withholding, guaranty fund and similar assessments, excise, import,
governmental fees, duties and all other charges, as well as additions to tax,
penalties and interest thereon, imposed by any Governmental Authority.
"Termination Date" shall mean the earlier of (a) April 1, 2003 or (b)
the date of termination in whole of the Commitments pursuant to Section 4.1,
4.3, 4.4 or 12.2.
"Tersk Investment" shall mean the Investment by the Borrower and
certain Subsidiaries of the Borrower in equity interests of Tersk LLC, a
Delaware limited liability company.
"Total Amount" shall mean (a) the Lender Amount, plus (b) the Pari
Passu Lender Amount.
"Transferee" - see Section 14.3.
"Trust" shall mean the Amherst Financial Trust, an Illinois trust
formed pursuant to the Trust Agreement.
"Trust Agreement" shall mean that certain Trust Agreement, dated as of
December 30, 1993, between RSL and the Trustee, as the same may be amended or
modified from time to time as permitted by this Agreement.
"Trust Documents" shall mean the Note Exchange Agreement, the Trust
Agreement, the Subsidiary Senior Notes, the Trust Notes and the Trust Note
Guaranties, as the same may be amended or modified from time to time as
permitted by this Agreement.
"Trust Note Guaranties" shall mean, collectively, the guaranty of each
Subsidiary Senior Note made by the Borrower and each of the Investment
Subsidiaries (other than the primary obligor on such note) in favor of the
Trust, as the same may be amended or modified from time to time as permitted by
this Agreement.
"Trust Notes" shall mean the senior notes of the Trust issued to RSL
pursuant to the terms of the Note Exchange Agreement, as the same may be amended
or modified from time to time pursuant to this Agreement.
"Trustee" shall mean the Trustee as such term is defined in the Master
Letter of Credit Agreement.
"Type(s) of Loans" or "Type" - see Section 2.2. The various Types of
Loans under this Agreement are as follows: Base Rate Loans and Offshore Rate
Loans.
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"UCC" shall mean the Uniform Commercial Code or comparable statute or
any successor statutes thereto, as in effect from time to time in the relevant
jurisdiction.
"U.S. Government Securities" shall mean obligations of, or obligations
guaranteed as to principal and interest by, the United States Government or any
agency or instrumentality thereof.
"Welfare Plan" shall mean a "welfare plan," as such term is defined in
section 3(1) of ERISA.
SECTION 1.2 Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the
above-defined meanings when used in any Related Document, or any
certificate, report or other document made or delivered pursuant to
this Agreement, unless the context therein shall clearly otherwise
require.
(b) The words "hereof," "herein," "hereunder" and similar
terms when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement.
(c) The words "amended or modified" when used in this
Agreement or any Related Document shall mean with respect to this
Agreement or any Related Document such document as from time to time,
in whole or in part, amended, modified, supplemented, restated,
refinanced, refunded or renewed.
(d) In the computation of periods of time in this Agreement
from a specified date to a later specified date, the word "from" means
"from and including" and the words "to" and "until" each means "to but
excluding."
SECTION 1.3 Accounting and Financial Determinations. For purposes of
this Agreement, unless otherwise specified, all accounting terms used herein or
in any Related Document shall be interpreted, all accounting determinations and
computations hereunder or thereunder shall be made, and all financial statements
required to be delivered hereunder or thereunder shall be prepared, in
accordance with GAAP.
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SECTION 2. THE COMMITMENTS AND THE LOANS
SECTION 2.1 Loan Commitment. (a) Subject to the terms and conditions of
this Agreement and relying on the representations and warranties herein set
forth, each of the Lenders, severally and for itself alone, agrees to make loans
(herein, collectively, called "Loans" and individually called a "Loan") to the
Borrower on a revolving basis from time to time from the Effective Date until
the Termination Date in such Lender's Percentage of such aggregate amounts as
the Borrower may from time to time request from all Lenders. The aggregate
principal amount of Loans which any Lender shall be committed to have
outstanding to the Borrower shall not at any one time exceed the amount set
forth opposite such Lender's name on Schedule 2.1 hereto. The aggregate
principal amount of all Loans which shall be committed to be outstanding
hereunder to the Borrower shall not at any one time exceed $70,000,000 (or such
increased amount as may be fixed pursuant to Section 2.1(b), or such reduced
amount as may be fixed pursuant to Section 2.6, 4.1, 4.4 or 12.2) (the "Facility
Amount"). The foregoing commitment of each Lender is herein called its
"Commitment" and, collectively, called the "Commitments".
(b) Optional Increase in Commitments. The Borrower may at anytime, by
means of a letter to the Administrative Agent substantially in the form of
Exhibit L, request that the aggregate amount of the Commitments be increased by
(i) increasing the amount of the Commitments of one of more Lenders which have
agreed to such increase and/or (ii) adding one or more new Lenders as parties
hereto with a Commitment in an amount agreed to by each such new Lender;
provided that (A) no new Lender shall be added as a party hereto unless such new
Lender shall have been approved in writing by the Administrative Agent (which
approval shall not be unreasonably withheld or delayed), (B) in no event shall
the aggregate amount of the Commitments exceed $100,000,000.00 without the
written consent of all Lenders, and (C) at the time of such increase, and after
giving effect thereto, no Default or Event of Default shall exist. Any increase
in the aggregate amount of the Commitments pursuant to this Section 2.1(b) shall
become effective three (3) Business Days after the date on which the
Administrative Agent has received and accepted the applicable increase letter in
the form of Annex I to Exhibit L (in the case of an increase in the amount of
the Commitment of an existing Lender) or assumption letter in the form of Annex
II to Exhibit L (in the case of the addition of a new Lender) or on such other
date as is agreed among the Borrower, the Administrative Agent and the
increasing or new Lender. The Administrative Agent shall promptly notify the
Borrower and the Lenders of any increase in the amount of the aggregate amount
of the Commitment pursuant to this Section 2.1(b) and the amount of the
Commitment and Percentage of each Lender after giving effect thereto. The
Borrower acknowledges that, in order to maintain Loans in accordance with each
Lender's Percentage, a reallocation of the Commitments as a result of a
non-pro-rata increase in the aggregate amount of the Commitments may require
prepayment of all or portions of certain Loans on the date of such increase (and
any such prepayment shall be subject to the provisions of Section 5.5).
SECTION 2.2 Types of Loans. The Loans shall be denominated as Base Rate
Loans or Offshore Rate Loans (each being herein called a "Type" of Loan), as the
Borrower shall specify in the related Notice of Borrowing or
Continuation/Conversion Notice pursuant to Section 2.3 or Section 2.5. Base Rate
Loans and Offshore Rate Loans may be outstanding at the same time;
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provided, that (a) in the case of Offshore Rate Loans, not more than five (5)
different Interest Periods shall be outstanding at any one time for all such
Loans, and (b) unless any applicable amounts are paid pursuant to Section 5.5,
the Borrower shall specify Types of Loans and Interest Periods such that no
payment or prepayment of any principal on any Loan shall result in an
interruption of any Interest Period.
SECTION 2.3 Procedure for Borrowing.
(a) Each Borrowing shall be made upon the Borrower's
irrevocable written notice (or by telephone promptly confirmed in
writing) delivered to the Administrative Agent in the form of a Notice
of Borrowing (which notice must be received by the Administrative Agent
prior to 11:00 a.m. (Chicago time) (i) two (2) Business Days prior to
the requested Borrowing Date, in the case of Offshore Rate Loans, and
(ii) on the requested Borrowing Date, in the case of Base Rate Loans,
specifying:
(A) the amount of such Borrowing, which shall be in
an aggregate minimum amount of $1,000,000 or any larger
integral multiple thereof in excess thereof;
(B) the requested Borrowing Date, which shall be a
Business Day;
(C) the Type of Loans comprising such Borrowing; and
(D) with respect to any Borrowing comprised of
Offshore Rate Loans, the duration of the Interest Period
applicable to such Loans included in such notice. If any
Notice of Borrowing fails to specify the duration of the
Interest Period for any Borrowing comprised of Offshore Rate
Loans, such Interest Period shall be three (3) months;
provided that no Interest Period shall extend beyond the
Termination Date.
(b) The Administrative Agent will promptly notify each Lender
of its receipt of any Notice of Borrowing and of the amount of such
Lender's Percentage of that Borrowing.
(c) Each Lender will make the amount of its Percentage of each
Borrowing available to the Administrative Agent for the account of the
Borrower at the Administrative Agent's Office by 1:00 p.m. (Chicago
time) on the Borrowing Date requested by the Borrower in funds
immediately available to the Administrative Agent. The proceeds of all
such Loans will then be made available to the Borrower by the
Administrative Agent by wire transfer in accordance with written
instructions provided to the Administrative Agent by the Borrower of
like funds as received by the Administrative Agent.
SECTION 2.4 Funding Reliance. Unless the Administrative Agent shall
have been notified by telephone, confirmed in writing, by any Lender by 11:30
a.m., Chicago time, on the
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relevant Borrowing Date that such Lender will not make available the amount
which would constitute its Percentage of the related Borrowing, the
Administrative Agent may assume, subject to the satisfactory fulfillment by the
Borrower of the applicable conditions precedent set forth in Section 11, that
such Lender shall make such amount available to the Administrative Agent and, in
reliance upon such assumption the Administrative Agent may (but shall not be
required to) make available to the Borrower a corresponding amount. If and to
the extent that such Lender shall not make such amount available to the
Administrative Agent, such Lender and the Borrower severally agree to repay the
Administrative Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date the Administrative Agent made such
amount available to the Borrower to the date such amount is repaid to the
Administrative Agent, (a) if repaid by the Borrower, at the interest rate
applicable at the time to the Type of Loans comprising such Borrowing and (b) if
repaid by a Lender, at the Federal Funds Effective Rate.
SECTION 2.5 Continuation and Conversion Elections.
(a) As to any Loans comprising a Borrowing, the Borrower may,
upon irrevocable written notice to the Administrative Agent in
accordance with clause (b) below:
(i) elect, as of any Business Day, in the case of
Base Rate Loans, or as of the last day of the applicable
Interest Period, in the case of Offshore Rate Loans, to
convert any such Loans (or any part thereof in an amount not
less than $1,000,000, or that is in an integral multiple
thereof in excess thereof) into any other Type of Loans; or
(ii) elect, as of the last day of the applicable
Interest Period, to continue any Offshore Rate Loans having
Interest Periods expiring on such day (or any part thereof in
an amount not less than $1,000,000, or that is in an integral
multiple thereof in excess thereof);
provided, that if at any time the aggregate amount of Offshore Rate
Loans in respect of any Borrowing is reduced, by payment, prepayment,
or conversion of part thereof to be less than $1,000,000, such Offshore
Rate Loans shall automatically convert into Base Rate Loans, and on and
after such date the right of the Borrower to continue such Loans as,
and convert such Loans into, Offshore Rate Loans, as the case may be,
shall terminate.
(b) The Borrower shall deliver a Continuation/Conversion
Notice in substantially the form of Exhibit C (a
"Continuation/Conversion Notice") to be received by the Administrative
Agent not later than 11:00 a.m. (Chicago time) at least (i) two (2)
Business Days in advance of the Continuation/ Conversion Date, if the
Loans are to be converted into or continued as Offshore Rate Loans, and
(ii) one Business Day in advance of the Continuation/Conversion Date,
if the Loans are to be converted into Base Rate Loans, specifying:
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(A) the proposed Continuation/Conversion Date;
(B) the aggregate amount of Loans to be converted or
renewed;
(C) the Type of Loans resulting from the proposed
conversion or continuation; and
(D) in the case of the continuation of Offshore Rate
Loans or conversions into Offshore Rate Loans, the duration of
the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable
to Offshore Rate Loans, the Borrower has failed to select timely a new
Interest Period to be applicable to such Offshore Rate Loans, the
Borrower shall be deemed to have elected to convert such Offshore Rate
Loans into Base Rate Loans effective as of the expiration date of such
Interest Period.
(d) The Administrative Agent will promptly notify each Lender
of its receipt of a Continuation/Conversion Notice, or, if no timely
notice is provided by the Borrower, the Administrative Agent will
promptly notify each Lender of the details of any automatic conversion
to Base Rate Loans. All conversions and continuations shall be made
ratably according to the respective outstanding principal amounts of
the Loans held by each Lender with respect to which the notice was
given.
(e) Unless the Required Lenders otherwise consent, during the
existence of a Default, the Borrower may not elect to have a Loan
converted into or continued as an Offshore Rate Loan.
(f) After giving effect to any conversion or continuation of
Loans, there may not be more than five (5) different Interest Periods
in effect for all Loans hereunder.
SECTION 2.6 Repayment of Loans. The outstanding principal amount of the
Loans shall be payable (and the Borrower agrees to pay such Loans) on the
Termination Date.
SECTION 2.7 Loan Accounts; Record Keeping; Notes. (a) The Loans made by
each Lender shall be evidenced by one or more loan accounts or records
maintained by such Lender in the ordinary course of business and the
Administrative Agent. The loan accounts or records maintained by the
Administrative Agent and each Lender shall be conclusive absent manifest error
of the amount and date of the Loans made by the Lenders to the Borrower and the
interest and payments thereon; provided, that in the event of a conflict between
information recorded by the Administrative Agent and any Lender as to such
Lender's Loans, the records of the Administrative Agent, absent manifest error,
shall control. Any failure to so record or any error in doing so shall not,
however, limit or otherwise affect the obligations of the Borrower
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hereunder, including, without limitation, the obligation to pay any amount owing
with respect to the Loans.
(b) Upon the request of any Lender made through the
Administrative Agent, the Loans made by such Lender may be evidenced by one or
more Notes, instead of loan accounts. Each such Lender shall endorse on the
schedules annexed to its Note(s) the date, amount and maturity of each Loan made
by it and the amount of each payment of principal made by the Borrower with
respect thereto. Each such Lender is irrevocably authorized by the Borrower to
endorse its Note(s) and each Lender's record shall be conclusive absent manifest
error with respect to such endorsement; provided, however, that the failure of a
Lender to make, or an error in making, a notation thereon with respect to any
Loan shall not limit or otherwise affect the obligations of the Borrower
hereunder or under any such Note to such Lender.
SECTION 3. INTEREST AND FEES, ETC.
SECTION 3.1 Interest Rates. With respect to each Loan, the Borrower
hereby promises to pay interest on the unpaid principal amount thereof for the
period commencing on the date of such Loan until such Loan is paid in full, as
follows:
(a) At all times while such Loan or any portion thereof is a
Base Rate Loan, at a rate per annum equal to the Base Rate from time to
time in effect plus the Applicable Base Rate Margin.
(b) At all times while such Loan or any portion thereof is an
Offshore Rate Loan, at a rate per annum equal to the Offshore Rate
(Reserve Adjusted) from time to time in effect plus the Applicable
Offshore Rate Margin.
(c) For purposes hereof, the applicable Offshore Rate margin
("Applicable Offshore Rate Margin") shall be determined based on the
higher of the then current rating of the Senior Notes by Moody's and
Standard & Poor's (or, in the event that such ratings differ by more
than one corresponding rating level, the rating that is one rating
level lower than the higher rating level), all in the manner reflected
in the chart below, or, if each of the named rating agencies cease
rating the Senior Notes, carrying an equivalent rating by a nationally
recognized rating agency. If the Senior Notes are defeased, repaid or
otherwise not rated, then the applicable rating will be that of any
other unsecured Indebtedness issued by the Borrower and rated by any of
the foregoing rating agencies as provided in the immediately preceding
sentence. If, for purposes of such chart, the ratings of any nationally
recognized rating agency other than Moody's or Standard & Poor's become
applicable, the rating of such agency shall be incorporated by
reference into such chart as if set forth therein. If neither Moody's
nor Standard & Poor's nor any other nationally recognized rating agency
rates the Senior Notes or such other unsecured Indebtedness of the
Borrower, the pricing shown below in the far right column will be
applicable. Any adjustment in the Applicable Offshore Rate Margin as a
result of a change in the rating of the Senior Notes or such other
unsecured Indebtedness, if applicable, by Moody's, Standard & Poor's or
such
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other nationally recognized rating agency shall be effective as of the
effective date of the change in such rating; provided that,
notwithstanding the foregoing, in no event will the Applicable Offshore
Rate Margin be reduced at any time when a Default has occurred and is
continuing. For purposes hereof, the initial Applicable Offshore Rate
Margin will be 1.500% per annum.
APPLICABLE OFFSHORE RATE MARGIN
====================================================================================================
RATING
----------------------------------------------------------------------------------------------------
BBB-/ BB+/ Less Than BB/Ba2 OR
Greater Than or Equal To BBB+ / Xxx0 XXX / Xxx0 Xxx0 Xx0 NOT RATED
----------------------------------------------------------------------------------------------------
1.250% 1.375% 1.500% 1.625% 1.750%
====================================================================================================
(d) For purposes hereof, the applicable Base Rate margin
("Applicable Base Rate Margin") shall be equal to the greater of (i)
the Applicable Offshore Rate Margin (as determined above) minus 1.25%
or (ii) zero (0); provided that any change in the Applicable Base Rate
Margin shall be determined in the same manner as set forth in clause
(c) above with respect to a change in the Applicable Offshore Rate
Margin; provided that, notwithstanding the foregoing, in no event will
the Applicable Base Rate Margin be reduced at any time when a Default
has occurred and is continuing. For purposes hereof, the initial
Applicable Base Rate Margin will be .25% per annum.
SECTION 3.2 Default Interest Rate. Notwithstanding the provisions of
Section 3.1, in the event that any Default shall occur, the Borrower hereby
promises to pay, upon demand therefor by the Administrative Agent, interest on
the unpaid principal amount of the Loans (and interest thereon to the extent
permitted by law) for the period commencing on the date of such Default until
such Loans are paid in full or such Default is cured or waived in accordance
with Sections 12.2 and 15.1 at a rate per annum equal to the Base Rate from time
to time in effect (but not less than the Base Rate as at such date of demand),
plus the Applicable Base Rate Margin, plus 2% per annum.
SECTION 3.3 Interest Payment Dates. Interest on each Loan shall be paid
in arrears on each Interest Payment Date. Interest shall also be paid on the
date of any prepayment of Offshore Rate Loans under Section 4.1, 4.2 or 4.3 for
the portion of the Loans so prepaid and upon payment (including prepayment) in
full thereof and during the existence of any Default, interest shall be paid on
demand of the Administrative Agent at the request or with the consent of the
Required Lenders. After the Termination Date (by acceleration or otherwise),
accrued interest on the Loans shall be payable on demand.
SECTION 3.4 Setting and Notice of Rates. The applicable Offshore Rate
shall be determined by the Administrative Agent. Each determination of the
applicable Offshore Rate shall be conclusive and binding upon the parties
hereto, in the absence of demonstrable error. If the Administrative Agent is
unable to determine such a rate, the provisions of Section 5.3 shall apply. The
Administrative Agent shall, upon written request of the Borrower or any Lender,
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deliver to the Borrower or such Lender a statement showing the computations used
by the Administrative Agent in determining any applicable Offshore Rate
hereunder.
