[CONFORMED COPY WITH EXHIBIT F
CONFORMED AS EXECUTED]
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
[GRAPHIC] [GRAPHIC]
CREDIT AGREEMENT
AMONG
AMERUS LIFE HOLDINGS, INC.,
VARIOUS LENDING INSTITUTIONS,
BANK ONE, INDIANA, NA
AND
ABN AMRO BANK, N.V.
AS CO-ARRANGERS,
AND
THE CHASE MANHATTAN BANK,
AS ADMINISTRATIVE AGENT
-------------------------------------------
DATED AS OF OCTOBER 23, 1997
-------------------------------------------
$250,000,000
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
----
SECTION 1. Xxxxxx and Terms of Credit . . . . . . . . . . . . . . . . . . . 1
1.01 Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Minimum Amount of Each Borrowing; Maximum Number of Borrowings . . 2
1.03 Notice of Borrowing. . . . . . . . . . . . . . . . . . . . . . . . 2
1.04 Disbursement of Funds. . . . . . . . . . . . . . . . . . . . . . . 2
1.05 Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.06 Conversions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.07 Pro Rata Borrowings. . . . . . . . . . . . . . . . . . . . . . . . 4
1.08 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.09 Interest Periods . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.10 Increased Costs, Illegality, etc.. . . . . . . . . . . . . . . . . 6
1.11 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.12 Change of Lending Office . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2. Fees; Commitments. . . . . . . . . . . . . . . . . . . . . . . . 10
2.01 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.02 Voluntary Reduction of Commitments . . . . . . . . . . . . . . . . 10
2.03 Mandatory Reduction of Commitments . . . . . . . . . . . . . . . . 11
SECTION 3. Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.01 Voluntary Prepayments. . . . . . . . . . . . . . . . . . . . . . . 11
3.02 Mandatory Repayments . . . . . . . . . . . . . . . . . . . . . . . 12
3.03 Method and Place of Payment. . . . . . . . . . . . . . . . . . . . 12
3.04 Net Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4. Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . 15
4.01 Conditions Precedent to the Initial Borrowing Date . . . . . . . . 15
4.02 Conditions Precedent to All Loans. . . . . . . . . . . . . . . . . 18
SECTION 5. Representations, Warranties and Agreements . . . . . . . . . . . 19
5.01 Corporate Status . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.02 Corporate Power and Authority. . . . . . . . . . . . . . . . . . . 20
5.03 No Contravention of Laws, Agreements or Organizational Documents . 20
(i)
Page
----
5.04 Litigation and Contingent Liabilities. . . . . . . . . . . . . . . 20
5.05 Use of Proceeds; Margin Regulations. . . . . . . . . . . . . . . . 20
5.06 Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.07 Investment Company Act . . . . . . . . . . . . . . . . . . . . . . 21
5.08 Public Utility Holding Company Act . . . . . . . . . . . . . . . . 21
5.09 True and Complete Disclosure; Projections and Assumptions. . . . . 21
5.10 Financial Condition; Financial Statements. . . . . . . . . . . . . 22
5.11 Security Interests . . . . . . . . . . . . . . . . . . . . . . . . 22
5.12 Tax Returns and Payments . . . . . . . . . . . . . . . . . . . . . 22
5.13 Compliance with ERISA. . . . . . . . . . . . . . . . . . . . . . . 23
5.14 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.15 Intellectual Property, etc.. . . . . . . . . . . . . . . . . . . . 24
5.16 Pollution and Other Regulations. . . . . . . . . . . . . . . . . . 24
5.17 Labor Relations; Collective Bargaining Agreements. . . . . . . . . 25
5.18 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.19 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.20 Compliance with Statutes, etc. . . . . . . . . . . . . . . . . . . 26
5.21 Insurance Licenses . . . . . . . . . . . . . . . . . . . . . . . . 26
5.22 Insurance Business . . . . . . . . . . . . . . . . . . . . . . . . 26
5.23 Reinsurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6. Affirmative Covenants. . . . . . . . . . . . . . . . . . . . . . 27
6.01 Information Covenants. . . . . . . . . . . . . . . . . . . . . . . 27
6.02 Books, Records and Inspections . . . . . . . . . . . . . . . . . . 30
6.03 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
6.04 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 31
6.05 Corporate Franchises . . . . . . . . . . . . . . . . . . . . . . . 31
6.06 Compliance with Statutes, etc. . . . . . . . . . . . . . . . . . . 31
6.07 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
6.08 Performance of Obligations . . . . . . . . . . . . . . . . . . . . 33
6.09 Good Repair. . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
6.10 End of Fiscal Years; Fiscal Quarters . . . . . . . . . . . . . . . 33
6.11 Maintenance of Licenses and Permits. . . . . . . . . . . . . . . . 33
SECTION 7. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . 33
7.01 Changes in Business. . . . . . . . . . . . . . . . . . . . . . . . 34
7.02 Consolidation, Merger, Sale or Purchase of Assets, etc.. . . . . . 34
7.03 Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.04 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(ii)
Page
----
7.05 Issuance of Stock. . . . . . . . . . . . . . . . . . . . . . . . . 41
7.06 Prepayments of Indebtedness, Modifications of Agreements, etc. . . 41
7.07 Dividends, etc.. . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.08 Limitation on Certain Restrictions . . . . . . . . . . . . . . . . 42
7.09 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . 42
7.10 Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.11 Interest Coverage Ratio. . . . . . . . . . . . . . . . . . . . . . 43
7.12 Minimum Adjusted Consolidated Surplus. . . . . . . . . . . . . . . 43
7.13 Minimum Risk-Based Capital . . . . . . . . . . . . . . . . . . . . 44
7.14 Minimum Rating . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 8. Events of Default. . . . . . . . . . . . . . . . . . . . . . . . 44
8.01 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.02 Representations, etc.. . . . . . . . . . . . . . . . . . . . . . . 45
8.03 Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.04 Default Under Other Agreements . . . . . . . . . . . . . . . . . . 45
8.05 Bankruptcy, etc. . . . . . . . . . . . . . . . . . . . . . . . . . 46
8.06 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
8.07 Pledge Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 47
8.08 Judgments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
8.09 Revocation of Insurance License. . . . . . . . . . . . . . . . . . 48
8.10 Iowa Approvals and Regulations. . . . . . . . . . . . . . . . . . . 48
SECTION 9. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 10. The Administrative Agent. . . . . . . . . . . . . . . . . . . . 67
10.01 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
10.02 Delegation of Duties. . . . . . . . . . . . . . . . . . . . . . . 68
10.03 Exculpatory Provisions. . . . . . . . . . . . . . . . . . . . . . 68
10.04 Reliance by Administrative Agent. . . . . . . . . . . . . . . . . 69
10.05 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . 69
10.06 Non-Reliance. . . . . . . . . . . . . . . . . . . . . . . . . . . 69
10.07 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . 70
10.08 The Administrative Agent in its Individual Capacity . . . . . . . 71
10.09 Successor Administrative Agent. . . . . . . . . . . . . . . . . . 71
SECTION 11. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . 71
11.01 Payment of Expenses, etc. . . . . . . . . . . . . . . . . . . . . 71
11.02 Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . . . 72
(iii)
Page
----
11.03 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
11.04 Benefit of Agreement. . . . . . . . . . . . . . . . . . . . . . . 73
11.05 No Waiver; Remedies Cumulative. . . . . . . . . . . . . . . . . . 75
11.06 Payments Pro Rata . . . . . . . . . . . . . . . . . . . . . . . . 75
11.07 Calculations; Computations. . . . . . . . . . . . . . . . . . . . 76
11.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE. . . . . . . . . 76
11.09 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . 78
11.10 Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . 78
11.11 Headings Descriptive. . . . . . . . . . . . . . . . . . . . . . . 78
11.12 Amendment or Waiver . . . . . . . . . . . . . . . . . . . . . . . 78
11.13 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
11.14 Domicile of Loans . . . . . . . . . . . . . . . . . . . . . . . . 79
11.15 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . 79
11.16 WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . . . 79
11.17 Register. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
11.18 Collateral Release. . . . . . . . . . . . . . . . . . . . . . . . 80
ANNEX I -- List of Banks and Commitments
ANNEX II -- Bank Addresses
ANNEX III -- Corporate Status
ANNEX IV -- Plans
ANNEX V -- Subsidiaries
ANNEX VI -- Collective Bargaining Agreements
ANNEX VII -- Capitalization
ANNEX VIII -- Indebtedness
ANNEX IX -- Insurance Licenses
ANNEX X -- Reinsurance
ANNEX XI -- Liens
EXHIBIT A -- Form of Notice of Borrowing
EXHIBIT B -- Form of Note
EXHIBIT C -- Form of Section 3.04(b)(ii) Certificate
EXHIBIT D -- Form of Opinion of Xxxxxx Xxxxxxxx, Esq.
EXHIBIT E-1 -- Form of Officer's Certificate
EXHIBIT E-2 -- Form of Secretary's Certificate
EXHIBIT F -- Form of Pledge Agreement
EXHIBIT G -- Form of Assignment and Assumption Agreement
(iv)
CREDIT AGREEMENT, dated as of October 23, 1997, among AMERUS LIFE
HOLDINGS, INC., an Iowa corporation (the "Borrower"), the lending
institutions listed from time to time on Annex I hereto (each a "Bank" and,
collectively, the "Banks"), BANK ONE, INDIANA, NA and ABN AMRO BANK, N.V.,
as Co-Arrangers, and THE CHASE MANHATTAN BANK, as Administrative Agent (the
"Administrative Agent"). Unless otherwise defined herein, all capitalized
terms used herein and defined in Section 9 are used herein as so defined.
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions set forth herein,
the Banks are willing to make available to the Borrower the credit facility
provided for herein.
NOW, THEREFORE, IT IS AGREED:
SECTION 1. AMOUNT AND TERMS OF CREDIT.
1.01 COMMITMENTS. Subject to and upon the terms and conditions set
forth herein, each Bank severally agrees, at any time and from time to time
on and after the Effective Date and prior to the Maturity Date, to make a
loan or loans (each, a "Loan" and, collectively, the "Loans") to the
Borrower, which Loans (i) shall, at the option of the Borrower, be Base Rate
Loans or Eurodollar Loans, PROVIDED that (x) except as otherwise specifically
provided in Section 1.10(b), all Loans comprising the same Borrowing shall at
all times be of the same Type and (y) unless the Administrative Agent has
determined that the Syndication Date has occurred (at which time this clause
(y) shall no longer be applicable), prior to the 90th day following the
Initial Borrowing Date the Borrower may only elect Base Rate Loans, or
Eurodollar Loans having an Interest Period of one week, and if during such
period the Borrower elects to have Loans outstanding as Eurodollar Loans, the
Interest Periods for all such Eurodollar Loans shall begin and end on the
same dates, (ii) may be repaid and reborrowed at any time in accordance with
the provisions hereof, (iii) shall have an aggregate principal amount at any
time outstanding which does not exceed for any Bank the Commitment of such
Bank at such time and (iv) shall have an aggregate principal amount at any
time outstanding which does not exceed for all Banks the Total Commitment at
such time.
1.02 MINIMUM AMOUNT OF EACH BORROWING; MAXIMUM NUMBER OF BORROWINGS. The
aggregate principal amount of each Borrowing hereunder shall not be less than
$5,000,000 and, if in excess thereof, shall be in an integral multiple of
$1,000,000. More than one Borrowing may be incurred on any day; PROVIDED
that at no time shall there be outstanding more than six Borrowings of
Eurodollar Loans.
1.03 NOTICE OF BORROWING. (a) In connection with its incurrence of
Loans on any Business Day, including the Initial Borrowing Date, the Borrower
shall give the Administrative Agent at its Notice Office, prior to 11:00 A.M.
(New York time), at least three Business Days' prior written notice (or
telephonic notice promptly confirmed in writing) of each Eurodollar Loan or
at least one Business Day's prior written notice (or telephonic notice
promptly confirmed in writing) of each Base Rate Loan. Such notice (the
"Notice of Borrowing"), except as otherwise expressly provided in Section
1.10, shall be irrevocable, and, in the case of a written notice and a
confirmation of telephonic notice, shall be in the form of Exhibit A hereto,
appropriately completed to specify (i) the aggregate principal amount of the
Loans to be made pursuant to such Borrowing, (ii) the date of such Borrowing
(which shall be a Business Day) and (iii) whether the respective Borrowings
shall consist of Base Rate Loans or Eurodollar Loans and, if Eurodollar
Loans, the Interest Period to be initially applicable thereto. The
Administrative Agent shall promptly give each Bank written notice (or
telephonic notice promptly confirmed in writing) of each proposed Borrowing,
of such Bank's proportionate share thereof and of the other matters covered
by the Notice of Borrowing.
(b) Without in any way limiting the obligation of the Borrower to
confirm in writing any notice it may give hereunder by telephone, the
Administrative Agent may act prior to receipt of written confirmation without
liability upon the basis of such telephonic notice, believed by the
Administrative Agent in good faith to be from an Authorized Officer of the
Borrower. In each such case the Administrative Agent's record of the terms
of any such telephonic notice shall be conclusive absent manifest error.
1.04 DISBURSEMENT OF FUNDS. (a) Subject to the terms and conditions
herein set forth, no later than 11:00 A.M. (New York time) on the date of
each incurrence of Loans, each Bank will make available to the Administrative
Agent its PRO RATA share of each Borrowing requested to be made on such date
in the manner provided below.
(b) Each Bank shall make available all amounts it is to fund under any
Borrowing in U.S. dollars and immediately available funds to the
Administrative Agent at the Administrative Agent's Payment Office and the
Administrative Agent will make
-2-
available to the Borrower as promptly as practicable by depositing to its
account at the Administrative Agent's Payment Office the aggregate of the
amounts so made available in the type of funds received. Unless the
Administrative Agent shall have been notified by any Bank prior to the date
of any such Borrowing that such Bank does not intend to make available to the
Administrative Agent its portion of the Borrowing or Borrowings to be made on
such date, the Administrative Agent may assume that such Bank has made such
amount available to the Administrative Agent on the date of such Borrowing,
and the Administrative Agent, in reliance upon such assumption, may (in its
sole discretion and without any obligation to do so) make available to the
Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Administrative Agent by such Bank and the
Administrative Agent has made available same to the Borrower, the
Administrative Agent shall be entitled to recover such corresponding amount
from such Bank. If such Bank does not pay such corresponding amount
forthwith upon the Administrative Agent's demand therefor, the Administrative
Agent shall promptly notify the Borrower, and the Borrower shall immediately
pay such corresponding amount to the Administrative Agent. The
Administrative Agent shall also be entitled to recover from the Bank or the
Borrower, as the case may be, interest on such corresponding amount in
respect of each day from the date such corresponding amount was made
available by the Administrative Agent to the Borrower to the date such
corresponding amount is recovered by the Administrative Agent, at a rate per
annum equal to (x) if paid by such Bank, the overnight Federal Funds
Effective Rate or (y) if paid by the Borrower, the then applicable rate of
interest, calculated in accordance with Section 1.08(a) or (b), as the case
may be, for the respective Loans.
(c) Nothing in this Section 1.04 shall be deemed to relieve any Bank
from its obligation to fulfill its commitments hereunder or to prejudice any
rights which the Borrower may have against any Bank as a result of any
default by such Bank hereunder.
1.05 NOTES. (a) The Borrower's obligation to pay the principal of,
and interest on, all the Loans made to it by each Bank shall be evidenced by
a promissory note substantially in the form of Exhibit B with blanks
appropriately completed in conformity herewith (each a "Note" and
collectively the "Notes").
(b) The Note issued to each Bank shall (i) be executed by the Borrower,
(ii) be payable to the order of such Bank and be dated the Initial Borrowing
Date (or if issued after the Initial Borrowing Date, be dated the date of the
issuance thereof), (iii) be in a stated principal amount equal to the
Commitment of such Bank and be payable in the principal amount of the
outstanding Loans evidenced thereby, (iv) mature on the Maturity Date, (v)
bear interest as provided in the appropriate clause of Section 1.08 in
respect of the Base Rate Loans and Eurodollar Loans, as the case may be,
evidenced
-3-
thereby, (vi) be subject to voluntary prepayment as provided in Section 3.01
and mandatory repayment as provided in Section 3.02 and (vii) be entitled to
the benefits of this Agreement and the other Credit Documents.
(c) Each Bank will record on its internal records the amount of each
Loan made by it and each payment in respect thereof and will prior to any
transfer of its Note endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such
notation or any error in any such notation shall not affect the Borrower's
obligations in respect of such Loans.
1.06 CONVERSIONS. The Borrower shall have the option to convert on any
Business Day all or a portion at least equal to $5,000,000 (and, if in excess
thereof, an integral multiple of $1,000,000) of the outstanding principal
amount of the Loans of one Type into a Borrowing or Borrowings of the other
Type of Loan; PROVIDED that (i) no partial conversion of a Borrowing of
Eurodollar Loans shall reduce the outstanding principal amount of the
Eurodollar Loans pursuant to such Borrowing to less than $5,000,000, (ii)
Base Rate Loans may only be converted into Eurodollar Loans if no Default or
Event of Default is in existence on the date of the conversion, (iii)
Borrowings of Eurodollar Loans resulting from this Section 1.06 shall be
limited in number as provided in Section 1.02, (iv) Eurodollar Loans may only
be converted into Base Rate Loans on the last day of the Interest Period
applicable thereto, (v) unless the Administrative Agent has determined that
the Syndication Date has occurred (at which time this clause (v) shall no
longer be applicable), prior to the 90th day following the Initial Borrowing
Date, conversions of Base Rate Loans into Eurodollar Loans may only be made
in accordance with Section 1.01(i)(y), and (vi) each such conversion shall be
made PRO RATA among the Loans of each Bank of the Type being converted. Each
such conversion shall be effected by the Borrower by giving the
Administrative Agent at its Notice Office, prior to 11:00 A.M. (New York
time), at least three Business Days' (or one Business Day's in the case of a
conversion into Base Rate Loans) prior written notice (or telephonic notice
promptly confirmed in writing) (each a "Notice of Conversion") specifying the
Loans to be so converted, the Type of Loans to be converted into and, if to
be converted into a Borrowing of Eurodollar Loans, the Interest Period to be
initially applicable thereto. The Administrative Agent shall give each Bank
prompt notice of any such proposed conversion affecting any of its Loans.
1.07 PRO RATA BORROWINGS. All Borrowings of Loans under this Agreement
shall be loaned by the Banks PRO RATA on the basis of their Commitments. It
is understood that no Bank shall be responsible for any default by any other
Bank in its obligation to make Loans hereunder and that each Bank shall be
obligated to make the Loans provided to be made by it hereunder, regardless
of the failure of any other Bank to fulfill its commitments hereunder.
-4-
1.08 INTEREST. (a) The unpaid principal amount of each Base Rate Loan
shall bear interest from the date of the Borrowing thereof until the earlier
of (i) the maturity (whether by acceleration or otherwise) of such Base Rate
Loan and (ii) the conversion of such Base Rate Loan to a Eurodollar Loan
pursuant to Section 1.06, at a rate per annum which shall at all times be the
Base Rate in effect from time to time.
(b) The unpaid principal amount of each Eurodollar Loan shall bear
interest from the date of the Borrowing thereof until the earlier of (i) the
maturity (whether by acceleration or otherwise) of such Eurodollar Loan or
(ii) the conversion of such Eurodollar Loan to a Base Rate Loan pursuant to
Section 1.06, at a rate per annum which shall at all times be the Applicable
Margin then in effect for Eurodollar Loans plus the relevant Eurodollar Rate
for the Interest Period applicable to such Eurodollar Loan.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan and any other overdue amount payable
hereunder shall bear interest at a rate per annum equal to the Base Rate in
effect from time to time plus 2%, PROVIDED that overdue principal in respect
of Eurodollar Loans shall bear interest until the end of the Interest Period
applicable to such Eurodollar Loans at a rate per annum equal to 2% in excess
of the rate otherwise applicable to such Eurodollar Loans.
(d) Interest shall accrue from and including the date of any Borrowing
to but excluding the date of any repayment thereof and shall be payable (i)
in respect of each Base Rate Loan, quarterly in arrears on the last Business
Day of each calendar quarter, (ii) in respect of each Eurodollar Loan, on the
last day of each Interest Period applicable thereto and, in the case of an
Interest Period of six months, on the date occurring three months after the
first day of such Interest Period and (iii) in respect of each Loan, on any
conversion or prepayment (on the amount so converted or prepaid), at maturity
(whether by acceleration or otherwise) and, after such maturity, on demand.
(e) All computations of interest hereunder shall be made in accordance
with Section 11.07(b).
(f) The Administrative Agent, upon determining the interest rate for
any Borrowing of Eurodollar Loans for any Interest Period, shall promptly
notify the Borrower and the Banks thereof.
1.09 INTEREST PERIODS. At the time the Borrower gives a Notice of
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, a Borrowing of Eurodollar Loans (in the case of the initial Interest
Period applicable thereto) or prior to 11:00 A.M. (New York time) on the
third Business Day prior to
-5-
the expiration of an Interest Period applicable to a Borrowing of Eurodollar
Loans, it shall have the right to elect by giving the Administrative Agent
written notice (or telephonic notice promptly confirmed in writing) of the
Interest Period to be applicable to such Borrowing, which Interest Period
shall, at the option of the Borrower, be a one week period or a one, two,
three or six month period. Notwithstanding anything to the contrary
contained above:
(i) the initial Interest Period for any Borrowing of Eurodollar Loans
shall commence on the date of such Borrowing (including the date of any
conversion from a Borrowing of Base Rate Loans) and each Interest Period
occurring thereafter in respect of such Borrowing shall commence on the day
on which the next preceding Interest Period expires;
(ii) if any Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period, such Interest Period shall end on the last Business Day of
such calendar month;
(iii) if any Interest Period would otherwise expire on a day which
is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, PROVIDED that if any Interest Period would
otherwise expire on a day which is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iv) no Interest Period may be elected if it would extend beyond the
Maturity Date; and
(v) no Interest Period may be elected at any time when a Default or
Event of Default is then in existence.
