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Exhibit 10.27
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SELECTIVE INSURANCE GROUP, INC.
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Note Purchase Agreement
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DATED AS OF MAY 4, 2000
$30,000,000 8.63% SERIES A SENIOR NOTES DUE MAY 4, 2007
$61,500,000 8.87% SERIES B SENIOR NOTES DUE MAY 4, 2010
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TABLE OF CONTENTS
1. PURCHASE AND SALE OF NOTES.....................................1
1.1. Issue of Notes...........................................1
1.2. The Closing..............................................2
1.3. Purchase for Investment..................................2
1.4. Source of Funds..........................................3
1.5. Failure To Deliver, Failure of Conditions................4
1.6. Expenses.................................................4
2. WARRANTIES AND REPRESENTATIONS.................................5
2.1. Nature of Business.......................................5
2.2. Financial Statements; Debt; Material Adverse Change......5
2.3. Subsidiaries and Affiliates..............................6
2.4. Pending Litigation.......................................6
2.5. Title to Properties......................................6
2.6. Patents, Trademarks, Licenses, etc.......................6
2.7. Taxes....................................................7
2.8. Full Disclosure..........................................7
2.9. Organization and Authority...............................7
2.10. Restrictions on Company and Subsidiaries.................9
2.11. Compliance with Law......................................9
2.12. ERISA....................................................9
2.13. Certain Laws.............................................11
2.14. Environmental Compliance.................................11
2.15. Sale is Legal and Authorized; Obligations
are Enforceable.........................................12
2.16. Governmental Consent.....................................12
2.17. Private Offering.........................................13
2.18. No Defaults..............................................13
2.19. Use of Proceeds..........................................13
2.20. Solvency.................................................14
3. CLOSING CONDITIONS.............................................14
3.1. Opinions of Counsel......................................14
3.2. Warranties and Representations True; No Prohibited
Action.................................................14
3.3. Officers' Certificates...................................15
3.4. Legality.................................................15
3.5. Private Placement Number.................................15
3.6. Certificates; Approvals..................................15
3.7. Compliance with this Agreement...........................15
3.8. Expenses.................................................15
3.9. Other Purchasers.........................................16
3.10. Proceedings Satisfactory.................................16
4. PURCHASERS' SPECIAL RIGHTS.....................................16
4.1. Direct Payment...........................................16
4.2. Delivery Expenses........................................16
4.3. Issue Taxes..............................................16
5. PREPAYMENTS; CHANGE OF CONTROL PUT OPTION......................17
5.1. Scheduled Required Prepayments and Payment at Maturity...17
5.2. Optional Prepayments.....................................17
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TABLE OF CONTENTS(Cont.)
5.3. Partial Prepayment Pro Rata..............................18
5.4. Notation of Notes on Prepayment..........................18
5.5. No Other Optional Prepayments............................18
5.6. Offer to Pay upon Change in Control Ratings Event........19
6. REGISTRATION; SUBSTITUTION OF NOTES............................20
6.1. Registration of Notes....................................20
6.2. Exchange of Notes........................................20
6.3. Replacement of Notes.....................................20
7. COMPANY BUSINESS COVENANTS.....................................21
7.1. Payment of Taxes and Claims..............................21
7.2. Maintenance of Properties and Corporate Existence........21
7.3. Payment of Notes and Maintenance of Office...............23
7.4. Liens....................................................23
7.5. Limitation on Indebtedness...............................25
7.6. Net Worth Maintenance....................................26
7.7. Maintenance of Debt to Capitalization Ratio..............26
7.8. Limitation on Subsidiary Indebtedness....................27
7.9. Disposition of Assets....................................27
7.10. Limitation on Sale-Leaseback.............................30
7.11. Restricted Payments......................................31
7.12. Merger...................................................32
7.13. ERISA....................................................32
7.14. Line of Business.........................................33
7.15. Transactions with Affiliates.............................33
7.16. Pro-Rata Offers..........................................34
7.17. Private Offering.........................................34
7.18. Tax Consolidation........................................34
7.19. Pari Passu Ranking.......................................34
8. INFORMATION AS TO COMPANY......................................34
8.1. Financial and Business Information.......................34
8.2. Officers' Certificates...................................37
8.3. Accountants' Certificates................................38
8.4. Inspection...............................................38
8.5. Report to NAIC...........................................38
9. EVENTS OF DEFAULT..............................................38
9.1. Nature of Events.........................................38
9.2. Default Remedies.........................................40
9.3. Annulment of Acceleration of Notes.......................41
10. INTERPRETATION OF THIS AGREEMENT...............................42
10.1. Terms Defined............................................42
10.2. Generally Accepted Accounting Principles.................55
10.3. Directly or Indirectly...................................55
10.4. Section Headings and Table of Contents and Construction..55
10.5. Governing Law............................................56
11. MISCELLANEOUS..................................................56
11.1. Communications...........................................56
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TABLE OF CONTENTS(Cont.)