SECTION 3.5 Computation of Fees and Interest. Fees and interest on
Offshore Rate Loans shall be computed for the actual number of days elapsed on
the basis of a 360-day year, and interest on Base Rate Loans shall be computed
for the actual number of days elapsed on the basis of a 365-day year. Each
determination of an interest rate by the Administrative Agent shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error.
SECTION 3.6 Fees. The Borrower agrees to pay the following fees (all
such fees being nonrefundable):
(a) The Borrower agrees to pay to the Administrative Agent for
its own account, to the Arranger for its own account and to the
Administrative Agent, for the account of the Lenders, the fees set
forth in the Fee Letter;
(b) Without duplication, the Borrower agrees to pay to the
Administrative Agent, for the benefit of the Lenders ratably according
to their respective Percentages, a non-use fee ("Non-Use Fee") on the
average daily unused Commitments, payable quarterly in arrears on the
last Business Day of each Fiscal Quarter (commencing with the first
such date occurring after the Effective Date for the period from the
Effective Date through and including such date) and on the Termination
Date at a rate per annum equal to an amount determined based on the
higher of the then current rating of the Senior Notes by Moody's and
Standard & Poor's (or, in the event that such ratings differ by more
than one corresponding rating level, the rating that is one rating
level lower than the higher rating level), all in the manner reflected
in the chart below, or, if each of the named rating agencies cease
rating the Senior Notes, carrying an equivalent rating by a nationally
recognized rating agency. If the Senior Notes are defeased, repaid or
otherwise not rated, then the applicable rating will be that of any
other unsecured Indebtedness issued by the Borrower and rated by any of
the foregoing rating agencies as provided in the immediately preceding
sentence. If, for purposes of such chart, the ratings of any nationally
recognized rating agency other than Moody's or Standard & Poor's become
applicable, the rating of such agency shall be incorporated by
reference into such chart as if set forth therein. If neither Moody's
nor Standard & Poor's nor any other nationally recognized rating agency
rates the Senior Notes or such other unsecured Indebtedness of the
Borrower, the Non-Use Fee shown below in the far right column will be
applicable. Any adjustment in the Non-Use Fee as a result of a change
in the rating of the Senior Notes or such other unsecured Indebtedness,
if applicable, by Moody's, Standard & Poor's or such other nationally
recognized rating agency shall be effective as of the effective date of
the change in such rating; provided that, notwithstanding the
foregoing, in no event will the Non-Use Fee be reduced at any time when
a Default has occurred and is continuing. For purposes hereof, the
initial Non-Use Fee will be .350% per annum.
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=================================================================================================================
RATING
-------------------------------------------------------------------------------------------
Greater Than or Equal To BBB-/ BB+/ Less Than or Equal To
BBB+ / Xxx0 XXX/Xxx0 Xxx0 XX0 XX/XX0 OR NOT RATED
-----------------------------------------------------------------------------------------------------------------
Non-Use Fee .275% .325% .350% .375% .400%
=================================================================================================================
SECTION 4. REDUCTION OR TERMINATION OF THE COMMITMENTS;
PAYMENTS AND PREPAYMENTS;
SECTION 4.1 Voluntary Reduction or Termination of the Commitments. The
Borrower may from time to time prior to the Termination Date on at least three
(3) Business Days' prior written or telephonic notice (promptly confirmed in
writing) received by the Administrative Agent (which shall promptly advise each
Lender thereof) permanently reduce the amount of the Commitments (such reduction
to be pro rata among the Lenders according to their respective Percentages) to
an amount not less than the aggregate unpaid principal amount of the Loans then
outstanding. Any such reduction shall be in an aggregate amount of $2,000,000 or
an integral multiples of $500,000 in excess thereof. The Borrower may at any
time on at least thirty (30) Business Days' prior written notice permanently
terminate the Commitments upon payment in full of the Loans (and any fees or
interest accrued thereon) and all other Liabilities.
SECTION 4.2 Voluntary Prepayments. The Borrower may from time to time
prepay the Loans in whole or in part; provided, that (a) the Borrower shall give
the Administrative Agent (which shall promptly advise each Lender) not less than
two (2) Business Days' prior written or telephonic notice (promptly confirmed in
writing) thereof, specifying the date and amount of prepayment, (b) unless any
prepayment of Offshore Rate Loans shall be accompanied by any amounts to be paid
with respect thereto pursuant to Section 5.5, Offshore Rate Loans shall be
prepaid only on the last day of the Interest Period relating thereto, (c) each
partial prepayment shall be in a principal amount of $1,000,000 or in integral
multiples of $100,000 in excess thereof and (d) any prepayment of Offshore Rate
Loans shall include accrued interest to the date of prepayment on the amount so
prepaid.
SECTION 4.3 Mandatory Prepayments. The Borrower shall make mandatory
prepayments of the Loans as follows:
(a) If, on any date, the Borrower or any of its Subsidiaries
shall sell, assign, lease, transfer, contribute, convey, issue or
otherwise dispose of, or grant options, warrants or other rights with
respect to, any of its assets (any of the foregoing being a
"Disposition"), other than a Disposition (i) permitted under Section
9.2, (ii) permitted under Section 9.3, or (iii) to the Borrower or its
directly owned Subsidiaries, and such Disposition results in Net
Proceeds in excess of $200,000, the Borrower shall promptly notify the
Administrative Agent (which shall promptly notify the Lenders) of such
Disposition, including the amount of Net Proceeds received by the
Borrower or any Subsidiary in respect of such Disposition (and the
amount and other type of consideration so received) and, subject to the
terms of the Collateral Sharing Agreement, an amount equal to the
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Lender Net Proceeds Portion shall be promptly applied after the receipt
from time to time of such Net Proceeds to repay the outstanding
principal of the Loans (together with any interest accrued thereon). To
the extent the Lender Net Proceeds Portion of any such Disposition
exceeds the amount of the Loans then outstanding (together with any
interest accrued thereon), or, at the time of such Disposition the
Loans shall have been paid in full, subject to the terms of the
Collateral Sharing Agreement, such Net Proceeds, up to 100% of such Net
Proceeds, after giving effect to the Pari Passu Lender Net Proceeds
Portion from such Disposition concurrently being applied under the Pari
Passu Credit Agreement, shall be applied to repay, first, any remaining
Liabilities, second, any Pari Passu Loans then outstanding (together
with any interest accrued thereon), third, any other remaining Pari
Passu Liabilities, fourth, any Letters of Credit drawn and unreimbursed
(including any interest accrued thereon) and, fifth, any other
remaining LC Liabilities then due and owing.
(b) If, on any date, the Borrower or any of its Subsidiaries
shall sell, issue or grant options, contingent interest rights,
warrants or other rights with respect to any of its equity securities
and, with respect to clause (iii) below only, debt securities (any of
the foregoing being a "Sale"), the Borrower shall promptly notify the
Administrative Agent (which shall promptly notify the Lenders) of such
Sale, including the amount of Net Proceeds received by the Borrower or
any Subsidiary in respect of such Sale (and the amount and other type
of consideration so received) and, subject to the terms of the
Collateral Sharing Agreement, an amount equal to the Lender Net
Proceeds Portion of such Net Proceeds (or, in the case of a Sale of the
type referenced in clause (iii) below, the Lender Net Proceeds Portion
of forty percent (40%) of such Net Proceeds in excess of $50,000,000)
shall be promptly applied after the receipt from time to time of such
Net Proceeds to repay outstanding principal of the Loans (together with
any interest accrued thereon). To the extent the Lender Net Proceeds
Portion of the Net Proceeds in respect of such Sale as is required to
be applied to the Loans under the immediately preceding sentence
exceeds the amount of the Loans then outstanding (together with any
interest accrued thereon), or, at the time of such Sale, the Loans
shall have been paid in full, subject to the terms of the Collateral
Sharing Agreement, the amount of such Net Proceeds, up to 100% of such
Net Proceeds (or, in the case of a Sale of the type referenced in
clause (iii) below, 40% of such Net Proceeds), after giving effect to
the Pari Passu Lender Net Proceeds Portion from such Sale concurrently
being applied under the Pari Passu Credit Agreement, shall be applied
to repay, first, any remaining Liabilities, second, any Pari Passu
Loans then outstanding (together with any interest accrued thereon),
third, any other remaining Pari Passu Liabilities, fourth, any Letters
of Credit drawn and unreimbursed (including any interest accrued
thereon) and, fifth, any other remaining LC Liabilities then due and
owing. Notwithstanding anything contained in this Section 4.3(b) to the
contrary, no prepayment hereunder shall be required with respect to:
(i) the issuance of common stock or preferred stock of the Borrower or
any options, contingent interest rights,
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warrants or other rights related thereto; (ii) the issuance of
Preferred Securities; (iii) the issuance of debt securities of the
Borrower; provided, that unless such debt securities (A) are issued to
refinance existing Indebtedness of the Borrower constituting
Consolidated Funded Debt or (B) require that no payment of principal be
made with respect to such debt securities on or prior to the
Termination Date, not less than the Lender Net Proceeds Portion of
forty percent (40%) of the Net Proceeds therefrom in excess of
$50,000,000 shall be applied to prepay the principal of the Loans
(together with any interest accrued on such principal) as provided
above; (iv) a Sale which results in Net Proceeds of less than $200,000;
(v) Sales to the Borrower or any of its Subsidiaries; or (vi) stock
options granted to or exercised by members of management of the
Borrower or any of its Subsidiaries or related in any way to its
earnings or performance.
In connection with the application of the Net Proceeds of any
Disposition or Sale as set forth in Sections 4.3(a) and 4.3(b), respectively,
the Borrower and the Administrative Agent hereby agree that, subject to the
terms of the Collateral Sharing Agreement, any Lender Net Proceeds Portion of
the Net Proceeds not applied to the payment of the Loans (together with any
interest accrued thereon) and the remaining Liabilities shall be promptly turned
over by the Administrative Agent to the Borrower unless the Pari Passu
Administrative Agent or the LC Administrative Agent notifies the Administrative
Agent that any Pari Passu Loans, Pari Passu Liabilities, LC Obligations or LC
Liabilities are then outstanding under the Pari Passu Credit Agreement or Master
Letter of Credit Agreement, as applicable, in which case the Administrative
Agent shall promptly turn over such excess Net Proceeds first, to the Pari Passu
Administrative Agent and, second, to the LC Administrative Agent for application
of such excess Net Proceeds by the Pari Passu Administrative Agent and LC
Administrative Agent to the payment of the Pari Passu Loans, the remaining Pari
Passu Liabilities, LC Obligations and the remaining LC Liabilities, as
applicable. The Administrative Agent shall have no obligation to determine the
accuracy of any amount of the Pari Passu Loans, Pari Passu Liabilities, LC
Obligations or LC Liabilities claimed to be owing by the Pari Passu
Administrative Agent or the LC Administrative Agent under the Pari Passu Credit
Agreement or Master Letter of Credit Agreement, respectively, or confirm such
amount with the Borrower.
SECTION 4.4 Mandatory Reduction in the Commitments. Each payment,
prepayment or repayment on the Loans pursuant to Section 2.6, 4.1, 4.3(a) or
4.3(b) shall automatically and permanently ratably reduce the Commitments and
the Facility Amount by an amount equal to such repayment.
SECTION 4.5 Payments by the Borrower. (a) All payments to be made by
the Borrower hereunder shall be made without set-off, recoupment or
counterclaim. Except as otherwise expressly provided herein, all payments by the
Borrower shall be made to the Administrative Agent for the account of the
Lenders at the Administrative Agent's Office, and shall be made in Dollars and
in immediately available funds, no later than 1:00 p.m. (Chicago time) on the
date specified herein. The Administrative Agent will promptly distribute to each
Lender its pro rata share (based on its Percentage) (or other applicable share
as expressly provided herein) of such payment in like funds as received. The
Borrower shall have no responsibility or liability for the Administrative
Agent's failure or delay in making any
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distribution pursuant to the immediately preceding sentence. Any payment
received by the Administrative Agent later than 1:00 p.m. (Chicago time) shall
be deemed to have been received on the following Business Day and any applicable
interest or fee shall continue to accrue.
(b) Subject to the provisions set forth in the definition of "Interest
Period" herein, whenever any payment is due on a day other than a Business Day,
such payment shall be made on the following Business Day, and such extension of
time shall in such case be included in the computation of interest or fees, as
the case may be.
(c) Unless the Administrative Agent receives notice from the Borrower
prior to the date on which any payment is due to the Lenders that the Borrower
will not make such payment in full as and when required, the Administrative
Agent may assume that the Borrower has made such payment in full to the
Administrative Agent on such date in immediately available funds and the
Administrative Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent the Borrower has not made such
payment in full to the Administrative Agent, each Lender shall repay to the
Administrative Agent on demand such amount distributed to such Lender, together
with interest thereon at the Federal Funds Effective Rate for each day from the
date such amount is distributed to such Lender until the date repaid.
SECTION 4.6 Sharing of Payments.
(a) If any Lender shall obtain any payment or other recovery
(whether voluntary, involuntary, by application of offset or otherwise)
on account of the Loans (other than pursuant to the terms of Section 5
or 14) in excess of its pro rata share (based on its Percentage) of
payments and other recoveries obtained by all Lenders of the Loans on
account of principal of and interest on the Loans, such Lender shall
purchase from the other Lenders such participation in the Loans as
shall be necessary to cause such purchasing Lender to share the excess
payment or other recovery ratably with each of them; provided, however,
that if all or any portion of the excess payment or other recovery is
thereafter recovered from such purchasing Lender, the purchase shall be
rescinded and each Lender which has sold a participation to the
purchasing Lender shall repay to the purchasing Lender the purchase
price to the ratable extent of such recovery together with an amount
equal to such selling Lender's ratable share (according to the
proportion of (i) the amount of such selling Lender's required
repayment to the purchasing Lender to (ii) the total amount so
recovered from the purchasing Lender) of any interest or other amount
paid or payable by the purchasing Lender in respect of the total amount
so recovered.
(b) The Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to Section 4.6(a) may, to
the fullest extent permitted by law, exercise all its rights of payment
(including pursuant to Section 4.7) with respect to such participation
as fully as if such Lender were the direct creditor of the Borrower in
the amount of such participation. If under any applicable bankruptcy,
insolvency or other similar law, any Lender receives a
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secured claim in lieu of a setoff to which this Section applies, such
Lender shall, to the extent practicable, exercise its rights in respect
to such secured claim in a manner consistent with the rights of the
Lenders entitled under this Section 4.6(b) to share in the benefits of
any recovery of such secured claim.
SECTION 4.7 Setoff. Except as prohibited by the Trust Indenture Act of
1939, as amended, each Lender shall, upon the occurrence of any Event of Default
described in Section 12.1.1 or, with the consent of the Required Lenders, upon
the occurrence of any other Event of Default, have the right to appropriate and
apply to the payment of the Liabilities owing to it (whether or not then due),
and (as security for such Liabilities), the Borrower hereby grants to each
Lender a continuing security interest in, any and all balances, credits,
deposits, accounts or moneys of the Borrower then or thereafter maintained with
such Lender. Any such appropriation and application shall be subject to the
provisions of Section 4.6. Each Lender agrees promptly to notify the Borrower
and the Administrative Agent after any such setoff and application made by such
Lender; provided, however, that the failure to give such notice shall not affect
the validity of such setoff and application. The rights of each Lender under
this Section 4.7 are in addition to other rights and remedies (including other
rights of setoff under applicable law or otherwise) which such Lender may have.
SECTION 4.8 Net Payments. All payments by the Borrower of principal of,
and interest on, the Loans and all other amounts payable hereunder shall be made
free and clear of and without deduction for any present or future income, stamp
or other Taxes, fees, duties, withholdings or other charges of any nature
whatsoever imposed by any taxing authority, other than Taxes imposed on or
measured by any Lender's Net Income or receipts (such non-excluded items being
called "Charges"). In the event that any withholding or deduction from any
payment to be made by the Borrower hereunder is required in respect of any
Charges pursuant to any applicable law, rule or regulation, then the Borrower
will:
(a) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(b) promptly forward to the Administrative Agent an official
receipt or other documentation satisfactory to the Administrative Agent
evidencing such payment to such authority; and
(c) pay to the Administrative Agent for the account of the
Lenders such additional amount or amounts as are necessary to ensure
that the net amount actually received by each Lender will equal the
full amount such Lender would have received had no such withholding or
deduction been required (including any withholding or deduction
applicable to additional amounts payable under this Section 4.8).
Upon request of the Borrower, each Lender that is organized under the laws of a
jurisdiction other than the United States of America or any state thereof shall,
prior to the due date of any payments with respect to the Loans, execute and
deliver to the Borrower, on or about the first scheduled payment date in each
calendar year, a United States Internal Revenue Service
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Form W-8BEN or Form W-8ECI, as may be applicable (or any successor form),
appropriately completed; provided, that any Lender which is prospectively unable
to deliver such form solely as a result of a change in applicable tax laws
occurring subsequent to the Effective Date shall nevertheless be entitled to the
benefits of this Section 4.8. Without prejudice to the survival of any other
agreement of the Borrower hereunder or under any other document, the agreement
of the Borrower contained in this Section 4.8 shall survive satisfaction of the
Liabilities and termination of this Agreement.
SECTION 5. CHANGES IN CIRCUMSTANCES
SECTION 5.1 Increased Costs. If (a) Regulation D, or (b) after the
Effective Date, the adoption of any applicable law, rule or regulation, or any
change in any of the foregoing, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or any Lending Office of such Lender) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency,
(i) shall subject any Lender (or any Lending Office
of such Lender) to any tax, duty or other charge with respect
to its Offshore Rate Loans or its obligation to make Offshore
Rate Loans or shall change the basis of taxation of payments
to any Lender of the principal of or interest on its Offshore
Rate Loans or any other amounts due under this Agreement in
respect of its Offshore Rate Loans or its obligation to make
Offshore Rate Loans (except for changes in the rate of Tax,
other than Taxes covered by Section 4.8, on the overall gross
or Net Income of such Lender or its Lending Office); or
(ii) shall impose, modify or deem applicable any
reserve (including, without limitation, any reserve imposed by
the FRB, but excluding any reserve included in the
determination of interest rates pursuant to Section 3),
special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by,
any Lender (or any Lending Office of such Lender); or
(iii) shall impose on any Lender (or its Lending
Office) any other condition affecting its Offshore Rate Loans;
and the result of any of the foregoing is to increase the cost to (or in the
case of Regulation D referred to above, to impose a cost on) such Lender (or any
Lending Office of such Lender) of making or maintaining any Offshore Rate Loans
or to reduce the amount of any sum received or receivable by such Lender (or the
Lending Office or such Lender) under this Agreement or under its Loans or its
Commitment with respect thereto, then within thirty (30) days after demand by
such Lender (which demand shall be accompanied by a written statement setting
forth the basis of such demand), the Borrower shall pay directly to such Lender
such additional amount or amounts as will compensate such Lender for such
increased cost or such reduction.