If upon the expiration of any Interest Period, the Borrower has failed,
or is not permitted, to elect a new Interest Period to be applicable to the
respective Borrowing of Eurodollar Loans as provided above, the Borrower
shall be deemed to have elected to convert such Borrowing into a Borrowing of
Base Rate Loans effective as of the expiration date of such current Interest
Period.
1.10 INCREASED COSTS, ILLEGALITY, ETC. (a) In the event that (x) in
the case of clause (i) below, the Administrative Agent or (y) in the case of
clauses (ii) and (iii) below, any Bank shall have determined in good faith
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto):
-6-
(i) on any date for determining the Eurodollar Rate for any
Interest Period, that, by reason of any changes arising after the Effective
Date affecting the interbank Eurodollar market, adequate and fair means do
not exist for ascertaining the applicable interest rate on the basis
provided for in the definition of Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loans (other than any increased cost or reduction in the
amount received or receivable resulting from the imposition of or a change
in the rate of taxes or similar charges) because of (x) any change since
the Effective Date in any applicable law, governmental rule, regulation,
guideline, order or request (whether or not having the force of law), or in
the interpretation or administration thereof and including the introduction
of any new law or governmental rule, regulation, guideline, order or
request (such as, for example, but not limited to, a change in official
reserve requirements, but, in all events, excluding reserves required under
Regulation D to the extent included in the computation of the Eurodollar
Rate) and/or (y) other circumstances affecting the interbank Eurodollar
market or the position of such Bank in such market; or
(iii) at any time, that the making or continuance of any Eurodollar
Loan has become unlawful by compliance by such Bank in good faith with any
change since the Effective Date in any law, governmental rule, regulation,
guideline or order, or the interpretation or application thereof, or would
conflict with any thereof not having the force of law but with which such
Bank customarily complies, or has become impracticable as a result of a
contingency occurring after the Effective Date which materially adversely
affects the interbank Eurodollar market;
then, and in any such event, such Bank (or the Administrative Agent in the
case of clause (i) above) shall (x) on such date and (y) within 10 Business
Days of the date on which such event no longer exists give notice (by
telephone confirmed in writing) to the Borrower and to the Administrative
Agent of such determination and the reason therefor (which notice the
Administrative Agent shall promptly transmit to each of the other Banks).
Thereafter (x) in the case of clause (i) above, Eurodollar Loans shall no
longer be available until such time as the Administrative Agent notifies the
Borrower and the Banks that the circumstances giving rise to such notice by
the Administrative Agent no longer exist, and any Notice of Borrowing or
Notice of Conversion given by the Borrower with respect to Eurodollar Loans
which have not yet been incurred shall be deemed rescinded by the Borrower
or, in the case of a Notice of Borrowing, shall, at the option of the
Borrower, be deemed converted into a Notice of Borrowing for
-7-
Base Rate Loans to be made on the date of Borrowing contained in such Notice
of Borrowing, (y) in the case of clause (ii) above, the Borrower shall pay to
such Bank, upon written demand therefor, such additional amounts (in the form
of an increased rate of, or a different method of calculating, interest or
otherwise as such Bank shall determine in good faith) as shall be required to
compensate such Bank for such increased costs or reductions in amounts
receivable hereunder (a written notice as to the additional amounts owed to
such Bank, showing the basis for the calculation thereof, which basis shall
be reasonable and consistently applied, submitted to the Borrower by such
Bank shall, absent manifest error, be final and conclusive and binding upon
all parties hereto) and (z) in the case of clause (iii) above, the Borrower
shall take one of the actions specified in Section 1.10(b) as promptly as
possible and, in any event, within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may
(and in the case of a Eurodollar Loan affected pursuant to Section
1.10(a)(iii) the Borrower shall) either (i) if the affected Eurodollar Loan
is then being made pursuant to a Borrowing, by giving the Administrative
Agent telephonic notice (confirmed promptly in writing) thereof on the same
date that the Borrower was notified by a Bank (or on the next Business Day if
the Borrower received such notice after 3:00 p.m. (New York time)) pursuant
to Section 1.10(a)(ii) or (iii), cancel said Borrowing, convert the related
Notice of Borrowing into one requesting a Borrowing of Base Rate Loans or
require the affected Bank to make its requested Loan as a Base Rate Loan, or
(ii) if the affected Eurodollar Loan is then outstanding, upon at least one
Business Day's notice to the Administrative Agent, require the affected Bank
to convert each such affected Eurodollar Loan into a Base Rate Loan, PROVIDED
that if more than one Bank is affected at any time, then all affected Banks
must be treated the same pursuant to this Section 1.10(b).
(c) If any Bank shall have determined in good faith that after the
Effective Date the adoption or effectiveness of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any change
in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged by law with the
interpretation or administration thereof, or compliance by such Bank or its
parent corporation with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank
or comparable agency, in each case made subsequent to the Effective Date, has
or would have the effect of reducing the rate of return on such Bank's or its
parent corporation's capital or assets as a consequence of such Bank's
commitments or obligations hereunder to a level below that which such Bank or
its parent corporation could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration such Bank's or
its parent corporation's policies with respect to capital
-8-
adequacy), then from time to time, upon demand by such Bank (with a copy to
the Administrative Agent), the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank or its parent
corporation for such reduction. Each Bank, upon determining in good faith
that any additional amounts will be payable pursuant to this Section 1.10(c),
will give prompt written notice thereof to the Borrower, which notice shall
set forth the basis of the calculation of such additional amounts, which
basis must be reasonable and consistently applied, although the failure to
give any such notice shall not release or diminish any of the Borrower's
obligations to pay additional amounts pursuant to this Section 1.10(c) upon
the subsequent receipt of such notice.
1.11 COMPENSATION. The Borrower shall compensate each Bank, upon its
written request (which request shall set forth the basis for requesting such
compensation), for all reasonable losses, expenses and liabilities
(including, without limitation, any loss, expense or liability incurred by
reason of the liquidation or reemployment of deposits or other funds required
by such Bank to fund its Eurodollar Loans but excluding any loss of
anticipated profit with respect to such Loans) which such Bank may sustain:
(i) if for any reason (other than a default by such Bank or the
Administrative Agent) a Borrowing of Eurodollar Loans does not occur on a
date specified therefor in a Notice of Borrowing or Notice of Conversion
(whether or not withdrawn by the Borrower or deemed withdrawn pursuant to
Section 1.10(a)); (ii) if any repayment, prepayment or conversion of any of
its Eurodollar Loans occurs on a date which is not the last day of an
Interest Period applicable thereto; (iii) if any prepayment of any of its
Eurodollar Loans is not made on any date specified in a notice of prepayment
given by the Borrower; or (iv) as a consequence of (x) any other failure by
the Borrower to repay its Loans when required by the terms of this Agreement
or (y) an election made pursuant to Section 1.10(b). Calculation of all
amounts payable to a Bank under this Section 1.11 shall be made as though
that Bank had actually funded its relevant Eurodollar Loan through the
purchase of a Eurodollar deposit bearing interest at the Eurodollar Rate in
an amount equal to the amount of that Loan, having a maturity comparable to
the relevant Interest Period and through the transfer of such Eurodollar
deposit from an offshore office of that Bank or other bank to a domestic
office of that Bank in the United States of America; PROVIDED, HOWEVER, that
each Bank may fund each of its Eurodollar Loans in any manner it sees fit and
the foregoing assumption shall be utilized only for the calculation of
amounts payable under this Section 1.11.
1.12 CHANGE OF LENDING OFFICE. Each Bank agrees that, upon the
occurrence of any event giving rise to the operation of Section 1.10(a)(ii)
or (iii) or 3.04 with respect to such Bank, it will, if requested by the
Borrower, use reasonable efforts (subject to overall policy considerations of
such Bank) to designate another lending office for any Loans affected by such
event; PROVIDED that such designation is made on such
-9-
terms that, in the opinion of such Bank, such Bank and its lending office
suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of any
such Section. Nothing in this Section 1.12 shall affect or postpone any of
the obligations of the Borrower or the right of any Bank provided in Section
1.10 or 3.04.
SECTION 2. FEES; COMMITMENTS.
2.01 FEES. (a) The Borrower agrees to pay the Administrative Agent a
commitment fee (the "Commitment Fee") for the account of each Bank for the
period from and including the Effective Date to but excluding the earlier of
the Maturity Date and the date the Total Commitment has been terminated (the
"Termination Date"), computed at a per annum rate equal to the Applicable
Commitment Fee Percentage from time to time on the daily average Unutilized
Commitment of such Bank. Accrued Commitment Fees shall be due and payable in
arrears on the last Business Day of each March, June, September and December
and on the Termination Date.
(b) The Borrower agrees to pay the Administrative Agent a utilization
fee (the "Utilization Fee") for the account of each Bank for each day from
and including the Effective Date to and including the earlier of the Maturity
Date and the Termination Date on which the outstanding principal amount of
all Loans made by such Bank equals or exceeds 50% of the Commitment of such
Bank, computed at a per annum rate equal to the Applicable Utilization Fee
Percentage from time to time on the outstanding principal amount of Loans of
such Bank from time to time. Accrued Utilization Fees shall be due and
payable in arrears on the last Business Day of each March, June, September
and December and on the Termination Date.
(c) The Borrower shall pay to the Administrative Agent, for the account
of the Administrative Agent, when and as due, such fees as have been, or are
from time to time, separately agreed upon.
(d) All computations of Fees shall be made in accordance with Section
11.07(b).
2.02 VOLUNTARY REDUCTION OF COMMITMENTS. Upon at least three Business
Days' prior written notice (or telephonic notice promptly confirmed in
writing) given by the Borrower to the Administrative Agent at its Notice
Office (which notice the Administrative Agent shall promptly transmit to each
of the Banks), the Borrower shall have the right, without premium or penalty,
to terminate, in whole or in part, the Total Unutilized Commitment, PROVIDED
that (x) partial reductions of the Total
-10-
Unutilized Commitment pursuant to this Section 2.02 shall be in the amount of
at least $5,000,000, and (y) any such termination shall apply proportionately
to permanently reduce the Commitment of each of the Banks.
2.03 MANDATORY REDUCTION OF COMMITMENTS. (a) The Total Commitment
(and the Commitment of each Bank) shall be terminated at 5:00 p.m. (New York
time) on the Expiration Date unless the Effective Date has occurred on or
before such date.
(b) The Total Commitment shall terminate on the Maturity Date.
(c) In addition to any other mandatory commitment reductions
pursuant to this Section 2.03, the Total Commitment shall be permanently
reduced on any date after the Effective Date on which the Borrower incurs any
Indebtedness for borrowed money (other than Indebtedness for borrowed money
incurred pursuant to Sections 7.04(a)-(o)) by an amount equal to 50% of the
net proceeds of such Indebtedness. Any reduction to the Total Commitment
pursuant to this Section 2.03(c) shall be applied proportionately to reduce
the Commitment of each Bank; PROVIDED, that in no event shall the Total
Commitment be reduced below $150,000,000 at any time as a result of this
Section 2.03(c).
SECTION 3. PAYMENTS.
3.01 VOLUNTARY PREPAYMENTS. The Borrower shall have the right to
prepay Loans, without premium or penalty (except for amounts payable pursuant
to Section 1.11), in whole or in part, from time to time on the following
terms and conditions: (i) the Borrower shall give the Administrative Agent at
its Notice Office written notice (or telephonic notice promptly confirmed in
writing) of its intent to prepay the Loans, the amount of such prepayment and
(in the case of Eurodollar Loans) the specific Borrowing(s) pursuant to which
made, which notice shall be received by the Administrative Agent (x) in the
case of Base Rate Loans, no later than 11:00 A.M. (New York time) one
Business Day prior to the date of such prepayment, or (y) in the case of
Eurodollar Loans, three Business Days prior to the date of such prepayment,
which notice shall promptly be transmitted by the Administrative Agent to
each of the Banks; (ii) each partial prepayment of any Borrowing shall be in
an aggregate principal amount of at least $5,000,000, PROVIDED that no
partial prepayment of Eurodollar Loans made pursuant to a Borrowing shall
reduce the aggregate principal amount of the Loans outstanding pursuant to
such Borrowing to an amount less than $5,000,000; and (iii) each prepayment
in respect of any Loans made pursuant to a Borrowing shall be applied PRO
RATA among such Loans.
-11-
3.02 MANDATORY REPAYMENTS. (a) On any day on which the sum of the
aggregate outstanding principal amount of the Loans exceeds the Total
Commitment as then in effect, the Borrower shall prepay principal of Loans in
an amount equal to such excess.
(b) With respect to each repayment of Loans required by this
Section 3.02, the Borrower may designate the Types of Loans which are to be
repaid and, in the case of Eurodollar Loans, the specific Borrowing or
Borrowings pursuant to which made, PROVIDED that: (i) if any repayment of
Eurodollar Loans made pursuant to a single Borrowing shall reduce the
outstanding Eurodollar Loans made pursuant to such Borrowing to an amount
less than $5,000,000 such Borrowing shall be converted immediately into a
Borrowing of Base Rate Loans and (ii) each repayment of Loans made pursuant
to the same Borrowing shall be applied PRO RATA among the Banks which made
such Loans. In the absence of a designation by the Borrower as described in
the preceding sentence, the Administrative Agent shall, subject to the above,
make such designation in its sole discretion.
3.03 METHOD AND PLACE OF PAYMENT. Except as otherwise specifically
provided herein, all payments under this Agreement and the Notes shall be
made to the Administrative Agent for the ratable account of the Banks
entitled thereto, not later than 11:00 A.M. (New York time) on the date when
due and shall be made in immediately available funds and in lawful money of
the United States of America at the Payment Office, it being understood that
written, telex or facsimile notice by the Borrower to the Administrative
Agent to make a payment from the funds in the Borrower's account at the
Payment Office shall constitute the making of such payment to the extent of
such funds held in such account. Any payments under this Agreement which are
made later than 11:00 A.M. (New York time) shall be deemed to have been made
on the next succeeding Business Day. Whenever any payment to be made
hereunder shall be stated to be due on a day which is not a Business Day, the
due date thereof shall be extended to the next succeeding Business Day and,
with respect to payments of principal, interest shall be payable during such
extension at the applicable rate in effect immediately prior to such
extension.
3.04 NET PAYMENTS. (a) All payments made by the Borrower hereunder
or under any Note will be made without setoff, counterclaim or other defense.
Except as provided in Section 3.04(b), all such payments will be made free
and clear of, and without deduction or withholding for, any present or future
taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any
political subdivision or taxing authority thereof or therein with respect to
such payments (but excluding, except as provided in the second succeeding
sentence, any tax imposed on or measured by the net income or net profits of
a
-12-
Bank, or franchise taxes imposed on it, pursuant to the laws of the
jurisdiction in which it is organized or the jurisdiction in which the
principal office or applicable lending office of such Bank is located or any
subdivision thereof or therein) and all interest, penalties or similar
liabilities with respect to such non-excluded taxes, levies, imposts, duties,
fees, assessments or other charges (all such non-excluded taxes, levies,
imposts, duties, fees, assessments or other charges being referred to
collectively as "Taxes"). If any Taxes are so levied or imposed, the
Borrower agrees to pay the full amount of such Taxes, and such additional
amounts as may be necessary so that every payment of all amounts due under
this Agreement or under any Note, after withholding or deduction for or on
account of any Taxes, will not be less than the amount provided for herein or
in such Note. If any amounts are payable in respect of Taxes pursuant to the
preceding sentence, the Borrower agrees to reimburse each Bank, upon the
written request of such Bank, for taxes imposed on or measured by the net
income or net profits of such Bank, and franchise taxes imposed on such Bank,
pursuant to the laws of the jurisdiction in which such Bank is organized or
in which the principal office or applicable lending office of such Bank is
located or under the laws of any political subdivision or taxing authority of
any such jurisdiction in which such Bank is organized or in which the
principal office or applicable lending office of such Bank is located and for
any withholding of taxes as such Bank shall determine are payable by, or
withheld from, such Bank, in respect of such amounts so paid to or on behalf
of such Bank pursuant to the preceding sentence and in respect of any amounts
paid to or on behalf of such Bank pursuant to this sentence. The Borrower
will furnish to the Administrative Agent within 45 days after the date the
payment of any Taxes is due pursuant to applicable law certified copies of
tax receipts evidencing such payment by the Borrower. The Borrower agrees to
indemnify and hold harmless each Bank, and reimburse such Bank upon its
written request, for the amount of any Taxes so levied or imposed and paid by
such Bank.
(b) Each Bank that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax
purposes agrees to deliver to the Borrower and the Administrative Agent on or
prior to the Effective Date, or in the case of a Bank that is an assignee or
transferee of an interest under this Agreement pursuant to Section 11.04(b)
(unless the respective Bank was already a Bank hereunder immediately prior to
such assignment or transfer), on the date of such assignment or transfer to
such Bank, (i) two accurate and complete original signed copies of Internal
Revenue Service Form 4224 or 1001 (or successor forms) certifying to such
Bank's entitlement to a complete exemption from United States withholding tax
with respect to payments to be made under this Agreement and under any Note,
or (ii) if the Bank is not a "bank" within the meaning of Section
881(c)(3)(A) of the Code and cannot deliver either Internal Revenue Service
Form 1001 or 4224 pursuant to clause (i) above, (x) a certificate
substantially in the form of Exhibit C (any such certificate,
-13-
a "Section 3.04(b)(ii) Certificate") and (y) two accurate and complete
original signed copies of Internal Revenue Service Form W-8 (or successor
form) certifying to such Bank's entitlement to a complete exemption from
United States withholding tax with respect to payments of interest to be made
under this Agreement and under any Note. In addition, each Bank agrees that
from time to time after the Effective Date, when a lapse in time or change in
circumstances renders the previous certification obsolete or inaccurate in
any material respect, it will deliver to the Borrower and the Administrative
Agent two new accurate and complete original signed copies of Internal
Revenue Service Form 4224 or 1001, or Form W-8 and a Section 3.04(b)(ii)
Certificate, as the case may be, and such other forms as may be required in
order to confirm or establish the entitlement of such Bank to a continued
exemption from or reduction in United States withholding tax with respect to
payments under this Agreement and any Note, or it shall immediately notify
the Borrower and the Administrative Agent of its inability to deliver any
such Form or Certificate, in which case such Bank shall not be required to
deliver any such Form or Certificate pursuant to this Section 3.04(b).
Notwithstanding anything to the contrary contained in Section 3.04(a), but
subject to Section 11.04(b) and the immediately succeeding sentence, (x) the
Borrower shall be entitled, to the extent it is required to do so by law, to
deduct or withhold income or similar taxes imposed by the United States (or
any political subdivision or taxing authority thereof or therein) from
interest, Fees or other amounts payable hereunder for the account of any Bank
which is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for U.S. Federal income tax purposes to the extent
that such Bank has not provided to the Borrower U.S. Internal Revenue Service
Forms that establish a complete exemption from such deduction or withholding
and (y) the Borrower shall not be obligated pursuant to Section 3.04(a)
hereof to gross-up payments to be made to a Bank in respect of income or
similar taxes imposed by the United States if (I) such Bank has not provided
to the Borrower the Internal Revenue Service Forms required to be provided to
the Borrower pursuant to this Section 3.04(b) or (II) in the case of a
payment, other than interest, to a Bank described in clause (ii) above, to
the extent that such Forms do not establish a complete exemption from
withholding of such taxes. Notwithstanding anything to the contrary
contained in the preceding sentence or elsewhere in this Section 3.04 and
except as set forth in Section 11.04(b), the Borrower agrees to pay any
additional amounts and to indemnify each Bank in the manner set forth in
Section 3.04(a) (without regard to the identity of the jurisdiction requiring
the deduction or withholding) in respect of any Taxes deducted or withheld by
it as described in the immediately preceding sentence as a result of any
changes after the Effective Date in any applicable law, treaty, governmental
rule, regulation, guideline or order, or in the interpretation thereof,
relating to the deducting or withholding of such Taxes.
-14-
SECTION 4. CONDITIONS PRECEDENT.
4.01 CONDITIONS PRECEDENT TO THE INITIAL BORROWING DATE. The
obligation of the Banks to make Loans to the Borrower hereunder on the
Initial Borrowing Date is subject to the satisfaction of each of the
following conditions at such time:
(a) EFFECTIVENESS; NOTES. (i) The Effective Date shall have
occurred and (ii) there shall have been delivered to the Administrative
Agent for the account of each Bank the appropriate Note or Notes
executed by the Borrower in the amount, maturity and as otherwise
provided herein.
(b) OPINIONS OF COUNSEL. On the Initial Borrowing Date, the
Administrative Agent shall have received an opinion, or opinions, in
form and substance reasonably satisfactory to the Administrative Agent,
addressed to each of the Banks and dated the Initial Borrowing Date,
from Xxxxxx Xxxxxxxx, Esq., counsel to the Borrower, which opinion shall
cover the matters contained in Exhibit D hereto.
(c) OFFICER'S CERTIFICATE; CORPORATE PROCEEDINGS. (i) On the
Initial Borrowing Date, the Banks shall have received from the Borrower
(A) an Officer's Certificate, dated the Initial Borrowing Date and
signed by the President or any Vice President of the Borrower, in the
form of Exhibit E-1 hereto with appropriate insertions and (B) a
Secretary's Certificate, dated the Initial Borrowing Date and signed by
the Secretary or any Assistant Secretary of the Borrower, in the form of
Exhibit E-2 hereto with appropriate insertions, together with (x) copies
of the Certificate of Incorporation and By-Laws or other organizational
documents of the Borrower and its direct Subsidiaries and (y) the
resolutions of the Borrower and the other documents referred to in such
certificate, and the foregoing shall be reasonably satisfactory to the
Administrative Agent.
(ii) All corporate and legal proceedings and all instruments and
agreements in connection with the transactions contemplated by this
Agreement and the other Credit Documents shall be reasonably
satisfactory in form and substance to the Administrative Agent, and the
Administrative Agent shall have received all information and copies of
all certificates, documents and papers, including good standing
certificates and any other records of corporate proceedings and
governmental approvals, if any, which the Administrative Agent
reasonably may have requested in connection therewith, such documents
and papers where appropriate to be certified by proper corporate or
governmental authorities.