11.2. Reproduction of Documents................................56
11.3. Survival.................................................57
11.4. Successors and Assigns...................................57
11.5. Amendment and Waiver.....................................57
11.6. Payments, When Received..................................58
11.7. Entire Agreement.........................................59
11.8. Duplicate Originals, Execution in Counterpart............59
12. CONFIDENTIAL INFORMATION.......................................59
Annex 1 -- Information as to Purchasers
Annex 2 -- Payment Instructions at Closing
Annex 3 -- Information as to Company
Exhibit A1 -- Form of 8.63% Series A Senior Note Due May 4, 2007
Exhibit A2 -- Form of 8.87% Series B Senior Note Due May 4, 2010
Exhibit B1 -- Form of Company Outside Counsel's Closing Opinion
Exhibit B2 -- Form of Company's General Counsel's Closing Opinion
Exhibit B3 -- Form of Special Counsel's Closing Opinion
Exhibit C -- Form of Officers' Certificate
Exhibit D -- Form of Secretary's Certificate
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SELECTIVE INSURANCE GROUP, INC.
NOTE PURCHASE AGREEMENT
$30,000,000 8.63% Series A Senior Notes Due May 4, 2007
$61,500,000 8.87% Series B Senior Notes Due May 4, 2010
Dated as of May 4, 2000
[Insert Name and Address
of each Purchaser]
Ladies and Gentlemen:
SELECTIVE INSURANCE GROUP, INC. (together with its successors and assigns,
the "Company"), a New Jersey corporation, hereby agrees with you as follows:
1. PURCHASE AND SALE OF NOTES
1.1. Issue of Notes.
The Company will authorize the issue of
(a) Thirty Million Dollars ($30,000,000) in aggregate principal
amount of its eight and sixty-three hundredths percent (8.63%) Series A
Senior Notes due May 4, 2007 (the "Series A Notes"). Each Series A Note
shall:
(i) bear interest (computed on the basis of a 360-day year of
twelve 30-day months) on the unpaid principal balance thereof from
the date of such Series A Note at the rate of eight and sixty-three
hundredths percent (8.63%) per annum, payable semi-annually on the
fourth day of each May and November in each year commencing on the
later of November 4, 2000 or the payment date next succeeding the
date of such Series A Note, until the principal amount thereof shall
be due and payable, and
(ii) bear interest, payable on demand, on any overdue
principal (including any overdue prepayment of principal) and
Make-Whole Amount, if any, and (to the extent permitted by
applicable law) on any overdue installment of interest, at a rate
equal to the lesser of the highest rate allowed by applicable law or
ten and sixty-three hundredths percent (10.63%) per annum,
(iii) mature on May 4, 2007; and
(iv) be in the form of the Series A Note set out in Exhibit A1
hereto.
(b) Sixty-One Million Five Hundred Thousand Dollars ($61,500,000) in
aggregate principal amount of its eight and eighty-seven hundredths
percent (8.87%) Series B Senior Notes due May 4, 2010 (the "Series B
Notes"). Each Series B Note shall:
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(i) bear interest (computed on the basis of a 360-day year of
twelve 30-day months) on the unpaid principal balance thereof from
the date of such Series B Note at the rate of eight and eighty-seven
hundredths percent (8.87%) per annum, payable semi-annually on the
fourth day of each May and November in each year commencing on the
later of November 4, 2000 or the payment date next succeeding the
date of such Series B Note, until the principal amount thereof shall
be due and payable, and
(ii) bear interest, payable on demand, on any overdue
principal (including any overdue prepayment of principal) and
Make-Whole Amount, if any, and (to the extent permitted by
applicable law) on any overdue installment of interest, at a rate
equal to the lesser of the highest rate allowed by applicable law or
ten and eighty-seven hundredths percent (10.87%) per annum,
(iii) mature on May 4, 2010; and
(iv) be in the form of the Series B Note set out in Exhibit A2
hereto.
The Series A Notes and the Series B Notes are herein referred to
collectively as the "Notes," and individually as a "Note."
1.2. The Closing.
(a) Purchase and Sale of Notes. The Company hereby agrees to sell to
you and you hereby agree to purchase from the Company, in accordance with
the provisions hereof, the aggregate principal amount of Notes set forth
below your name on Annex 1 hereto at one hundred percent (100%) of the
principal amount thereof.