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SECTION 5.2 Change in Rate of Return. If, after the Effective Date, any
change in, or the introduction, adoption, effectiveness, interpretation,
reinterpretation or phase-in of, any law or regulation, directive, guideline,
decision or request including, without limitation, any law or guideline pursuant
to or arising out of the July 1988 report of the Basle Committee on Banking
Regulations and Supervisory Practices entitled "International Convergence of
Capital Measurement and Capital Standards" (whether or not having the force of
law) of any court, central bank, regulator or other Governmental Authority or
comparable agency charged with the interpretation or administration thereof
affects or would affect the amount of capital required or expected to be
maintained by any Lender or any person controlling such Lender, and such Lender
reasonably determines that the rate of return on its or such controlling
Person's capital as a consequence of the Loans made by or Commitment of such
Lender (or any participating interest therein held by such Lender) is reduced to
a level below that which such Lender or such controlling Person could have
achieved but for the occurrence of any such circumstance, then, in any such case
the Borrower shall, within thirty (30) days after written demand by such Lender
to the Borrower, pay directly to such Lender additional amounts sufficient to
compensate such Lender or such controlling Person for such reduction in rate of
return; provided, that such Lender shall have used reasonable efforts to
minimize such additional amounts. A written statement of such Lender as to any
such additional amount or amounts (including calculations thereof in reasonable
detail) shall, in the absence of demonstrable error, be conclusive and binding
on the Borrower. In determining such amount, such Lender may use any method of
averaging and attribution that it shall deem reasonably applicable. Each Lender
shall notify the Borrower of any event of which it has knowledge, occurring
after the date hereof, which will entitle such Lender to compensation pursuant
to this Section 5.2.
SECTION 5.3 Basis for Determining Interest Rate Inadequate or Unfair.
If with respect to any Interest Period:
(a) deposits in Dollars (in the applicable amounts) are not
being offered to the Administrative Agent in the interbank eurodollar
market for such Interest Period, or the Administrative Agent otherwise
determines (which determination shall be binding and conclusive on all
parties) that by reason of circumstances affecting the interbank
eurodollar market adequate and reasonable means do not exist for
ascertaining the applicable Offshore Rate; or
(b) any Lender advises the Administrative Agent that the
Offshore Rate (Reserve Adjusted), as determined by the Administrative
Agent, will not adequately and fairly reflect the cost to such Lender
of maintaining or funding such Loan for such Interest Period, or that
the making or funding of Offshore Rate Loans has become impracticable
as a result of an event occurring after the date of this Agreement
which in the opinion of such Lender materially changes such Loans,
then, so long as such circumstances shall continue:
(i) the Administrative Agent shall promptly
notify the Borrower and the Lenders thereof,
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(ii) no Lender shall be under any obligation to
make, continue or convert into Offshore Rate Loans so
affected, and
(iii) on the last day of the then current
Interest Period for Offshore Rate Loans so affected, such
Offshore Rate Loans shall, unless then repaid in full,
automatically convert to Base Rate Loans.
SECTION 5.4 Changes in Law Rendering Certain Loans Unlawful. In the
event that any change in (including the adoption of any new) applicable laws or
regulations, or any change in the interpretation of applicable laws or
regulations by any governmental or other regulatory body charged with the
administration thereof, should make it unlawful for a Lender or the Lending
Office of such Lender ("Affected Lender") to make, maintain or fund Offshore
Rate Loans, then (a) the Affected Lender shall promptly notify each of the other
parties hereto, (b) the obligation of all Lenders to make, continue or convert
into Offshore Rate Loans made unlawful for the Affected Lender shall, upon the
effectiveness of such event, be suspended for the duration of such unlawfulness,
and (c) on the last day of the current Interest Period for Offshore Rate Loans
(or, in any event, if the Affected Lender so requests, on such earlier date as
may be required by the relevant law, regulation or interpretation), the Offshore
Rate Loans shall, unless then repaid in full, automatically convert to Base Rate
Loans; provided, that conversion of an Offshore Rate Loan to a Base Rate Loan
pursuant to this Section 5.4 shall not subject the Borrower to Breakage Costs
under Section 5.5.
SECTION 5.5 Funding Losses. The Borrower hereby agrees that upon
demand by any Lender (which demand shall be accompanied by a written statement
setting forth the basis for the calculations of the amount being claimed) the
Borrower will indemnify such Lender against any loss or expense which such
Lender may sustain or incur (including, without limitation, any loss or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund or maintain Offshore Rate Loans) (collectively,
"Breakage Costs"), as reasonably determined by such Lender, as a result of (a)
any payment or prepayment or conversion of any Offshore Rate Loans of such
Lender on a date other than the last day of an Interest Period for such Offshore
Rate Loan, or (b) any failure of the Borrower to borrow, continue or convert any
portion of the Loans on a date specified therefor in a Notice of Borrowing or
Continuation/Conversion Notice pursuant to this Agreement. For this purpose, all
notices to the Administrative Agent pursuant to this Agreement shall be deemed
to be irrevocable.
SECTION 5.6 Right of Lenders to Fund Through Other Offices. Each
Lender may, if it so elects, fulfill its Commitment as to Offshore Rate Loans by
causing its Lending Offices to make such Offshore Rate Loans; provided, that in
such event for the purposes of this Agreement, such Offshore Rate Loans shall be
deemed to have been made by such Lender and the obligation of the Borrower to
repay such Offshore Rate Loans shall nevertheless be to such Lender and shall be
deemed held by it, to the extent of such Offshore Rate Loans, for the account of
such branch or affiliate.
SECTION 5.7 Discretion of Lenders as to Manner of Funding.
Notwithstanding any provision of this Agreement to the contrary, each Lender
shall be entitled to fund and maintain
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its funding of all or any part of its Loans in any manner it sees fit, it being
understood, however, that for the purposes of this Agreement all determinations
hereunder shall be made as if such Lender had actually funded and maintained
each Offshore Rate Loan during each Interest Period for such Loan through the
purchase of deposits having a maturity corresponding to such Interest Period and
bearing an interest rate equal to the Offshore Rate (Reserve Adjusted) for such
Interest Period.
SECTION 5.8 Conclusiveness of Statements; Survival of Provisions.
Determinations and statements of any Lender pursuant to Section 5.1 through
Section 5.5 shall be conclusive absent demonstrable error. The provisions of
Sections 5.1, 5.2, 5.4, 5.5 and this Section 5.8 shall survive termination of
this Agreement.
SECTION 5.9 Replacement of Lenders. If any Lender shall become
affected by any of the changes or events described in Sections 5.1, 5.2, 5.3 or
5.4 (any such Lender being hereinafter referred to as a "Replaced Lender") and
shall petition the Borrower for any increased cost or amounts thereunder, then
in such case, the Borrower may, within thirty (30) days after such petition and
upon at least five (5) Business Days' written notice to the Administrative Agent
and such Replaced Lender, designate a replacement lender (a "Replacement
Lender") acceptable to the Administrative Agent in its reasonable discretion, to
which such Replaced Lender shall, subject to its receipt (unless a later date
for the remittance thereof shall be agreed upon by the Borrower and such
Replaced Lender) of all amounts claimed by such Replaced Lender under Section
5.1, 5.2, 5.3 or 5.4, assign all (but not less than all) of its rights,
obligations, Loans and Commitment hereunder; provided, that all Liabilities
(except Liabilities which by the terms hereof survive the payment in full of the
Loans and termination of this Agreement) due and payable to such Replaced Lender
shall be paid in full as of the date of such assignment. Upon any assignment by
any Lender pursuant to this Section 5.9 becoming effective, the Replacement
Lender shall thereupon be deemed to be a "Lender" for all purposes of this
Agreement and such Replaced Lender shall thereupon cease to be a "Lender" for
all purposes of this Agreement and shall have no further rights or obligations
hereunder (except Liabilities which by the terms hereof survive the payment in
full of the Loans and termination of this Agreement). Notwithstanding any
Replaced Lender's failure or refusal to assign its rights, obligations, Loans
and Commitment under this Section 5.9, such Replaced Lender shall cease to be a
"Lender" for all purposes of this Agreement (except to the limited extent set
forth above) and the Replacement Lender substituted therefor upon payment to
such Replaced Lender by the Replacement Lender of all amounts set forth in this
Section 5.9 without any further action of such Replaced Lender.
SECTION 6. COLLATERAL AND OTHER SECURITY
SECTION 6.1 Borrower. (a) Concurrently with or prior to the Effective
Date, the Borrower shall execute and deliver to the Collateral Agent a pledge
agreement (herein, as the same may be amended or modified, called the "Borrower
Pledge Agreement") covering, among other things, all of the issued and
outstanding capital stock of RSL-Texas and the issued and outstanding capital
stock of the Borrower's other Subsidiaries (other than Delphi Brokerage Company)
directly owned by the Borrower.
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(b) Concurrently with or prior to any Acquisition permitted by the
terms of this Agreement, the Borrower shall, or shall cause its Subsidiaries to,
comply with Section 11.2.
(c) Concurrently with or prior to the Effective Date, the Borrower
shall cause SIG Holdings to execute and deliver to the Collateral Agent a pledge
agreement, in substantially the form attached hereto as Exhibit I (herein, as
the same may be amended or modified, called the "SIG Holdings Pledge
Agreement"), covering, among other things, all of the issued and outstanding
capital stock of Safety National.
SECTION 6.2 Further Assurances. The Borrower (a) agrees that upon
request of the Collateral Agent it shall promptly deliver or cause to be
delivered to the Collateral Agent, in due form for transfer, all chattel paper,
instruments, securities and documents of title, if any, at any time representing
all or any of the Collateral, and (b) shall promptly execute and deliver or
cause to be executed and delivered to the Collateral Agent, in due form for
filing or recording (and pay the cost of filing or recording the same in all
public offices deemed necessary by the Collateral Agent), such further
assignment agreements, security agreements, pledge agreements, instruments,
consents, waivers, financing statements, stock or bond powers, searches,
releases, and other documents in addition to those documents executed and
delivered by the Borrower on the Effective Date and do such other acts and
things, all as the Collateral Agent may from time to time request to establish
and maintain to the satisfaction of the Collateral Agent a valid perfected Lien
on all Collateral (free of all other Liens except as permitted under this
Agreement and the Related Documents) to secure payment of the Liabilities.
SECTION 7. REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make the
Loans hereunder, the Borrower represents and warrants to the Administrative
Agent and to each of the Lenders that as of the Effective Date and as of each
Borrowing Date:
SECTION 7.1 Organization, etc. The Borrower and each of its
Subsidiaries is a corporation, partnership or limited liability company duly
organized or formed, validly existing and in good standing under the laws of the
state of its incorporation or formation; and each of the Borrower and its
Subsidiaries is duly qualified to transact business and in good standing as a
foreign corporation, partnership or limited liability company authorized to do
business in each jurisdiction where the nature of its business makes such
qualification necessary or failure to so qualify could have a Material Adverse
Effect.
SECTION 7.2 Authorization. The Borrower (a) has (or had at the time
of execution, delivery or performance thereof) the power to execute, deliver and
perform this Agreement and the Related Documents and (b) has (or had) taken all
necessary action to authorize the execution, delivery and performance by it of
this Agreement and the Related Documents.
SECTION 7.3 No Conflict. The execution, delivery and performance by
the Borrower of this Agreement and the Related Documents, does not and will not,
or did not at the time of execution thereof (a) contravene or conflict with any
provision of any law, statute, rule or regulation, (b) contravene or conflict
with, result in any breach of, or constitute a default under,
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any agreement or instrument binding on it or its Subsidiaries (including,
without limitation, any writ, judgment, injunction or other similar court
order), (c) result in the creation or imposition of or the obligation to create
or impose any Lien (except for Permitted Liens) upon any of the property or
assets of the Borrower or its Subsidiaries or (d) contravene or conflict with
any provision of the articles of incorporation, by-laws, certificate of limited
partnership, operating agreement or partnership agreement (as applicable) of the
Borrower or any of its Subsidiaries.
SECTION 7.4 Governmental Consents. Except as have been obtained, no
order, consent, approval, license, authorization or validation of, or filing,
recording or registration with or exemption by, any governmental or public body
or authority, or any subdivision thereof, is, or was at the time of execution
thereof, required in connection with the execution, delivery and performance by
the Borrower of this Agreement or the Related Documents.
SECTION 7.5 Validity. The Borrower has, or prior to the date of the
effectiveness of this Agreement and the initial Borrowing hereunder will have,
duly executed and delivered this Agreement and the Related Documents and each of
such documents constitutes, or upon execution and delivery will constitute, the
legal, valid and binding obligation of the Borrower enforceable in accordance
with its terms.
SECTION 7.6 Financial Statements.
(a) Statutory Financial Statements.
(i) The Annual Statements, or the quarterly
statements, as the case may be, of each of the Reliance
Standard Insurance Companies and Safety National
including, without limitation, the provisions made therein
for investments and the valuation thereof, reserves,
policy and contract claims and Statutory Liabilities, in
each case as filed with the appropriate Governmental
Authority of its state of domicile (the "Department") and
delivered to each Lender prior to the execution and
delivery of this Agreement, as of, and for the 1999 Fiscal
Year, and as of the end of, and for, the Fiscal Quarter
ended March 31, 2000 (collectively, the "Statutory
Financial Statements"), have been prepared in accordance
with SAP applied on a consistent basis. Each such
Statutory Financial Statement was in compliance in all
material respects with applicable law when filed. The
Statutory Financial Statements fairly present the
financial condition, the results of operations, changes in
equity and changes in financial position of each of the
Reliance Standard Insurance Companies and Safety National
as of and for the respective dates and periods indicated
therein in accordance with SAP applied on a consistent
basis. Except for liabilities and obligations, including,
without limitation, reserves, policy and contract claims
and Statutory Liabilities (all of which have been computed
in accordance with SAP), disclosed or provided for in the
Statutory Financial Statements, the Reliance Standard
Insurance Companies and Safety National did not have, as
of the respective dates of each of such financial
statements any liabilities or obligations (whether
absolute or contingent and whether due or to become due)
which, in conformity with SAP, applied on a consistent
basis, would have been required to be or should be
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disclosed or provided for in such financial statements.
All books of account of the Reliance Standard Insurance
Companies and Safety National fully and fairly disclose,
in all material respects, all of the transactions,
properties, assets, investments, liabilities and
obligations of the Reliance Standard Insurance Companies
and Safety National and all of such books of account are
in the possession of each of the Reliance Standard
Insurance Companies and Safety National and are true,
correct and complete in all material respects.
(ii) The investments of each of the Reliance
Standard Insurance Companies and Safety National reflected
in the Annual Statements filed with the Department with
respect to each of the Reliance Standard Insurance
Companies' and Safety National's 1999 Fiscal Year (the
"1999 Annual Statements"), as updated through the March
31, 2000 quarterly statements (the "2000 Quarterly
Statements"), comply in all material respects with all
applicable requirements of the applicable Department as to
investments which may be made by such Reliance Standard
Insurance Company and Safety National.
(iii) The provisions made in the 1999 Annual
Statements and in the 2000 Quarterly Statements for
reserves, policy and contract claims and Statutory
Liabilities are in compliance in all material respects
with the requirements of the applicable Department and
have been computed in accordance with SAP.
(iv) Marketable securities and short term
investments reflected, with respect to the Reliance
Standard Insurance Companies, in line 11, page 2, column 1
and, with respect to Safety National, in line 9, page 2,
column 1, of their respective 1999 Annual Statements and
in the 2000 Quarterly Statements are valued at cost,
amortized cost or market value, as noted on such Statutory
Financial Statements and as required by applicable law.
(v) There has been no change, event, action,
condition or effect which individually or in the aggregate
materially and adversely affects the consolidated
business, operations, financial prospects or condition of
the Reliance Standard Insurance Companies taken as a whole
or Safety National since December 31, 1999. Except as set
forth on Schedule 7.6, no dividends or other distributions
have been declared, paid or made upon any shares of
capital stock of any of the Reliance Standard Insurance
Companies or Safety National nor have any shares of
capital stock of any of the Reliance Standard Insurance
Companies or Safety National been redeemed, retired,
purchased or otherwise acquired since December 31, 1999,
other than as reflected in the balance sheets of the
Reliance Standard Insurance Companies or Safety National.
(b) GAAP Financial Statements.
(i) The audited consolidated financial
statements of the Borrower as of the end of, and for, the
1999 Fiscal Year, and as of the end of, and for, the
Fiscal Quarter ended March 31, 2000, copies of which have
been furnished to the
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Administrative Agent and each of the Lenders, have been
prepared in conformity with GAAP applied on a consistent
basis, and accurately present the financial condition of
the Borrower and each of its Subsidiaries as at such dates
and the results of operations for the periods then ended.
(ii) There has been no change, event, action,
condition or effect which individually or in the aggregate
materially and adversely affects the consolidated
business, operations, financial prospects or condition of
the Borrower or its Subsidiaries taken as a whole since
December 31, 1999. Except as set forth on Schedule 7.6, no
dividends or other distributions have been declared, paid
or made upon any shares of capital stock of the Borrower
or any of its Subsidiaries, nor have any shares of capital
stock of the Borrower or any of its Subsidiaries been
redeemed, retired, purchased or otherwise acquired, since
December 31, 1999.
(iii) With respect to any representation and
warranty which is deemed to be made after the date hereof
by the Borrower, the condensed balance sheet and condensed
statements of operations, of stockholders' equity and of
cash flows, which as of such date shall most recently have
been furnished by or on behalf of the Borrower to each
Lender for the purposes of or in connection with this
Agreement or any transaction contemplated hereby, shall
have been prepared in accordance with GAAP consistently
applied (except as disclosed therein), and shall present
fairly (in a condensed manner) the consolidated financial
condition of the corporations covered thereby as at the
dates thereof and for the periods then ended, subject, in
the case of quarterly financial statements, to normal
year-end and audit adjustments.
SECTION 7.7 Material Adverse Change. No Material Adverse Change has
occurred since December 31, 1999.
SECTION 7.8 Litigation and Contingent Obligations. No Material
Litigation is pending or threatened except as set forth (including estimates of
the Dollar amounts involved) in Schedule 7.8. The Borrower and its Subsidiaries
have no material Contingent Obligations other than (a) as provided for or
disclosed on Schedule 7.8 or in the financial statements referred to in Section
7.6 or (b) any Contingent Obligation consisting of a guarantee by the Borrower
with respect to any payment obligations under Preferred Securities.
SECTION 7.9 Liens. None of the assets of the Borrower or any of its
Subsidiaries is subject to any Lien, except for Permitted Liens.
SECTION 7.10 Subsidiaries. The Borrower has no Subsidiaries except as
set forth on Schedule 7.10.
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SECTION 7.11 Pension and Welfare Plans.