-15-
(d) EXISTING CREDIT AGREEMENT. On the Initial Borrowing Date and
concurrently with the making of the initial Loans hereunder, all
commitments under the Existing Credit Agreement shall have been
terminated, all principal, interest, fees and other amounts thereunder
shall have been paid in full and the collateral securing the Existing
Credit Agreement shall have been released, in each case to the
satisfaction of the Administrative Agent and the Collateral Agent.
(e) ADVERSE CHANGE, ETC. On the Initial Borrowing Date, nothing
shall have occurred (and the Banks shall have become aware of no facts
or conditions not previously known or disclosed on any Annex hereto),
which, when taken as a whole, the Administrative Agent shall reasonably
determine (A) has, or is reasonably likely to have, a material adverse
effect on the rights or remedies of the Banks, the Administrative Agent
or the Collateral Agent under this Agreement or any other Credit
Document, or on the ability of the Borrower to perform its obligations
to them, or (B) has or is reasonably likely to have a Material Adverse
Effect.
(f) LITIGATION. No actions, suits or proceedings shall be pending
or, to the knowledge of the Borrower, threatened against the Borrower
(i) with respect to this Agreement or any other Credit Document or the
transactions contemplated hereby or thereby or (ii) which either the
Administrative Agent or the Required Banks shall in good faith determine
has, or is reasonably likely to have, (x) a Material Adverse Effect or
(y) a material adverse effect on the rights or remedies of the Banks,
the Administrative Agent or the Collateral Agent hereunder or under any
other Credit Document or on the ability of the Borrower to perform its
obligations to them hereunder or under any other Credit Documents.
(g) APPROVALS, ETC. On the Initial Borrowing Date the following
approvals shall have been obtained to the satisfaction of the Banks:
(i) all necessary and material governmental and third party
approvals, permits and licenses in connection with this Agreement
and the transactions contemplated by the Credit Documents and
otherwise referred to herein or therein, to the extent such
approvals, consents, permits and licenses are required to be
obtained or made prior to the Initial Borrowing Date, shall have
been obtained and remain in full force and effect, and all
applicable waiting periods shall have expired, in each case without
any action being taken by any competent authority (including any
court having jurisdiction) which restrains, prevents or imposes, in
the
-16-
reasonable judgment of the Required Banks or the Administrative
Agent, materially adverse conditions upon the consummation of any
such agreement or transaction;
(ii) any necessary shareholder approvals in connection with
the Indebtedness to be incurred pursuant to this Agreement and the
Liens to be created under the Pledge Agreement shall have been
obtained and remain in full force and effect; and
(iii) all regulatory approvals in connection with the pledge
of the stock and notes pursuant to the Pledge Agreement shall have
been obtained and remain in full force and effect.
(h) PLEDGE AGREEMENT. On or prior to the Initial Borrowing Date,
the Borrower shall have duly authorized, executed and delivered a Pledge
Agreement substantially in the form of Exhibit F hereto (as modified,
amended or supplemented from time to time in accordance with the terms
thereof and hereof, the "Pledge Agreement"), which Pledge Agreement
shall be in full force and effect, and shall have delivered to the
Collateral Agent, as pledgee thereunder:
(i) all of the Pledged Securities referred to therein,
endorsed in blank or together with undated stock powers executed in
blank, as appropriate; and
(ii) evidence that all other actions necessary or, in the
reasonable opinion of the Collateral Agent, desirable to perfect
and protect the security interests purported to be created by the
Pledge Agreement have been taken or will be taken promptly after
the Initial Borrowing Date.
(i) FINANCIAL STATEMENTS; PROJECTIONS. Prior to the Initial
Borrowing Date, the Borrower shall have delivered or caused to be
delivered to the Administrative Agent with copies for each Bank:
(i) the audited consolidated and consolidating balance sheets
of the Borrower as of December 31, 1996, and the related
consolidated and consolidating statements of income, of
stockholder's equity and of cash flows for the fiscal year then
ended, in each case prepared in accordance with GAAP;
-17-
(ii) the audited Annual Statement of each Regulated Insurance
Company for the fiscal year ended December 31, 1996, prepared in
accordance with SAP and as filed with the Applicable Insurance
Regulatory Authority;
(iii) the unaudited consolidated and consolidating balance
sheets of the Borrower as of June 30, 1997, and the related
consolidated and consolidating statements of income, of
stockholder's equity and of cash flows for the fiscal quarter then
ended, in each case prepared in accordance with GAAP; and
(iv) the Quarterly Statement of each Regulated Insurance
Company for the fiscal quarter ended June 30, 1997.
(j) DELTA LIFE ACQUISITION. No later than concurrently with the
initial Borrowing hereunder, the Borrower shall have consummated the
acquisition of Delta Holdings through a merger of a Wholly-Owned
Subsidiary of the Borrower with Delta Holdings, and Delta Holdings and
Delta Life shall be Wholly-Owned Subsidiaries of the Borrower.
(k) PAYMENT OF FEES. On the Initial Borrowing Date, all costs,
fees and expenses (including, without limitation, legal fees and
expenses), and all other compensation contemplated by this Agreement or
the other Credit Documents, due to the Administrative Agent or any Banks
shall have been paid to the extent due.
4.2 CONDITIONS PRECEDENT TO ALL LOANS. The obligation of each Bank
to make each Loan (including, without limitation, Loans made on the Initial
Borrowing Date) is subject, at the time of the making of each such Loan, to
the satisfaction of the following conditions:
(a) NO DEFAULT; REPRESENTATIONS AND WARRANTIES. At the time of
the making of each such Loan and also after giving effect thereto (i)
there shall exist no Default or Event of Default and (ii) all
representations and warranties contained herein or in the other Credit
Documents shall be true and correct in all material respects with the
same effect as though such representations and warranties had been made
on the date of the making of such Loan (it being understood and agreed
that any representation or warranty which by its terms is made as of a
specified date shall be required to be true and correct in all material
respects only as of such specified date).
-18-
(b) NOTICE OF BORROWING. Prior to the making of each Loan, the
Administrative Agent shall have received a Notice of Borrowing meeting
the requirements of Section 1.03(a).
The occurrence of the Initial Borrowing Date and the acceptance of
the proceeds of each Loan shall constitute a representation and warranty by
the Borrower to the Administrative Agent and each of the Banks that all the
conditions specified in this Section 4 and applicable to the Initial
Borrowing Date and/or the making of such Loan, as the case may be, exist as
of that time (except to the extent that any of the conditions specified in
this Section 4 are required to be satisfactory to or determined by any Bank,
the Required Banks and/or the Administrative Agent or otherwise expressly
calls for a subjective determination to be made by any Bank, the Required
Banks and/or the Administrative Agent). All of the Notes, certificates,
legal opinions and other documents and papers referred to in this Section 4,
unless otherwise specified, shall be delivered to the Administrative Agent at
the Notice Office for the account of each of the Banks and, except for the
Notes, in sufficient counterparts or copies for each of the Banks and shall
be in form and substance reasonably satisfactory to the Administrative Agent.
SECTION 5. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. In order
to induce the Banks to enter into this Agreement and to make the Loans
provided for herein, the Borrower makes the following representations and
warranties to, and agreements with, the Banks, all of which shall survive the
execution and delivery of this Agreement and the making of the Loans (with
the making of each Loan being deemed to constitute a representation and
warranty that the matters specified in this Section 5 are true and correct in
all material respects on and as of the date of the making of such Loan unless
such representation and warranty expressly indicates that it is being made as
of any specific date in which case such representation and warranty shall be
true and correct in all material respects as of such specified date):
5.01 CORPORATE STATUS. Except as disclosed on Annex III hereto,
the Borrower and each of its Subsidiaries (i) is a duly organized and validly
existing corporation or business trust or other entity in good standing under
the laws of the jurisdiction of its organization and has the corporate or
other organizational power and authority to own its property and assets and
to transact the business in which it is engaged and presently proposes to
engage, and (ii) has been duly qualified and is authorized to do business and
is in good standing in all jurisdictions where it is required to be so
qualified and where the failure to be so qualified would have a Material
Adverse Effect.
-19-
5.02 CORPORATE POWER AND AUTHORITY. The Borrower has the corporate
power and authority to execute, deliver and carry out the terms and
provisions of the Credit Documents to which it is a party and has taken all
necessary corporate action to authorize the execution, delivery and
performance of the Credit Documents to which it is a party. The Borrower has
duly executed and delivered each Credit Document to which it is a party and
each such Credit Document constitutes the legal, valid and binding obligation
of the Borrower enforceable against the Borrower in accordance with its
terms, except to the extent that enforceability thereof may be limited by
applicable bankruptcy, insolvency, moratorium or similar laws affecting
creditors' rights generally and general principles of equity regardless of
whether enforcement is sought in a proceeding in equity or at law.
5.03 NO CONTRAVENTION OF LAWS, AGREEMENTS OR ORGANIZATIONAL
DOCUMENTS. Neither the execution, delivery and performance by the Borrower of
the Credit Documents to which it is a party nor compliance with the terms and
provisions thereof, nor the consummation of the transactions contemplated
therein, (i) will contravene any applicable provision of any law, statute,
rule, regulation, order, writ, injunction or decree of any court or
governmental instrumentality, (ii) will conflict or be inconsistent with or
result in any breach of any of the terms, covenants, conditions or provisions
of, or constitute a default under, or (other than pursuant to the Pledge
Agreement) result in the creation or imposition of (or the obligation to
create or impose) any Lien upon any of the property or assets of the Borrower
or any of its Subsidiaries pursuant to the terms of, any indenture, mortgage,
deed of trust, loan agreement, credit agreement or any other material
instrument to which the Borrower or any of its Subsidiaries is a party or by
which it or any of its property or assets are bound or to which it may be
subject or (iii) will violate any provision of the Certificate of
Incorporation or By-Laws of the Borrower or any of its Subsidiaries.
5.04 LITIGATION AND CONTINGENT LIABILITIES. There are no actions,
suits or proceedings pending or threatened in writing involving the Borrower
or any of its Subsidiaries (including, without limitation, with respect to
this Agreement or any documentation executed in connection herewith) (i) that
have or could reasonably be expected to have a Material Adverse Effect or
(ii) that could reasonably be expected to have a material adverse effect on
the rights or remedies of the Banks, the Administrative Agent or the
Collateral Agent or on the ability of the Borrower to perform its respective
obligations to the Banks, the Administrative Agent or the Collateral Agent
hereunder and under the other Credit Documents to which it is, or will be, a
party.
5.05 USE OF PROCEEDS; MARGIN REGULATIONS. (a) The proceeds of the
Loans incurred on the Initial Borrowing Date shall be utilized as follows:
-20-
(i) first, to repay all obligations existing under the Existing Credit
Agreement and all fees, interest and other amounts payable thereunder in
their entirety; and
(ii) second, to finance the Delta Life Acquisition.
(b) After compliance with clause (a) above, the proceeds of the Loans
incurred on the Initial Borrowing Date and thereafter shall be utilized as
follows: (i) to finance other mergers and acquisitions not prohibited
hereunder; and (ii) for general corporate purposes.
(c) Neither the making of any Loan hereunder or other Indebtedness or
financing of the Borrower, nor the use of the proceeds thereof, will violate
or be inconsistent with the provisions of Regulation G, T, U or X of the
Board of Governors of the Federal Reserve System and no part of the proceeds
of any Loan or other Indebtedness or financing of the Borrower will be used
to purchase or carry any Margin Stock or to extend credit for the purpose of
purchasing or carrying any Margin Stock.
5.06 APPROVALS. Any order, consent, approval, license, authorization,
or validation of, or filing, recording or registration with, or exemption by,
any foreign or domestic governmental or public body or authority, or any
subdivision thereof, which is required to authorize or is required in
connection with (i) the execution, delivery and performance of any Credit
Document or (ii) the legality, validity, binding effect or enforceability of
any Credit Document, has been obtained.
5.07 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.
5.08 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.
5.09 TRUE AND COMPLETE DISCLOSURE; PROJECTIONS AND ASSUMPTIONS. All
factual information (taken as a whole) heretofore or contemporaneously
furnished by or on behalf of the Borrower or any of its Subsidiaries to the
Administrative Agent or any Bank (including, without limitation, all
information contained in the Credit Documents) for purposes of or in
connection with this Agreement or any transaction contemplated herein is, and
all other factual information (taken as a whole) hereafter
-21-
furnished by or on behalf of any such Persons in writing to the
Administrative Agent will be, true and accurate in all material respects on
the date as of which such information is dated and not incomplete by omitting
to state any material fact necessary to make such information (taken as a
whole) not misleading at such time in light of the circumstances under which
such information was provided. The projections contained in such materials
are based on good faith estimates and assumptions believed by the Borrower to
be reasonable and attainable at the time made, it being recognized by the
Banks that such projections as to future events are not to be viewed as facts
and that actual results during the period or periods covered by any such
projections may differ from the projected results.
5.10 FINANCIAL CONDITION; FINANCIAL STATEMENTS. (a) The financial
statements delivered to the Administrative Agent pursuant to Section 4.01(i)
present fairly in all material respects the financial position of the
respective Persons referred to in such Sections at the dates of said
statements and the results of operations for the periods covered thereby.
All such financial statements have been prepared in accordance with SAP or
GAAP, as indicated in Section 4.01(i), consistently applied except to the
extent provided in the notes to said financial statements.
(b) Since December 31, 1996, nothing has occurred which, when taken as
a whole, has or is reasonably likely to have a Material Adverse Effect.
5.11 SECURITY INTERESTS. On and after the Initial Borrowing Date but
prior to the Collateral Release Date, the Pledge Agreement creates, as
security for the Obligations, valid and enforceable perfected security
interests in and Liens on all of the Collateral subject thereto, superior to
and prior to the rights of all third persons, and subject to no other Liens,
in favor of the Collateral Agent for the benefit of the Banks. At all times
on or after the Initial Borrowing Date but prior to the Collateral Release
Date, the Borrower has good and marketable title to all Collateral free and
clear of all Liens (except as created pursuant to the Pledge Agreement). No
filings or recordings are required in order to perfect the security interests
created under the Pledge Agreement.
5.12 TAX RETURNS AND PAYMENTS. The Borrower and its Subsidiaries have
filed or have obtained valid extensions with respect to all material income
and other material tax returns which are required to be filed and have paid,
on or before the due dates thereof, all taxes shown to be due and payable on
said returns or on any assessments made against them or their property and
all other material taxes, assessments, fees or other charges imposed on them
or any of their property by any Governmental Authority (other than (x) those
not yet due and payable and (y) those contested in good faith and for which
adequate reserves have been established), and
-22-
there are no waivers or agreements for the extension of time for the
assessment of any tax other than those not reasonably likely to have a
Material Adverse Effect. No tax Liens have been filed and no claims are
pending or, to the best knowledge of the Borrower, proposed or threatened
with respect to any such taxes, fees or other charges for any fiscal period,
which are reasonably likely to have a Material Adverse Effect.
5.13 COMPLIANCE WITH XXXXX. (a) Annex IV sets forth each Plan in
effect on the Effective Date; each Plan (and each related trust, insurance
contract or fund) is in compliance with its terms and with all applicable
laws, including without limitation ERISA and the Code; each Plan (and each
related trust, if any) which is intended to be qualified under Section 401(a)
of the Code has received a determination letter from the Internal Revenue
Service to the effect that it meets the requirements of Sections 401(a) and
501(a) of the Code and/or, in the case of a Plan amendment, has timely filed
a request for such a determination letter; no Reportable Event has occurred;
no Plan which is a multiemployer plan (as defined in Section 4001(a) (3) of
ERISA) is, to the knowledge of the Borrower, insolvent or in reorganization;
no Plan has an Unfunded Current Liability; no Plan which is subject to
Section 412 of the Code or Section 302 of ERISA has an accumulated funding
deficiency, within the meaning of such sections of the Code or ERISA, or has
applied for or received a waiver of an accumulated funding deficiency or an
extension of any amortization period, within the meaning of Section 412 of
the Code or Section 303 of 304 of ERISA; all contributions required to be
made with respect to a Plan have been timely made except to the extent of any
such contribution which, if not timely made, would not result in a material
liability to the Borrower, any Subsidiary of the Borrower or any ERISA
Affiliate; neither the Borrower nor any Subsidiary of the Borrower nor any
ERISA Affiliate has incurred any liability (including any indirect,
contingent or secondary liability) to or on account of a Plan pursuant to
Section 409, 502(i), 502(1), 515, 4062, 4063, 4064, 4069, 4201, 4204, or 4212
of ERISA or Section 401(a) (29), 4971 or 4975 of the Code or expects to incur
any such liability under any of the foregoing sections with respect to any
Plan; no condition exists which presents a risk to the Borrower or any
Subsidiary of the Borrower or any ERISA Affiliate of incurring a liability to
or on account of a Plan pursuant to the foregoing provisions of ERISA and the
Code; no proceedings have been instituted by the PBGC to terminate or appoint
a trustee to administer any Plan which is subject to Title IV of ERISA in a
distress termination; no action, suit, proceeding, hearing, audit or
investigation with respect to the administration, operation or the investment
of assets of any Plan (other than routine claims for benefits or relating to
qualified domestic relations orders) is pending, expected or, to the
knowledge of the Borrower, threatened; neither the Borrower nor any
Subsidiary of the Borrower nor any ERISA Affiliate has incurred any liability
as a result of any group health plan (as defined in Section 607(1) of ERISA
or Section 4980B(g)(2) of the Code) other than a multiemployer plan described
in Section 3(37) of ERISA which covers or has covered
-23-
employees or former employees of the Borrower, any Subsidiary of the
Borrower, or any ERISA Affiliate having not been operated in compliance with
the provisions of Part 6 of subtitle B of Title I of ERISA and Section 4980B
of the Code; no lien imposed under the Code or ERISA on the assets of the
Borrower or any Subsidiary of the Borrower or any ERISA Affiliate exists or
is likely to arise on account of any Plan; and the Borrower and its
Subsidiaries may cease contributions to or terminate any employee benefit
plan maintained by any of them without incurring any liability; PROVIDED that
the provisions of this Section 5.13 shall not be deemed to be untrue based on
circumstances which would not, individually or in the aggregate, have or
reasonably be expected to have, a Material Adverse Effect.
5.14 SUBSIDIARIES. (a) Annex V hereto lists each Subsidiary of the
Borrower (and the direct and indirect ownership interest of the Borrower
therein) and also identifies the owner thereof, in each case existing on the
Initial Borrowing Date after giving effect to the Delta Life Acquisition.
(b) There are no restrictions on the Borrower or any of its
Subsidiaries which prohibit or otherwise restrict the transfer of cash or
other assets from any Subsidiary of the Borrower to the Borrower, other than
prohibitions or restrictions existing under or by reason of (i) this
Agreement or the other Credit Documents, (ii) Legal Requirements, (iii)
non-assignment provisions in contracts entered into in the ordinary course of
business and consistent with past practices, (iv) purchase money obligations
for property acquired in the ordinary course of business, so long as such
obligations are permitted under this Agreement and (v) such restrictions with
respect to a Person which becomes a Subsidiary after the date hereof,
PROVIDED that such restrictions existed at the time such Person became a
Subsidiary and were not created in anticipation thereof.
5.15 INTELLECTUAL PROPERTY, ETC. The Borrower and each of its
Subsidiaries have obtained all material patents, trademarks, service marks,
trade names, copyrights, licenses and other rights, free from burdensome
restrictions, that are necessary for the operation of their respective
businesses as presently conducted and as proposed to be conducted.
5.16 POLLUTION AND OTHER REGULATIONS. The Borrower and each of its
Subsidiaries are in compliance with all laws and regulations relating to
pollution and environmental control, equal employment opportunity and
employee safety in all domestic and foreign jurisdictions in which the
Borrower and each of its Subsidiaries is presently doing business, and the
Borrower will comply and cause each of its Subsidiaries to comply with all
such laws and regulations which may be imposed in the future in jurisdictions
in which the Borrower or such Subsidiary may then be doing
-24-
business; in each case other than those the non-compliance with which would
not have a Material Adverse Effect.
5.17 LABOR RELATIONS; COLLECTIVE BARGAINING AGREEMENTS. (a) Set forth
on Annex VI is a list and description (including dates of termination) of all
Collective Bargaining Agreements between or applicable to the Borrower or any
of its Subsidiaries and any union, labor organization or other bargaining
agent in respect of the employees of the Borrower and/or any Subsidiary on
the Effective Date.
(b) Neither the Borrower nor any of its Subsidiaries is engaged in any
unfair labor practice that is reasonably likely to have a Material Adverse
Effect. There is (i) no significant unfair labor practice complaint pending
against the Borrower or any of its Subsidiaries or threatened in writing
against any of them, before the National Labor Relations Board, and no
significant grievance or significant arbitration proceeding arising out of or
under any Collective Bargaining Agreement is now pending against the Borrower
or any of its Subsidiaries or threatened in writing against any of them, (ii)
no significant strike, labor dispute, slowdown or stoppage is pending against
the Borrower or any of its Subsidiaries or threatened in writing against the
Borrower or any of its Subsidiaries and (iii) to the best knowledge of the
Borrower, no union representation question exists with respect to the
employees of the Borrower or any of its Subsidiaries, except (with respect to
any matter specified in clause (i), (ii) or (iii) above, either individually
or in the aggregate) such as is not reasonably likely to have a Material
Adverse Effect.
5.18 CAPITALIZATION. As of the Effective Date, the authorized capital
stock of the Borrower consists of (i) 75,000,000 shares of Class A common
stock, no par value per share, 18,155,989 of which are issued and
outstanding, (ii) 50,000,000 shares of Class B common stock, no par value per
share, 5,000,000 of which are issued and outstanding and (iii) 20,000,000
shares of preferred stock, no par value per share, none of which are issued
and outstanding. As of the Effective Date, all such outstanding shares of
the Borrower have been duly and validly issued and are fully paid and
nonassessable. As of the Initial Borrowing Date after giving effect to the
Delta Life Acquisition, neither the Borrower nor any of its Subsidiaries has
outstanding any securities convertible into or exchangeable for its capital
stock or outstanding any rights to subscribe for or to purchase, or any
options for the purchase of, or any agreements providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to, its capital stock except for options, warrants and
grants outstanding in the aggregate amounts set forth on Annex VII.