(b) The Closing. The closing (the "Closing") of the Company's sale
of Notes shall be held on May 4, 2000 (the "Closing Date") at 10:00 a.m.,
Hartford, Connecticut time, at the office of your special counsel, Bingham
Dana LLP, One State Street, Hartford, Connecticut 06103. At the Closing,
the Company shall deliver to you one or more Notes (as set forth below
your name on Annex 1 hereto), of the Series and in the denominations
indicated on Annex 1 hereto, in the aggregate principal amount of your
purchase, dated the Closing Date and payable to you or payable as
indicated on Annex 1 hereto, against payment by federal funds wire
transfer in immediately available funds of the purchase price thereof, as
directed by the Company on Annex 2 hereto.
(c) Other Purchasers. Contemporaneously with the execution and
delivery hereof, the Company is entering into a separate Note Purchase
Agreement identical (except for the name and signature of the purchaser)
hereto (this Agreement and such other separate Note Purchase Agreements
being herein sometimes referred to collectively as the "Note Purchase
Agreements") with each other purchaser (individually, an "Other
Purchaser," and collectively, the "Other Purchasers") listed on Annex 1
hereto, providing for the sale to each Other Purchaser of Notes in the
aggregate principal amount set forth below its name on such Annex. The
sales of the Notes to you and to each Other Purchaser are to be separate
sales.
1.3. Purchase for Investment.
You represent to the Company that you are purchasing the Notes
listed on Annex 1 hereto below your name for your own account for
investment and with no present intention of distributing or reselling the
Notes or any part thereof, but without prejudice to your right at all
times to
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(a) sell or otherwise dispose of all or any part of the Notes under
a registration statement filed under the Securities Act, or in a
transaction exempt from the registration requirements of such Act, and
(b) have control over the disposition of all of your assets to the
fullest extent required by any applicable insurance law.
It is understood that, in making the representations set out in Section
2.15(a) hereof and Section 2.16 hereof, the Company is relying, to the
extent applicable, upon your representation as aforesaid.
1.4. Source of Funds.
You represent that at least one of the following statements is an
accurate representation as to each source of funds (a "Source") to be used
by you to pay the purchase price of the Notes to be purchased by you
hereunder:
(a) the Source is an "insurance company general account" as
defined in United States Department of Labor Prohibited Transaction
Exemption ("PTE") 95-60 (60 FR 35925, July 12, 1995) and in respect
thereof you represent that there is no "employee benefit plan" (as
defined in section 3(3) of ERISA and section 4975(e)(1) of the IRC,
treating as a single plan all plans maintained by the same employer
or employee organization or affiliate thereof) with respect to which
the amount of the general account reserves and liabilities of all
contracts held by or on behalf of such plan exceeds 10% of the total
reserves and liabilities of such general account (exclusive of
separate account liabilities) plus surplus, as set forth in the
National Association of Insurance Commissioners' Annual Statement
filed with your state of domicile and that such acquisition is
eligible for and satisfies the other requirements of such exemption;
or
(b) if you are an insurance company, the Source does not
include assets allocated to any separate account maintained by you
in which any employee benefit plan (or its related trust) has any
interest, other than a separate account that is maintained solely in
connection with your fixed contractual obligations under which the
amounts payable, or credited, to such plan and to any participant or
beneficiary of such plan (including any annuitant) are not affected
in any manner by the investment performance of the separate account;
or
(c) the Source is either (i) an insurance company pooled
separate account, within the meaning of PTE 90-1 (issued January
29,1990), or (ii) a bank collective investment fund, within the
meaning of the PTE 91-38 (issued July 12, 1991) and, except as you
have disclosed to the Company in writing pursuant to this paragraph
1.4(c), no employee benefit plan or group of plans maintained by the
same employer or employee organization beneficially owns more than
10% of all assets allocated to such pooled separate account or
collective investment fund; or
(d) the Source constitutes assets of an "investment fund"
(within the meaning of part V of PTE 84-14 (the "QPAM Exemption"))
managed by a "qualified professional asset manager" or "QPAM"
(within the meaning of part V of the QPAM Exemption), no employee
benefit plan's assets that are included in such investment fund,
when combined with the assets of all other employee benefit plans
established or maintained by the same employer or by an affiliate
(within the meaning of section V(c)(1) of the QPAM Exemption) of
such employer or by the same employee organization and managed by
such QPAM, exceed 20% of the total client assets managed by such
QPAM, the conditions of part I(c) and (g) of the QPAM Exemption are
satisfied,
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neither the QPAM nor a person controlling or controlled by the QPAM
(applying the definition of "control" in section V(e) of the QPAM
Exemption) owns a 5% or more interest in the Company and
(i) the identity of such QPAM and
(ii) the names of all employee benefit plans whose
assets are included in such investment fund
have been disclosed to the Company in writing pursuant to this
paragraph 1.4(d); or
(e) the Source is a governmental plan; or
(f) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Company in
writing pursuant to this paragraph 1.4(f); or
(g) the Source does not include assets of any employee benefit
plan, other than a plan exempt from the coverage of ERISA.