(a) During the twelve-consecutive-month period prior to
the Effective Date and prior to the date of any Loan hereunder, no
steps have been taken to terminate any Single Employer Pension Plan
or Welfare Plan or completely or partially withdraw from any Pension
Plan which termination or withdrawal is reasonably likely to have a
Material Adverse Effect and no contribution failure has occurred with
respect to any Pension Plan sufficient to give rise to a Lien under
section 302(f) of ERISA;
(b) no condition exists or event or transaction has
occurred with respect to any Single Employer Pension Plan or
Multiemployer Pension Plan which could reasonably be expected to
result in the incurrence by the Borrower or any other member of the
Controlled Group of any material liability, fine, Tax or penalty;
(c) except as disclosed in Schedule 7.11, neither the
Borrower nor any other member of the Controlled Group has any
material vested or contingent liability with respect to any
post-retirement benefit under a Welfare Plan, other than liability
for continuation coverage described in Part 6 of Title I of ERISA;
(d) with respect to each Single Employer Pension Plan
maintained or contributed to by Borrower or any other Controlled
Group member which is intended to qualify under section 401 of the
Code, a favorable determination letter has been received from the
Internal Revenue Service stating that such Pension Plan so qualifies
and the Borrower is not aware of anything that has occurred since the
date of issuance of such determination letter which could reasonably
be expected to cause any such Single Employer Pension Plan to cease
to qualify under section 401 of the Code; and
(e) no Single Employer Pension Plan maintained by or
contributed to by the Borrower or any other member of the Controlled
Group and subject to section 302 of ERISA or section 412 of the Code
has incurred an accumulated funding deficiency as defined in section
302(a)(2) of ERISA and section 412(a) of the Code, whether or not
waived.
SECTION 7.12 Investment Company Act. Neither the Borrower nor any of
its Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 7.13 Public Utility Holding Company Act. Neither the Borrower
nor any of its Subsidiaries is a "holding company," or a "subsidiary company" of
a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
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SECTION 7.14 Margin Regulation. Neither the Borrower nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation U.
SECTION 7.15 Collateral. As security for the Liabilities, the
Collateral Agent has possession of all Collateral which consists of instruments
or securities as defined in the UCC and, subject to the terms of the Collateral
Sharing Agreement and the Intercreditor Agreement, has a valid, first priority
perfected Lien on the Collateral. Except as set forth on Schedule 9.1, there are
no Liens or UCC financing statements on file naming the Borrower or any of its
Subsidiaries as debtor, except for Permitted Liens.
SECTION 7.16 Taxes.
(a) The Borrower and each of its Subsidiaries have filed
all material Tax Returns and Reports required by law to have been
filed by them and have paid or provided adequate reserves for all
Taxes thereby shown to be owing, except any such Taxes which are
being diligently contested in good faith by appropriate proceedings
and for which adequate reserves have been established and are being
maintained in accordance with GAAP. Except as set forth on Schedule
7.16, there is no ongoing audit or, to the Borrower's knowledge,
other governmental investigation of the tax liability of the Borrower
or its Subsidiaries and there is no unresolved claim by a taxing
authority concerning the Borrower's or any of its Subsidiaries' tax
liability, for any period for which returns have been filed or were
due. The liability stated for Taxes as of December 31, 1999 in the
financial statements described in Section 7.6 is sufficient in all
material respects for all Taxes as of such date.
(b) All life insurance reserves shown as such on federal
tax returns (other than individual annuity contracts) of each of the
Reliance Standard Insurance Companies qualify as life insurance
reserves under section 816(b) of the Code or under former section
801(b) of the Code.
(c) All current Reinsurance Agreements among the Reliance
Standard Insurance Companies and Safety National and their respective
Affiliates have, at all times, been conducted on an arm's-length
basis.
(d) Each of RSL and RSL-Texas is a life insurance company
as defined in section 816 of the Code.
(e) RSL and RSL-Texas are includable life insurance
companies as described in section 1504(c)(1) of the Code.
SECTION 7.17 Accuracy of Information. All factual information
heretofore (as supplemented) or contemporaneously furnished by or on behalf of
the Borrower or any of its Subsidiaries in writing to the Administrative Agent,
the Collateral Agent or any Lender for purposes of or in connection with this
Agreement or any transaction contemplated hereby is, and
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all other such factual information hereafter furnished by or on behalf of the
Borrower to the Administrative Agent, the Collateral Agent or any Lender will
be, true and accurate in every material respect on the date as of which such
information is dated or certified and as of the Effective Date, and such
information is not, or shall not be, as the case may be, incomplete by omitting
to state any material fact necessary to make such information not misleading.
SECTION 7.18 Environmental Warranties. Except as set forth in
Schedule 7.18:
(a) to the best of Borrower's knowledge after due inquiry,
all facilities and real property (including underlying groundwater)
owned or leased by the Borrower or any of its Subsidiaries have been,
and continue to be, as of the date hereof, in compliance with all
Environmental Laws, except where such noncompliance could not
reasonably be expected to have a Material Adverse Effect;
(b) there have been no, and as of the date hereof there
continue to be no, written Environmental Claims pending or threatened
against the Borrower or any of its Subsidiaries;
(c) to the best of Borrower's knowledge after due inquiry,
as of the date hereof, there have been no releases of Hazardous
Materials at, on or under any property now or previously owned or
leased by the Borrower or any of its Subsidiaries that, individually
or in the aggregate, have, or could reasonably be expected to have, a
Material Adverse Effect;
(d) the Borrower and its Subsidiaries possess and are in
compliance with all permits, certificates, approvals and licenses
under Environmental Laws and necessary for their businesses, except
where such failure to have or to be in compliance with such permits,
certificates, approvals or licenses could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect;
(e) to the best of Borrower's knowledge after due inquiry,
no property now or previously owned or leased by the Borrower or any
of its Subsidiaries is listed or formally proposed for listing on the
National Priorities List pursuant to CERCLA, on the CERCLIS or on any
similar state list of sites requiring investigation or clean-up;
(f) there are no underground storage tanks, active or
abandoned, including petroleum storage tanks, on or under any
property now or previously owned or leased by the Borrower or any of
its Subsidiaries that could, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect;
(g) to the actual knowledge of the Borrower after due
inquiry, neither the Borrower nor any of its Subsidiaries has
directly transported or directly arranged for the transportation of
any Hazardous Material to any location which is listed or
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formally proposed for listing on the National Priorities List
pursuant to CERCLA, on the CERCLIS or on any similar state list or
which is the subject of federal, state, Governmental Authority or
local enforcement actions or other investigations which could,
individually or in the aggregate, reasonably be expected to result in
a Material Adverse Effect with any remedial work, damage to natural
resources or personal injury, including claims under CERCLA;
(h) there are no polychlorinated biphenyls above 50 ppm or
friable asbestos present at any property now or previously owned or
leased by the Borrower or any of its Subsidiaries that could,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect; and
(i) no conditions exist at, on or under any property now
or previously owned or leased by the Borrower or any of its
Subsidiaries which would reasonably be expected to give rise to a
liability under any Environmental Law, except for liabilities that
would not, individually or in the aggregate, reasonably be expected
to result in a Material Adverse Effect.
Notwithstanding the foregoing, to the extent the Borrower's representations in
this Section 7.18 relate to property leased or previously owned by the Borrower
such representations are limited to the actual knowledge of the Borrower.
SECTION 7.19 Proceeds. The proceeds of the Loans will be used (a) for
the costs, expenses, fees and Taxes incurred by the Borrower in connection
herewith, including, without limitation, costs, expenses, fees and Taxes
incurred pursuant to Section 15.4, and (b) for other valid corporate purposes
permitted hereunder.
SECTION 7.20 Insurance. Schedule 7.20 sets forth a true and correct
summary of all insurance carried by the Borrower and its Subsidiaries. The
Borrower and its Subsidiaries are adequately insured for their benefit under
policies issued by insurers of recognized responsibility. No notice of any
pending or threatened cancellation or material premium increase has been
received by the Borrower or any of its Subsidiaries with respect to any of such
insurance policies. The Borrower and its Subsidiaries are in compliance with all
material conditions contained in such insurance policies.
SECTION 7.21 Securities Laws. Neither the Borrower nor any of its
Affiliates, nor, to the best of their knowledge, anyone acting on behalf of any
such Person, has directly or indirectly offered any interest in the Loans or any
other Liabilities for sale to, or solicited any offer to acquire any such
interest from, or has sold any such interest to, any Person that would subject
the issuance or sale of the Loans or any other Liabilities to registration under
the Securities Act of 1933, as amended.
SECTION 7.22 Governmental Authorizations. The Borrower and its
Subsidiaries have all licenses, franchises, permits and other governmental
authorizations necessary for all businesses presently carried on by them
(including ownership and leasing of the real and personal property owned and
leased by them), except where failure to obtain such licenses,
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franchises, permits and other governmental authorizations would not have a
Material Adverse Effect.
SECTION 7.23 Representations in Other Agreements True and Correct.
Each of the representations and warranties contained in each Related Document
(each as originally executed notwithstanding any amendment, modification or
termination thereof except to the extent consented to by the Required Lenders)
is true and correct.
SECTION 7.24 Business Locations; Trade Names. Schedule 7.24 lists
each of the locations where the Borrower or any of its Subsidiaries maintains an
office, a place of business or any records together with each corporate,
fictitious or trade name under or by which the Borrower or any of its
Subsidiaries conducts or has conducted its business.
SECTION 7.25 Solvency. The Borrower and each of its Subsidiaries is,
and after consummation of this Agreement and after giving effect to all
Indebtedness incurred and Liens created by the Borrower and each of its
Subsidiaries in connection herewith and therewith and the application of
proceeds therefrom will be, Solvent.
SECTION 7.26 Insurance Licenses. Schedule 7.26 lists all of the
jurisdictions in which each of the Reliance Standard Insurance Companies, Safety
National, and after consummation of any other Acquisition permitted by this
Agreement, each Acquired Person (to the extent applicable) hold licenses
(including, without limitation, licenses or certificates of authority from
applicable insurance departments), permits or authorizations to transact
insurance and reinsurance business (collectively, the "Licenses"). No such
License is the subject of a proceeding for suspension or revocation or any
similar proceedings and, to the best knowledge of the Borrower, there is no
sustainable basis for such a suspension or revocation and no such suspension or
revocation is threatened by any state insurance department. Schedule 7.26
indicates that line or lines of insurance which each of the Reliance Standard
Insurance Companies, Safety National and such Acquired Person are permitted to
be engaged in with respect to each License therein listed. The Reliance Standard
Insurance Companies, Safety National and such Acquired Person do not transact
any insurance business, directly or indirectly, in any state or jurisdiction
other than those enumerated on Schedule 7.26, where such business requires any
license, permit, governmental approval, consent or other authorization (other
than those obtained).
SECTION 7.27 Compliance with Laws. None of the Borrower or any of its
Subsidiaries is in violation of any law, ordinance, rule, regulation, order,
policy, guideline or other requirement of any Governmental Authority, if the
effect of such violation could reasonably be expected to have a Material Adverse
Effect and no such violation has been alleged and each of the Borrower and its
Subsidiaries (a) has filed in a timely manner all reports, documents and other
materials required to be filed by it with any Governmental Authority, if such
failure to so file could reasonably be expected to have a Material Adverse
Effect; and the information contained in each of such filings is true, correct
and complete in all material respects and (b) has retained all records and
documents required to be retained by it pursuant to any law, ordinance, rule,
regulation, order, policy, guideline or other requirement of any Governmental
Authority, if
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the failure to so retain such records and documents could reasonably be expected
to have a Material Adverse Effect.
SECTION 7.28 No Default. Neither the Borrower nor any of its
Subsidiaries is in default under any agreement or instrument to which the
Borrower or any of its Subsidiaries is a party or by which any of their
respective properties or assets is bound or affected, which default could
reasonably be expected to materially and adversely affect the financial
condition or operations of the Borrower and its Subsidiaries taken as a whole.
SECTION 7.29 Pledged Shares. All of the shares of capital stock of
the Borrower and its Subsidiaries are duly authorized and validly issued and are
fully paid and non-assessable. The shares of capital stock of the Borrower's
Subsidiaries pledged pursuant to the Pledge Agreements represent 100% of the
issued and outstanding capital stock of such Subsidiaries. All of the shares of
capital stock and surplus debentures, if any, of the Borrower's Subsidiaries
pledged as Collateral are owned by the Borrower (other than the capital stock of
Safety National, which is wholly-owned by SIG Holdings).
SECTION 7.30 Indebtedness Permitted. The Loans to be made with
respect to any Notice of Borrowing submitted by the Borrower under this
Agreement are and at the time of the incurrence of the Indebtedness evidenced by
such Loans will be permitted under the Indenture, the Master Letter of Credit
Agreement, the Pari Passu Credit Agreement and the Other Senior Indebtedness and
will not be in violation or breach of any term contained therein.
SECTION 7.31 Replacement of Schedules. Any Schedule delivered to the
Lenders under this Section 7 may be amended and replaced with the consent of the
Required Lenders (such consent not to be unreasonably withheld) so that the
representations and warranties set forth in this Section 7 shall be true and
correct at the time made by the Borrower; provided that the consent of the
Required Lenders shall not be required to (a) amend Schedule 7.20, (b) to amend
Schedule 7.24 to add additional locations thereto within the continental United
States of America or (c) to amend Schedule 7.26 to add additional Licenses.
SECTION 8. AFFIRMATIVE COVENANTS
The Borrower agrees that, on and after the Effective Date and for so
long thereafter as any Lender has any Commitment hereunder or any of the
Liabilities remain unpaid or outstanding, the Borrower will:
SECTION 8.1 Reports, Certificates and Other Information. Unless
otherwise provided herein, furnish or cause to be furnished to the
Administrative Agent and each Lender:
8.1.1 Audit Report. As soon as available, but in any event
within one hundred (100) days after the end of each Fiscal Year of
the Borrower:
(a) copies of the audited consolidated balance sheet,
statement of earnings, stockholders' equity and cash flows of the
Borrower as at the end of such Fiscal Year and an unaudited
consolidating balance sheet of the Borrower as
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of the end of such Fiscal Year and the related statements of earnings
for such Fiscal Year, in each case setting forth the figures as of
the end of, and for, the previous year, prepared in reasonable detail
and in accordance with GAAP applied consistently throughout the
periods reflected therein, certified (as to the consolidated balance
sheet, statement of earnings, stockholders' equity and cash flows
only) without Qualification by Ernst & Young (or such other
independent certified public accountants of recognized standing
acceptable to the Required Lenders); and
(b) a certificate from such accountants containing a
computation of, and showing compliance with, each of the financial
ratios and restrictions contained in Sections 9.5 and 10, and to the
effect that, in making the examination necessary for the signing of
the annual audit report of the Borrower by such accountants, they
have not become aware of any non-compliance by the Borrower under
this Agreement or the Related Documents or any Default;
8.1.2 Quarterly Reports. As soon as available, but in any
event within fifty-two (52) days after the end of each Fiscal Quarter
of each Fiscal Year of the Borrower, copies of the unaudited
consolidated balance sheet, statement of earnings, stockholders'
equity and cash flows of the Borrower as at the end of and for such
Fiscal Quarter and an unaudited consolidating balance sheet of the
Borrower as at the end of such Fiscal Quarter and the related
unaudited statements of earnings for such Fiscal Quarter and the
portion of the Fiscal Year through such Fiscal Quarter, and with
respect to the consolidated balance sheet, statement of earnings,
stockholders' equity and cash flows setting forth in comparative form
the figures as of the end of, and for, the corresponding periods of
the previous Fiscal Year and the previous Fiscal Quarter, prepared in
reasonable detail and in accordance with GAAP applied consistently
throughout the periods reflected therein and certified by the chief
financial officer of the Borrower as presenting fairly the financial
condition and results of operations of the Borrower and its
Subsidiaries (subject to normal year-end and audit adjustments);
8.1.3 Tax Returns and Reports. If requested by the
Administrative Agent, copies of all federal, state, local and foreign
Tax Returns and Reports filed by the Borrower and any of its
Subsidiaries;
8.1.4 SAP Financial Statements.
(a) As soon as possible, but in any event within seventy
(70) days after the end of each Fiscal Year of each of the Reliance
Standard Insurance Companies, Safety National, and, after the
consummation of any other Acquisition permitted under this Agreement,
each Acquired Person (to the extent applicable), a copy of the Annual
Statement of such Reliance Standard Insurance Company, Safety
National and such Acquired Person for such Fiscal Year prepared in
accordance with SAP and accompanied by the certification of the chief
financial officer of such Reliance Standard Insurance Company, Safety
National and such Acquired
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Person that such financial statement presents fairly, in accordance
with SAP, the financial condition and results of operations of such
Reliance Standard Insurance Company, Safety National and such
Acquired Person as of the end of, and for, the period then ended;
(b) As soon as possible, but in any event within fifty-two
(52) days after the end of each Fiscal Quarter of each Fiscal Year of
each of the Reliance Standard Insurance Companies, Safety National,
and, after the consummation of any other Acquisition permitted under
this Agreement, each Acquired Person (to the extent applicable) a
copy of the quarterly statement of such Reliance Standard Insurance
Company, Safety National and such Acquired Person for such Fiscal
Quarter, all prepared in accordance with SAP and accompanied by the
certification of the chief financial officer of such Reliance
Standard Insurance Company, Safety National and such Acquired Person
that all such financial statements present fairly in accordance with
SAP the financial condition and results of operations of such
Reliance Standard Insurance Company, Safety National and such
Acquired Person as of the end of, and for, the period then ended;
(c) Within thirty (30) days after being delivered to any
of the Reliance Standard Insurance Companies, Safety National, and,
after consummation of any other Acquisition permitted under this
Agreement, each Acquired Person (to the extent applicable), any final
Triennial Examination Report issued by the Department or the NAIC;
(d) Within one hundred (100) days after the close of each
Fiscal Year of each of the Reliance Standard Insurance Companies,
Safety National, and, after consummation of any other Acquisition
permitted under this Agreement, each Acquired Person (to the extent
applicable), a copy of the "Statement of Actuarial Opinion" and
"Management Discussion and Analysis" for such Reliance Standard
Insurance Company, Safety National and such Acquired Person which is
provided to the applicable Department (or equivalent information
should the Department no longer require such a statement) as to the
adequacy of loss reserves of such company. Such opinion shall be in
the format prescribed by the Department;
8.1.5 Compliance Certificate. Contemporaneously with the
furnishing of a copy of each set of the statements and reports
provided for in Sections 8.1.1 and 8.1.2, a duly completed
certificate, substantially in the form of Exhibit D (the "Compliance
Certificate"), signed by the chief financial officer of the Borrower,
containing, among other things, a computation of, and showing
compliance with, each of the applicable financial ratios and
restrictions contained in Sections 9 and 10 and to the effect that as
of such date, to the best of Borrower's knowledge, no Default has
occurred and is continuing, or, if there is any such event,
describing it and the steps, if any, being taken to cure it;
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8.1.6 Auditors' Materials. Promptly upon receipt thereof,
copies of all management letters and reports regarding the Borrower
or any of its Subsidiaries submitted to the Borrower or its
Subsidiaries by independent public accountants in connection with
each annual audit report made by such accountants of the books of the
Borrower or any of its Subsidiaries;
8.1.7 Business Plan and Projections. As soon as available,
but in any event no later than sixty (60) days after the beginning of
each Fiscal Year, updated projections of the Borrower, including,
without limitation, the operating cash flow of the Borrower for such
Fiscal Year and the statutory income statement of RSL, Safety
National and, after consummation of any other Acquisition permitted
by this Agreement, each Acquired Person (to the extent applicable)
for such Fiscal Year;
8.1.8 Reports to SEC and to Shareholders. Promptly upon
the filing or making thereof, copies of each filing and report made
by the Borrower or any of its Subsidiaries with or to any securities
exchange or the Securities and Exchange Commission and of each
communication from the Borrower to shareholders generally in their
capacity as shareholders;
8.1.9 Notice of Default, Litigation and License Matters.
Promptly and without delay upon learning of the occurrence of any of
the following, written notice thereof, describing the same and the
steps being taken by the Borrower with respect thereto:
(a) the occurrence of a Default,
(b) the institution of any Material Litigation or the
occurrence of any Material Litigation Development,
(c) the commencement of any dispute which might lead to
the material modification, transfer, revocation, suspension or
termination of this Agreement or any Related Document,
(d) any Material Adverse Change, or
(e) any announcement by Standard & Poor's or Xxxxx'x or
such other rating agency whose rating becomes applicable pursuant to
the provisions of Section 3.1(c) and Section 3.6(b) of any change of
any debt rating of the Borrower.