5.19 INDEBTEDNESS. Xxxxx XXXX sets forth a true and complete list of
all Indebtedness for borrowed money of the Borrower and its Subsidiaries as
of the
-25-
Effective Date the aggregate principal amount of which equals or exceeds
$2,500,000, in each case showing the aggregate principal amount thereof, the
name of the lender in respect thereof and the name of the respective borrower
and any other entity which has directly or indirectly guaranteed such
Indebtedness.
5.20 COMPLIANCE WITH STATUTES, ETC. The Borrower and each of its
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, and has filed or
otherwise provided all material reports, data, registrations, filings,
applications and other information required to be filed with or otherwise
provided to, all governmental bodies, domestic or foreign, in respect of the
conduct of its business and the ownership of its property (including
compliance with all applicable environmental laws), except such failure(s) to
comply as would not, in the aggregate, have a Material Adverse Effect. All
required regulatory approvals are in full force and effect on the date
hereof, except where the failure of such approvals to be in full force and
effect could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
5.21 INSURANCE LICENSES. Each Regulated Insurance Company has obtained
and maintains in full force and effect all licenses and permits from all
regulatory authorities necessary to operate in the jurisdictions in which
such Regulated Insurance Company operates, in each case other than such
licenses and permits the failure to obtain or maintain which, individually or
in the aggregate, is not reasonably likely to have a Material Adverse Effect.
Annex IX sets forth a true, correct and complete list, as of the Initial
Borrowing Date after giving effect to the Delta Life Acquisition, of each of
the jurisdictions in which each Regulated Insurance Company is duly licensed
and in good standing to write insurance, the lines of insurance that each
Regulated Insurance Company is authorized to write in such jurisdictions and
the dates of expiration of each of the licenses.
5.22 INSURANCE BUSINESS. All insurance policies issued by any
Regulated Insurance Company are, to the extent required under Applicable Law,
on forms approved by the insurance regulatory authorities of the jurisdiction
where issued or have been filed with and not objected to by such authorities
within the period provided for objection, except for those forms with respect
to which a failure to obtain such approval or make such a filing without it
being objected to, could not, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
5.23 REINSURANCE. As of the Effective Date, the reinsurance agreements
described in Annex X are the only material contracts regarding reinsurance,
coinsurance, excess insurance, ceding of insurance (other than insurance
ceded on an
-26-
assumption reinsurance basis), assumption of insurance or indemnification
with respect to insurance ("Reinsurance") to which any Regulated Insurance
Company is a party.
SECTION 6. AFFIRMATIVE COVENANTS. The Borrower hereby covenants and
agrees that on the Effective Date and thereafter, for so long as this
Agreement is in effect and until the Loans, together with interest, Fees and
all other Obligations incurred hereunder, are paid in full:
6.01 INFORMATION COVENANTS. The Borrower will furnish to each Bank:
(a) ANNUAL FINANCIAL STATEMENTS. (i) As soon as available and in
any event within 95 days after the close of each fiscal year of the
Borrower, (x) the consolidated balance sheet of the Borrower and its
Subsidiaries, in each case, as at the end of such fiscal year and the
related consolidated statements of income, of stockholder's equity and
of cash flows for such fiscal year and (y) the consolidating balance
sheet of the Borrower and each of its Subsidiaries as at the end of the
fiscal year and the related consolidating statements of income, of
stockholders' equity and of cash flows for such fiscal year; in each
case prepared in accordance with GAAP and setting forth comparative
figures for the preceding fiscal year, and, in the case of such
consolidated statements, examined by independent certified public
accountants of recognized national standing whose report shall not be
qualified as to the scope of audit or as to the status of the Borrower
and its Subsidiaries as a going concern.
(ii) As soon as available and in any event within 120 days after
the close of each fiscal year of each Regulated Insurance Company, the
Annual Statement (prepared in accordance with SAP) for such fiscal year
of such Regulated Insurance Company, as filed with the Applicable
Insurance Regulatory Authority in compliance with the requirements
thereof (or a report containing equivalent information for any Regulated
Insurance Company not so required to file the foregoing with the
Applicable Insurance Regulatory Authority) together with the opinion
thereon of the Chief Financial Officer or other Authorized Officer of
such Regulated Insurance Company stating that such Annual Statement
presents fairly in all material respects the financial condition and
results of operations of such Regulated Insurance Company in accordance
with SAP.
(iii) As soon as available and in any event within 120 days after
the close of each fiscal year of the Borrower, a copy of the "Statement
of Actuarial Opinion" and "Management Discussion and Analysis" for
each Regulated
-27-
Insurance Company (prepared in accordance with SAP) for such fiscal year
and as filed with the Applicable Regulatory Insurance Authority in
compliance with the requirements thereof (or a report containing
equivalent information for any Regulated Insurance Company not so
required to file the foregoing with the Applicable Regulatory Insurance
Authority).
(b) QUARTERLY FINANCIAL STATEMENTS. (i) As soon as available and
in any event within 50 days after the close of each of the first three
quarterly accounting periods in each fiscal year of the Borrower, (x)
the consolidated balance sheet of the Borrower and its Subsidiaries,
each as at the end of such fiscal quarter and the related consolidated
statements of income, of stockholder's equity and of cash flows for such
quarterly period and for the elapsed portion of the fiscal year ended
with the last day of such quarterly period and (y) the consolidating
balance sheet of the Borrower and each of its Subsidiaries as at the end
of such fiscal quarter and the related consolidating statements of
income, of stockholders' equity and of cash flows for such quarterly
period and for the elapsed portion of the fiscal year ended with the
last day of such quarterly period; in each case setting forth
comparative figures for the related periods in the prior fiscal year,
and all of which shall be prepared in accordance with GAAP and certified
by the Chief Financial Officer or other Authorized Officer of the
Borrower, as the case may be, subject to changes resulting from normal
year-end audit adjustments.
(ii) As soon as available and in any event within 50 days after the
close of each of the first three quarterly accounting periods in each
fiscal year of each Regulated Insurance Company, the Quarterly Statement
(prepared in accordance with SAP) for such fiscal period of such
Regulated Insurance Company, as filed with the Applicable Insurance
Regulatory Authority together with the opinion thereon of the Chief
Financial Officer or other Authorized Officer of such Regulated
Insurance Company stating that such financial statements present fairly
in all material respects the financial condition and results of
operations of such Regulated Insurance Company in accordance with SAP.
(c) OFFICER'S CERTIFICATES. At the time of the delivery of the
financial statements provided for in Sections 6.01(a)(i) and (ii) and
(b)(i) and (ii), a certificate of the Chief Financial Officer or other
Authorized Officer of the Borrower to the effect that no Default or
Event of Default exists or, if any Default or Event of Default does
exist, specifying the nature and extent thereof, which certificate shall
set forth the calculations required to establish whether the Borrower
and its Subsidiaries were in compliance with the provisions of Sec-
-28-
tions 7.10 through 7.13, inclusive, as at the end of such fiscal year or
quarter, as the case may be.
(d) NOTICE OF DEFAULT OR LITIGATION. (x) Promptly, and in any
event within three Business Days after the Borrower or any of its
Subsidiaries obtains knowledge thereof, notice of the occurrence of any
event which constitutes a Default or Event of Default, which notice
shall specify the nature thereof, the period of existence thereof and
what action the Borrower proposes to take with respect thereto and (y)
promptly after the Borrower or any of its Subsidiaries obtains knowledge
thereof, notice of any outstanding litigation or governmental or
regulatory proceeding pending against the Borrower or any of its
Subsidiaries which could have a Material Adverse Effect, or a material
adverse effect on the ability of the Borrower to perform its respective
obligations hereunder or under any other Credit Document.
(e) AUDITORS' REPORTS. Promptly upon receipt thereof, a copy of
(x) each other report or "management letter" submitted to the Borrower
or any of its Subsidiaries by their independent accountants in
connection with any annual, interim or special audit made by them of the
books of the Borrower or any of its Subsidiaries and (y) each report
submitted to the Borrower or any of its Subsidiaries by any independent
actuary to the extent that such report, in the good faith opinion of the
Borrower, identifies a condition, situation or event that has or is
reasonably likely to have a Material Adverse Effect.
(f) OTHER REGULATORY STATEMENTS AND REPORTS. Promptly (A) after
their becoming available, copies of any statutory financial statements
(including all exhibits and schedules thereto) that the Borrower or any
Regulated Insurance Company periodically files with the Applicable
Insurance Regulatory Authority of the state in which it is domiciled
and, to the extent materially different from the financial statements
filed in such state of domicile, any other state in which it is deemed
to be commercially domiciled or any governmental agency or agencies
substituted therefor, (B) after receipt thereof, copies of all regular
and periodic reports of reviews or examinations (including, without
limitation, triennial examinations and risk adjusted capital reports) of
any Regulated Insurance Company, delivered to such Person by any
Applicable Insurance Regulatory Authority, insurance commission or
similar regulatory authority, (C) after receipt thereof, written notice
of any assertion by any Applicable Insurance Regulatory Authority or any
governmental agency or agencies substituted therefor, as to a violation
of any Legal Requirement by any Regulated Insurance Company which is
likely to have a Material Adverse Effect, (D) after receipt thereof, a
copy of the final report to each Regulated Insurance Company from
-29-
the NAIC for each fiscal year, as to such Regulated Insurance Company's
compliance or noncompliance with each of the NAIC Tests, (E) after
receipt thereof, a copy of any final rating analysis by any rating
agency (including, without limitation, A.M. Best) for each Regulated
Insurance Company for each fiscal year, (F) after receipt thereof, a
copy of any notice of termination, cancellation or recapture of any
Reinsurance Agreement or Retrocession Agreement to which a Regulated
Insurance Company is a party to the extent such termination or
cancellation is likely to have a Material Adverse Effect, (G) and in any
event not later than seven days after the making of any such filing,
copies of all insurance holding company system act filings with
governmental authorities by a Regulated Insurance Company, including,
without limitation, filings which seek approval of governmental
authorities with respect to transactions between any of the Regulated
Insurance Companies and any of their respective Affiliates, (H) and in
any event within three Business Days after receipt thereof, copies of
any notice of actual suspension, termination or revocation of any
license of any Regulated Insurance Company by any Applicable Insurance
Regulatory Authority, including any request by an Applicable Insurance
Regulatory Authority which commits a Regulated Insurance Company to take
or refrain from taking any action or which otherwise affects the
authority of such Regulated Insurance Company to conduct its business,
and (I) and in any event within 20 Business Days after the Borrower or
any of its Subsidiaries obtains knowledge thereof, notice of any actual
changes in the insurance laws enacted in any state in which any
Regulated Insurance Company is domiciled which could have a Material
Adverse Effect.
(g) OTHER INFORMATION. Promptly upon transmission thereof, copies
of any filings and registrations with, and reports to, the SEC by the
Borrower or any of its Subsidiaries (other than any registration
statement on Form S-8) and copies of all financial statements, proxy
statements, notices and reports as the Borrower or any of its
Subsidiaries shall send to analysts generally or the holders of their
capital stock or of any public subordinated debt issued by the Borrower
in their capacity as such holders (in each case to the extent not
theretofore delivered to the Banks pursuant to this Agreement) and, with
reasonable promptness, such other information or existing documents
(financial or otherwise) as the Administrative Agent or any Bank may
reasonably request from time to time.
6.02 BOOKS, RECORDS AND INSPECTIONS. The Borrower will, and will
cause each of its Subsidiaries to, permit officers and designated
representatives of the Administrative Agent or any Bank to visit and inspect any
of the properties or assets of the Borrower and any of its Subsidiaries in
whomsoever's possession (but only to the
-30-
extent the Borrower or such Subsidiary has the right to do so to the extent
in the possession of another Person), and to examine the books of account of
the Borrower and any of its Subsidiaries and discuss the affairs, finances
and accounts of the Borrower and of any of its Subsidiaries with, and be
advised as to the same by, its and their officers and independent accountants
and independent actuaries, if any, all at such reasonable times and
intervals, upon reasonable prior notice and to such reasonable extent as the
Administrative Agent or any Bank may request.
6.03 INSURANCE. The Borrower will, and will cause each of its
Subsidiaries to, at all times maintain in full force and effect insurance in
such amounts, covering such risks and liabilities and with such deductibles
or self-insured retentions as are in accordance with normal industry practice.
6.04 PAYMENT OF TAXES. The Borrower will pay and discharge, and will
cause each of its Subsidiaries to pay and discharge, all taxes, assessments
and governmental charges or levies imposed upon it or upon its income or
profits, or upon any properties belonging to it, prior to the date on which
penalties attach thereto, and all lawful claims (other than claims relating
to the adjustment or settling, in the ordinary course of business, of claims
in respect of insurance policies or reinsurance contracts) which, if unpaid,
might become a Lien or charge upon any properties of the Borrower or any of
its Subsidiaries; PROVIDED, that neither the Borrower nor any Subsidiary
shall be required to pay any such tax, assessment, charge, levy or claim
which (i) is being contested in good faith and by proper proceedings if it
has maintained adequate reserves (in the good faith judgment of the
management of the Borrower) with respect thereto in accordance with GAAP, or
(ii) if not paid, could not, individually or in the aggregate, be reasonably
expected to have a Material Adverse Effect.
6.05 CORPORATE FRANCHISES. The Borrower will do, and will cause each
Subsidiary to do, or cause to be done, all things reasonably necessary to
preserve and keep in full force and effect its corporate existence, rights
and authority; PROVIDED that any transaction permitted by Section 7.02 will
not constitute a breach of this Section 6.05.
6.06 COMPLIANCE WITH STATUTES, ETC. The Borrower will, and will cause
each Subsidiary to, comply with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or foreign, in respect of the conduct of its business and
the ownership of its property (including applicable statutes, regulations,
orders and restrictions relating to environmental standards and controls)
other than those the non-compliance with which would not have a Material
Adverse Effect.
-31-
6.07 ERISA. As soon as possible and, in any event, within 10 Business
Days after the Borrower, any Subsidiary of the Borrower or any ERISA
Affiliate knows or has reason to know of the occurrence of any of the
following, the Borrower will deliver to each of the Banks a certificate of
the Chief Financial Officer of the Borrower setting forth the full details as
to such occurrence and the action, if any, that the Borrower, such Subsidiary
or such ERISA Affiliate is required or proposes to take, together with any
notices required or proposed to be given to or filed with or by the Borrower,
the Subsidiary, the ERISA Affiliate, the PBGC, a Plan participant or the Plan
administrator with respect thereto: that a Reportable Event has occurred;
that an accumulated funding deficiency, within the meaning of Section 412 of
the Code or Section 302 of ERISA, in excess of $250,000 has been incurred or
an application may be or has been made for a waiver or modification of the
minimum funding standard (including any required installment payments) or an
extension of any amortization period under Section 412 of the Code or Section
303 or 304 of ERISA with respect to a Plan; that any contribution required to
be made with respect to a Plan has not been timely made except to the extent
that any such untimely contribution would not result in a material liability
to the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate; that
a Plan has been or may be terminated, reorganized, partitioned or declared
insolvent under Title IV of ERISA; that a Plan has an Unfunded Current
Liability in excess of $250,000; that proceedings may be or have been
instituted to terminate or appoint a trustee to administer a Plan which is
subject to Title IV of ERISA; that a proceeding has been instituted pursuant
to Section 515 of ERISA to collect a delinquent contribution to a Plan; that
the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate will or
may incur any material amount of liability (including any indirect,
contingent, or secondary liability) to or on account of the termination of or
withdrawal from a Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or
4212 of ERISA or with respect to a Plan under Section 401(a)(29), 4971, 4975
or 4980 of the Code or Section 409 or 502(i) or 502(l) of ERISA or with
respect to a group health plan (as defined in Section 607(1) of ERISA or
Section 4980B(g)(2) of the Code) under Section 4980B of the Code; or that the
Borrower or any Subsidiary of the Borrower may incur any material liability
pursuant to any employee welfare benefit plan (as defined in Section 3(1) of
ERISA) that provides death, health or severance benefits to retired employees
or other former employees (other than as required by Section 601 of ERISA or
applicable state law) or any Plan (other than (x) severance benefits paid
pursuant to or in connection with a merger or acquisition permitted under
Section 7.02(a) and (y) death, health and severance benefits accrued on the
books of the Borrower and its Subsidiaries). At the request of any Bank, the
Borrower will promptly deliver to such Bank a complete copy of the annual
report (on Internal Revenue Service Form 5500-series) of each Plan
(including, to the extent required, the related financial and actuarial
statements and opinions and other supporting statements, certifications,
schedules and information) required to be filed with the Internal Revenue
-32-
Service. In addition to any certificates or notices delivered to the Banks
pursuant to the first sentence hereof, if requested by the Banks, copies of
annual reports and any material notices received by the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate with respect to any Plan
shall be delivered to the Banks no later than 10 Business Days after the date
such notice has been received by the Borrower, the Subsidiary or the ERISA
Affiliate, as applicable.
6.08 PERFORMANCE OF OBLIGATIONS. The Borrower will, and will cause
each of its Material Subsidiaries to, perform in all material respects all of
its obligations under the terms of each mortgage, indenture, security
agreement, other debt instrument and material contract by which it is bound
or to which it is a party.
6.09 GOOD REPAIR. The Borrower will, and will cause each of its
Subsidiaries to, ensure that its material properties and equipment used or
useful in its business in whomsoever's possession they may be, are kept in
good repair, working order and condition, normal wear and tear excepted, and
that from time to time there are made in such properties and equipment all
needful and proper repairs, renewals, replacements, extensions, additions,
betterments and improvements thereto, to the extent and in the manner
customary for companies in similar businesses.
6.10 END OF FISCAL YEARS; FISCAL QUARTERS. The Borrower will, for
financial reporting purposes, cause (i) each of its, and each of its
Subsidiaries', fiscal years to end on December 31 of each year and (ii) each
of its, and each of its Subsidiaries', fiscal quarters to end on March 31,
June 30, September 30 and December 31 of each year; PROVIDED, that in the
event that the Borrower or any of its Subsidiaries acquires a Subsidiary
after the Initial Borrowing Date which does not comply with the requirements
of this Section 6.10, there shall not be deemed to be a breach of this
Section 6.10 as to such Subsidiary so long as the fiscal year and fiscal
quarter ends of such Subsidiary are changed to comply with the terms of this
Section 6.10 within one year following the date of acquisition of such
Subsidiary.
6.11 MAINTENANCE OF LICENSES AND PERMITS. The Borrower will, and will
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 except where failure to
maintain the same could not reasonably be expected to have a Material Adverse
Effect.
SECTION 7. NEGATIVE COVENANTS. The Borrower hereby covenants and
agrees that on the Effective Date and thereafter, for so long as this
Agreement is in
-33-
effect and until the Loans together with interest, Xxxx and all other
Obligations incurred hereunder, are paid in full:
7.01 CHANGES IN BUSINESS. The Borrower will not, and will not permit
any of its Subsidiaries to, engage in any material business other than the
life insurance business and businesses reasonably related thereto; PROVIDED,
that the foregoing covenant shall not be deemed to limit portfolio
investments by the Borrower and its Subsidiaries and shall not be deemed
violated based on any ancillary business conducted by a Person (or a
Subsidiary of such Person) who might become a Subsidiary of the Borrower
after the Effective Date.
7.02 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC. The
Borrower will not, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs, or enter into any transaction of merger or
consolidation, or sell or otherwise dispose of any of its property or assets
(including the sale of capital stock of any of its Subsidiaries, but
excluding any sale or disposition of property or assets in the ordinary
course of business), or purchase, lease or otherwise acquire (in one
transaction or a series of related transactions) all or any part of the
property or assets of any Person (excluding any purchases, leases or other
acquisitions of property or assets in, and for use in, the ordinary course of
business) or agree to do any of the foregoing at any future time, except that
the following shall be permitted:
(a) so long as no Default or Event of Default is then in existence
or would result therefrom, the Borrower and its Subsidiaries may enter
into mergers and acquisitions, and transactions reasonably incidental
thereto, provided that (x) in the case of any merger involving the
Borrower, the Borrower shall be the surviving corporation and (y) in the
case of any merger involving a Subsidiary of the Borrower, the surviving
corporation of such merger shall be an existing or resulting
Wholly-Owned Subsidiary of the Borrower;
(b) capital expenditures by the Borrower and its Subsidiaries;
(c) the Borrower and its Subsidiaries may acquire, hold, and dispose
of portfolio investments in accordance with investment guidelines adopted
by the Borrower and its Subsidiaries from time to time;
(d) any Regulated Insurance Company may enter into any Insurance
Contract, Reinsurance Agreement or Retrocession Agreement in accordance
with its underwriting, indemnity and retention policies as in effect from
time to time;
-34-
(e) the Borrower or any of its Subsidiaries may enter into leases
of property or assets not otherwise in violation of this Agreement;
(f) each of the Borrower and its Subsidiaries may sell assets,
PROVIDED that:
(i) such asset sale is in the ordinary course of its business;
(ii) the fair market value of any asset the subject of such
asset sale, taken together with the fair market value of all other
assets the subject of asset sales pursuant to this Section 7.02(f)(ii)
in the same fiscal year, does not exceed $10,000,000; or
(iii) such asset sale is with respect to the assets of the
Borrower or any of its Subsidiaries and the net proceeds of such sale
are either (x) employed in the business of the Borrower and its
Subsidiaries or reinvested within 180 days after receipt of such net
proceeds in assets used in the business of the Borrower or any of its
Subsidiaries (including, without limitation, in the investment
portfolio of the Borrower and its Subsidiaries) or (y) used within
180 days after receipt of such net proceeds to repay Indebtedness of
the Borrower or any of its Subsidiaries;
(g) Wholly-Owned Subsidiaries of the Borrower may be merged with
other Wholly-Owned Subsidiaries of the Borrower; PROVIDED, that prior to
the Collateral Release Date, if any shares of capital stock of any such
Subsidiary are pledged to the Collateral Agent pursuant to the Pledge
Agreement immediately prior to any such merger, then 100% (or, if less,
the maximum amount permitted under Applicable Laws to be pledged) of the
capital stock of the surviving entity shall be pledged to the Collateral
Agent pursuant to the Pledge Agreement;
(h) any Subsidiary of the Borrower which does not have any
significant assets may be wound-up, liquidated or dissolved; and
(i) the Borrower and its Wholly-Owned Subsidiaries may transfer
property or assets (including, without limitation, the capital stock of
Subsidiaries) to or among one another; PROVIDED, that prior to the
Collateral Release Date, in the case of any transfer of the capital stock
of a Subsidiary which is pledged to the Collateral Agent pursuant to the
Pledge Agreement, such Subsidiary must remain so pledged following such
transfer.