As used in this Section 1.4, the terms "employee benefit
plan", "governmental plan" and "separate account" shall have the
respective meanings assigned to such terms in Section 3 of ERISA.
1.5. Failure To Deliver, Failure of Conditions.
If at the Closing the Company fails to tender to you the Notes to be
purchased by you thereat, or if the conditions specified in Section 3 hereof to
be fulfilled at the Closing have not been fulfilled, you may thereupon elect to
be relieved of all further obligations hereunder. Nothing in this Section 1.5
shall operate to relieve the Company from any of its obligations hereunder or to
waive any of your rights against the Company.
1.6. Expenses.
(a) Generally. Whether or not the Notes are sold, the Company shall
promptly (and in any event within thirty (30) days of receiving any
statement or invoice therefor except with respect to the statements or
invoices referred to in clause (b) below that are to be paid at Closing)
pay all fees, expenses and costs relating hereto, including but not
limited to:
(i) the cost of reproducing this Agreement and the Notes;
(ii) the reasonable fees and disbursements of your special
counsel, Bingham Dana LLP;
(iii) the cost of delivering to your home office or custodian
bank, insured to your satisfaction, the Notes purchased by you at
the Closing;
(iv) the fees, expenses and costs incurred complying with each
of the conditions to closing set forth in Section 3 hereof; and
(v) the reasonable expenses relating to the consideration,
negotiation, preparation or execution of any amendments, waivers or
consents pursuant to the
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provisions hereof, whether or not any such amendments, waivers or
consents are executed.
(b) Counsel. Without limiting the generality of the foregoing, it is
agreed and understood that the Company will pay, at the Closing, the
statement for fees and disbursements of your special counsel presented at
the Closing, and the Company will also pay upon receipt of any statement
thereof each additional statement for fees and disbursements of your
special counsel rendered within 30 days after the Closing in connection
with the issuance of the Notes or the matters referred to in Section
1.6(a)(iv) hereof.
(c) Survival. The obligations of the Company under this Section 1.6
shall survive the payment or prepayment of the Notes and the termination
hereof.
2. WARRANTIES AND REPRESENTATIONS
To induce you to enter into this Agreement and to purchase the Notes
listed on Annex 1 hereto below your name, the Company warrants and represents,
as of the date hereof as follows:
2.1. Nature of Business.
The private placement memorandum (together with all attachments thereto,
including, without limitation, the Company's Annual Report to Shareholders for
the year 1999 and the Company's Annual Report on Form 10-K for fiscal year ended
December 31, 1999) dated April, 2000, and furnished by Merrill, Lynch, Pierce,
Fenner & Smith Incorporated (the aforesaid private placement memorandum with
attachments is herein referred to as the "Placement Memorandum"), correctly
describes the general nature of the business and principal Properties of the
Company and the Subsidiaries as of the date hereof. Copies of the Placement
Memorandum have been previously delivered to you.
2.2. Financial Statements; Debt; Material Adverse Change.
(a) Financial Statements. Copies of the following financial
statements have been delivered to you:
(i) the consolidated balance sheets of the Company and the
Subsidiaries as of December 31, 1998 and December 31, 1999, and the
related statements of income, shareholders' equity and cash flows
for the fiscal years ended on such dates, all accompanied by
opinions thereon by KPMG LLP, independent certified public
accountants, and
(ii) the unaudited consolidated balance sheet, and the related
statements of income and cash flows of the Company and its
consolidated Subsidiaries for the fiscal quarter ended March 31,
2000.
Each of the above financial statements have been prepared in accordance
with Generally Accepted Accounting Principles consistently applied, and
present fairly the financial position of the Company and the Subsidiaries,
taken as a whole, as of the dates set forth above and the results of their
operations and cash flows for the periods set forth above. All such
financial statements include the accounts of all Subsidiaries for the
respective periods during which a subsidiary relationship has existed.
Except as set forth on Part 2.2(a) of Annex 3 hereto, all Subsidiaries
were subsidiaries during all of the periods covered by such financial
statements.
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(b) Debt. Part 2.2(b) of Annex 3 to this Agreement correctly lists
all outstanding Debt of the Company and each of the Subsidiaries as of the
date hereof.
(c) Material Adverse Change. Since December 31, 1999, there has been
no change in the business, prospects, profits, Properties or condition
(financial or otherwise) of the Company or any of the Subsidiaries, taken
as a whole, except changes in the ordinary course of business that, in the
aggregate, have not had a material adverse effect on the business,
prospects, profits, Properties or condition (financial or otherwise) of
the Company and the Subsidiaries, taken as a whole, the ability of the
Company to perform its obligations set forth herein and in the Notes, or
the rights and remedies of the holders of the Notes hereunder or under the
Notes.