8.1.10 Insurance and Actuarial Reports.
(a) written notification thirty (30) days prior to any
cancellation or material change of any insurance policy listed on
Schedule 7.20 by the Borrower or any of its Subsidiaries, and within
five (5) Business Days after receipt of any notice (whether formal or
informal) of cancellation or material change by any of
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its insurers if, in either case, such cancellation or change could
reasonably be expected to cause a Material Adverse Change; and
(b) promptly for each Reliance Standard Insurance Company,
Safety National, and after consummation of any other Acquisition
permitted by this Agreement, each Acquired Person (to the extent
applicable) to the Administrative Agent (which shall promptly furnish
to the Lenders) all actuarial reports required to be delivered to the
Department;
8.1.11 ERISA Liability. Promptly upon learning of the
occurrence of the following, written notice thereof describing the
same and the steps being taken by Borrower with respect thereto:
(a) the failure of the Borrower or any other member of the
Controlled Group to make a required contribution to any Single
Employer Pension Plan if such failure is sufficient to give rise to a
Lien under section 302(f)(1) of ERISA or accumulated funding
deficiency under section 302 of ERISA,
(b) the institution of any steps by the Borrower or any
other member of the Controlled Group to withdraw from, or the
institution of any steps by the Borrower or any other member of the
Controlled Group to terminate, any Pension Plan which could
reasonably be expected to result in liability to the Pension Benefit
Guaranty Corporation or any successor thereto or such Pension Plan in
excess of $10,000,000,
(c) the taking of any action with respect to a Single
Employer Pension Plan which could reasonably be expected to result in
the requirement that the Borrower or any of its Subsidiaries furnish
a bond or other security to the Pension Benefit Guaranty Corporation
or any successor thereto or such Single Employer Pension Plan, or
(d) the occurrence of any event with respect to any Single
Employer Pension Plan which could reasonably be expected to result in
the incurrence by the Borrower or any of its Subsidiaries of any
liability, fine, Tax or penalty in excess of $10,000,000;
8.1.12 Pension Plan Withdrawals. With respect to each
Multiemployer Pension Plan which is a "multi-employer plan," as
defined in section 4001 of ERISA as to which any member of the
Controlled Group may incur any liability, written notice thereof, as
soon as it has reason to believe (on the basis of the most recent
information available to it) that the sum of (a) the withdrawal
liability that would be incurred by the Controlled Group if all
members of the Controlled Group were to completely withdraw from all
multi-employer plans as to which any member of the Controlled Group
has an obligation to contribute, and (b) the aggregate amount of the
outstanding withdrawal liability (without
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unaccrued interest) incurred by the Controlled Group to
multi-employer plans, would exceed $10,000,000;
8.1.13 Information Concerning the Parent and the
Subsidiaries. Promptly upon learning thereof, written notice of
(a) the occurrence with respect to any of its Subsidiaries
or the Parent of any of the events the occurrence of which in
relation to the Borrower would constitute an Event of Default under
Section 12.1.3;
(b) the execution of any agreement by any of its
Subsidiaries to merge with or consolidate into or with, or purchase
or otherwise acquire all or substantially all of the assets or stock
of any class of, or any partnership or joint venture interest in, any
other Person, or for the sale, transfer, lease or conveyance by any
of its Subsidiaries of all or any substantial part of its assets or
sale or assignment without recourse of any of its receivables; and
(c) any action which may reasonably be expected to result
in a Change in Control;
8.1.14 Environmental Liabilities. Promptly upon learning
thereof, written notice (together with copies, if available) of all
Environmental Claims against the Borrower or any of its Subsidiaries
that, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect and that relates to the Borrower's
or any Subsidiary's,
(a) properties or facilities, or
(b) compliance with Environmental Laws, together with a
description of the steps being taken by the Borrower or such
Subsidiary with respect thereto;
8.1.15 Insurance Holding Company Filings. Copies of all
material Insurance Holding Company System Act filings with
Governmental Authorities by the Borrower which seek approval of
Governmental Authorities with respect to transactions between the
Borrower and its Affiliates or which relate to dividends no later
than ten (10) Business Days after such filings are made;
8.1.16 Insurance Licenses. Within ten (10) Business Days
of such notice, notice of actual suspension, termination or
revocation of any License or material restriction thereon of any of
the Reliance Standard Insurance Companies, Safety National, and after
consummation of any other Acquisition permitted hereunder, each
Acquired Person (to the extent applicable) by any Governmental
Authority or of receipt of notice from any Governmental Authority
notifying any of the Reliance Standard Insurance Companies, Safety
National or such Acquired Person of a scheduled hearing (which is not
withdrawn within ten (10) days) relating to such a suspension,
termination, revocation or restriction, including any
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request by a Governmental Authority which commits any of the Reliance
Standard Insurance Companies, Safety National or such Acquired Person
to take, or refrain from taking, any action or which otherwise
materially and adversely affects the authority of any of the Reliance
Standard Insurance Companies, Safety National or such Acquired Person
to conduct its business;
8.1.17 Insurance Proceedings. Within ten (10) Business
Days of such notice, notice of any pending or threatened
investigation or regulatory proceeding (other than routine periodic
investigations or reviews) by any Governmental Authority concerning
the business, practices or operations of any of the Reliance Standard
Insurance Companies, Safety National, and, after consummation of any
other Acquisition permitted under this Agreement, each Acquired
Person (to the extent applicable) including any agent or managing
general agent thereof, which could reasonably be expected to have a
Material Adverse Effect;
8.1.18 Changes in Applicable Insurance Code. Promptly,
upon knowledge of the Borrower, any of the Reliance Standard
Insurance Companies, Safety National, or, after consummation of any
other Acquisition permitted under this Agreement, each Acquired
Person (to the extent applicable) to the Administrative Agent (who
shall promptly deliver such notice to the Lenders), notice of any
actual or proposed material changes in any Applicable Insurance Code
which could reasonably be expected to cause a Material Adverse
Change;
8.1.19 Reinsurance Agreements. Promptly, notice of any
material change or modification to any Reinsurance Agreements or
Surplus Relief Reinsurance Agreements whether entered into before or
after the Closing Date including Reinsurance Agreements, if any,
which were in a runoff mode on the Closing Date, which change or
modification could have a Material Adverse Effect;
8.1.20 Investments. Within fifty-two (52) days of the end
of each Fiscal Quarter and one hundred (100) days of the end of each
Fiscal Year, (a) a list of the Limited Partnership Investments of the
Borrower and its Subsidiaries and the Borrower's best estimates of
capital account changes and performance as to each of such Limited
Partnership Investments (based on information provided by the
managers of such partnerships) and (b) an updated calculation of the
aggregate Limited Partnership Investments' standard deviation of
monthly rates of return and a comparison of such standard deviation
to that of the S&P 500 and the Xxxxxxx Xxxx Index (or their
equivalents);
8.1.21 Revenue Agent Notices. Promptly, and in any event
within ten (10) days of receipt, any revenue agent's reports or
statutory notices of deficiency related to the Borrower or any of its
Subsidiaries which could reasonably be expected to have a Material
Adverse Effect;
8.1.22 Notice of Tax Claim. Prompt notice to the
Administrative Agent of the commencement of any claim, audit,
examination, notice of deficiency, or
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other change or adjustment by any Governmental Authority (a "Tax
Claim"), or of the extension of any statute of limitations regarding
Taxes which could reasonably be expected to have a Material Adverse
Effect;
8.1.23 Other Tax Information. Upon request, promptly to
the Administrative Agent copies of all correspondence (including
without limitation, notices, requests, explanations, determinations,
schedules, charts and lists) delivered to any Governmental Authority
in connection with any Tax Claim or Taxes and any protest, petition
or refund suit filed on behalf of any Subsidiaries in connection with
any Tax Claim or Taxes;
8.1.24 Tax Sharing Agreements. Promptly an executed copy
of any Tax Sharing Agreement permitted by this Agreement executed
after the Effective Date; and
8.1.25 Other Information. From time to time such other
information and certifications concerning the Borrower and any of its
Subsidiaries as the Administrative Agent, the Collateral Agent or a
Lender may reasonably request.
SECTION 8.2 Corporate Existence; Foreign Qualification. Do and cause
to be done at all times all things necessary to (a) maintain and preserve the
existence of the Borrower and each of its Subsidiaries, except as otherwise
permitted pursuant to Section 9.2(a), (b) be, and ensure that each of its
Subsidiaries are, duly qualified to do business and in good standing in each
jurisdiction where the nature of their business makes such qualification
necessary or failure to so qualify could have a Material Adverse Effect, and (c)
comply, and cause its Subsidiaries to comply, with all contractual obligations
and requirements of law binding upon such entity, except to the extent that the
failure to comply therewith could not in the aggregate have a Material Adverse
Effect.
SECTION 8.3 Books, Records and Inspections.
(a) Maintain, and cause each of its Subsidiaries to
maintain, complete and accurate books and records;
(b) permit, and cause each of its Subsidiaries to permit,
access at reasonable times by the Administrative Agent, the
Collateral Agent and each Lender to its books and records;
(c) permit, and cause each of its Subsidiaries to permit,
the Administrative Agent, the Collateral Agent and each Lender to
inspect at reasonable times its properties and operations; and
(d) permit, and cause each of its Subsidiaries to permit,
the Administrative Agent, the Collateral Agent and each Lender to
discuss its business, operations and financial condition with its
officers.
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SECTION 8.4 Insurance. Maintain, and cause each of its Subsidiaries
to maintain, insurance with responsible insurance companies, or, as permitted by
applicable law, to self-insure, with respect to its properties and business
against such casualties and contingencies and of such types and in such amounts
as is customary in the case of similar businesses.
SECTION 8.5 Taxes and Liabilities.
(a) Pay, and cause each of its Subsidiaries to pay, when
due all Taxes and other material liabilities, except as contested in
good faith and by appropriate proceedings with respect to which
reserves have been established, and are being maintained, in
accordance with GAAP if and so long as forfeiture of any part of the
Collateral will not result from the failure to pay any such Taxes or
other material liabilities during the period of any such contest;
(b) cause each of the Reliance Standard Insurance
Companies (other than FRSL) to continue to qualify as life insurance
companies under section 816 of the Code, except to the extent failure
to so qualify would not materially adversely impact the cash under
the Tax Sharing Agreements which would have been available to the
Borrower if such Reliance Standard Insurance Company had continued to
qualify as a life insurance company; and
(c) cause each of the Reliance Standard Insurance
Companies to promptly file consolidated federal tax returns and to
include all such companies on such returns, except to the extent
failure to so file a consolidated federal tax return would not
adversely impact the cash under the Tax Sharing Agreements which
would have been available to the Borrower if such Reliance Standard
Insurance Company had filed a consolidated federal tax return.
SECTION 8.6 Pension Plans and Welfare Plans. Maintain each Single
Employer Pension Plan and Welfare Plan in compliance in all material respects
with all applicable requirements of law, and any rules and regulations related
thereto.
SECTION 8.7 Compliance with Laws. Comply, and cause each of its
Subsidiaries to comply, with all federal, state and local laws, rules and
regulations related to its businesses (including, without limitation, all such
laws, rules and regulations relating to Hazardous Materials or the disposal
thereof) if the failure so to comply could have a Material Adverse Effect.
SECTION 8.8 Maintenance of Permits. Maintain, and cause each of its
Subsidiaries to maintain, all permits, licenses and consents as may be required
for the conduct of its business by any state, federal or local government agency
or instrumentality (including, without limitation, the Licenses and any such
license, consent or permit relating to Hazardous Materials or the disposal
thereof) if the failure to maintain such licenses, permits and consents could
have a Material Adverse Effect.
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SECTION 8.9 Environmental Compliance. Maintain, and cause each of its
Subsidiaries to maintain, (a) all material permits, approvals, certificates,
licenses and other authorizations relating to environmental matters in effect
and use and operate all of its facilities and properties in material compliance
with all Environmental Laws, and (b) appropriate procedures for the handling of
all Hazardous Materials in material compliance with all applicable Environmental
Laws, and materially comply with such procedures at all times.
SECTION 8.10 Dividends. To the maximum extent permitted by law,
without necessitating approval of the Department, cause each of the Reliance
Standard Insurance Companies and Safety National to make dividends or principal
or interest payments on surplus debentures to the Borrower, RSL-Texas, RSL or
SIG Holdings, as applicable, to the extent necessary to satisfy the Liabilities.
SECTION 9. NEGATIVE COVENANTS
The Borrower agrees that, on and after the Effective Date and for so
long thereafter as any Lender has any Commitment hereunder or any of the
Liabilities remains unpaid or outstanding, the Borrower will:
SECTION 9.1 Liens. Not, and not permit any of its Subsidiaries to,
create, assume or suffer to exist any Lien on any asset now owned or hereafter
acquired by it, except for the following (collectively called "Permitted
Liens"):
(a) Liens in favor of the Collateral Agent for the benefit
of the Lenders pursuant to this Agreement and the Related Documents;
(b) Liens for current Taxes not delinquent or for Taxes
being contested in good faith and by appropriate proceedings and with
respect to which adequate reserves are being maintained in accordance
with GAAP;
(c) Liens in connection with the acquisition or leasing of
fixed or capital assets after the date hereof attaching only to the
property being acquired, provided the Indebtedness secured thereby
does not exceed ninety percent (90%) of the fair market value of such
property at the time of acquisition thereof;
(d) Liens shown on Schedule 9.1;
(e) Liens incurred in the ordinary course of business in
connection with worker's compensation, unemployment insurance or
other forms of governmental insurance or benefits or to secure
performance of tenders, statutory obligations, leases and contracts
(other than for borrowed money) entered into in the ordinary course
of business or to secure obligations on surety or appeal bonds;
(f) Liens of mechanics, carriers, materialmen and other
like Liens arising in the ordinary course of business in respect of
obligations which are not delinquent or which are being contested in
good faith and by appropriate
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proceedings and with respect to which adequate reserves are being
maintained in accordance with GAAP;
(g) Liens arising in the ordinary course of business for
sums being contested in good faith and by appropriate proceedings and
with respect to which adequate reserves are being maintained in
accordance with GAAP, or for sums not due, and in either case not
involving any deposits or advances for borrowed money or the deferred
purchase price of property or services;
(h) Liens in favor of any Federal Home Loan Bank;
(i) Liens incurred in connection with the acquisition of
Investments permitted by this Agreement, including, without
limitation, Liens in favor of the holders of the SIG Notes with
respect to the capital stock of Safety National pursuant to the SIG
Notes Pledge Agreement;
(j) Liens arising in connection with reverse repurchase
agreements and Interest Rate and Currency Exchange Agreement
Obligations entered into in the ordinary course of business;
(k) Liens in favor of the LC Administrative Agent for the
benefit of the Lenders pursuant to the Master Letter of Credit
Agreement and the Related Documents (as defined in the Master Letter
of Credit Agreement);
(l) Liens pursuant to trust or other security arrangements
in connection with reinsurance agreements under which insurance
liabilities are ceded to any of the Reliance Standard Insurance
Companies or Safety National; and
(m) Liens in favor of the Pari Passu Collateral Agent for
the benefit of the lenders under the Pari Passu Credit Agreement and
the Related Documents (as defined in the Pari Passu Credit
Agreement); provided that the principal amount of Indebtedness
thereunder shall not exceed $180,000,000 at any time, less the amount
of any scheduled payments of principal and any other mandatory
prepayment of the Pari Passu Liabilities which permanently reduces
the commitments under the Pari Passu Credit Agreement, or the amount
of any other voluntary or involuntary reduction of the commitments
thereunder.
SECTION 9.2 Consolidation, Merger, etc. Not, and not permit any of
its Subsidiaries to, liquidate or dissolve, consolidate with, or merge into or
with, any other Person, or purchase or otherwise acquire all or substantially
all of the assets of any Person (or of any division thereof) except:
(a) any Subsidiary of the Borrower may liquidate or
dissolve voluntarily into, and may merge with and into, the Borrower
or any other Subsidiary of the Borrower; provided that with respect
to any merger between Subsidiaries of the Borrower the percentage of
the equity and voting power of the surviving
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Subsidiary owned by the Borrower immediately after such merger shall
not be less than the greatest percentage of the equity and voting
power owned by the Borrower in any Subsidiary party to such merger
immediately prior thereto;
(b) so long as no Default has occurred and is continuing
or would occur after giving effect thereto, the Borrower and its
Subsidiaries may purchase or acquire, through merger, consolidation
or otherwise, all or substantially all of the assets or capital stock
of a Person so long as the purchase price of all such assets and
capital stock plus the purchase price paid for books of insurance
business purchased by any of the Reliance Standard Insurance
Companies and Safety National pursuant to Section 9.14, taken in the
aggregate from and after December 5, 1996 (excluding all amounts paid
by the Borrower in connection with the Acquisition and disposition of
Unicover Managers, Inc., and its Affiliates) does not exceed thirty
percent (30%) of the Consolidated Equity of the Borrower, as
determined after giving effect to the applicable purchase or
acquisition, including for such purpose any increase in Consolidated
Equity of the Borrower arising from the issuance by the Borrower of
common stock or warrants, options or other rights with respect to the
Borrower's common stock in connection with such purchase or
acquisition (not including, for purposes of calculating any purchase
price with respect to any purchase or acquisition under this Section
9.2(b), any part of such price that is represented by such common
stock, warrants, options or other rights); and
(c) any Subsidiary (other than any of the Reliance
Standard Insurance Companies and Safety National) engaged primarily
in investing in securities may voluntarily dissolve or liquidate so
long as its net assets are distributed in accordance with the
proportionate equity interests of its shareholders, partners or other
beneficial owners.