-35-
Notwithstanding the foregoing provisions of this Section 7.02, neither
the Borrower nor any of its Subsidiaries may make a sale of or with
respect to any capital stock of a Regulated Insurance Company, but
nothing in this sentence shall prohibit (x) any such Regulated Insurance
Company from merging with another Regulated Insurance Company in a
transaction permitted under clause (g) above or (y) any transfer of the
capital stock of a Subsidiary to the Borrower or a Wholly-Owned
Subsidiary of the Borrower under clause (i) above.
7.03 LIENS. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon
or with respect to any property or assets of any kind (real or personal,
tangible or intangible) of the Borrower or any such Subsidiary whether
now owned or hereafter acquired, except:
(a) Liens for taxes not yet due or Liens for taxes being contested
in good faith and by appropriate proceedings for which adequate reserves
(in the good faith judgment of the management of the Borrower) have been
established;
(b) Liens in respect of property or assets of the Borrower or any
of its Subsidiaries imposed by law which were incurred in the ordinary
course of business, such as carriers', warehousemen's and mechanics'
Liens and other similar Liens arising in the ordinary course of
business, and (x) which do not in the aggregate materially detract from
the value of such property or assets or materially impair the use
thereof in the operation of the business of the Borrower or any
Subsidiary or (y) which are being contested in good faith by appropriate
proceedings, which proceedings have the effect of preventing the
forfeiture or sale of any material property or asset subject to such
Lien;
(c) Liens created by this Agreement or the other Credit Documents;
(d) Liens in existence on the Effective Date which are listed, and
the property subject thereto on the Effective Date described, in Annex
XI, and any extensions or renewals thereof (provided that (i) the
securities subject to any such Lien may be replaced by other securities
of no greater principal amount and (ii) no such extension or renewal
will increase the obligations secured thereby or result in any such Lien
attaching to any additional property);
(e) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section 8.08;
-36-
(f) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds, Reinsurance
Agreements, Retrocession Agreements and other similar obligations
incurred in the ordinary course of business (exclusive of obligations in
respect of the payment for borrowed money);
(g) Leases or subleases granted to others not interfering in any
material respect with the business of the Borrower or any of its
Material Subsidiaries and any interest or title of a lessor under any
lease not in violation of this Agreement;
(h) Easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the ordinary conduct of the
business of the Borrower or any of its Material Subsidiaries;
(i) Liens arising from UCC financing statements regarding leases
not in violation of this Agreement;
(j) Liens on pledges or deposits of cash or securities made by any
Regulated Insurance Company as a condition to obtaining or maintaining
any licenses issued to it by any Applicable Insurance Regulatory
Authority;
(k) Purchase money mortgages or security interests, conditional
sale arrangements and other similar security interests, on equipment and
motor vehicles acquired by the Borrower or such Subsidiary (hereinafter
referred to individually as a "Purchase Money Security Interest");
PROVIDED, HOWEVER, that:
(i) the transaction in which any Purchase Money Security
Interest is proposed to be created is not then prohibited by any
other Section of this Agreement;
(ii) any Purchase Money Security Interest shall attach only to
the property or asset acquired in such transaction and shall not
extend to or cover any other assets or properties of the Borrower;
(iii) the Indebtedness secured or covered by any Purchase Money
Security Interest shall not exceed (at the time such Purchase
-37-
Money Security Interest is created) the lesser of the cost or fair
market value of the property or asset acquired and shall not be
prepaid from the proceeds of any Borrowing hereunder; and
(iv) the aggregate outstanding amount of all Indebtedness of
the Borrower and all of its Subsidiaries secured by Purchase Money
Security Interests shall not at any time exceed an amount equal to
$20,000,000;
(l) Liens on the property or assets of a Person which becomes a
Subsidiary after the date hereof securing Indebtedness permitted by
subsection 7.04(i), provided that (i) such Liens existed at the time
such Person became a Subsidiary and were not created in anticipation
thereof, (ii) any such Lien shall not extend to or cover any additional
property or assets of such Person, or any property of the Borrower or
any other Subsidiary, after the time such Person becomes a Subsidiary,
and (iii) the amount of Indebtedness secured thereby is not increased;
(m) Liens securing Indebtedness permitted under Section 7.04(b);
(n) Liens on marketable securities securing the Indebtedness
permitted under Section 7.04(e); provided that the principal amount of
such Indebtedness so secured shall not exceed $5,000,000;
(o) Liens on marketable securities securing the Indebtedness
permitted under Section 7.04(j);
(p) Liens on marketable securities securing the Indebtedness
permitted under Section 7.04(n); PROVIDED, that the principal amount of
such Indebtedness so secured shall not exceed $25,000,000;
(q) Xxxxx created in the ordinary course of business of acquiring,
holding and disposing of portfolio investments, including without
limitation investment accounts, futures accounts and deposit accounts,
in accordance with investment guidelines adopted by the Borrower and its
Subsidiaries from time to time; and
(r) Liens (of a type and/or to an extent not otherwise permitted
hereunder) which secure obligations not exceeding (as to the Borrower
and all of its Subsidiaries) $10,000,000 in aggregate amount at any time
outstanding.
-38-
7.04 INDEBTEDNESS. The Borrower will not, and will not permit any of
its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness for borrowed money, except:
(a) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(b) Capitalized Lease Obligations of the Borrower and its
Subsidiaries, provided that the aggregate Capitalized Lease Obligations
under all Capital Leases, other than any Capital Leases listed in Annex
VIII, shall not exceed $15,000,000 at any time;
(c) Indebtedness in existence on the Effective Date and listed in
Part A of Xxxxx XXXX, together with any subsequent extension, renewal or
refinancing thereof;
(d) Indebtedness of any Regulated Insurance Company with respect
to (i) letters of credit securing obligations under Reinsurance
Agreements entered into in the ordinary course of business of any such
Regulated Insurance Company, (ii) letters of credit issued in lieu of
deposits to satisfy Legal Requirements or (iii) letters of credit or
surety bonds issued in lieu of depositing securities with any Applicable
Insurance Regulatory Authority to satisfy regulatory requirements in
connection with worker's compensation insurance; in any case to the
extent (x) such letters of credit are not drawn upon or, if and to the
extent drawn upon, such drawing is reimbursed no later than 10 days
following receipt by the Borrower or such Subsidiary of notice of
payment on such letter of credit and (y) the aggregate outstanding
amount of such obligations does not exceed $5,000,000 at any time;
(e) Indebtedness of the Borrower and its Subsidiaries under
Interest Rate Protection Agreements;
(f) Indebtedness under reimbursement obligations in respect of
letters of credit issued to guaranty or support the payment of
performance bonds, workers' compensation claims, insurance claims and
contested appeals and compliance with operational and regulatory
obligations incurred in the ordinary course of business, in an aggregate
principal amount not to exceed $5,000,000;
(g) Indebtedness secured by Xxxxx permitted under Section 7.03(k)
and any extensions, renewals or refinancing thereof;
-39-
(h) Indebtedness (i) of any Wholly-Owned Subsidiary of the
Borrower to the Borrower, (ii) of the Borrower to any Wholly-Owned
Subsidiary of the Borrower or (iii) of any Wholly-Owned Subsidiary of
the Borrower to any other Wholly-Owned Subsidiary of the Borrower;
(i) Indebtedness of a Person which becomes a Subsidiary after the
date hereof; PROVIDED that (i) such Indebtedness existed at the time
such Person became a Subsidiary and was not created in anticipation
thereof, (ii) immediately after giving effect to the acquisition of such
Person by the Borrower no Default or Event of Default shall have
occurred and be continuing, and (iii) the Borrower shall not become
liable therefor;
(j) Indebtedness of AmerUs Life owing to the Federal Home Loan
Bank (the "FHLB") under a liquidity facility provided by the FHLB, and
Indebtedness of AmerUs Life consisting of Federal Home Loan Bank
Community Investment Long-Term Advances, so long as the aggregate
outstanding principal amount of Indebtedness under this clause (j) does
not exceed $75,000,000 at any time;
(k) Indebtedness of any Regulated Insurance Company owing to the
Borrower under any Surplus Note, so long as, prior to the Collateral
Release Date, such Surplus Note is pledged to the Banks pursuant to the
Pledge Agreement;
(l) Indebtedness in respect of the AVLIC Guaranties;
(m) Indebtedness of the Borrower and its Subsidiaries consisting
of Contingent Obligations in respect of other Indebtedness (x)
outstanding as of the Effective Date and having an aggregate principal
amount not in excess of $10,000,000 and (y) incurred after the Effective
Date and having an aggregate principal amount not in excess of
$15,000,000;
(n) Indebtedness of the Borrower and its Subsidiaries under
letters of credit issued in the ordinary course of business so long as
the aggregate stated amount of all such letters of credit at no time
exceeds $50,000,000;
(o) Indebtedness of the Borrower and the trust formed in
connection with any Trust Preferred Offering under the Trust Preferred
Related Debt Securities, the Trust Preferred Offering and the guaranty
provided in connection therewith, when and if issued;
-40-
(p) Indebtedness of the Borrower under any Permitted Subordinated
Debt Securities; and
(q) other Indebtedness for borrowed money of the Borrower not to
exceed $250,000,000 in aggregate outstanding principal amount at any
time; PROVIDED, that the amount of Indebtedness permitted by this clause
(q) shall be reduced dollar for dollar by the amount of any Indebtedness
which is incurred under clause (p) above, but the amount of Indebtedness
permitted under this clause (q) shall not be reduced to less than
$50,000,000 at any time.
7.05 ISSUANCE OF STOCK. The Borrower will not permit any of its
Subsidiaries directly or indirectly to issue, sell, assign, pledge, or
otherwise encumber or dispose of any shares of the capital stock or other
equity securities (or warrants, rights or options to acquire shares or other
equity securities) of such Subsidiary, except (i) to the Borrower or another
Wholly-Owned Subsidiary of the Borrower, (ii) to qualify directors if
required by applicable law, (iii) pursuant to the Pledge Agreement, (iv)
issuances of securities by special-purpose Subsidiaries pursuant to
structured asset-backed securities transactions or (v) issuances of preferred
stock by any Subsidiary constituting a business trust pursuant to any Trust
Preferred Offering.
7.06 PREPAYMENTS OF INDEBTEDNESS, MODIFICATIONS OF AGREEMENTS, ETC.
the Borrower will not, and will not permit any of its Subsidiaries to:
(a) make (or give any notice in respect thereof) any voluntary or
optional payment or prepayment or redemption or acquisition for value of
(including, without limitation, by way of depositing with the trustee with
respect thereto money or securities before due for the purpose of paying
when due) or exchange of, any Permitted Subordinated Debt Securities or
Trust Preferred Related Debt Securities after the issuance thereof; or
(b) amend, modify or change in any manner adverse to the interests
of the Banks the Certificate of Incorporation (including, without limita-
tion, by the filing of any certificate of designation) or By-Laws or other
organizational documents of the Borrower or any of its Subsidiaries.
7.07 DIVIDENDS, ETC. The Borrower will not, and will not permit
any of its Subsidiaries to, declare or pay any dividends (other than dividends
payable solely in common stock of such Person) or return any capital to, its
stockholders or authorize or make any other distribution, payment or delivery of
property or cash to its stockholders as such, or redeem, retire, purchase or
otherwise acquire, directly or indirectly, for a consideration, any shares of
any class of its capital stock now or hereafter
-41-
outstanding (or any warrants for or options or stock appreciation rights in
respect of any of such shares), or set aside any funds for any of the
foregoing purposes, or purchase or otherwise acquire or permit any of its
Subsidiaries to purchase or otherwise acquire for consideration any shares of
any class of the capital stock of the Borrower or any other Subsidiary, as
the case may be, now or hereafter outstanding (or any options or warrants or
stock appreciation rights issued by such Person with respect to its capital
stock) (all of the foregoing "Dividends"), except that:
(i) any Subsidiary of the Borrower may pay Dividends to its parent
if such parent is the Borrower or a Wholly-Owned Subsidiary of the
Borrower;
(ii) so long as no Default or Event of Default exists or would exist
immediately after giving effect thereto, the Borrower may pay cash
Dividends on its common stock in an amount not to exceed for any fiscal
year 3% of the Borrower's Consolidated Net Worth as of the last day of the
previous fiscal year;
(iii) the payment of cash Dividends on any preferred stock issued
pursuant to a Trust Preferred Offering in accordance with the terms thereof
shall be permitted;
(iv) upon and in connection with the exercise of any options,
warrants, awards, grants, or stock appreciation rights under or pursuant to
any stock plan of the Borrower in respect of the Borrower's common stock by
any holder thereof pursuant to which the Borrower is required to deliver
shares of its common stock to such holder, the Borrower may purchase a
number of shares of its common stock sufficient to enable the Borrower to
satisfy such requirement; and
(v) the Borrower may redeem, purchase or acquire shares of capital
stock (and/or warrants, options and stock appreciation rights in respect of
such capital stock) of a Person which is acquired by the Borrower or a
Subsidiary of the Borrower pursuant to a transaction permitted under
Section 7.02(a).
7.08 LIMITATION ON CERTAIN RESTRICTIONS. The Borrower will not, and
will not permit any of its Subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist any encumbrance or restriction which
prohibits or otherwise restricts (i) the ability of any Subsidiary to pay
dividends or make other distributions or pay any Indebtedness owed to the
Borrower or any of its Subsidiaries, to make loans or advances to the Borrower
or any Subsidiary, to transfer any of its properties or assets to the Borrower
or any Subsidiary or to guarantee the Obligations or (ii) the
-42-
ability of the Borrower or any Subsidiary of the Borrower to create, incur,
assume or suffer to exist any Lien upon its property or assets to secure the
Obligations, other than prohibitions or restrictions existing under or by
reason of (w) this Agreement and the other Credit Documents, (x) Legal
Requirements, (y) provisions restricting the transfer of assets subject to
Liens permitted under Sections 7.03 and (z) restrictions contained in
Indebtedness described in Section 7.04(i).
7.09 TRANSACTIONS WITH AFFILIATES. The Borrower will not, and will
not permit any Subsidiary to, enter into any transaction or series of
transactions with any Affiliate other than in the ordinary course of business
and on terms and conditions substantially as favorable to the Borrower or such
Subsidiary as would be obtainable by the Borrower or such Subsidiary at the time
in a comparable arm's-length transaction with a Person other than an Affiliate;
PROVIDED, HOWEVER, that:
(i) in no event may the aggregate amount of investments, advances
and loans (determined on a cost basis, exclusive of retained earnings,
write-offs and write-downs) after the Effective Date in or to Group or
Subsidiaries of Group other than the Borrower and its Subsidiaries, whether
or not on an arms-length basis, exceed $75,000,000 at any one time;
(ii) AmerUs Life may make investments, advances and/or loans in or to
AMAL Corporation, in an aggregate amount not to exceed $75,000,000 so long
as AmerUs Life retains the ability to elect at least 50% of the board of
directors of AMAL Corporation;
(iii) the Borrower may make payments or loans pursuant to the
guaranty provided in connection with any Trust Preferred Offering, and
the Borrower and its Subsidiaries may lend or borrow such amounts as
are contemplated in connection with any Trust Preferred Offering and any
Trust Preferred Related Debt Securities;
(iv) the Borrower may enter into transactions with any of its Wholly-
Owned Subsidiaries, and any such Wholly-Owned Subsidiary may enter into
transactions with the Borrower or any other such Wholly-Owned Subsidiary;
(v) the Subsidiaries of any Regulated Insurance Company may pay
dividends and make investments, advances and loans to such Regulated
Insurance Company; and
(vi) Regulated Insurance Companies may enter into reinsurance
transactions with one another.
-43-
7.10 LEVERAGE RATIO. The Borrower will not permit the Leverage
Ratio at any time to be greater than 0.35:1.0.
7.11 INTEREST COVERAGE RATIO. The Borrower will not permit the
Interest Coverage Ratio for any Test Period to be less than 2.5:1.0.
7.12 MINIMUM ADJUSTED CONSOLIDATED SURPLUS. (a) Subject to Section
7.12(d) below, the Borrower shall not permit AmerUs Life to have at any time an
Adjusted Capital and Surplus of less than $300,000,000.
(b) Subject to Section 7.12(d) below, the Borrower shall not permit
Delta Life to have at any time an Adjusted Capital and Surplus of less than
$80,000,000.
(c) Subject to Section 7.12(d) below, the Borrower shall not permit
any Material Regulated Insurance Company acquired after the Effective Date
to have at any time an Adjusted Capital and Surplus of less than 80% of the
Adjusted Capital and Surplus of such Regulated Insurance Company on its
most recent Statutory Statement prior to such acquisition.
(d) In the event that any two or more of the Persons specified in
Sections 7.12(a)-(c) shall merge or consolidate with each other, the
minimum required Adjusted Capital and Surplus for the surviving Person
shall be an amount which equals the sum of the minimum amounts of
Adjusted Capital and Surplus required for each Person so merged or
consolidated immediately prior to such merger or consolidation;
PROVIDED, that in the case of a merger or consolidation of a Regulated
Insurance Company with and into its direct or indirect parent Regulated
Insurance Company, the minimum required Adjusted Capital and Surplus
for the surviving Person shall be equal to the minimum amount required
for such parent Regulated Insurance Company immediately prior to such
merger or consolidation.
7.13 MINIMUM RISK-BASED CAPITAL. The Borrower will not permit the
Risk-Based Capital for any Material Regulated Insurance Company to be less than
400%.
7.14 MINIMUM RATING. The Borrower will not permit any Material
Regulated Insurance Company to have a rating of below "A-" ("B++" in the
case of American Investors Life and "B" in the case of Financial Benefit
Life) from A.M. Best & Company ("A.M. Best"); PROVIDED, that the Borrower
shall not be in violation of this Section 7.14 until the earlier of (i) the
date on which the A.M. Best rating for a Material Regulated Insurance Company
falls below "B++"("B+" in the case of
-44-
American Investors Life and "B-" in the case of Financial Benefit Life) or
(ii) the end of twelve consecutive months during which the A.M. Best rating
for a Material Regulated Insurance Company is below "A-" ("B++" in the
case of American Investors Life and "B" in the case of Financial Benefit
Life).