2.3. Subsidiaries and Affiliates.
(a) Part 2.3 of Annex 3 to this Agreement states
(i) the name of each of the Subsidiaries, its jurisdiction of
incorporation or organization and the percentage of its Voting Stock
owned by the Company and each other Subsidiary, and
(ii) the name of each of the Company's corporate or joint
venture Affiliates and the nature of the affiliation.
(iii) Each of the Company and each Subsidiary has good and
marketable title to all of the membership interests and shares of
stock it purports to own of each Subsidiary, free and clear in each
case of any Lien. All such shares have been duly issued and are
fully paid and nonassessable.
2.4. Pending Litigation.
Except as disclosed in Part 2.4 of Annex 3 hereto and the Placement
Memorandum, there are no proceedings, actions or investigations pending or, to
the knowledge of the Company, threatened against or affecting the Company or any
Subsidiary in any court or before any Governmental Authority or arbitration
board or tribunal that, in the aggregate, would have a material adverse effect
on the business, prospects, profits, Properties or condition (financial or
otherwise) of the Company and the Subsidiaries, taken as a whole, the ability of
the Company to perform its obligations set forth herein and in the Notes, or the
rights and remedies of the holders of the Notes hereunder or under the Notes.
The Company is not in default with respect to any judgment, order, writ,
injunction, or decree of any court, Governmental Authority or arbitration board
or tribunal that, in the aggregate, would have a material adverse effect on the
business, prospects, profits, Properties or condition (financial or otherwise)
of the Company and the Subsidiaries, taken as a whole, the ability of the
Company to perform its obligations set forth herein and in the Notes, or the
rights and remedies of the holders of the Notes hereunder or under the Notes.
2.5. Title to Properties.
Each of the Company and the Subsidiaries has good and marketable title to
all of the Property reflected in the most recent balance sheet referred to in
Section 2.2 hereof (except as sold or otherwise disposed of in the ordinary
course of business), free from Liens not otherwise permitted by Section 7.4
hereof.
2.6. Patents, Trademarks, Licenses, etc
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Each of the Company and the Subsidiaries, owns, possesses or has the right
to use all of the patents, trademarks, service marks, trade names, copyrights,
licenses, and rights with respect thereto, necessary for the present and
currently planned future conduct of its business, without any known conflict
with the rights of others.
2.7. Taxes.
All tax returns required to be filed by each of the Company, any
Subsidiary and any other Person with which the Company files or has filed a
consolidated return in any jurisdiction have in fact been filed on a timely
basis, and all taxes, assessments, fees and other governmental charges upon each
of the Company, such Subsidiary and any such Person, and upon any of their
respective Properties, income or franchises, that are due and payable have been
paid. Except as set forth on Part 2.7 of Annex 3 to this Agreement, the Company
does not know of any pending additional tax assessment directed particularly
against it, any such Subsidiary or any such Person, the payment of which would
have a material adverse effect on the business, prospects, profits, Properties
or condition (financial or otherwise) of the Company and the Subsidiaries, taken
as a whole, the ability of the Company to perform its obligations set forth
herein and in the Notes, or the rights and remedies of the holders of the Notes
hereunder or under the Notes. All liabilities of the Company and such Persons
with respect to federal income taxes have been finally determined except for the
fiscal years 1995 through 1999, the only years not closed by the completion of
an audit or the expiration of the statute of limitations. The amount of the
liability for taxes reflected in the consolidated balance sheet of the Company
and its consolidated subsidiaries as of December 31, 1999, referred to in
Section 2.2 hereof is an adequate provision for taxes (including without
limitation, any payment due pursuant to any tax sharing agreement) as are or may
become payable by any one or more of the Company and its consolidated
subsidiaries in respect of all tax periods ending on or prior to such date, all
as determined in accordance with, and pursuant to, Generally Accepted Accounting
Principles.
2.8. Full Disclosure.
The financial statements referred to in Section 2.2 hereof do not, nor
does this Agreement, the Placement Memorandum or any written statement furnished
by or on behalf of the Company to you in connection with the negotiation of the
sale of the Notes, contain any untrue statement of a material fact or omit a
material fact necessary to make the statements contained therein or herein not
misleading. There is no fact that the Company has not disclosed to you in the
Placement Memorandum or in this Agreement that has had or will have a material
adverse effect on the business, prospects, profits, Properties or condition
(financial or otherwise) of the Company and the Subsidiaries, taken as a whole,
the ability of the Company to perform its obligations set forth herein and in
the Notes, or the rights and remedies of the holders of the Notes hereunder or
under the Notes.