SECTION 9.3 Asset Disposition, etc. Not, and not permit any of its
Subsidiaries to, sell, assign, lease, transfer, contribute, convey or otherwise
dispose of, or grant options, warrants or other rights with respect to, any of
its assets to any Person, unless:
(a) such sale, assignment, transfer, lease, contribution,
conveyance or other disposition is in the ordinary course of its
business;
(b) the book value of such assets net of related
liabilities, together with the net book value of all other assets
sold, transferred, leased, contributed or conveyed otherwise than in
the ordinary course of business by the Borrower or any of its
Subsidiaries pursuant to this clause since December 5, 1996, does not
exceed $25,000,000 (without taking into account, for such purposes,
the Borrower's disposition of its Investment in Unicover Managers,
Inc. and its Affiliates or the disposition by RSL of the real
property commonly known as 0000 Xxxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx);
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(c) such sale, transfer, lease, contribution, conveyance
or other disposition has been consented to in writing by the Required
Lenders (it being understood such Required Lenders shall have no
obligation to so consent); or
(d) such sale, transfer, contribution or conveyance is in
connection with any liquidation, dissolution, consolidation or merger
permitted under Section 9.2.
SECTION 9.4 Dividends, etc. Except for (a) dividends made on
preferred stock of the Borrower when no Default has occurred, (b) dividends made
on common stock of the Borrower and the repurchase or redemption of capital
stock of the Borrower, in each case, when no Default has occurred and which do
not, in the aggregate in any Fiscal Year, exceed 4% of the Consolidated Equity
of the Borrower as of December 31 of the Fiscal Year immediately preceding the
Fiscal Year in which such dividend, repurchase or redemption is to be made;
provided, that, solely for the Borrower's 1999 Fiscal Year, dividends made on
common stock of the Borrower and repurchases or redemptions of capital stock of
the Borrower shall be permitted when no Default has occurred and which do not,
in the aggregate, exceed 4% of the Consolidated Equity of the Borrower as of
June 30, 1999, plus the amount of any repurchases of common stock of the
Borrower made by the Borrower from January 1, 1999 to August 11, 1999
(approximately $29,000,000); and provided, further, to the extent the aggregate
amount of such dividends, repurchases or redemptions in any Fiscal Year is less
than the amount permitted for such Fiscal Year, the Borrower may carry over the
additional amount to any succeeding Fiscal Year, and (c) in addition to clauses
(a) and (b), repurchases of capital stock of the Borrower when no Default has
occurred in an aggregate amount not to exceed $20,000,000 during the term of
this Agreement, not (i) declare, pay or make any dividend or distribution (in
cash, property or obligations) on any shares of any class of capital stock (now
or hereafter outstanding) of the Borrower or on any warrants, options or other
rights with respect to any shares of any class of capital stock (now or
hereafter outstanding) of the Borrower (other than dividends or distributions
payable in its common stock or warrants to purchase its common stock or splitups
or reclassifications of its stock into additional or other shares of its common
stock) or apply, or permit any of its Subsidiaries to apply, any of its funds,
property or assets to the purchase, redemption, sinking fund or other retirement
of any shares of any class of capital stock (now or hereafter outstanding) of
the Borrower or any option, warrant or other right to acquire shares of the
Borrower's capital stock (other than any such payment pursuant to stock
appreciation rights granted and exercised in accordance with applicable rules
and regulations of the Securities and Exchange Commission); or (ii) make any
deposit for any of the foregoing purposes.
SECTION 9.5 Investments. Not, and not permit any of its Subsidiaries
to, make, incur, assume or suffer to exist any Investment in any other Person,
except:
(a) Investments in Cash Equivalents;
(b) the recapitalization of the Investment Subsidiaries as
contemplated by and in connection with the Master Letter of Credit
Agreement and the Trust Documents, and in the ordinary course of
business, Investments by the Borrower in any of its Subsidiaries, or
by any such Subsidiary in any of its or the
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Borrower's Subsidiaries or the Borrower, by way of contributions to
capital or loans or advances; and
(c) other Investments by any of the Borrower and its
Subsidiaries which shall not violate any of the following guidelines:
(i) All Investments by the Reliance Standard
Insurance Companies, Safety National and any Acquired
Person (if an insurance company) shall be in compliance
with the Applicable Insurance Code(s) of each Reliance
Standard Insurance Company's, Safety National's and such
Acquired Person's state of domicile or approved by the
applicable Department;
(ii) Investments by the Borrower and its
Non-Insurance Subsidiaries in Risk Assets and Limited
Partnership Investments shall not exceed 1.00 times the
Consolidated Equity of the Borrower in the aggregate;
provided that the value of any Investment constituting a
Risk Asset shall be reduced, for such purposes, to take
into account any transaction in the ordinary course of
business by the Borrower or such Non-Insurance Subsidiary,
as the case may be, with respect to Investments of (or
Investments convertible into or exchangeable for
Investments of) the same issuer of such Investment,
including, but not limited to, a short position
established or put option held with respect to such
Investment or an Investment into which such Investment is
convertible;
(iii) Investments by the Borrower and its
Subsidiaries in securities of a single issuer (other than
(A) U.S. Government Securities; (B) overnight investments
in securities rated at least A-2 by Standard & Poor's or
P-2 by Xxxxx'x which are purchased through short-term
asset management accounts offered by any commercial banks
organized under the laws of the United States which are
Lenders or which have a combined capital and surplus in
excess of $500,000,000; (C) repurchase agreements
collateralized by any of the securities referenced in
clauses (A) and (B) above or clause (2) below; and (D)
investments in the Borrower or any of its Affiliates)
shall not exceed (1) except as to securities covered by
clause (2) below, the lesser of 3% of the consolidated
total assets of the Borrower and its Subsidiaries or 20%
of Consolidated Equity of the Borrower; or (2) as to
asset-backed securities backed by a single pool of assets
that are Investment Grade Securities, 5% of the
consolidated total assets of the Borrower and its
Subsidiaries; provided that for the purposes of
determining compliance with this Section 9.5(c)(iii), (1)
the Tersk Investment shall not be considered as an
Investment in a single issuer; instead, the Investments of
Tersk LLC, to the extent of the Borrower's and its
Subsidiaries' proportionate equity interests therein,
shall be deemed to be Investments of the Borrower and its
Subsidiaries (but not to exceed in the aggregate for such
purpose, however, the amount of the Tersk Investment), and
(2) Investments of the Borrower and its Subsidiaries in
the Structured Notes shall not be considered as
Investments in a single issuer;
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provided, however, that for purposes of applying Section 9.5(c), Investments by
Subsidiaries of the Borrower which are not wholly-owned Subsidiaries shall only
be taken into account to the extent that the Borrower's direct or indirect
proportionate equity interest of such Subsidiary is taken into account in
calculating Consolidated Equity of the Borrower.
SECTION 9.6 Other Senior Indebtedness; Subsidiary Senior Notes; Trust
Documents; Master Letter of Credit Agreement; Pari Passu Credit Agreement. Not,
and not permit any of its Subsidiaries to:
(a) other than as permitted by this Agreement, enter into
any amendment or modification of the Other Senior Indebtedness or the
Subsidiary Senior Notes which (i) increases the principal of or rate
of interest on the Other Senior Indebtedness or the Subsidiary Senior
Notes, (ii) shortens the stated maturity or Average Life of the Other
Senior Indebtedness or the Subsidiary Senior Notes, or (iii) would
otherwise have a Material Adverse Effect; or
(b) enter into any amendment or modification of any Trust
Document (other than the Subsidiary Senior Notes, subject to the
restrictions set forth in clause (a) above), the Master Letter of
Credit Agreement, the Pari Passu Credit Agreement or any document or
instrument executed in connection therewith which is in any manner
materially adverse to the interests of the Lenders.
SECTION 9.7 Take or Pay Contracts. Not, and not permit any of its
Subsidiaries to, enter into or be a party to any arrangement for the purchase of
materials, supplies, other property or services if such arrangement by its
express terms requires that payment be made by the Borrower or such Subsidiary
regardless of whether such materials, supplies, other property or services are
delivered or furnished to it.
SECTION 9.8 Regulation U. Not, and not permit any of its Subsidiaries
to, use or permit any proceeds of the Loans to be used, either directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of
"purchasing or carrying margin stock" within the meaning of Regulation U.
SECTION 9.9 Subsidiaries. Notwithstanding any provision of this
Agreement to the contrary, not, and not permit any of its Subsidiaries to,
create or permit to exist any Subsidiary other than the Subsidiaries listed on
Schedule 7.10 unless the Administrative Agent and the Lenders are promptly
notified of the creation or existence of any such Subsidiary.
SECTION 9.10 Other Agreements. Not, and not permit any of its
Subsidiaries to, enter into any agreement containing any provision which (a)
would be violated or breached by the performance of its obligations hereunder or
under any instrument or document delivered or to be delivered by it hereunder or
in connection herewith, (b) other than in connection with the issuance of the
Letters of Credit under the Master Letter of Credit Agreement, the Pari Passu
Credit Agreement, or the SIG Note Agreement, prohibits or restricts the creation
or assumption of any Lien (other than Permitted Liens) upon its properties,
revenues or assets (whether now owned or hereafter acquired) as security for the
Liabilities hereunder, (c) other than the SIG Note
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Agreement, prohibits or restricts the ability of any of its Subsidiaries to make
dividends or advances or payments to the Borrower, (d) other than the Master
Letter of Credit Agreement or the Pari Passu Credit Agreement, prohibits or
restricts the ability of the Borrower or any of its Subsidiaries to amend or
otherwise modify this Agreement or any other document executed in connection
herewith, or (e) other than the SIG Note Agreement, constitutes an agreement to
a limitation or restriction of the type described in clauses (a) through (d)
with respect to any other Indebtedness.
SECTION 9.11 Business Activities. Not, and not permit any of its
Subsidiaries to, (a) engage in any type of business except (i) the businesses in
which the Borrower and its Subsidiaries are engaged as of the date hereof, (ii)
insurance and insurance-related businesses and insurance services of all types,
(iii) investment management services for Persons other than the Borrower and its
Subsidiaries and (iv) the acquisition or origination of financial assets,
including but not limited to mortgage, automobile and other consumer finance
loans, and the origination of securitizations based on such financial assets.
SECTION 9.12 Change of Location or Name. Not, and not permit any of
its Subsidiaries to, change (a) the location of its principal place of business,
chief executive office, major executive office, chief place of business or
records concerning its business and financial affairs, or (b) its name or the
name under or by which it conducts its business, in each case without first
giving the Administrative Agent at least thirty (30) days' advance written
notice thereof (which notice shall promptly be delivered to the Lenders by the
Administrative Agent) and having taken any and all action required or desirable
to maintain and preserve the Lien on Collateral in favor of the Collateral Agent
for the benefit of the Lenders as contemplated hereby free and clear of any
other Lien whatsoever except for Permitted Liens; provided, however, that
notwithstanding the foregoing, neither the Borrower nor any of its Subsidiaries
shall change the location of its principal place of business, chief executive
office, major executive office, chief place of business or records concerning
its business and financial affairs to any place outside the contiguous
continental United States of America.
SECTION 9.13 Transactions with Affiliates. Not, and not permit any of
its Subsidiaries to, enter into, or cause, suffer or permit to exist any
arrangement, Reinsurance Agreement, Surplus Relief Reinsurance Agreement,
contract with or investment in any of its other Affiliates which is not a
directly or indirectly wholly-owned Subsidiary of the Borrower unless such
arrangement (a) is fair and equitable to the Borrower or such Subsidiary, (b) is
of a sort which would be entered into by a prudent Person in the position of the
Borrower or such Subsidiary with a Person which is not one of its Affiliates,
and (c) is on terms which are not less favorable to the Borrower or such
Subsidiary than are obtainable from a Person which is not one of its Affiliates.
SECTION 9.14 Books of Business. Not, and not permit any of the
Reliance Standard Insurance Companies, Safety National or any Acquired Person
to, purchase books of insurance business with a purchase price which, when
aggregated with the purchase price for all other books of business and for
assets and capital stock purchases pursuant to Section 9.2(b), taken in the
aggregate from and after December 5, 1996, exceeds thirty percent (30%) of the
Consolidated Equity of the Borrower, determined as provided in Section 9.2(b).
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SECTION 9.15 Ownership of RSL, SIG Holdings and Safety National. (a)
Not permit RSL-Texas to cease to own, free and clear of all Liens (other than
Liens created under the Borrower Pledge Agreement and the Pari Passu Pledge
Agreements), at least 100% of the outstanding shares of voting stock and voting
power of RSL on a fully diluted basis, except as a result of any merger,
consolidation, liquidation or dissolution referenced in clause (a) of the
definition of Change of Control, whereafter this clause (a) shall apply to the
Borrower rather than to RSL-Texas; (b) not cease to own, free and clear of all
Liens (other than Liens created under the Borrower Pledge Agreement and the Pari
Passu Pledge Agreement), at least 100% of the outstanding voting stock and
voting power of SIG Holdings and (c) not permit SIG Holdings to cease to own,
free and clear of all Liens (other than Liens created by the SIG Notes Pledge
Agreement, the SIG Holdings Pledge Agreement and the Pari Passu SIG Holdings
Pledge Agreement), at least 100% of the outstanding shares of voting stock and
voting power of Safety National on a fully diluted basis.
SECTION 10. FINANCIAL COVENANTS
The Borrower agrees that, on and after the Effective Date and for so
long thereafter as any Lender has any Commitment hereunder or any of the
Liabilities remain unpaid or outstanding, it will:
SECTION 10.1 Minimum Surplus. Not permit Capital and Surplus plus
IMR/AVR of RSL to be less than $190,000,000 at any time and not permit Capital
and Surplus of Safety National to be less than $155,000,000 at any time.
SECTION 10.2 Consolidated Equity of the Borrower. Not permit
Consolidated Equity of the Borrower at any time to be less than $550,000,000
plus 50% of the consolidated Net Income of the Borrower and its Subsidiaries for
the period beginning on January 1, 2000 and ending on the applicable date of
calculation. This calculation shall be made as of the end of each Fiscal Quarter
for the Fiscal Quarter then ended.
SECTION 10.3 Debt to Capital. Not permit the Debt to Capital Ratio to
exceed 0.40:1 at any time during any Fiscal Year. This ratio shall be measured
as of the end of each Fiscal Quarter for the Fiscal Quarter then ended.
SECTION 10.4 Risk-Based Capital. Not permit the Risk-Based Capital of
RSL to fall below 180% and not permit the Risk-Based Capital of Safety National
to fall below 150%. This ratio shall be measured as of the end of each Fiscal
Year for the Fiscal Year then ended.
SECTION 10.5 Cash Coverage Ratio. Not permit the Cash Coverage Ratio
of the Borrower to be less than 3.0 to 1 as of the end of any Fiscal Quarter.
SECTION 11. CONDITIONS
The effectiveness of this Agreement and the obligation of each of the
Lenders to make its Loans as provided for hereunder is subject to the
performance by the Borrower of all of its obligations under this Agreement and
to the satisfaction of the following conditions precedent:
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SECTION 11.1 Effectiveness of Agreement; Initial Borrowing. In the
case of the effectiveness of this Agreement and the initial Borrowing hereunder,
the Administrative Agent shall have received on or before the Effective Date all
of the following, each, except to the extent otherwise specified below, duly
executed by a Responsible Officer of the Borrower, dated the Effective Date (or
such earlier date as shall be satisfactory to the Administrative Agent and each
of the Lenders), in form and substance satisfactory to the Administrative Agent,
and each in sufficient number of signed counterparts to provide one for each
Lender (except that with respect to the Notes, if any, to be delivered pursuant
to Section 11.1.2 below, the Borrower shall be required to deliver one original
Note to each of the respective Lenders):
11.1.1 An executed copy of this Agreement;
11.1.2 If requested by a Lender, an appropriately
completed Note executed by a Responsible Officer of the Borrower
payable to the order of such Lender in the amount set forth opposite
such Lender's name on Schedule 2.1;
11.1.3 Favorable opinions of Xxxx Xxxxxxx, counsel to the
Borrower, SIG Holdings and each of the Reliance Standard Insurance
Companies, and Xxxxxxx Xxxx, general counsel of Safety National,
substantially in the form of Exhibits E-1 and E-2, respectively, in
each case, addressing such other legal matters as the Administrative
Agent may require;
11.1.4 An executed Borrower Pledge Agreement;
11.1.5 An executed SIG Holdings Pledge Agreement;
11.1.6 An executed Collateral Sharing Agreement;
11.1.7 An officer's certificate of the Borrower
substantially in the form of Exhibit F and dated as of the date
hereof, signed by the president or a vice-president of the Borrower
and attested to by the secretary or assistant secretary of the
Borrower and SIG Holdings, together with certified copies of the
Borrower's, the Reliance Standard Insurance Companies', SIG Holdings
and Safety National's certificate or articles of incorporation,
by-laws and, as to the Borrower and SIG Holdings, incumbency and
resolutions;
11.1.8 Evidence of the good standing of the Borrower and
each of its Subsidiaries in the jurisdiction in which such Person is
incorporated or domiciled;
11.1.9 Evidence that the Borrower shall have paid to the
Administrative Agent and the Arranger the fees and expenses provided
for herein (including, without limitation, the legal fees and
expenses of XxXxxxxxx, Will & Xxxxx);
11.1.10 Evidence satisfactory to the Administrative Agent
and the Collateral Agent that each of the Related Documents have been
executed and delivered and are in full force and effect without
amendment or modification
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except for amendments or modifications acceptable to the
Administrative Agent and the Collateral Agent;
11.1.11 Certified copies of each material consent, license
and approval required in connection with the execution, delivery,
performance, validity and enforceability of this Agreement and the
Related Documents;
11.1.12 Certificate of a Responsible Officer of the
Borrower that there are no material insurance regulatory proceedings
pending or threatened against any of the Reliance Standard Insurance
Companies, SIG Holdings or Safety National;
11.1.13 A certificate of a Responsible Officer of the
Borrower, dated the Effective Date, as to the matters set forth in
Sections 11.3.2 through 11.3.5;
11.1.14 An officer's certificate, signed by a Responsible
Officer of the Borrower, certifying that since December 31, 1999, no
event has occurred which individually or in the aggregate could have
a Material Adverse Effect;
11.1.15 A certified list of the Responsible Officers and
directors of the Borrower;
11.1.16 A certified calculation of the Debt to Capital
Ratio calculated based on Consolidated Funded Debt and Consolidated
Equity of the Borrower as of the end of the Fiscal Quarter
immediately preceding the Effective Date; and
11.1.17 Such other information and documents as may
reasonably be required or requested by the Administrative Agent and
the Administrative Agent's counsel.