SECTION 8. EVENTS OF DEFAULT. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
8.01 PAYMENTS. The Borrower shall (i) default in the payment when
due of any principal of any Loan or any Note, (ii) default, and such default
shall continue for two or more days, in the payment when due of any interest on
any Loan or any Note or any Fees or (iii) default in the prompt payment
following notice or demand in respect of any other amounts owing hereunder
or under any other Credit Document; or
8.02 REPRESENTATIONS, ETC. Any representation, warranty or state-
ment made or deemed made by the Borrower herein or in any other Credit Document
or in any statement or certificate delivered or required to be delivered
pursuant hereto or thereto shall prove to be untrue in any material respect on
the date as of which made or deemed made; or
8.03 COVENANTS. The Borrower shall (a) default in the due
performance or observance by it of any term, covenant or agreement contained
in Section 6.10 or 7, or (b) default in the due performance or observance by
it of any term, covenant or agreement (other than those referred to in
Section 8.01 or clause (a) of this Section 8.03) contained in this Agreement
and such default shall continue unremedied for a period of at least 30 days; or
8.04 DEFAULT UNDER OTHER AGREEMENTS. (a) The Borrower or any of
its Subsidiaries shall (i) default in any payment with respect to Indebtedness
(other than the Obligations) in excess of $5,000,000 individually or in the
aggregate, for the Borrower and its Subsidiaries, beyond the period of grace, if
any, provided in the instrument or agreement under which such Indebtedness was
created or (ii) default in the observance or performance of any agreement or
condition relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause (determined
without regard to whether any notice of acceleration, or any lapse of time prior
to the effectiveness of any notice of acceleration, is required), any such
Indebtedness to become due prior to its stated maturity; or (b) any such
Indebtedness of the Borrower
-45-
or its Subsidiaries shall be declared to be due and payable in accordance
with the terms of such Indebtedness or required to be prepaid, other than by
a regularly scheduled required prepayment or as a mandatory prepayment
(unless such required prepayment or mandatory prepayment results from a
default thereunder or an event of the type that constitutes an Event of
Default), prior to the stated maturity thereof; or
8.05 BANKRUPTCY, ETC. The Borrower or any of its Subsidiaries shall
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy," as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced against
the Borrower or any of its Subsidiaries and the petition is not controverted
within 10 days, or is not dismissed within 60 days, after commencement of the
case; or a custodian (as defined in the Bankruptcy Code) is appointed for, or
takes charge of, all or substantially all of the property of the Borrower or
any of its Subsidiaries; or the Borrower or any of its Subsidiaries commences
(including by way of applying for or consenting to the appointment of, or the
taking of possession by, a rehabilitator, receiver, custodian, trustee,
conservtor or liquidator (collectively, a "conservator") of itself or all or
any substantial portion of its property) any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency, liquidation, rehabilitation, conservatorship or similar law of any
jurisdiction whether now or hereafter in effect relating to the Borrower or any
of its Subsidiaries; or any such proceeding is commenced against (a) any
Regulated Insurance Company which is engaged in the business of underwriting
insurance and/or reinsurance in the United States, or (b) the Borrower or any of
its Subsidiaries (other than (x) any Regulated Insurance Company described in
the immediately preceding clause (a) or (y) any dissolution or liquidation
proceeding commenced against a non-Regulated Insurance Company (i) the assets of
which do not exceed an aggregate amount of $100,000 and (ii) in connection with
the winding-up of such Subsidiary) to the extent such proceeding is consented to
by such Person, and in the case of either clause (a) or (b) remains undismissed
for a period of 60 days; or the Borrower or any of its Subsidiaries is
adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or (a) any Regulated Insurance
Company which is engaged in the business of underwriting insurance and/or
reinsurance in the United States suffers any appointment of any conservator or
the like for it or any substantial part of its property, or (b) the Borrower or
any of its Subsidiaries (other than any Regulated Insurance Company described in
the immediately preceding clause (a)) suffers any appointment of any conservator
or the like for it or any substantial part of its property which continues
undischarged or unstayed for a period of 60 days; or the Borrower or any of its
Subsidiaries makes a general assignment for the benefit of creditors; or any
corporate action is taken by the Borrower or any of its Subsidiaries for the
purpose of effecting any of the foregoing; or
-46-
8.06 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof under Section 412 of the
Code or Section 302 of ERISA or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, any Plan
which is subject to Title IV of ERISA shall have had or is likely to have a
trustee appointed by the PBGC to administer such Plan, any Plan which is subject
to Title IV of ERISA is, shall have been or is likely to be terminated or to be
the subject of termination proceedings under ERISA, any Plan shall have an
Unfunded Current Liability, a contribution required to be made with respect to a
Plan has not been timely made, the Borrower or any Subsidiary of the Borrower or
any ERISA Affiliate has incurred or is likely to incur any liability to or on
account of a Plan under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064,
4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the
Code or on account of a group health plan (as defined in Section 607(1) of ERISA
or Section 4980B(g)(2) of the Code) under Section 4980B of the Code, or the
Borrower or any Subsidiary of the Borrower has incurred or is likely to incur
liabilities pursuant to one or more employee welfare benefit plans (as defined
in Section 3(1) of ERISA) that provide death, health or severance benefits to
retired employees or other former employees (other than as required by Section
601 of ERISA or applicable state law) or Plans; and (b) there shall result from
any such event or events the imposition of a lien, the granting of a security
interest, or a liability; and (c) such lien, security interest or liability,
individually and/or in the aggregate, has had, or could reasonably be expected
to have, a Material Adverse Effect; or
8.07 PLEDGE AGREEMENT. Except in each case to the extent resulting
from the failure of the Collateral Agent to retain possession of the applicable
Pledged Securities, the Pledge Agreement shall, prior to the Collateral Release
Date, cease to be in full force and effect, or shall, prior to the Collateral
Release Date, cease to give the Collateral Agent the Liens, rights, powers and
privileges purported to be created thereby (including, without limitation, a
first priority perfected security interest in, and Lien on, all of the
Collateral subject thereto, in favor of the Collateral Agent, superior to and
prior to the rights of all third Persons and subject to no other Liens), or the
Borrower shall, prior to the Collateral Release Date, default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to the Pledge Agreement; or
8.08 JUDGMENTS. One or more judgments or decrees shall be entered
against the Borrower or any of its Subsidiaries involving a liability, net of
undisputed reinsurance, of $5,000,000 or more in the case of any one such
judgment or decree or in the aggregate for all such judgments and decrees for
the Borrower and its Subsidiaries and any such judgments or decrees shall not
have been vacated, dis-
-47-
charged, stayed or bonded pending appeal within 60 days from the entry
thereof; PROVIDED, that in the event that a judgment or decree is entered
against the Borrower or any of its Subsidiaries which by its terms provides
for its payment and satisfaction during a period of longer than 60 days, then
there shall be no Default or Event of Default under this Section 8.08 as a
result of such a judgment or decree so long as the Borrower or its
Subsidiary, as the case may be, is in compliance with the terms of such
judgment or decree; or
8.09 REVOCATION OF INSURANCE LICENSE. Any Insurance License shall
be suspended or revoked and such suspension or revocation shall continue for 30
days, or any renewal application for any Insurance License shall be disapproved
or ultimately fail to be approved, if such suspension, revocation, disapproval
or ultimate failure to win approval could reasonably be expected to have a
Material Adverse Effect; or
8.10 IOWA APPROVALS AND REGULATIONS. (a) The Department of Insurance
of the State of Iowa shall at any time withdraw or materially modify any
approvals or consents it may have granted with respect to any Pledge Agreement,
and such withdrawal or material modification shall remain in effect for a period
of 60 days or more; or (b) the State of Iowa shall enact or modify any law or
statute, or any agency or instrumentality thereof (including, without
limitation, the Department of Insurance of the State of Iowa) shall promulgate
or modify any rule or regulation, in any such case which has or is reasonably
likely to have a Material Adverse Effect; or
8.11 OWNERSHIP. A Change of Control shall occur;
then, and in any such event, and at any time thereafter, if any Event of
Default shall then be continuing, the Administrative Agent shall, upon the
written request of the Required Banks, by written notice to the Borrower,
take any or all of the following actions, without prejudice to the rights of
the Administrative Agent or any Bank to enforce its claims against the
Borrower, except as otherwise specifically provided for in this Agreement
(PROVIDED that if an Event of Default specified in Section 8.05 shall occur
with respect to the Borrower, the result which would occur upon the giving of
written notice by the Administrative Agent as specified in clauses (i) and
(ii) below shall occur automatically without the giving of any such notice):
(i) declare the Total Commitment terminated, whereupon the Commitment of each
Bank shall forthwith terminate immediately and any Commitment Fees and
Utilization Fees shall forthwith become due and payable without any other
notice of any kind; (ii) declare the principal of and any accrued interest in
respect of all Loans and all Obligations owing hereunder and under the other
Credit Documents to be, whereupon the same shall become, forthwith due and
payable without presentment, demand, protest or other notice of any kind, all
of which are hereby waived by the Borrower; and/or (iii) enforce, as
-48-
Collateral Agent (or direct the Collateral Agent to enforce), any or all of
the Liens and security interests created pursuant to the Pledge Agreement.
SECTION 9. DEFINITIONS. As used herein, the following terms shall
have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural the singular:
"Adjusted Capital and Surplus" shall mean, at any time, with
respect to any Regulated Insurance Company, the sum of the following (without
duplication): (a) the amount of Capital and Surplus of such Regulated Insurance
Company at such time plus (b) the amount of any asset valuation reserve
maintained by such Regulated Insurance Company at such time in accordance with
SAP.
"Administrative Agent" shall have the meaning provided in the first
paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to Section 10.09.
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling (including, but not limited to,
all directors and officers of such Person), controlled by, or under direct
or indirect common control with, such Person. A Person shall be deemed to
control a corporation if such Person possesses, directly or indirectly, the
power (i) to vote 10% or more of the securities having ordinary voting power
for the election of directors of such corporation or (ii) to direct or cause
the direction of the management and policies of such corporation, whether
through the ownership of voting securities, by contract or otherwise.
"Agreement" shall mean this Credit Agreement, as the same may be
from time to time modified, amended and/or supplemented.
"American Investors Life" shall mean American Investors Life
Insurance Company, Inc., a stock life insurance company.
"AmerUs Life" shall mean AmerUs Life Insurance Company, a stock
life insurance company.
"Annual Statement" shall mean the annual financial statement
required to be filed by any Regulated Insurance Company with the Applicable
Insurance Regulatory Authority.
-49-
"Applicable Credit Rating" shall mean (i) the Xxxxx'x Credit Rating
and the S&P Credit Rating, if the same; (ii) if the Xxxxx'x Credit Rating and
the S&P Credit Rating differ by one rating level, the higher of such Ratings;
and (iii) if the Xxxxx'x Credit Rating and the S&P Credit Rating differ by
two or more rating levels, the Applicable Credit Rating shall be one rating
level below the higher of such Ratings.
"Applicable Commitment Fee Percentage" shall mean, for any day, the
percentage set forth below opposite the Applicable Period then in effect:
APPLICABLE PERIOD APPLICABLE COMMITMENT FEE PERCENTAGE
----------------- ------------------------------------
Category A Period 0.1250%
Category B Period 0.1375%
Category C Period 0.1500%
Category D Period 0.1750%
Category E Period 0.2500%
"Applicable Insurance Regulatory Authority" shall mean, when used with
respect to any Regulated Insurance Company, the insurance department or
similar administrative authority or agency located in (x) each state in which
such Regulated Insurance Company is domiciled or (y) to the extent asserting
regulatory jurisdiction over such Regulated Insurance Company, the insurance
department, authority or agency in each state in which such Regulated
Insurance Company is licensed, and shall include any Federal insurance
regulatory department, authority or agency that may be created and that
asserts regulatory jurisdiction over such Regulated Insurance Company.
"Applicable Laws" shall mean all applicable laws and treaties,
judgments, decrees, injunctions, writs and orders of any court, arbitrator or
governmental agency or authority and rules, regulations, orders, licenses and
permits of any governmental body, instrumentality, agency or authority.
"Applicable Leverage Ratio" shall mean, at any time, the Leverage
Ratio of the Borrower as of the last day of the then most recently ended
calendar quarter for which the Borrower has delivered financial statements
pursuant to Section 6.01(a)(i) or (b)(i) (it being understood that a Leverage
Ratio shall constitute the Applicable Leverage Ratio from and including the
date of delivery of such financial statements to but excluding the date of
the next delivery of such financial statements). Notwithstanding anything to
the contrary contained above in this definition, (i) for the period from and
including the Effective Date to but excluding the date on which the Borrower
delivers financial statements pursuant to Section 6.01(b)(i) in respect of
the fiscal quarter ending September 30, 1997, the Applicable Leverage Ratio
shall be
-50-
deemed to be greater than or equal to 0.335 to 1.0, (ii) thereafter, but
prior to the earlier of (x) the date on which the Borrower acquires AmVestors
Financial Corporation and (y) the date on which the Borrower delivers
financial statements pursuant to Section 6.01(a)(i) in respect of the fiscal
year ending December 31, 1997, the Applicable Leverage Ratio shall be the
Leverage Ratio of the Borrower as of September 30, 1997 (determined on a PRO
FORMA basis as if the Delta Acquisition had been consummated, and all
Indebtedness incurred in connection therewith had been incurred, prior to
September 30, 1997, with such PRO FORMA Leverage Ratio to be set forth in a
certificate executed by the chief financial officer of the Borrower and
delivered to the Banks), (iii) from and including the date (if any) on which
the Borrower consummates the acquisition of AmVestors Financial Corporation
to but excluding the date on which the Borrower delivers financial statements
pursuant to Section 6.01(a)(i) in respect of the fiscal year ending December
31, 1997, the Applicable Leverage Ratio shall be the Leverage Ratio of the
Borrower as of the date of such acquisition (determined on a PRO FORMA basis
after giving effect to such acquisition, with such PRO FORMA Leverage Ratio
to be set forth in a certificate executed by the chief financial officer of
the Borrower and delivered to the Banks), and (iv) from and after the date on
which the Borrower delivers financial statements pursuant to Section
6.01(a)(i) in respect of the fiscal year ending December 31, 1997, the
Applicable Leverage Ratio shall be determined as provided in the preceding
sentence.
"Applicable Margin" shall mean, for any day, the rate per annum set
forth below opposite the Applicable Period then in effect:
APPLICABLE PERIOD APPLICABLE MARGIN
----------------- -----------------
Category A Period 0.375%
Category B Period 0.400%
Category C Period 0.450%
Category D Period 0.650%
Category E Period 0.750%
"Applicable Period" shall mean, at any time, the period set forth
below then in effect:
APPLICABLE PERIOD CRITERIA
----------------- --------
Category A Period The Applicable Leverage Ratio is less than
0.20 to 1.0 and the Applicable Credit Rating
is BBB+/Baa1 or above.
-51-
Category B Period The Applicable Leverage Ratio is greater than
or equal to 0.20 to 1.0 but less than 0.275
to 1.0 AND the Applicable Credit Rating is
BBB/Baa2 or above, but a Category A Period is
not in effect at such time.
Category C Period The Applicable Leverage Ratio is greater than
or equal to 0.275 to 1.0 but less than 0.335
to 1.0 AND the Applicable Credit Rating is
BBB-/Baa3, but neither a Category A Period
nor a Category B Period is in effect at such
time.
Category D Period The Applicable Leverage Ratio is greater than
or equal to 0.335 to 1.0 AND the Applicable
Credit Rating is BB+/Ba1 or above, but none
of a Category A Period, a Category B Period
nor a Category C Period is in effect at such
time.
Category E Period None of a Category A Period, a Category B
Period, a Category C Period nor a Category D
Period is in effect at such time.
"Applicable Utilization Fee Percentage" shall mean, for any day, the
percentage set forth below opposite the Applicable Period then in effect:
APPLICABLE UTILIZATION
APPLICABLE PERIOD FEE PERCENTAGE
----------------- ----------------------
Category A Period 0.00%
Category B Period 0.05%
Category C Period 0.05%
Category D Period 0.05%
Category E Period 0.05%
"Authorized Control Level" shall mean "Authorized Control Level" as
defined by the NAIC from time to time and as applied in the context of the Risk
Based
-52-
Capital Guidelines promulgated by the NAIC (or any term substituted therefor
by the NAIC).
"Authorized Officer" shall mean any senior officer of the Borrower
designated as such in writing by the Borrower to, and found acceptable by,
the Administrative Agent.
"AVLIC Guaranties" shall mean and include each of the guaranty
agreements (i) by Ameritas Life Insurance Corp. in favor of Ameritas Variable
Life Insurance Company ("AVLIC") dated as of July 8, 1991, (ii) by AMAL
Corporation for the benefit of AVLIC dated as of April 1, 1996, (iii) by
AmerUs Life (f/k/a American Mutual Life Insurance Company) in favor of AVLIC
dated as of April 1, 1996 and (iv) by the Borrower in favor of AVLIC after
the Effective Date on substantially the same terms as the foregoing.
"Bank" shall have the meaning provided in the first paragraph of this
Agreement.
"Bankruptcy Code" shall have the meaning provided in Section 8.05.
"Base Rate" at any time shall mean the higher of (x) the rate which is
1/2 of 1% in excess of the Federal Funds Effective Rate and (y) the Prime
Lending Rate as in effect from time to time.
"Base Rate Loans" shall mean each Loan bearing interest at the rates
provided in Section 1.08(a).
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrowing" shall mean the incurrence of one Type of Loan hereunder by
the Borrower from all of the Banks on a PRO RATA basis on a given date (or
resulting from a conversion or conversions on such date), having in the case
of Eurodollar Loans the same Interest Period, PROVIDED that Base Rate Loans
incurred pursuant to Section 1.10(b) shall be considered part of any related
Borrowing of Eurodollar Loans.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day, excluding Saturday, Sunday and any day which
shall be in the City of New York a legal holiday or a day on which banking
institutions are authorized by law or other governmental actions to close, and
(ii) with respect to all notices and determinations in connection with, and
payments of principal and interest on,
-53-
Eurodollar Loans, any day which is a Business Day described in clause (i) and
which is also a day for trading by and between banks in U.S. dollar deposits
in the interbank Eurodollar market.
"Capital and Surplus" shall mean, as of the last day of any calendar
quarter (including the last day of the calendar year), with respect to any
Regulated Insurance Company, the capital and surplus of such Regulated
Insurance Company as set forth in the Statutory Statement of such Regulated
Insurance Company for such date, or, if there is no such Statutory Statement
for such date, the amount computed and certified as correct by the Chief
Financial Officer of such Regulated Insurance Company, as the case may be,
that would be set forth in such a Statutory Statement for such date, based on
SAP, consistently applied.
"Capital Lease" as applied to any Person, shall mean any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is, or is required to be, accounted for as a capital
lease on the balance sheet of that Person.
"Capitalized Lease Obligations" shall mean all obligations under
Capital Leases of the Borrower or any of its Subsidiaries in each case taken
at the amount thereof accounted for as liabilities in accordance with GAAP.
"Cash Flow" shall mean, with respect to the Borrower, for any Test
Period, the difference between (a) and (b), where (a) is equal to the sum of:
(i) the sum of the amount of Dividends available to the Borrower allocable to
each of the four quarters comprising such Test Period, where such allocable
amount for each fiscal quarter is calculated as being 25% of the maximum
Dividends available to the Borrower under Applicable Laws from all Regulated
Insurance Companies for the calendar year in which such fiscal quarter occurs
(whether or not any such Dividends are or have been paid), PROVIDED that in
the event any Regulated Insurance Company has a net loss from operations (as
determined on a SAP basis) for two consecutive fiscal years, Dividends
available from such Regulated Insurance Company for such second fiscal year
shall not be included in this clause (i), plus (ii) management fees,
administrative fees, service fees, home office charges, consulting fees and
technical service charges paid to the Borrower during such Test Period plus
(iii) gross tax sharing payments received by the Borrower during such Test
Period plus (iv) all Surplus Note interest received by the Borrower during
such Test Period plus (v) net investment income of the Borrower during such
Test Period plus (vi) realized net capital gains from investments of the
Borrower during such Test Period to the extent not included in net investment
income; and (b) is equal to the sum of: (i) cash operating expenses paid by
the
-54-
Borrower during such Test Period and (ii) taxes paid by the Borrower
during such Test Period.
"Change of Control" shall mean the occurrence of any of the following
events: (i) the Borrower shall cease to own, directly, or indirectly through
Wholly-Owned Subsidiaries, 100% of the issued and outstanding voting stock of
AmerUs Life ordinarily entitled to vote for the election of directors, or any
other class of stock of AmerUs Life of which the Borrower owns 50% or less
shall become entitled to elect a majority of AmerUs Life's board of
directors; (ii) failure of Group at any time to own a majority of the voting
shares of the Borrower as determined pursuant to Section 521A.14 of the Iowa
Code; or (iii) during any period of 25 consecutive calendar months,
individuals who at the beginning of such period constituted the Board of
Directors of the Borrower (together with any new directors whose election by
such Board of Directors or whose nomination for election by the stockholders
or members, as the case may be, of the Borrower was approved by a vote of a
majority of the directors then still in office who were either directors at
the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of such
Board of Directors then in office.
"Chase" shall mean The Chase Manhattan Bank.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of
this Agreement and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all of the Collateral as defined in the Pledge
Agreement.
"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Banks.
"Collateral Release Date" shall mean the first date on which the
Borrower has issued at least $100,000,000 in aggregate principal amount of
public Indebtedness, which Indebtedness has been issued a rating of at least
BBB by S&P and has been issued a rating of at least Baa2 by Moody's.
"Commitment" shall mean, with respect to each Bank, the amount set
forth opposite such Bank's name on Annex I hereto, as the same may be (x)
reduced
-55-
or terminated pursuant to Sections 2.02, 2.03 and/or 8 or (y) adjusted from
time to time as a result of assignment to or from such Bank pursuant to
Section 11.04(b).
"Commitment Fee" shall have the meaning provided in Section 2.01(a).
"Consolidated Indebtedness" shall mean, at any time and as to any
Person, all Indebtedness for borrowed money of such Person and its
Subsidiaries at such time determined on a consolidated basis in accordance
with GAAP, PROVIDED that as to the Borrower, only 50% of any Trust Preferred
Offering shall constitute Consolidated Indebtedness.
"Consolidated Interest Expense" shall mean, for any period and as to
any Person, (i) total interest expense (including that attributable to
Capital Leases in accordance with GAAP) of such Person and its Subsidiaries
on a consolidated basis including, without limitation, all commissions,
discounts and other fees and charges owed with respect to letters of credit
and bankers' acceptance financing and net costs under Interest Rate
Protection Agreements, but excluding however, any amortization of deferred
financing costs, plus (ii) all Dividends paid or accrued during such period
in connection with the preferred stock of the Borrower or any Subsidiary of
the Borrower which is a business trust.
"Consolidated Net Worth" shall mean, with respect to any Person, the
Net Worth of such Person and its Subsidiaries determined on a consolidated
basis in accordance with GAAP after appropriate deduction for any minority
interests in Subsidiaries; PROVIDED, that for the purpose of calculating the
maximum amount of Dividends payable pursuant to Section 7.07(ii),
Consolidated Net Worth shall exclude 100% of any Trust Preferred Offering.
"Consolidated Total Capital" shall mean, at any time and as to any
Person, the sum of Consolidated Indebtedness of such Person and Consolidated
Net Worth of such Person at such time; PROVIDED, that Consolidated Total
Capital shall in any event include 100% of any Trust Preferred Offering.
"Contingent Obligations" shall mean, as to any Person, any obligation
of such Person guaranteeing or intended to guarantee any Indebtedness,
leases, dividends or other obligations ("primary obligations") of any other
Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment of any such primary obligation
or (ii) to maintain working capital or equity capital of the primary obligor
or
-56-
otherwise to maintain the net worth or solvency of the primary obligor, (c)
to purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (d) otherwise
to assure or hold harmless the owner of such primary obligation against loss
in respect thereof; PROVIDED, HOWEVER, that the term Contingent Obligation
shall not include (x) endorsements of instruments for deposit or collection
in the ordinary course of business or (y) obligations of any Regulated
Insurance Company under Insurance Contracts, Reinsurance Agreements or
Retrocession Agreements. The amount of any Contingent Obligation shall be
deemed to be an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Contingent Obligation is made or,
if not stated or determinable, the maximum reasonably anticipated liability
in respect thereof (assuming such Person is required to perform thereunder)
as determined by such Person in good faith.
"Credit Documents" shall mean this Agreement, the Notes, the Pledge
Agreement and all other documents, instruments and agreements executed or
delivered to the Administrative Agent and/or the Banks in connection herewith
or therewith.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Delta Holdings" shall mean Delta Life Corporation, a Delaware
corporation.
"Delta Life" shall mean Delta Life and Annuity Company, a Tennessee
stock life corporation and a Wholly-Owned Subsidiary of Delta Holdings.
"Delta Life Acquisition" shall mean the merger of Delta Holdings and a
Wholly-Owned Subsidiary of the Borrower, after giving effect to which merger
Delta Holdings shall be a Wholly-Owned Subsidiary of the Borrower.
"Dividends" shall have the meaning provided in Section 7.07.
"Effective Date" shall have the meaning provided in Section 11.10.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement and any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
-57-
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with the Borrower or a Subsidiary of the Borrower
would be deemed to be a "single employer" within the meaning of Section
414(b),(c), (m) or (o) of the Code.
"Eurodollar Loans" shall mean each Loan bearing interest at the rates
provided in Section 1.08(b).