2.9. Organization and Authority.
(a) The Company,
(i) is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of New Jersey,
(ii) has all legal and corporate power and authority to own
and operate its Properties and to carry on its business as now
conducted and as presently proposed to be conducted,
(iii) has all licenses, certificates, permits, franchises and
other governmental authorizations necessary to own and operate its
Properties and to carry on its business as now conducted and as
presently proposed to be conducted, including, without limitation
all licenses and authorizations in all jurisdictions which require
any Person controlling
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one or more insurance companies to be so licensed or authorized,
except where the failure to have such licenses, certificates,
permits and authorizations, in the aggregate, would not have a
material adverse effect on the business, prospects, profits,
Properties or condition (financial or otherwise) of the Company and
the Subsidiaries, taken as a whole, the ability of the Company to
perform its obligations set forth herein and in the Notes, and
(iv) has duly qualified or has been duly licensed, and is
authorized to do business and is in good standing, as a foreign
corporation, in each State where the failure to be so qualified or
licensed and authorized and in good standing would have a material
adverse effect on the business, prospects, profits, Properties or
condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole, the ability of the Company to
perform its obligations set forth herein and in the Notes, or the
rights and remedies of the holders of the Notes hereunder or under
the Notes.
(b) Each insurance Subsidiary
(i) is a corporation duly incorporated, validly existing and
in good standing under the laws of its state of incorporation,
(ii) is duly qualified and licensed as an insurance company
and is authorized to transact property and/or casualty insurance
business in the jurisdiction of its incorporation and in each of the
jurisdictions set forth on Part 2.9 of Annex 3 hereto, and, with
respect to the jurisdictions set forth on Part 2.9 of Annex 3, each
such Subsidiary is in good standing as a nonresident insurance
company, and
(iii) has all legal and corporate power and authority to own
and operate its Properties and to carry on its business as now
conducted and as presently proposed to be conducted.
(c) Each Subsidiary other than insurance Subsidiaries
(i) is a corporation duly incorporated, validly existing and
in good standing under the laws of its state of incorporation,
(ii) has all legal and corporate or limited liability company
power and authority to own and operate its Properties and to carry
on its business as now conducted and as presently proposed to be
conducted,
(iii) has all licenses, certificates, permits, franchises and
other governmental authorizations necessary to own and operate its
Properties and to carry on its business as now conducted and as
presently proposed to be conducted, except where the failure to have
such licenses, certificates, permits and authorizations, in the
aggregate, would not have a material adverse effect on the business,
prospects, profits, Properties or condition (financial or otherwise)
of the Company and the Subsidiaries, taken as a whole, the ability
of the Company to perform its obligations set forth herein and in
the Notes, or the rights and remedies of the holders of the Notes
hereunder or under the Notes, and
(iv) has duly qualified or has been duly licensed, and is
authorized to do business and is in good standing, as a foreign
corporation, in each State where the failure to be so qualified or
licensed and authorized and in good standing would have a material
adverse effect on the business, prospects, profits, Properties or
condition (financial or
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otherwise) of the Company and the Subsidiaries, taken as a whole,
the ability of the Company to perform its obligations set forth
herein and in the Notes, or the rights and remedies of the holders
of the Notes hereunder or under the Notes.
2.10. Restrictions on Company and Subsidiaries.
Neither the Company nor any Subsidiary:
(a) is a party to any contract or agreement, or subject to any
charter or other corporate restriction that materially and adversely
affects the business, profits, prospects, Properties or condition
(financial or otherwise) of the Company and the Subsidiaries, taken as a
whole, the ability of the Company to perform its obligations as set forth
herein and in the Notes, or the rights and remedies of the holders of the
Notes hereunder or under the Notes,
(b) is a party to any contract or agreement that restricts the right
or ability of the Company to incur Debt, other than this Agreement and the
agreements listed on Part 2.10 of Annex 3 hereto, the terms of none of
which will be violated by the issue of the Notes or the execution and
delivery of, or compliance with, this Agreement by the Company; and
(c) has agreed or consented to cause or permit in the future (upon
the happening of a contingency or otherwise) any of its Property, whether
now owned or hereafter acquired, to be subject to a Lien not permitted by
Section 7.4 hereof.
2.11. Compliance with Law.
Neither the Company nor any Subsidiary is in violation of any law,
ordinance, governmental rule or regulation to which it is subject, which
violation would have a material adverse effect on the business, prospects,
profits, Properties or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole, the ability of the Company to perform its
obligations set forth herein and in the Notes, or the rights and remedies of the
holders of the Notes hereunder or under the Notes.