SECTION 11.2 Acquisition Loans. In addition to the satisfaction of
the conditions precedent in Section 11.1, the obligation of the Lenders to make
Loans to consummate any Acquisition permitted by this Agreement is subject to
the following further conditions precedent:
11.2.1 The Borrower shall have delivered to the
Administrative Agent, the Collateral Agent and the Lenders in form
and detail satisfactory to the Administrative Agent, the Collateral
Agent and the Required Lenders,
(a) at least twenty (20) days prior to any requested
Borrowing, a duly executed preliminary financing request,
substantially in the form of Exhibit J, outlining the aggregate
principal amount of any requested Borrowing which the Borrower will
request to facilitate or consummate such Acquisition; and
(b) duly executed pledge agreements, security agreements,
mortgages, hypothecation agreements, amendments, financing statements
and other documents as the Collateral Agent and the Required Lenders
shall deem necessary or appropriate whereby the Borrower or the
applicable Subsidiary shall
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grant to the Collateral Agent, for the benefit of the Lenders,
subject to the terms of the Collateral Sharing Agreement, a first
priority lien on, and security interest in, (i) with respect to any
Acquisition by the Borrower or any of its Subsidiaries (other than
any Subsidiary which is an insurance company) of the type referenced
in clause (b) of the definition of Acquisition, the capital stock or
partnership or membership interests of such Acquired Person and (ii)
with respect to any Acquisition by the Borrower or any of its
Subsidiaries (other than any Subsidiary which is an insurance
company) of the type referenced in clause (a) of the definition of
Acquisition, the assets of such Acquired Person, in each case as the
Collateral Agent and the Required Lenders shall request;
11.2.2 The Borrower shall have delivered to the
Administrative Agent, the Collateral Agent and the Lenders certified
copies of any acquisition agreements, letters of intent, asset
purchase agreements, stock purchase agreements or other related
documentation or instruments proposed to be executed and delivered in
connection therewith as the Administrative Agent, the Collateral
Agent or the Required Lenders shall request;
11.2.3 The Borrower shall have delivered to the
Administrative Agent, the Collateral Agent and the Lenders such other
information and documents as may reasonably be required or requested
by the Administrative Agent, the Collateral Agent, the Required
Lenders and the Administrative Agent's or the Collateral Agent's
counsel.
SECTION 11.3 All Loans. In addition to the satisfaction of the
conditions precedent in Section 11.1, the obligation of each Lender to make each
Loan is subject to the following further conditions precedent:
11.3.1 The Administrative Agent shall have received an
appropriately completed Notice of Borrowing duly executed by the
president or chief financial officer of the Borrower.
11.3.2 No Default exists or will result from the making of
such Loan.
11.3.3 The representations and warranties of the Borrower
contained in Section 7 and in the Related Documents, as updated from
time to time in a manner reasonably acceptable to the Required
Lenders, are true and correct in all material respects with the same
effect as though made (in such updated form) on the Effective Date.
11.3.4 No Material Litigation exists except as disclosed
on Schedule 7.8, and since the Effective Date no Material Litigation
Development has occurred with respect to any Litigation so disclosed
on Schedule 7.8.
11.3.5 No Letter of Credit shall be drawn and unreimbursed
under the Master Letter of Credit Agreement.
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11.3.6 No Default or Event of Default shall exist under
the Pari Passu Credit Agreement.
SECTION 12. EVENTS OF DEFAULT AND THEIR EFFECT
SECTION 12.1 Events of Default. An "Event of Default" shall exist if
any one or more of the following events (herein collectively called "Events of
Default") shall occur and be continuing:
12.1.1 Non-Payment of Loans, etc.
(a) Default in the payment or prepayment when due of any
principal of or interest on any Loan; or
(b) Default and continuance for five (5) days in the
payment when due of any other amount owing by the Borrower pursuant
to this Agreement or any Related Documents.
12.1.2 Non-Payment of Other Indebtedness. Default in the
payment when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any Indebtedness of the Borrower or any
of its Subsidiaries (other than Indebtedness in respect of this
Agreement) in an aggregate amount at any one time in excess of
$5,000,000 or default in the performance or observance of any
obligation or condition with respect to any such Indebtedness if the
effect of such default in performance or observance is to accelerate
the maturity of any such Indebtedness or to permit the holder or
holders thereof, or any trustee or agent for such holders, to cause
such Indebtedness to become due and payable prior to its expressed
maturity.
12.1.3 Bankruptcy, Insolvency, etc. The Borrower or any of
its Subsidiaries becomes insolvent or generally fails to pay, or
admits in writing its inability to pay, debts as they become due; or
the Borrower or any of its Subsidiaries applies for, consents to, or
acquiesces in the appointment of, a trustee, receiver or other
custodian for the Borrower or any of its Subsidiaries or any property
thereof, or makes a general assignment for the benefit of creditors;
or, in the absence of such application, consent or acquiescence, a
trustee, receiver or other custodian is appointed for the Borrower or
any of its Subsidiaries or for a substantial part of the property of
any thereof and is not discharged within thirty (30) days; or any
bankruptcy, reorganization, debt arrangement, or other case or
proceeding under any bankruptcy or insolvency law, or any dissolution
or liquidation proceeding (except the voluntary dissolution, not
under any bankruptcy or insolvency law, of a Subsidiary), is
commenced in respect of the Borrower or any of its Subsidiaries and
if such case or proceeding is not commenced by the Borrower or any of
its Subsidiaries, it is consented to or acquiesced in by the Borrower
or any of its Subsidiaries or remains for thirty
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(30) days undismissed; or the Borrower or any of its Subsidiaries
takes any corporate action to authorize, or in furtherance of, any of
the foregoing.
12.1.4 Defaults Under this Agreement. Failure by the
Borrower to comply with or perform any of the covenants or agreements
of the Borrower set forth in Sections 8.1.9, 9 (other than Sections
9.5, 9.7, 9.9 and 9.12 which shall be governed by Section 12.1.5) or
10.
12.1.5 Other Noncompliance with this Agreement. Failure by
the Borrower or any of its Subsidiaries to comply with or perform any
other provision of this Agreement or the Related Documents applicable
to it (other than those listed in Sections 12.1.1, 12.1.2, 12.1.4 or
those constituting an Event of Default under any of the other
provisions of this Section 12) and continuance of such failure for
thirty (30) days after notice thereof to the Borrower from the
Administrative Agent.
12.1.6 Representations and Warranties. Any representation
or warranty made by the Borrower, or any of its Subsidiaries herein
or in any of the Related Documents is false or misleading in any
material respect as of the date hereof or as of the date hereafter
certified, or any schedule, certificate, financial statement, report,
notice, or other writing furnished by the Borrower, or any of its
Subsidiaries to the Administrative Agent, the Collateral Agent or any
Lender is false or misleading in any material respect on the date as
of which the facts therein set forth are stated or certified.
12.1.7 Pension Plans. With respect to any Single Employer
Pension Plan there shall exist a deficiency of more than $10,000,000
in the plan assets available to satisfy the benefits guaranteeable
under ERISA with respect to such plan, and (a) such plan is
terminated or (b) the Borrower or any other member of its Controlled
Group withdraws from or institutes steps to withdraw from such plan
and such withdrawal is reasonably likely to result in liability to
the Borrower in excess of $10,000,000, or (c) a Reportable Event
shall occur with respect to such plan which constitutes reasonable
grounds for the termination of such plan by the Pension Benefit
Guaranty Corporation or any successor thereto and which is reasonably
likely to result in liability of the Borrower in excess of
$10,000,000.
12.1.8 Adverse Judgment. One or more final judgments or
decrees (other than judgments or decrees against any Subsidiary which
is an insurance company in the ordinary course of business) shall be
entered against the Borrower or any of its Subsidiaries involving, in
the aggregate, a liability (not covered by collectible insurance or
indemnification) of $10,000,000 or more and all such judgments or
decrees shall not have been vacated, satisfied, discharged or stayed
or bonded pending appeal within ten (10) consecutive days from the
entry thereof.
12.1.9 Related Documents. The Borrower or any of its
Subsidiaries shall fail to comply with any of the provisions of the
Related Documents applicable to
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it within any applicable grace period; or any of the Related
Documents shall fail to remain in full force and effect and such
failure shall continue for ten (10) days; or any action shall be
taken by the Borrower or any of its Subsidiaries to discontinue any
of the Related Documents or to assert the invalidity of any thereof.
12.1.10 Change in Control. The occurrence of a Change in
Control.
12.1.11 Default under Master Letter of Credit Agreement;
Pari Passu Credit Agreement. The occurrence of an Event of Default as
defined in the Master Letter of Credit Agreement or the Pari Passu
Credit Agreement.
SECTION 12.2 Effect of Event of Default. If any Event of Default
described in Section 12.1.3 shall occur and be continuing, the Commitments (if
they have not theretofore terminated) shall immediately and automatically
terminate and all Liabilities shall become immediately and automatically due and
payable, all without presentment, demand, protest or notice of any kind which
presentment, demand, protest and notice are hereby expressly waived; and, in the
case of any other Event of Default, the Administrative Agent may (or shall, upon
the written request of the Required Lenders) declare the Commitments (if they
have not theretofore terminated) to be terminated and all Liabilities to be due
and payable, whereupon the Commitments (if they have not theretofore terminated)
shall immediately terminate and all Liabilities shall become immediately due and
payable, all without presentment, demand, protest or notice of any kind (which
presentment, demand, protest or notice are hereby expressly waived). The
Administrative Agent shall promptly advise the Borrower and each Lender of any
such declaration, but failure to do so shall not impair the effect of such
declaration. Notwithstanding the foregoing or any provision of Section 15.1, the
effect as an Event of Default of any event described in Section 12.1.3 may only
be waived by the written concurrence of the Lenders holding 100% of the
aggregate unpaid principal amount of the Loans, and the effect as an Event of
Default of any other event described in this Section 12 may be waived as
provided in Section 15.1.
SECTION 13. THE ADMINISTRATIVE AGENT AND COLLATERAL AGENT
SECTION 13.1 Authorization and Action. Each Lender hereby appoints
and authorizes the Administrative Agent and the Collateral Agent (collectively,
the "Agents") to take such action as agent on its behalf and to exercise such
powers to the extent provided herein or in any document or instrument delivered
hereunder or in connection herewith, together with such other action as may be
reasonably incidental thereto. As to matters not expressly provided for by this
Agreement (including, without limitation, enforcement or collection of this
Agreement or any Related Documents) the Agents shall not be required to exercise
any discretion, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
instructions of the Required Lenders and such instructions shall be binding upon
all Lenders. Under no circumstances shall the Agents be required to take any
action which exposes such Agent to personal liability or which is contrary to
this Agreement or to the Related Documents or applicable law.
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SECTION 13.2 Liability of the Agents. No Agent-Related Person shall
be liable for any action taken or omitted to be taken by it or them under or in
connection with this Agreement and the Related Documents, except for its or
their own gross negligence or willful misconduct. Without limiting the
generality of the foregoing, the Agents (a) may treat any Lender as such until
such Agent receives an executed Assignment Agreement entered into between a
Lender and an Eligible Assignee pursuant to Section 14.1; (b) may consult with
legal counsel (including counsel for the Borrower), independent public
accountants and other experts or consultants selected by it; (c) shall not be
liable for any action taken or omitted to be taken in good faith by such Agent
in accordance with the advice of counsel, accountants, consultants or experts;
(d) makes no warranty or representation to any Lender and shall not be
responsible to any Lender for any recitals, statements, warranties or
representations, whether written or oral, made in or in connection with this
Agreement or the Related Documents; (e) shall not have any duty to ascertain or
to inquire as to the performance or observance of any of the terms, obligations,
covenants or conditions of this Agreement on the part of the Borrower or to
inspect the property (including, without limitation, any books and records) of
the Borrower; (f) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement, any Related Document, any Collateral or other support or security, or
any other document furnished in connection with any of the foregoing; and (g)
shall incur no liability under or in respect of this Agreement or any Related
Document by action upon any written notice, statement, certificate, order,
telephone message, facsimile or other document which such Agent believes in good
faith to be genuine and correct and to have been signed, sent or made by the
proper Person.
SECTION 13.3 Bank of America and Affiliates. With respect to the
Loans made by it, Bank of America shall have the same rights and powers under
this Agreement and the Related Documents as any other Lender and may exercise
the same as though it were not the Administrative Agent or the Collateral Agent;
and the term "Lender" or "Lenders" shall, unless otherwise expressly indicated,
include Bank of America in its individual capacity. Bank of America and its
Affiliates may accept deposits from, lend money to, act as trustee under
indentures of, and generally engage in any kind of business with, the Borrower
and any of its Subsidiaries and any Person who may do business with or own
securities of the Borrower or any of its Subsidiaries, all as if Bank of America
were not the Administrative Agent or the Collateral Agent and without any duty
to account therefor to the Lenders. The Lenders hereby acknowledge that Bank of
America also serves as administrative agent and collateral agent for the lenders
under the Pari Passu Credit Agreement, and serves as administrative agent for
the lenders under the Master Letter of Credit Agreement.
SECTION 13.4 Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon the Agents or any other Lender and
based on the financial statements referred to in Section 7.6 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Agents 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 this Agreement.
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SECTION 13.5 Indemnification. Whether or not the transactions
contemplated hereby are consummated, the Lenders agree to indemnify each
Agent-Related Person (to the extent not reimbursed by the Borrower), ratably
according to their Percentages, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or assessed against any such Agent-Related Person in any way
relating to or arising out of this Agreement or the Related Documents, or any
action taken or omitted by any Agent-Related Person under this Agreement or the
Related Documents; provided, that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from such Agent-Related
Person's gross negligence or willful misconduct. Without limiting any of the
foregoing, each Lender agrees to reimburse each Agent-Related Person promptly
upon demand for its Percentage of any expenses (including reasonable counsel
fees) incurred by such Agent-Related Person in connection with the preparation,
execution, delivery, administration, modification, amendment, waiver or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under this Agreement or
the Related Documents to the extent that such Agent-Related Person is not
reimbursed for such expenses by the Borrower. All obligations provided for in
this Section 13.5 shall survive termination of this Agreement.
SECTION 13.6 Successor Agents. Either Agent may resign at any time
and either Agent may be removed at any time with cause by the Required Lenders
upon thirty (30) days prior written notice thereof to the Administrative Agent
or the Collateral Agent, as applicable. Upon any such resignation or removal,
the Required Lenders shall have the right to appoint a successor agent. If no
successor agent shall have been so appointed by the Required Lenders, and shall
have accepted such appointment within thirty (30) days after the retiring
agent's giving of notice of resignation or the Required Lenders' removal of the
retiring agent, then the retiring agent may, on behalf of the Lenders, appoint a
successor agent which shall be a commercial bank having a combined capital and
surplus of at least $250,000,000. Upon the acceptance of any appointment as
agent hereunder by a successor agent, such successor agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring agent, and the retiring agent shall be discharged from its
duties and obligations in its capacity as agent under this Agreement. After any
retiring agent's resignation or removal hereunder as agent, the provisions of
this Section 13 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was an Agent under this Agreement.
SECTION 13.7 Collateral Matters. (a) The Collateral Agent is
authorized on behalf of all the Lenders, without the necessity of any notice to
or further consent from the Lenders, from time to time to take any action with
respect to any Collateral or the Related Documents which may be necessary to
perfect and maintain perfected the security interest in and Liens upon the
Collateral granted pursuant to the Related Documents.
(b) The Lenders irrevocably authorize the Collateral Agent, at
its option and in its discretion, to release any Lien granted to or held by the
Collateral Agent upon any Collateral (i) upon termination of the Commitments and
payment in full of all Loans and all other Liabilities known to the Collateral
Agent and payable under this Agreement or any Related Document; (ii)
constituting property sold or to be sold or disposed of as part of or in
connection
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with any disposition permitted hereunder; (iii) constituting property in which
the Borrower or any of its Subsidiaries owned no interest at the time such Lien
was granted or at any time thereafter; (iv) constituting property leased to the
Borrower or any of its Subsidiaries under a lease which has expired or been
terminated in a transaction permitted under this Agreement or is about to expire
and which has not been, and is not intended by the Borrower or such Subsidiary
to be, renewed or extended; (v) consisting of an instrument evidencing
Indebtedness or other debt instrument, if the indebtedness evidenced thereby has
been paid in full; or (vi) if approved, authorized or ratified in writing by the
Required Lenders or all the Lenders, as the case may be, as provided in Section
15.1. Upon request by the Collateral Agent at any time, the Lenders will confirm
in writing the Collateral Agent's authority to release particular types or items
of Collateral pursuant to this Section 13.7.
(c) Each Lender agrees with and in favor of each other (which
agreement shall not be for the benefit of the Borrower or any of its
Subsidiaries) that the Borrower's obligation to such Lender under this Agreement
and the Related Documents is not and shall not be secured by any real property
collateral now or hereafter acquired by such Lender.
SECTION 13.8 Co-Agents. None of the Lenders identified on the facing
page or signature pages of this Agreement as a "co-agent" shall have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than those applicable to all Lenders as such. Without limiting the foregoing,
none of the Lenders so identified as a "co-agent" shall have or be deemed to
have any fiduciary relationship with any Lender. Each Lender acknowledges that
it has not relied, and will not rely, on any of the Lenders so identified in
deciding to enter into this Agreement or in taking or not taking action
hereunder.
SECTION 14. ASSIGNMENTS AND PARTICIPATIONS
SECTION 14.1 Assignments.
(a) Each Lender shall have the right at any time to
assign, with the consent of the Administrative Agent and the Borrower
(which consent will not unreasonably be withheld), to any Eligible
Assignee, all or any part of such Lender's rights and obligations
under this Agreement and the Related Documents including its rights
in respect of its Loan and its Note. Any such assignment shall be
pursuant to an assignment agreement, substantially in the form of
Exhibit G (an "Assignment Agreement"), duly executed by such Lender
and the Eligible Assignee, and acknowledged by the Administrative
Agent. Although its failure to do so will not affect any of the
rights or obligations provided for therein or herein, the Borrower
agrees, if it has consented to an assignment hereunder, to duly
acknowledge any Assignment Agreement executed by any assigning Lender
promptly after its receipt of the same.
(b) Each assignment may be made on a pro rata or non-pro
rata basis, at the option of the assigning Lender, with respect to
all rights and obligations of the assigning Lender including the
Loans and its Note. Each assignment shall be in an amount equal to or
in excess of $5,000,000 (except for assignments of the
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entire unpaid balance, if less than $5,000,000, of the Loans of a
Lender or to another Lender). In the case of any such assignment,
upon the fulfillment of the conditions in Section 14.1(c), this
Agreement shall be deemed to be amended to the extent, and only to
the extent, necessary to reflect the addition of such Eligible
Assignee, and such Eligible Assignee shall for all purposes be a
Lender party hereto and shall have, to the extent of such assignment,
the same rights and obligations as a Lender hereunder.