"Eurodollar Rate" shall mean, with respect to each Interest Period for
a Eurodollar Loan, (i) the arithmetic average (rounded to the nearest 1/100
of 1%) of (a) for Interest Periods of one, two, three or six months, the
offered rates for U.S. dollar deposits having a term comparable to such
Interest Period and of amounts in same day funds comparable to the
outstanding principal amount of such Eurodollar Loan which appear on the
Reuters Screen LIBO Page, or (b) for an Interest Period of one week, the
offered quotation to first-class banks in the interbank Eurodollar market by
Chase for U.S. dollar deposits having a term comparable to such Interest
Period and of amounts in same day funds comparable to the outstanding
principal amount of such Eurodollar Loan for which an interest rate is then
being determined by Chase, in the case of each of clauses (a) and (b) above
determined as of 10:00 A.M. (New York time) on the date which is two Business
Days prior to the commencement of such Interest Period divided (and rounded
upward to the next whole multiple of 1/16 of 1%) by (ii) a percentage equal
to 100% minus the then stated maximum rate of all reserve requirements
(including, without limitation, any marginal, emergency, supplemental,
special or other reserves) applicable to any member bank of the Federal
Reserve System in respect of Eurocurrency liabilities as defined in
Regulation D (or any successor category of liabilities under Regulation D).
"Event of Default" shall have the meaning provided in Section 8.
"Existing Credit Agreement" shall mean the Credit Agreement, dated as
of December 11, 1996, among the Borrower, various lending institutions and
The Chase Manhattan Bank, as Administrative Agent, as amended, modified or
supplemented prior to the Effective Date.
"Expiration Date" shall mean November 18, 1997.
"Federal Funds Effective Rate" shall mean for any period, a
fluctuating interest rate equal for each day during such period to the
weighted average of the rates on overnight Federal Funds transactions with
members of the Federal Reserve System arranged by Federal Funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of
-58-
New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by the Administrative Agent from three Federal Funds brokers of
recognized standing selected in good faith by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to, or referred to in,
Section 2.01.
"FHLB" shall have the meaning provided in Section 7.04(j).
"Financial Benefit Life" shall mean Financial Benefit Life Insurance
Company, a stock life insurance company.
"GAAP" shall mean generally accepted accounting principles in the
United States of America; it being understood and agreed that determinations
in accordance with GAAP for purposes of Section 7, including defined terms as
used therein, are subject (to the extent provided therein) to Section
11.07(a).
"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.
"Group" shall mean AmerUs Group Co., an Iowa corporation.
"Indebtedness" of any Person shall mean (i) all indebtedness of such
Person for borrowed money, (ii) the deferred purchase price of assets or
services which in accordance with GAAP would be shown on the liability side
of the balance sheet of such Person, (iii) the face amount of all letters of
credit issued for the account of such Person and, without duplication, all
drafts drawn thereunder, (iv) all Indebtedness of a second Person secured by
any Lien on any property owned by such first Person, whether or not such
Indebtedness has been assumed, (v) all Capitalized Lease Obligations of such
Person, (vi) all obligations of such Person under Interest Rate Protection
Agreements and (vii) all Contingent Obligations of such Person with respect
to any of the foregoing; PROVIDED, that Indebtedness shall not include (x)
trade payables (including payables under insurance contracts and reinsurance
payables) and accrued expenses, in each case arising in the ordinary course
of business and (y) obligations with respect to Policies.
"Initial Borrowing Date" shall mean the date of the incurrence of the
initial Loans hereunder.
-59-
"Initial Offering" shall mean, collectively, a transaction
involving the sale of Trust Preferred Related Debt Securities of the Borrower
to a Delaware statutory business trust which constitutes a Subsidiary of the
Borrower and the concurrent sale by such Subsidiary of preferred equity
securities, which transaction was consummated on February 3, 1997.
"Insurance Business" shall mean one or more aspects of the
business of selling, issuing or underwriting insurance or reinsurance.
"Insurance Contract" shall mean any insurance contract or policy
issued by a Regulated Insurance Company but shall not include any Reinsurance
Agreement or Retrocession Agreement.
"Insurance Licenses" shall mean each of the insurance licenses
listed on Annex IX and any other insurance license necessary for the conduct
of business by any Regulated Insurance Company.
"Interest Coverage Ratio" shall mean, for any Test Period, the
ratio of Cash Flow for such Test Period to Consolidated Interest Expense of
the Borrower for such Test Period.
"Interest Period" shall mean, with respect to any Eurodollar Loan,
the interest period applicable thereto, as determined pursuant to Section
1.09.
"Interest Rate Protection Agreement" shall mean any interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedging agreement or other similar agreement or arrangement.
"Legal Requirements" shall mean all applicable laws, rules and
regulations made by any governmental body or regulatory authority (including,
without limitation, any Applicable Insurance Regulatory Authority) having
jurisdiction over the Borrower or a Subsidiary of the Borrower.
"Leverage Ratio" shall mean the ratio of (i) Consolidated
Indebtedness of the Borrower to (ii) Consolidated Total Capital of the
Borrower.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any
of the foregoing, any conditional sale or other title retention agreement or
any lease in the nature thereof), or any understanding or agreement to
repurchase any property or assets sold by the Borrower or any of its
Subsidiaries (including sales of accounts receivable or notes with
-60-
recourse to the Borrower or any of its Subsidiaries), or the
assignment of any right to receive income, or the filing of any financing
statement under the UCC or any other similar notice under any similar
recording or notice statute relating to any property.
"Loan" shall have the meaning provided in Section 1.01.
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean a material adverse effect on
the business, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower or of the Borrower and its
Subsidiaries taken as a whole.
"Material Regulated Insurance Company" shall mean each Regulated
Insurance Company which has a statutory surplus equal to or greater than
$5,000,000; PROVIDED that (i) American Vanguard Life Insurance Company shall
not be considered a Material Regulated Insurance Company unless and until it
has a statutory surplus equal to or greater than $15,000,000, and (ii) CLA
Assurance Company shall not be considered a Material Regulated Insurance
Company unless and until it has a statutory surplus equal to or greater than
$7,500,000.
"Material Subsidiary" shall mean any Subsidiary of the Borrower
the fair market value of whose assets constitutes 1% or more of the fair
market value of the consolidated assets of the Borrower and its Subsidiaries.
"Maturity Date" shall mean the date five years from the Effective
Date.
"Moody's" shall mean Xxxxx'x Investors Service, Inc. and its
successors.
"Moody's Credit Rating" shall mean the rating level (it being
understood that a rating level shall include numerical modifiers and (+) and
(-) modifiers) assigned by Moody's to the senior unsecured long-term debt of
the Borrower, PROVIDED that if at any time Moody's does not rate the senior
unsecured long-term debt of the Borrower, the "Moody's Credit Rating" shall
be three rating levels below the claims paying rating assigned by Moody's to
AmerUs Life. If either of the foregoing ratings shall be changed by Moody's,
such change shall be effective for purposes of this definition on the
Business Day following the day on which Moody's announces such change.
"NAIC" shall mean the National Association of Insurance
Commissioners or any successor organization thereto.
-61-
"NAIC Tests" shall mean the ratios and other financial
measurements developed by the NAIC under its Insurance Regulatory Information
System, as in effect from time to time.
"Net Worth" shall mean, as to any Person, the sum of its capital
stock (including, without limitation, its preferred stock), capital in excess
of par or stated value of shares of its capital stock (including, without
limitation, its preferred stock), retained earnings and any other account
which, in accordance with GAAP, constitutes stockholders equity, but
excluding (i) any treasury stock and (ii) the effects of Financial Accounting
Statement No. 115.
"Note" shall have the meaning provided in Section 1.05.
"Notice of Borrowing" shall have the meaning provided in Section
1.03.
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Administrative Agent
at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or such other office as the
Administrative Agent may designate to the Borrower and the Banks from time to
time.
"Obligations" shall mean all amounts, direct or indirect,
contingent or absolute, of every type or description, and at any time
existing, owing to the Administrative Agent, the Collateral Agent or any Bank
pursuant to the terms of this Agreement or any other Credit Document.
"Other Hedging Agreements" shall mean any foreign exchange
contracts, currency swap agreements or other similar agreements or
arrangements designed to protect against fluctuations in currency values.
"Payment Office" shall mean the office of the Administrative Agent
at Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 10081 or such other office
as the Administrative Agent may designate to the Borrower and the Banks from
time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Subordinated Debt Securities" shall mean unsecured
subordinated debt of the Borrower the terms and conditions of which are
reasonably satisfactory to the Administrative Agent and the Required Banks.
-62-
"Person" shall mean any individual, partnership, joint venture,
firm, corporation, association, trust or other enterprise or any government
or political subdivision or any agency, department or instrumentality thereof.
"Plan" shall mean any pension plan as defined in Section 3(2) of
ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) the Borrower or a Subsidiary of the Borrower or
an ERISA Affiliate, and each such plan for the five year period immediately
following the latest date on which the Borrower, or a Subsidiary of the
Borrower or an ERISA Affiliate maintained, contributed to or had an
obligation to contribute to such plan.
"Pledge Agreement" shall have the meaning provided in Section
4.01(h).
"Pledged Securities" shall mean all the Pledged Securities as
defined in the Pledge Agreement.
"Policies" shall mean all insurance policies, annuity contracts,
guaranteed interest contracts and funding agreements (including riders to any
such policies or contracts, certificates issued with respect to group life
insurance or annuity contracts and any contracts issued in connection with
retirement plans or arrangements) and assumption certificates issued or to be
issued (or filed pending current review by applicable Governmental
Authorities) by any Regulated Insurance Company and any coinsurance
agreements entered into or to be entered into by any Regulated Insurance
Company.
"Prime Lending Rate" shall mean the rate which Chase announces
from time to time as its prime commercial lending rate, the Prime Lending
Rate to change when and as such prime commercial lending rate changes. The
Prime Lending Rate is a reference rate and does not necessarily represent the
lowest or best rate actually charged to any customer. Chase may make
commercial loans or other loans at rates of interest at, above or below the
Prime Lending Rate.
"Purchase Money Security Interest" shall have the meaning provided
in Section 7.03(k).
"Quarterly Statement" shall mean the quarterly financial
statements required to be filed by any Regulated Insurance Company with the
Applicable Regulatory Insurance Authority.
"Rating Agencies" shall mean S&P and Moody's.
-63-
"Register" shall have the meaning provided in Section 11.17.
"Regulated Insurance Company" shall mean any Subsidiary of the
Borrower, whether now owned or hereafter acquired, that is authorized or
admitted to carry on or transact Insurance Business in any jurisdiction and
is regulated by any Applicable Insurance Regulatory Authority.
"Regulation D" shall mean Regulation D of the Board of Governors
of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing reserve requirements.
"Regulation U" shall mean Regulation U of the Board of Governors
of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing margin requirements.
"Reinsurance Agreement" shall mean any agreement, contract, treaty
or other arrangement whereby one or more insurers, as reinsurers, assume
liabilities under insurance policies or agreements issued by another
insurance or reinsurance company or companies.
"Reportable Event" shall mean an event described in Section
4043(c) of ERISA with respect to a Plan other than those events as to which
the 30-day notice period is waived under subsection .13, .14, .16, .18, .19
or .20 of 40 C.F.R. 4043.
"Required Banks" shall mean Banks whose Commitments (or, after the
Commitments have terminated, outstanding Loans) constitute at least 66-2/3%
of the Total Commitment (or, after the Commitments have terminated, all
outstanding Loans) at such time.
"Retrocession Agreement" shall mean any agreement, contract,
treaty or other arrangement whereby one or more insurers or reinsurers, as
retrocessionaires, assume liabilities of reinsurers under a Reinsurance
Agreement or other retrocessionaires under another Retrocession Agreement.
"Risk-Based Capital" shall mean for any Regulated Insurance
Company, the ratio (expressed as a percentage), at any time, of the Total
Adjusted Capital of such entity to the Authorized Control Level of such
entity.
"S&P" shall mean Standard & Poor's Ratings Group and its
successors.
-64-
"S&P Credit Rating" shall mean the rating level (it being
understood that a rating level shall include numerical modifiers and (+) and
(-) modifiers) assigned by S&P to the senior unsecured long-term debt of the
Borrower, PROVIDED that if at any time S&P does not rate the senior unsecured
long-term debt of the Borrower, the "S&P Credit Rating" shall be three
rating levels below the claims paying rating assigned by S&P to AmerUs Life.
If either of the foregoing ratings shall be changed by S&P, such change shall
be effective for purposes of this definition on the Business Day following
the day on which S&P announces such change.
"SAP" shall mean, with respect to any Regulated Insurance Company,
the accounting procedures and practices prescribed or permitted by the
Applicable Insurance Regulatory Authority of the state in which such
Regulated Insurance Company is domiciled; it being understood and agreed that
determinations in accordance with SAP for purposes of Section 7, including
defined terms as used therein, are subject (to the extent provided therein)
to Section 11.07(a).
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"SEC Regulation D" shall mean Regulation D as promulgated under
the Securities Act of 1933, as amended, as the same may be in effect from
time to time.
"Section 3.04(b)(ii) Certificate" shall have the meaning provided
in Section 3.04(b)(ii).
"Secured Creditors" shall have the meaning provided in the Pledge
Agreement.
"Statutory Statement" shall mean, as to any Regulated Insurance
Company, a statement of the condition and affairs of such Regulated Insurance
Company, prepared in accordance with SAP and filed with the Applicable
Insurance Regulatory Authority.
"Subsidiary" of any Person shall mean and include (i) any
corporation more than 50% of whose stock of any class or classes having by
the terms thereof ordinary voting power to elect a majority of the directors
of such corporation (irrespective of whether or not at the time stock of any
class or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time owned by such
Person directly or indirectly through Subsidiaries and (ii) any partnership,
association, joint venture or other entity in which such Person directly or
indirectly through Subsidiaries has more than a 50% equity or voting interest
at the
-65-
time. Unless otherwise expressly provided, all references herein to
"Subsidiary" shall mean a Subsidiary of the Borrower.
"Surplus Note" shall mean a surplus note issued by any Regulated
Insurance Company to the Borrower.
"Syndication Date" shall mean that date upon which the
Administrative Agent determines (and notifies the Borrower and the Banks)
that the primary syndication (and resulting addition of Persons as Banks
pursuant to Section 11.04(b)) has been completed.
"Taxes" shall have the meaning provided in Section 3.04(a).
"Termination Date" shall have the meaning provided in Section 2.01(a).
"Test Period" shall mean the four consecutive fiscal quarters of
the Borrower ended on the last day of the most recently ended fiscal quarter
of the Borrower (taken as one accounting period). The first Test Period
shall end on December 31, 1997.
"Total Adjusted Capital" shall mean "Total Adjusted Capital" as
defined by the NAIC as of December 31, 1996 and as applied in the context of
the Risk Based Capital Guidelines promulgated by the NAIC.
"Total Commitment" shall mean the sum of the Commitments of each
Bank.
"Total Unutilized Commitment" shall mean, at any time, an amount
equal to the remainder of (x) the Total Commitment then in effect less (y)
the aggregate principal amount of Loans then outstanding.
"Trust Preferred Offering" shall mean (i) the Initial Offering and
(ii) any subsequent issuance of Trust Preferred Related Debt Securities by
the Borrower to a business trust, together with the concurrent issuance by
such trust of preferred equity securities on substantially the same terms as
the Initial Offering.
"Trust Preferred Related Debt Securities" shall mean unsecured,
fixed-rate subordinated debt issued or to be issued by the Borrower in
connection with any Trust Preferred Offering, provided that such Indebtedness
issued after the Effective Date, and the agreements and other documents
entered into by the Borrower and/or any of its Subsidiaries in connection
therewith shall contain terms and conditions (including,
-66-
without limitation, with respect to the obligor and guarantors, if any, in
respect of such Indebtedness, amortization schedules, interest rates
(including pay-in-kind provisions) (subject to normal fluctuations and
changes in methods of interest calculations), covenants, defaults, remedies
and subordination provisions) in form and substance substantially the same as
the terms and conditions of the Trust Preferred Related Debt Securities
issued in connection with the Initial Offering.
"Type" shall mean any type of Loan determined with respect to the
interest option applicable thereto, I.E., a Base Rate Loan or a Eurodollar
Loan.
"UCC" shall mean the Uniform Commercial Code.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the actuarial present value of the accumulated plan benefits
under the Plan as of the close of its most recent plan year exceeds the fair
market value of the assets allocable thereto, each determined in accordance
with Statement of Financial Accounting Standards No. 87, based upon the
actuarial assumptions used by the Plan's actuary in the most recent annual
valuation of the Plan.
"Unutilized Commitment" with respect to any Bank, at any time,
shall mean such Bank's Commitment at such time less the aggregate outstanding
principal amount of Loans made by such Bank.
"Utilization Fee" shall have the meaning provided in Section
2.01(b).
"Wholly-Owned Subsidiary" of any Person shall mean any Subsidiary
of such Person to the extent all of the capital stock or other ownership
interests in such Subsidiary, other than directors' or nominees' qualifying
shares, is owned directly or indirectly by such Person.
"Written" or "in writing" shall mean any form of written
communication or a communication by means of telex, facsimile device,
telegraph or cable.
SECTION 10. THE ADMINISTRATIVE AGENT.
10.1 APPOINTMENT. Each Bank hereby irrevocably designates and
appoints Chase as Administrative Agent (such term as used in this Section 10
to include Chase acting as Collateral Agent) to act as specified herein and
in the other Credit Documents, and each such Bank hereby irrevocably
authorizes Chase as the Administrative Agent for such Bank, to take such
action on its behalf under the provisions of this
-67-
Agreement and the other Credit Documents and to exercise such powers and
perform such duties as are expressly delegated to the Administrative Agent by
the terms of this Agreement and the other Credit Documents, together with
such other powers as are reasonably incidental thereto. The Administrative
Agent agrees to act as such upon the express conditions contained in this
Section 10. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein or in the other
Credit Documents, nor any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or otherwise exist against the
Administrative Agent. The provisions of this Section 10 are solely for the
benefit of the Administrative Agent and the Banks, and the Borrower shall not
have any rights as a third party beneficiary of any of the provisions hereof.
In performing its functions and duties under this Agreement, the
Administrative Agent shall act solely as agent of the Banks and does not
assume and shall not be deemed to have assumed any obligation or relationship
of agency or trust with or for the Borrower.
10.2 DELEGATION OF DUTIES. The Administrative Agent may execute
any of its duties under this Agreement or any other Credit Document by or
through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents
or attorneys-in-fact selected by it with reasonable care except to the extent
otherwise required by Section 10.03.
10.3 EXCULPATORY PROVISIONS. Neither the Administrative Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement (except
for its or such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Banks for any recitals, statements,
representations or warranties made by the Borrower or any Subsidiary or any
of their respective officers contained in this Agreement, any other Credit
Document or in any certificate, report, statement or other document referred
to or provided for in, or received by the Administrative Agent under or in
connection with, this Agreement or any other Credit Document or for any
failure of the Borrower or any of its Subsidiaries or any of their respective
officers to perform its obligations hereunder or thereunder. The
Administrative Agent shall not be under any obligation to any Bank to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement, or to inspect the
properties, books or records of the Borrower or any of its Subsidiaries. The
Administrative Agent shall not be responsible to any Bank for the
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of this Agreement or any Credit Document
-68-
or for any representations, warranties, recitals or statements made herein or
therein or made in any written or oral statement or in any financial or other
statements, instruments, reports, certificates or any other documents in
connection herewith or therewith furnished or made by the Administrative
Agent to the Banks or by or on behalf of the Borrower to the Administrative
Agent or any Bank or be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained herein or therein or as to the use of the
proceeds of the Loans or of the existence or possible existence of any
Default or Event of Default.
10.4 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, facsimile transmission, telex or teletype message,
statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrower), independent accountants and
other experts selected by the Administrative Agent. The Administrative Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Credit Document unless it shall first receive such
advice or concurrence of the Required Banks as it deems appropriate or it
shall first be indemnified to its satisfaction by the Banks against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Administrative Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement and the other Credit Documents in accordance with a request of the
Required Banks, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Banks.
10.5 NOTICE OF DEFAULT. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event
of Default hereunder unless the Administrative Agent has received notice from
a Bank or the Borrower referring to this Agreement, describing such Default
or Event of Default and stating that such notice is a "notice of default."
In the event that the Administrative Agent receives such a notice, the
Administrative Agent shall give prompt notice thereof to the Banks. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Banks,
PROVIDED that unless and until the Administrative Agent shall have received
such directions, the Administrative Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interests
of the Banks.
-69-
10.06 NON-RELIANCE. Each Bank expressly acknowledges that neither the
Administrative Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates have made any representations or warranties
to it and that no act by the Administrative Agent hereinafter taken,
including any review of the affairs of the Borrower or any of its
Subsidiaries, shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Bank. Each Bank represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Bank, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, assets, operations, property, financial and
other conditions, prospects and creditworthiness of the Borrower and its
Subsidiaries and made its own decision to make its Loans hereunder and enter
into this Agreement. Each Bank also represents that it will, independently
and without reliance upon the Administrative Agent or any other Bank, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement, and to make such
investigation as it deems necessary to inform itself as to the business,
assets, operations, property, financial and other conditions, prospects and
creditworthiness of the Borrower and its Subsidiaries. The Administrative
Agent shall not have any duty or responsibility to provide any Bank with any
credit or other information concerning the business, operations, assets,
property, financial and other conditions, prospects or creditworthiness of
the Borrower or any Subsidiary which may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
10.07 INDEMNIFICATION. Each Bank agrees to indemnify the Administrative
Agent and the Collateral Agent in its respective capacities as such ratably
according to such Bank's respective Commitment (or, if the Total Commitment
has terminated, according to such Bank's respective Commitment immediately
prior to such termination), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
reasonable expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
Obligations) be imposed on, incurred by or asserted against the
Administrative Agent in its capacity as such in any way relating to or
arising out of this Agreement or any other Credit Document, or any documents
contemplated by or referred to herein or the transactions contemplated hereby
or any action taken or omitted to be taken by the Administrative Agent under
or in connection with any of the foregoing, but only to the extent that any
of the foregoing is not paid by the Borrower or any of its Subsidiaries,
PROVIDED that no Bank shall be liable to the Administrative Agent for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from the Administrative Agent's gross negligence or willful
misconduct. If any
-70-
indemnity furnished to the Administrative Agent for any purpose shall, in the
opinion of the Administrative Agent, be insufficient or become impaired, the
Administrative Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity
is furnished. The agreements in this Section 10.07 shall survive the payment
of all Obligations.