2.12. ERISA.
(a) Relationship of Vested Benefits to Pension Plan Assets. The
present value of all benefits, determined as of the most recent valuation
date for such benefits as provided in Section 7.13(c) hereof, vested under
each Pension Plan does not exceed the value of the assets of such Pension
Plan allocable to such vested benefits, determined as of such date as
provided in Section 7.13(c) hereof.
(b) ERISA Requirements. Each of the Company and the ERISA
Affiliates,
(i) has fulfilled all obligations under the applicable minimum
funding standards of ERISA and the IRC with respect to each Pension
Plan subject to such standards and that is not a Multiemployer Plan,
(ii) has satisfied all respective contribution obligations in
respect of each Multiemployer Plan,
(iii) is in compliance in all material respects with all other
applicable provisions of ERISA and the IRC with respect to each
Pension Plan and each Multiemployer Plan, and
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(iv) has not incurred any liability under Title IV of ERISA to the PBGC
(other than in respect of required insurance premiums, all of which
that are due having been paid), with respect to any Pension Plan,
any Multiemployer Plan or any trust established thereunder.
No Pension Plan, or trust created thereunder subject to section 412 of the
IRC or section 403 of ERISA, has incurred any accumulated funding
deficiency (as such term is defined in section 302 of ERISA), whether or
not waived, as of the last day of the most recently ended plan year of
such Pension Plan.
(c) Prohibited Transactions.
(i) The purchase of the Notes by you will not constitute a
"prohibited transaction" (as such term is defined in section 406 of
ERISA or section 4975 of the IRC) that would subject any Person to
the penalty or tax on prohibited transactions imposed by section 502
of ERISA or section 4975 of the IRC, and neither the Company nor any
ERISA Affiliate has engaged in any "prohibited transaction" with
respect to any "employee benefit plan" (as such term is hereinafter
defined) of the Company or any ERISA Affiliate or any trust created
thereunder, that would subject the Company or such ERISA Affiliate
to such penalty or tax. The representation by the Company in the
preceding sentence is made in reliance upon and subject to the
accuracy of the representations in Section 1.4 hereof as to the
source of funds used by the Purchasers.
(ii) Part 2.12(c) of Annex 3 hereto completely lists all ERISA
Affiliates and all employee benefit plans with respect to which the
Company or any "affiliate" (as such term is hereinafter defined) is
a "party-in-interest" (as such term is hereinafter defined) or in
respect of which the Notes would constitute an "employer security"
(as such term is hereinafter defined). As used in this Section
2.12(c), the terms "employee benefit plan" and "party-in-interest"
have the respective meanings assigned to them in section 3 of ERISA
and "affiliate" and "employer security" have the meanings assigned
to them in section 407(d) of ERISA.
(d) Reportable Events. No Pension Plan or trust created thereunder
has been terminated, and there have been no "reportable events" (as such
term is defined in section 4043 of ERISA), with respect to any Pension
Plan or trust created thereunder or with respect to any Multiemployer
Plan, which reportable event or events will or would reasonably be
expected to result in the termination of such Pension Plan or
Multiemployer Plan and give rise to a liability of the Company or any
ERISA Affiliate in respect thereof that would have a material adverse
effect on the business, prospects, profits, Properties or condition
(financial or otherwise) of the Company and the Subsidiaries, taken as a
whole, the ability of the Company to perform its obligations set forth
herein and in the Notes, or the rights and remedies of the holders of the
Notes hereunder or under the Notes.
(e) Multiemployer Plans. Except as set forth on Part 2.12(e) of
Annex 3 hereto, neither the Company nor any ERISA Affiliate is an employer
required to contribute to any Multiemployer Plan. Neither the Company nor
any ERISA Affiliate has incurred, nor is expected to incur, any withdrawal
liability (that has not previously been fully satisfied) under ERISA with
respect to any Multiemployer Plan. None of the Multiemployer Pension Plans
referred to on Annex 3 have been terminated under section 4041A of ERISA,
have been placed in reorganization status under Title IV of ERISA, or have
been determined to be "insolvent" (as such term is defined in section 4245
of ERISA).
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(f) Multiple Employer Pension Plans. Except as forth on Part 2.12(f)
of Annex 3 hereto, neither the Company nor any ERISA Affiliate is a
"contributing sponsor" (as such term is defined in section 4001 of ERISA)
of any Multiple Employer Pension Plan and neither the Company nor any
ERISA Affiliate has incurred (without fully satisfying the same), or
reasonably expects to incur, withdrawal liability in respect of any such
Multiple Employer Pension Plan listed on Part 2.12(f) of Annex 3 hereto,
which withdrawal liability would have a material adverse effect on the
business, prospects, profits, Properties or condition (financial or
otherwise) of the Company the ability of the Company to perform its
obligations set forth herein and in the Notes, or the rights and remedies
of the holders of the Notes hereunder or under the Notes.