(c) An assignment shall become effective hereunder when
all of the following shall have occurred:
(i) the Assignment Agreement shall have been
executed by the parties thereto,
(ii) the Assignment Agreement shall have been
acknowledged by the Administrative Agent and consented to
by the Borrower (which consent shall not be unreasonably
withheld),
(iii) the assigning Lender shall pay a
processing fee of $3,000 to the Administrative Agent for
its own account; provided that the Eligible Assignee shall
be solely responsible for such processing fee with respect
to any assignment pursuant to Section 5.9, and
(iv) the assigning Lender and the
Administrative Agent shall have agreed upon a date upon
which such assignment shall become effective. Upon such
assignment becoming effective, the Administrative Agent
shall forward all payments of interest, principal, fees
and other amounts that would have been made to the
assigning Lender, in proportion to the percentage of the
assigning Lender's rights transferred, to the Eligible
Assignee.
(d) Upon the effectiveness of any assignment, the
assigning Lender shall be relieved from its obligations hereunder to
the extent of the obligations so assigned (except to the extent, if
any, that the Borrower, any other Lender or the Administrative Agent
have rights against such assigning Lender as a result of any default
by such Lender under this Agreement). Promptly following the
effectiveness of each assignment, the Administrative Agent shall
furnish to the Borrower and each Lender a revised Schedule 2.1,
revised to reflect such assignment. Notwithstanding anything
contained in this Agreement to the contrary, any Lender may at any
time assign all or any portion of its rights under this Agreement and
the Notes issued to it to a Federal Reserve Bank; provided, that no
such assignment shall release a Lender from any of its obligations
hereunder.
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SECTION 14.2 Participations.
(a) Each Lender may grant participations in all or any
part of its Commitment, its Loans and its Note to any commercial bank
or other financial institution. A participant shall not have any
rights under this Agreement or any other document delivered in
connection herewith (the participant's rights against such Lender in
respect of such participation to be those set forth in the agreement
executed by such Lender in favor of the participant relating thereto,
which agreement with respect to such participation shall not restrict
such Lender's ability to make any modification, amendment or waiver
to this Agreement without the consent of the participant except that
the consent of such participant may be required in connection with
matters requiring the consent of all of the Lenders under Section
15.1). Notwithstanding the foregoing, each participant shall have the
rights of a Lender pursuant to Section 4.6 and 5; provided that with
respect to Section 5, the Borrower's liability shall be no greater
than if such Lender had not participated its Commitment and Loans to
such participant hereunder. All amounts payable by the Borrower under
this Agreement shall be determined as if the Lender had not sold such
participation. In the event of any such sale by a Lender of
participating interests to a participant, such Lender's obligations
under this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall
remain the holder of any obligation for all purposes under this
Agreement, and the Borrower, the Administrative Agent and the
Collateral Agent shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under
this Agreement.
(b) Limitation of Rights of any Participant.
Notwithstanding anything in the foregoing to the contrary,
(i) no participant shall have any direct rights
hereunder,
(ii) the Borrower, the Administrative Agent,
the Collateral Agent and the Lenders, other than the
selling Lender, shall deal solely with the selling Lender
and shall not be obligated to extend any rights or make
any payment to, or seek any consent of, the participant,
(iii) no participation shall relieve the
selling Lender of any of its other obligations hereunder
and such Lender shall remain solely responsible for the
performance thereof, and
(iv) except as agreed by the Lender and its
participant to the extent permitted under Section 14.2(a),
no participant, other than an affiliate of the selling
Lender, shall be entitled to require such Lender to take
or omit to take any action hereunder, except that such
Lender may agree with such participant that such Lender
will not, without participant's consent, take any action
which would,
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affect any principal, interest or fee in which the
participant has an ownership or beneficial interest.
SECTION 14.3 Disclosure of Information. The Borrower authorizes each
Lender to disclose to any participant, assignee or Eligible 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 which has been delivered to such Lender by the Borrower in
connection with such Lender's credit evaluation of the Borrower prior to
entering into this Agreement or which has been delivered to such Lender by the
Borrower pursuant to this Agreement; provided, that such information is public
information at the time of disclosure or such Lender has obtained a
confidentiality letter from such Transferee, substantially in the form of
Exhibit K, prior to such disclosure (except that, in connection with disclosure
to a Transferee or prospective Transferee that is an insurance company or an
Affiliate of an insurance company, such Lender shall obtain the prior written
consent of the Borrower). Each Lender by executing this Agreement agrees to be
bound by the confidentiality provision set forth in Exhibit K to the same extent
required of a Transferee therein and such provisions shall be deemed to be
incorporated herein by reference thereto.
SECTION 14.4 Foreign Transferees. If, pursuant to this Section 14,
any interest in this Agreement or any Loan or a Note is transferred to any
Transferee which is organized under the laws of any jurisdiction other than the
United States or any state thereof, the transferor Lender shall cause such
Transferee (other than any participant), and may cause any participant,
concurrently with the effectiveness of such transfer,
(a) to represent to the transferor Lender (for the benefit
of the transferor Lender, the Administrative Agent and the Borrower)
that under applicable law and treaties no Taxes will be required to
be withheld by the Administrative Agent,
(b) to represent to the Borrower or the transferor Lender
that under applicable law and treaties no Taxes will be required to
be withheld with respect to any payments to be made to such
Transferee in respect of the Loans or a Note,
(c) to furnish to the transferor Lender, the
Administrative Agent, the Collateral Agent and the Borrower either
U.S. Internal Revenue Service Form W-8BEN or any successor thereto or
U.S. Internal Revenue Service Form W-8ECI or any successor thereto
(wherein such transfer claims entitlement to complete exemption from
U.S. federal withholding tax on all interest payments hereunder), and
(d) to agree (for the benefit of the transferor Lender,
the Administrative Agent, the Collateral Agent and the Borrower) to
provide the transferor Lender, the Administrative Agent and the
Borrower a new Form W-8BEN or any successor thereto or Form W-8ECI or
any successor thereto upon the obsolescence of any previously
delivered form and comparable statements in accordance with
applicable U.S. laws and regulations and amendments duly executed and
completed by such Transferee, and to comply from time to time
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with all applicable U.S. laws and regulations with regard to such
withholding tax exemption.
SECTION 15. MISCELLANEOUS
SECTION 15.1 Waivers and Amendments. The provisions of this Agreement
and of each Related Document may from time to time be amended, modified or
waived, if such amendment, modification or waiver is in writing and consented to
by the Borrower and the Required Lenders; provided that no such amendment,
modification or waiver:
(a) which would modify any requirement hereunder that any
particular action be taken by all Lenders or by the Required Lenders,
shall be effective without the consent of each Lender;
(b) which would modify this Section 15.1, change the
definition of "Required Lenders," change any Percentage for any
Lender (except pursuant to an Assignment Agreement), reduce any fees
or any other amount payable to any Lender, extend the Termination
Date, or subject any Lender to any additional obligations, shall be
effective without the consent of each Lender;
(c) which would permit the release of all or substantially
all of the Collateral, shall be effective without the consent of each
Lender;
(d) which would extend the due date for, or reduce the
amount of, any payment or prepayment (including, without limitation,
any prepayment required pursuant to Section 4.3) of principal of or
interest on any Loan, or fee shall be effective without the consent
of each Lender; provided that any Lender may waive any fees payable
to such Lender hereunder without the consent of any other Lender; or
(e) which would affect adversely the interests, rights or
obligations or the Administrative Agent or the Collateral Agent (each
in such capacity), shall be effective without consent of the
Administrative Agent or the Collateral Agent, respectively.
SECTION 15.2 Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including bank wire, telex,
facsimile or similar writing) and shall be given to such party at its address,
facsimile or telex number set forth on the signature pages hereof or such other
address, facsimile or telex number as such party may hereafter specify for such
purpose by written notice to the Administrative Agent and the Borrower. Each
such notice, request or other communication shall be effective (a) if given by
facsimile or telex, when such facsimile or telex is transmitted to the telex
number specified in this Section and the appropriate answerback is received, (b)
if given by mail, seventy-two (72) hours after such communication is deposited
in the mails with first class postage prepaid, addressed as aforesaid or (c) if
given by any other means, when delivered at the address specified in this
Section, provided that notices to
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the Administrative Agent under Sections 3, 4 and 13 shall not be effective until
received by the Administrative Agent.
SECTION 15.3 Regulation U. Each Lender represents that it in good
faith is not relying, either directly or indirectly, upon any margin stock (as
such term is defined in Regulation U promulgated by the Board of Governors of
the Federal Reserve System) as collateral security for the extension or
maintenance by it of any credit provided for in this Agreement.
SECTION 15.4 Payment of Costs and Expenses. The Borrower agrees to
pay on demand all expenses of the Administrative Agent, the Collateral Agent
and, with respect to clause (d) below after the occurrence of an Event of
Default, the Lenders (including the reasonable fees and out-of-pocket expenses
of counsel for the Administrative Agent, the Collateral Agent and the Lenders
and of local counsel, if any, who may be retained by such counsel) in connection
with
(a) the negotiation, preparation, execution and delivery
of this Agreement and of each Related Document, including schedules
and exhibits, and any amendments, waivers, consents, supplements or
other modifications to this Agreement or any Related Document as may
from time to time hereafter be required, whether or not the
transactions contemplated hereby or thereby are consummated, and
(b) the filing, recording, refiling or rerecording of any
of the Related Documents (including the Pledge Agreements) and/or any
Uniform Commercial Code financing statements relating thereto and all
amendments, supplements and modifications to any thereof and any and
all other documents or instruments of further assurance required to
be filed or recorded or refiled or rerecorded by the terms hereof or
of the Related Documents, and
(c) the preparation and/or review of the form of any
document or instrument relevant to this Agreement or any Related
Document, and
(d) the negotiation of any restructuring or "work-out",
whether or not consummated, of any Liabilities.
The Borrower further agrees to pay, and to save the Co-Agents, the
Administrative Agent, the Collateral Agent and the Lenders harmless from all
liability for, any stamp or other Taxes which may be payable in connection with
the execution or delivery of this Agreement, the Borrowings hereunder, or the
issuance of the Notes or any other Related Documents. The Borrower also agrees
to reimburse the Co-Agents, the Administrative Agent, the Collateral Agent and
each Lender upon demand for all reasonable expenses (including reasonable
attorneys' fees and legal expenses) incurred by the Administrative Agent, the
Collateral Agent or such Lender in connection with the enforcement of any
Liabilities and the consideration of legal issues relevant thereto. All
obligations of the Borrower provided for in this Section 15.4 shall survive
termination of this Agreement.
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SECTION 15.5 Indemnity. Whether or not the transactions contemplated
hereby are consummated, the Borrower agrees to indemnify the Administrative
Agent the Collateral Agent, each Lender and each of their respective directors,
officers, employees, persons controlling or controlled by any of them or their
respective agents, consultants, attorneys and advisors (the "Indemnified
Parties") and hold each Indemnified Party harmless from and against any and all
liabilities, losses, claims, damages, costs and expenses of any kind to which
any of the Indemnified Parties may become subject, whether directly or
indirectly (including, without limitation, the reasonable fees and disbursements
of counsel for any Indemnified Party), relating to or arising out of this
Agreement, the Related Documents or any actual or proposed use of the proceeds
of the Loans hereunder; provided, that no Indemnified Party shall have the right
to be indemnified hereunder for its own gross negligence or willful misconduct
as determined by a court of competent jurisdiction. All obligations of the
Borrower provided for in this Section 15.5 shall survive termination of this
Agreement.
SECTION 15.6 Subsidiary References. The provisions of this Agreement
relating to Subsidiaries shall apply only during such times as the Borrower has
one or more Subsidiaries.
SECTION 15.7 Captions. Section captions used in this Agreement are
for convenience only, and shall not affect the construction of this Agreement.
SECTION 15.8 GOVERNING LAW. THIS AGREEMENT AND THE NOTES SHALL BE A
CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS, WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES. ALL OBLIGATIONS OF THE BORROWER AND
RIGHTS OF THE CO-AGENTS, THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT AND THE
LENDERS IN RESPECT OF THE LIABILITIES EXPRESSED HEREIN OR IN THE RELATED
DOCUMENTS SHALL BE IN ADDITION TO AND NOT IN LIMITATION OF THOSE PROVIDED BY
APPLICABLE LAW.
SECTION 15.9 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties on separate counterparts and
each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same agreement. When
counterparts executed by all the parties shall have been lodged with the
Administrative Agent (or, in the case of any Lender as to which an executed
counterpart shall not have been so lodged, the Administrative Agent shall have
received telegraphic, facsimile, telex or other written confirmation from such
Lender of execution of a counterpart hereof by such Lender), this Agreement
shall become effective as of the Effective Date, and at such time the
Administrative Agent shall notify the Borrower and each Lender.
SECTION 15.10 SUBMISSION TO JURISDICTION; WAIVER OF VENUE. THE
BORROWER, ON BEHALF OF ITSELF AND EACH SUBSIDIARY, (A) HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF ANY ILLINOIS STATE OR FEDERAL COURT SITTING IN
CHICAGO, ILLINOIS OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE RELATED DOCUMENTS, AND THE BORROWER HEREBY IRREVOCABLY
AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE
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HEARD AND DETERMINED IN SUCH ILLINOIS STATE OR FEDERAL COURT, AND (B) AGREES NOT
TO INSTITUTE ANY LEGAL ACTION OR PROCEEDING AGAINST THE CO-AGENTS, THE
ADMINISTRATIVE AGENT, THE COLLATERAL AGENT OR ANY LENDER OR THE DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS OR PROPERTY OF ANY THEREOF, ARISING OUT OF OR
RELATING TO THIS AGREEMENT, IN ANY COURT OTHER THAN AS HEREINABOVE SPECIFIED IN
THIS SECTION 15.10. THE BORROWER, ON BEHALF OF ITSELF AND EACH SUBSIDIARY,
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN ANY ACTION OR PROCEEDING
(WHETHER BROUGHT BY THE BORROWER, ANY SUBSIDIARY, THE CO-AGENTS, THE
ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, ANY LENDER, OR OTHERWISE) IN ANY
COURT HEREINABOVE SPECIFIED IN THIS SECTION 15.10 AS WELL AS ANY RIGHT IT MAY
NOW OR HEREAFTER HAVE TO REMOVE ANY SUCH ACTION OR PROCEEDING, ONCE COMMENCED,
TO ANOTHER COURT ON THE GROUNDS OF FORUM NON CONVENIENS OR OTHERWISE. THE
BORROWER ON BEHALF OF ITSELF AND EACH SUBSIDIARY AGREES THAT A FINAL JUDGMENT IN
ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
SECTION 15.11 Service of Process. The Borrower on behalf of itself
and each Subsidiary has appointed CT Corporation System (the "Process Agent"),
with an office on the date hereof at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx
00000, Xxxxxx Xxxxxx, as its agent to receive on behalf of the Borrower and its
Subsidiaries and its property service of copies of the summons and complaint and
any other process which may be served in any such action or proceeding, provided
that a copy of such process is also mailed by registered or certified mail,
postage prepaid, to the Borrower at its address specified pursuant to Section
15.2. Such service may be made by mailing or delivering a copy of such process
to the Borrower in care of the Process Agent at the Process Agent's above
address, and the Borrower hereby irrevocably authorizes and directs the Process
Agent to accept such service on its behalf. The Borrower agrees to indemnify
such Process Agent in connection with all matters relating to its appointment as
agent of the Borrower for such purposes, to enter into any agreement relating to
such appointment which such Process Agent may customarily require, and to pay
such Process Agent's customary fees upon demand. As an alternative method of
service, the Borrower for itself and its Subsidiaries also irrevocably consents
to the service of any and all process in any such action or proceeding by the
mailing of copies of such process to the Borrower at its address specified
pursuant to Section 15.2. Nothing in this Section 15.11 shall affect the right
of the Administrative Agent or any Lender to serve legal process in any other
manner permitted by law or affect the right of the Administrative Agent or any
Lender to bring any action or proceeding against the Borrower or its properties
in the courts of any other jurisdictions.
SECTION 15.12 Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that:
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(a) the Borrower may not assign or transfer its rights or
obligations hereunder without the prior written consent of the
Administrative Agent, the Collateral Agent and all the Lenders; and
(b) the rights of the Lenders to make assignments or grant
participations are subject to the provisions of Section 14.
SECTION 15.13 WAIVER OF JURY TRIAL. THE BORROWER, THE CO-AGENTS, THE
ADMINISTRATIVE AGENT, THE COLLATERAL AGENT AND EACH LENDER HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT, ANY
RELATED DOCUMENT OR UNDER ANY OTHER DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY
IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH, OR ARISING FROM
ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREE
THAT ANY SUCH ACTION, PROCEEDING OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT
AND NOT BEFORE A JURY; THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
ADMINISTRATIVE AGENT, THE COLLATERAL AGENT AND THE LENDERS ENTERING INTO THIS
AGREEMENT.
* * *
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Delivered at Chicago, Illinois, as of the day and year first above
written.
DELPHI FINANCIAL GROUP, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
----------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
-------------------------------
Title: Executive Vice President
-------------------------------
Notice Address
Address: 0000 Xxxxx Xxxxxx Xx.,
------------------------------
Xxxxx 0000
------------------------------
Xxxxxxxxxx, XX 00000
------------------------------
Attention: President
------------------------------
Telephone: (000) 000-0000
-----------------------------
Facsimile: (000) 000-0000
-----------------------------
With a copy to:
Delphi Capital Management, Inc.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
90
BANK OF AMERICA, N.A., IN ITS CAPACITY
AS ADMINISTRATIVE AGENT AND
COLLATERAL AGENT
By: /s/ Xxxxxxxxx X.X. Xxxxxx
----------------------------------
Name: Xxxxxxxxx X.X. Xxxxxx
----------------------------------
Title: Principal
----------------------------------
BANK OF AMERICA, N.A., IN ITS INDIVIDUAL
CORPORATE CAPACITY
By: /s/ Xxxxxxxxx X.X. Xxxxxx
----------------------------------
Name: Xxxxxxxxx X.X. Xxxxxx
----------------------------------
Title: Principal
----------------------------------
Administrative Matters
Address: 000 Xxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Credit Related Matters
Address: 000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
00
XXX XXXX XX XXX XXXX
By: /s/ Xxxx Xxxxx
----------------------------------
Name: Xxxx Xxxxx
----------------------------------
Title: Assistant Vice President
----------------------------------
Address: Insurance Division
Xxx Xxxx Xxxxxx, 00xx XX
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
92
FIRST UNION NATIONAL BANK
By: /s/ Xxxxxx X. Xxxxxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
----------------------------------
Title: Senior Vice President
----------------------------------
Address: 0000 Xxxxxxxx Xxxxxx
Mail Code PA 4819
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
93
FLEET NATIONAL BANK
By: /s/ Xxxx X. Pile
----------------------------------
Name: Xxxx X. Pile
----------------------------------
Title: Assistant Vice President
----------------------------------
Address: 000 Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