10.08 THE ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. The
Administrative Agent and its affiliates may make loans to, accept deposits
from and generally engage in any kind of business with the Borrower and its
Subsidiaries as though not acting as Administrative Agent hereunder. With
respect to the Loans made by it and all Obligations owing to it, the
Administrative Agent shall have the same rights and powers under this
Agreement as any Bank and may exercise the same as though it were not the
Administrative Agent, and the terms "Bank" and "Banks" shall include the
Administrative Agent in its individual capacity.
10.09 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as the Administrative Agent upon 20 days' notice to the Banks and the
Borrower. Upon such resignation, the Required Banks shall, with the consent
of the Borrower (such consent not to be unreasonably withheld), appoint from
among the Banks a successor Administrative Agent for the Banks, whereupon
such successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent" shall include
such successor agent effective upon its appointment, and the resigning
Administrative Agent's rights, powers and duties as the Administrative Agent
shall be terminated, without any other or further act or deed on the part of
such former Administrative Agent or any of the parties to this Agreement.
After the retiring Administrative Agent's resignation hereunder as the
Administrative Agent, the provisions of this Section 10 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
SECTION 11. MISCELLANEOUS.
11.01 PAYMENT OF EXPENSES, ETC. The Borrower hereby agrees to: (i)
whether or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses of the Administrative Agent in
connection with the negotiation, preparation, syndication, execution and
delivery of the Credit Documents and the documents and instruments referred
to therein (including, without limitation, the reasonable fees and
disbursements of White & Case, subject to the limitations agreed to by the
Administrative Agent and the Borrower); (ii) whether or not the transactions
herein contemplated are consummated, pay all reasonable out-of-pocket costs
and expenses of the Administrative Agent in connection with any
-71-
amendment, waiver or consent relating to this Agreement or any other Credit
Document; (iii) whether or not the transactions herein contemplated are
consummated, pay all reasonable out-of-pocket costs and expenses of the
Administrative Agent and each of the Banks in connection with the enforcement
of the Credit Documents and the documents and instruments referred to therein
(including, without limitation, the reasonable fees and disbursements of
counsel for the Administrative Agent and for each of the Banks); (iv) pay and
hold each of the Banks harmless from and against any and all present and
future stamp and other similar taxes with respect to the foregoing matters
and save each of the Banks harmless from and against any and all liabilities
with respect to or resulting from any delay or omission to pay such taxes;
and (v) indemnify the Administrative Agent and each Bank, and their
respective officers, directors, employees, representatives and agents (each,
an "indemnified person") from and hold each of them harmless against any
and all losses, liabilities, claims, damages or expenses (collectively,
"Claims") incurred by any of them as a result of, or arising out of, or in
any way related to, or by reason of, any investigation, litigation or other
proceeding (whether or not the Administrative Agent or any Bank is a party
thereto) related to the entering into and/or performance of any Credit
Document or the use of the proceeds of any Loans hereunder or the
consummation of any other transactions contemplated in any Credit Document,
including, without limitation, the reasonable fees and disbursements of
counsel incurred in connection with any such investigation, litigation or
other proceeding (but excluding any such losses, liabilities, claims, damages
or expenses to the extent incurred by reason of the gross negligence or
willful misconduct of the Person to be indemnified).
11.02 RIGHT OF SETOFF. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of
any such rights, upon the occurrence and continuance of an Event of Default,
each Bank is hereby authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to the Borrower or
to any other Person, any such notice being hereby expressly waived, to set
off and to appropriate and apply any and all deposits (general or special)
and any other Indebtedness at any time held or owing by such Bank (including,
without limitation, by branches and agencies of such Bank wherever located)
to or for the credit or the account of the Borrower against and on account of
the Obligations and liabilities of the Borrower to such Bank or any other
Bank under this Agreement or under any of the other Credit Documents,
including, without limitation, all interests in Obligations of the Borrower
purchased by such Bank or any other Bank pursuant to Section 11.06(b), and
all other claims of any nature or description arising out of or connected
with this Agreement or any other Credit Document, irrespective of whether or
not such Bank shall have made any demand hereunder and although said
Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured. Each Bank is hereby designated the agent of all other Banks for
purposes of effecting
-72-
set off pursuant to this Section 11.02 and the Borrower hereby grants to each
Bank for such Bank's own benefit and as agent for all other Banks a
continuing security interest in any and all deposits, accounts or moneys of
the Borrower maintained from time to time with such Bank.
11.03 NOTICES. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered, if to the Borrower, at
the address specified opposite its signature below; if to any Bank, at its
address specified for such Bank on Annex II hereto; or, at such other address
as shall be designated by any party in a written notice to the other parties
hereto. All such notices and communications shall be mailed, telegraphed,
telexed, telecopied, cabled or sent by overnight courier and shall be
effective when received.
11.04 BENEFIT OF AGREEMENT. (a) This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto; PROVIDED, HOWEVER, the Borrower may not
assign or transfer any of its rights or obligations hereunder without the
prior written consent of the Banks. Each Bank may at any time grant
participations in any of its rights hereunder or under any of its Notes to
any bank or other financial institution; PROVIDED that in the case of any
such participation, the participant shall not have any rights under this
Agreement or any of the other Credit Documents, including rights of consent,
approval or waiver (the participant's rights against such Bank in respect of
such participation to be those set forth in the agreement executed by such
Bank in favor of the participant relating thereto) and all amounts payable by
the Borrower hereunder shall be determined as if such Bank had not sold such
participation, except that the participant shall be entitled to receive the
additional amounts under Sections 1.10, 1.11 and 3.04 of this Agreement to,
and only to, the extent that such Bank would be entitled to such benefits if
the participation had not been entered into or sold; and PROVIDED FURTHER,
that no Bank shall transfer, grant or assign any participation under which
the participant shall have rights to approve any amendment to or waiver of
this Agreement or any other Credit Document except to the extent such
amendment or waiver would (i) extend the final scheduled maturity of any Loan
or Note in which such participant is participating or reduce the rate or
extend the time of payment of interest thereon or Fees, or reduce the
principal amount thereof, or increase such participant's participating
interest in any Commitment or Loan over the amount thereof then in effect (it
being understood that a waiver of any Default or Event of Default or of a
mandatory reduction in the Total Commitment shall not constitute a change in
the terms of any Commitment and that an increase in any Commitment shall be
permitted without the consent of any participant if such participant's
participation is not increased as a result thereof), (ii) release all or
-73-
any material portion of the Collateral (except as expressly provided in the
Credit Documents) or (iii) consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this Agreement or any
other Credit Document except in accordance with the terms hereof and thereof.
(b) Notwithstanding the foregoing, any Bank may assign all or a portion
of its rights and obligations hereunder to a bank or other financial
institution with the prior written consent of the Administrative Agent, which
consent shall not be unreasonably withheld. No assignment of less than all
of a Bank's rights and obligations hereunder pursuant to the immediately
preceding sentence shall, to the extent such transaction represents an
assignment to an institution other than one or more Banks hereunder, be in an
aggregate amount less than the minimum of $5,000,000 unless otherwise agreed
to by the Administrative Agent and the Borrower in writing. If any Bank so
sells or assigns all or a part of its rights hereunder or under the Notes,
any reference in this Agreement or the Notes to such assigning Bank shall
thereafter refer to such Bank and to the respective assignee to the extent of
their respective interests and the respective assignee shall have, to the
extent of such assignment (unless otherwise provided therein), the same
rights and benefits as it would if it were such assigning Bank. Each
assignment pursuant to this Section 11.04(b) shall be effected by the
assigning Bank and the assignee Bank executing an Assignment and Assumption
Agreement substantially in the form of Exhibit G (appropriately completed).
At the time of any such assignment, (i) Annex I shall be deemed to be amended
to reflect the Commitments, if any, and outstanding Loans of the respective
assignee (which shall result in a direct reduction to the Commitments, if
any, and outstanding Loans of the assigning Bank) and of the other Banks,
(ii) if any such assignment occurs after the Effective Date, at the request
of the assignor or the assignee the Borrower will issue new Notes to the
respective assignee and to the assigning Bank in conformity with the
requirements of Section 1.05 and (iii) the Administrative Agent shall receive
from the assigning Bank and/or the assignee Bank or financial institution at
the time of each assignment the payment of a nonrefundable assignment fee of
$3,500, PROVIDED that such transfer or assignment will not be effective until
recorded by the Administrative Agent on the Register pursuant to Section
11.17 hereof. At the time of each assignment pursuant to this Section
11.04(b) to a Person which is not already a Bank hereunder and which is not a
United States person (as such term is defined in Section 7701(a)(30) of the
Code) for Federal income tax purposes, the respective assignee Bank shall
provide to the Borrower and the Administrative Agent the appropriate Internal
Revenue Service forms (and, if applicable a Section 3.04(b)(ii) Certificate)
described in Section 3.04(b). Each Bank and the Borrower agrees to execute
such documents (including, without limitation, amendments to this Agreement
and the other Credit Documents) as shall be necessary to effect the
foregoing. Promptly following any assignment pursuant to this Section
11.04(b), the assigning Bank shall promptly notify the Borrower and the
Administrative
-74-
Agent thereof. Nothing in this Section 11.04 shall prevent or prohibit any
Bank from pledging its Loans or Notes hereunder to a Federal Reserve Bank in
support of borrowings made by such Bank from such Federal Reserve Bank.
(c) Notwithstanding any other provisions of this Section 11.04, no
transfer or assignment of the interests or obligations of any Bank hereunder
or any grant of participations therein shall be permitted if such transfer,
assignment or grant would require the Borrower to file a registration
statement with the SEC or to qualify the Loans under the "Blue Sky" laws of
any State.
(d) Each Bank initially party to this Agreement hereby represents, and
each Person that becomes a Bank pursuant to an assignment permitted by clause
(b) above will upon its becoming party to this Agreement represent, that it
is a commercial lender, other financial institution or other "accredited
investor" (as defined in SEC Regulation D) which makes loans in the ordinary
course of its business or is acquiring the Loans without a view to
distribution of the Loans within the meaning of the federal securities laws,
and that it will make or acquire Loans for its own account in the ordinary
course of such business, PROVIDED that, subject to the preceding clauses (a)
through (c), the disposition of any promissory notes or other evidences of or
interests in Indebtedness held by such Bank shall at all times be within its
exclusive control.
11.05 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part
of the Administrative Agent or any Bank in exercising any right, power or
privilege hereunder or under any other Credit Document and no course of
dealing between the Borrower and the Administrative Agent or any Bank shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or under any other Credit Document
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder or thereunder. The rights and remedies
herein expressly provided are cumulative and not exclusive of any rights or
remedies which the Administrative Agent or any Bank would otherwise have. No
notice to or demand on the Borrower in any case shall entitle the Borrower to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Administrative Agent or the Banks to
any other or further action in any circumstances without notice or demand.
11.06 PAYMENTS PRO RATA. (a) The Administrative Agent agrees that
promptly after its receipt of each payment from or on behalf of the Borrower
in respect of any Obligations of the Borrower, it shall distribute such
payment to the Banks (other than any Bank that has consented in writing to
waive its PRO RATA share of such payment) PRO RATA based upon their
respective shares, if any, of the Obligations with respect to which such
payment was received.
-75-
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or
interest on, the Loans or Fees, of a sum which with respect to the related
sum or sums received by other Banks is in a greater proportion than the total
of such Obligation then owed and due to such Bank bears to the total of such
Obligation then owed and due to all of the Banks immediately prior to such
receipt, then such Bank receiving such excess payment shall purchase for cash
without recourse or warranty from the other Banks an interest in the
Obligations of the Borrower to such Banks in such amount as shall result in a
proportional participation by all of the Banks in such amount, PROVIDED that
if all or any portion of such excess amount is thereafter recovered from such
Bank, such purchase shall be rescinded and the purchase price restored to the
extent of such recovery, but without interest.
11.07 CALCULATIONS; COMPUTATIONS. (a) The financial statements to be
furnished to the Banks pursuant hereto shall be made and prepared in
accordance with GAAP or SAP, as the case may be, consistently applied
throughout the periods involved (except as set forth in the notes thereto or
as otherwise disclosed in writing by the Borrower to the Banks). In
addition, except as otherwise specifically provided herein, all computations
determining compliance with Section 7, including definitions used therein,
shall utilize accounting principles and policies in effect from time to time;
PROVIDED that (i) if any such accounting principle or policy (whether GAAP or
SAP or both) shall change after the Effective Date, the Borrower shall give
reasonable notice thereof to the Administrative Agent and each of the Banks
and if within 30 days following such notice the Borrower, the Administrative
Agent or the Required Banks shall elect by giving written notice of such
election to the other parties hereto, such computations shall not give effect
to such change unless and until this Agreement shall be amended pursuant to
Section 11.12 to give effect to such change, and (ii) if at any time the
computations determining compliance with Section 7 utilize accounting
principles different from those utilized in the financial statements then
being furnished to the Banks pursuant to Section 6.01, such financial
statements shall be accompanied by reconciliation work-sheets.
(b) All computations of interest on Loans and Fees hereunder shall be
made on the actual number of days elapsed over a year of 360 days.
11.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE. (a) THIS
AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
-76-
BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN
THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE
BORROWER AND EACH BANK HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS. THE BORROWER AND EACH BANK HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM
THAT ANY SUCH COURTS LACK JURISDICTION OVER THE BORROWER OR SUCH BANK, AND
AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN ANY OF THE AFORESAID
COURTS, THAT ANY SUCH COURT LACKS JURISDICTION OVER THE BORROWER OR SUCH BANK.
THE BORROWER AND EACH BANK FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO THE BORROWER OR SUCH BANK, AS THE CASE MAY BE, AT ITS ADDRESS FOR
NOTICES PURSUANT TO SECTION 11.03, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS
AFTER SUCH MAILING. THE BORROWER AND EACH BANK, AS THE CASE MAY BE, HEREBY
IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER
IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING
HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY
WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
ADMINISTRATIVE AGENT OR ANY BANK TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE
BORROWER IN ANY OTHER JURISDICTION.
(b) THE BORROWER AND EACH BANK HEREBY IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF
THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (A) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES
-77-
NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
11.09 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
11.10 EFFECTIVENESS. This Agreement shall become effective on the
date (the "Effective Date") on which the Borrower, the Administrative Agent and
each of the Banks shall have signed a copy hereof (whether the same or different
copies) and shall have delivered the same to the Administrative Agent at the
Administrative Agent's Notice Office or, in the case of the Banks, shall have
given to the Administrative Agent telephonic (confirmed in writing), written,
telex or telecopy notice (actually received) at such office that the same has
been signed and mailed to it. The Administrative Agent will give the Borrower
and each Bank prompt written notice of the occurrence of the Effective Date.
11.11 HEADINGS DESCRIPTIVE. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
11.12 AMENDMENT OR WAIVER. Neither this Agreement nor any other
Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the Borrower and the Required Banks, PROVIDED that no such
change, waiver, discharge or termination shall, without the consent of each Bank
affected thereby, (i) extend the scheduled final maturity of any Loan or Note or
reduce the rate or extend the time of payment of interest thereon or Fees or
reduce the principal amount thereof, (ii) increase the Commitment of any Bank
over the amount thereof then in effect (it being understood that a waiver of any
Default or Event of Default or of a mandatory reduction in the Total Commitment
shall not constitute a change in the terms of any Commitment of any Bank), (iii)
release all or any material portion of the Collateral (except as expressly
provided in the Credit Documents), (iv) amend, modify or waive any provision of
this Section 11.12, (v) reduce any percentage specified in, or otherwise modify,
the definition of Required Banks or (vi) consent to the assignment or transfer
by the Borrower of any of its rights and obligations under this Agreement. No
provision of Section 10 or any other provision relating to the rights and/or
-78-
obligations of the Administrative Agent may be amended without the consent of
the Administrative Agent.
11.13 SURVIVAL. All indemnities set forth herein including, without
limitation, in Section 1.10, 1.11, 3.04, 10.07 or 11.01 shall survive the
execution and delivery of this Agreement and the making of the Loans, the
repayment of the Obligations and the termination of the Total Commitment.
11.14 DOMICILE OF LOANS. Subject to Section 11.04, each Bank may
transfer and carry its Loans at, to or for the account of any branch office,
subsidiary or affiliate of such Bank, PROVIDED that the Borrower shall not be
responsible for costs arising under Section 1.10 or 3.04 resulting from any such
transfer to the extent not otherwise applicable to such Bank prior to such
transfer.
11.15 CONFIDENTIALITY. Each Bank shall hold all non-public
information furnished by or on behalf of the Borrower in connection with such
Bank's evaluation of whether to become a Bank hereunder or obtained by such
Bank pursuant to the requirements of this Agreement ("Confidential Information")
in accordance with its customary procedure for handling confidential information
of this nature and in accordance with safe and sound banking or lending
practices; PROVIDED that any Bank and/or its affiliates may disclose any such
Confidential Information (a) as has become generally available to the public
other than as a result of disclosure in violation of this Section 11.15, (b) as
has become available to such Bank or any such affiliate on a non-confidential
basis from a source other than the Borrower and its affiliates, provided that
the source is not known by such Bank to be prohibited from transmitting such
information to such Bank by a contractual, legal or fiduciary obligation, (c) as
may be required or appropriate in any report, statement or testimony submitted
to any municipal, state or Federal regulatory body having or claiming to have
jurisdiction over such Bank and/or its affiliates, (d) as may be required or
appropriate in respect to any summons or subpoena or in connection with any
litigation or other judicial process (it being understood that, to the extent
reasonably practicable under the circumstances, the Borrower shall be given
prior notice and an opportunity to contest any proposed disclosure pursuant to
this clause (d)), (e) in order to comply with any law, order, regulation or
ruling applicable to such Bank and/or its affiliates, and (f) to any permitted
prospective or actual syndicate member or participant in the Loans, provided
that such prospective or actual syndicate member or participant agrees with the
respective assigning Bank to be bound by the provisions of this Section 11.15.
The provisions of this Section 11.15 shall survive any termination of this
Agreement.
11.16 WAIVER OF JURY TRIAL. EACH OF THE PARTIES TO THIS AGREEMENT
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL
-79
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING
TO THIS AGREEMENT, THE CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
11.17 REGISTER. The Borrower hereby designates the Administrative
Agent to serve as its agent, solely for purposes of this Section 11.17, to
maintain a register (the "Register") on which it will record the Commitments
from time to time of each of the Banks, the Loans made by each of the Banks and
each repayment in respect of the principal amount of the Loans of each Bank.
Failure to make any such recordation, or any error in such recordation shall not
affect the obligations of the Borrower in respect of such Loans. With respect
to any Bank, the transfer of the Commitments of such Bank and the rights to the
principal of, and interest on, any Loan made pursuant to such Commitments shall
not be effective until such transfer is recorded on the Register maintained by
the Administrative Agent with respect to ownership of such Commitments and Loans
and prior to such recordation all amounts owing to the transferor with respect
to such Commitments and Loans shall remain owing to the transferor. The
registration of assignment or transfer of all or part of any Commitments and
Loans shall be recorded by the Administrative Agent on the Register only upon
the acceptance by the Administrative Agent of a properly executed and delivered
Assignment and Assumption Agreement pursuant to Section 11.04(b). Coincident
with the delivery of such an Assignment and Assumption Agreement to the
Administrative Agent for acceptance and registration of assignment or transfer
of all or part of a Loan, or as soon thereafter as practicable, the assigning or
transferor Bank shall surrender the Note evidencing such Loan, and thereupon one
or more new Notes in the same aggregate principal amount shall be issued to the
assigning or transferor Bank and/or the new Bank. The Borrower agrees to
indemnify the Administrative Agent from and against any and all losses, claims,
damages and liabilities of whatsoever nature which may be imposed on, asserted
against or incurred by the Administrative Agent in performing its duties under
this Section 11.17 (but excluding any such losses, liabilities, claims, damages
or expenses to the extent incurred by reason of the gross negligence or willful
misconduct of the Administrative Agent).
11.18 COLLATERAL RELEASE. On the Collateral Release Date, so long as
no Default or Event of Default shall exist at such time, the Pledge Agreement
shall be terminated and no longer be of any force or effect and the Collateral
Agent is hereby authorized and directed at such time to take such actions as are
appropriate to give effect to such termination and release.
* * *
-80-
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Agreement to be duly executed and delivered as of the date first
above written.
ADDRESS:
000 Xxxxx Xxxxxx XXXXXX XXXX HOLDINGS, INC.
Des Moines, Iowa 50309
Tel: (000) 000-0000
Fax: (000) 000-0000 By /s/ Xxxxx X. Xxxxxx
Attention: Xxxxxxx Xxxxxxx --------------------
Title: President & CEO
The Chase Manhattan Bank THE CHASE MANHATTAN BANK,
000 Xxxx Xxxxxx Individually and as Administrative Agent
New York, New York 10017
Tel: (000) 000-0000
Fax: (000) 000-0000 By /s/Xxxxx Xxxxxxx
Attention: Xxxxx Xxxxxxx -----------------
Title: Vice-President
Bank One Center/Tower; IN1-0192 BANK ONE, INDIANA, NA,
000 Xxxxxxxx Xxxxxx Individually and as a Co-Arranger
Suite 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000 By /s/ Xxxxx X. Xxxxxx
Attention: Xxxxx Xxxxxx -------------------
Title: Vice-President
000 Xxxx Xxxxxx XXX XXXX XXXX, X.X.,
Xxx Xxxx, Xxx Xxxx 00000 Individually and as a Co-Arranger
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx By /s/ Xxxxxx X. Xxxxxx
---------------------
Title: Vice-President
By /s/ Xxxxxx Xxxxxx
------------------
Title: Corporate Banking Officer