2.13. Certain Laws.
(a) Investment Company Act. Neither the Company nor any Subsidiary
is, or is directly or indirectly controlled by, or acting on behalf of any
Person which is, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(b) Holding Company Status. Neither the Company nor any Subsidiary
is a "holding company" or an "affiliate" of a "holding company," or a
"subsidiary company" of a "holding company," or a "public utility" within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
2.14. Environmental Compliance.
Except as set forth on Part 2.14 of Annex 3 hereto:
(a) Compliance -- each of the Company and the Subsidiaries is in
compliance with all Environmental Protection Laws in effect in each
jurisdiction where it is presently doing business, and in which the
failure so to comply would be reasonably expected to have a material
adverse effect on the business, prospects, profits, Properties or
condition (financial or otherwise) of the Company and the Subsidiaries,
taken as a whole, the ability of the Company to perform its obligations
hereunder and in the Notes, or the rights and remedies of the holders of
the Notes hereunder or under the Notes;
(b) Liability -- each of the Company and the Subsidiaries is not
subject to any liability under any Environmental Protection Laws that, in
the aggregate, would be reasonably expected to have a material adverse
effect on the business, prospects, profits, Properties or condition
(financial or otherwise) of the Company and the Subsidiaries, taken as a
whole, the ability of the Company to perform its obligations hereunder and
in the Notes, or the rights and remedies of the holders of the Notes
hereunder or under the Notes; and
(c) Notices -- neither the Company nor any Subsidiary has received
any
(i) notice from any Governmental Authority by which any of its
present or previously-owned or leased real properties has been
designated, listed, or identified in any manner by any Governmental
Authority charged with administering or enforcing any Environmental
Protection Law as a Hazardous Substance disposal or removal site,
"Super Fund" clean-up site, or candidate for removal or closure
pursuant to any Environmental Protection Law,
(ii) notice of any Lien arising under or in connection with
any Environmental Protection Law that has attached to any revenues
of, or to, any of its owned or leased real properties, or
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(iii) summons, citation, notice, directive, letter, or other
communication, written or oral, from any Governmental Authority
concerning any intentional or unintentional action or omission by
the Company or such Subsidiary in connection with its ownership or
leasing of any real Property resulting in the releasing, spilling,
leaking, pumping, pouring, emitting, emptying, dumping, or otherwise
disposing of any Hazardous Substance into the environment resulting
in any material violation of any Environmental Protection Law,
in each case where the effect of which would be reasonably expected to
have a material adverse effect on the business, prospects, profits,
Properties or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole, the ability of the Company to perform its
obligations hereunder and in the Notes, or the rights and remedies of the
holders of the Notes hereunder or under the Notes.
Nothing set forth in this Section 2.14 shall relate or pertain to
liability accruing to any insurance Subsidiary pursuant to any Environmental
Protection Law solely by virtue of an insurance policy issued by such insurance
Subsidiary or solely by virtue of any environmental-related claim that has been
or may be asserted under any such insurance policy; all such liabilities have
been appropriately reserved for by each such insurance Subsidiary in accordance
with applicable Statutory Financial Statement Accounting Procedures and
insurance law. The Company has no knowledge of the assertion of any such claim
the payment of which would have a material adverse effect on the business,
prospects, profits, Properties or condition (financial or otherwise) of the
Company and the Subsidiaries, taken as a whole, the ability of the Company to
perform its obligations set forth herein and in the Notes, or the rights and
remedies of the holders of the Notes hereunder or under the Notes.
2.15. Sale is Legal and Authorized; Obligations are Enforceable.
(a) Sale is Legal and Authorized. Each of the issue, sale and
delivery of the Notes by the Company and the execution and delivery of
this Agreement by the Company and the compliance by the Company with all
of the provisions of this Agreement and the Notes:
(i) is within the corporate powers of the Company; and
(ii) is legal and does not conflict with, result in any breach
in any of the provisions of, constitute a default under, or result
in the creation of any Lien upon any Property of the Company or any
Subsidiary under the provisions of, any agreement, charter
instrument, bylaw or other instrument to which it is a party or by
which it or any of its Property may be bound.
(b) Obligations are Enforceable. Each of this Agreement and the
Notes has been duly authorized by all necessary action on the part of the
Company, has been executed and delivered by duly authorized officers of
the Company, and constitutes a legal, valid and binding obligation of the
Company, enforceable in accordance with its terms, except that the
enforceability of this Agreement and the Notes may be:
(i) limited by applicable bankruptcy, reorganization,
arrangement, insolvency, moratorium, or other similar laws affecting
the enforceability of creditors' rights generally; and
(ii) subject to the availability of equitable remedies.
2.16. Governmental Consent.
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Neither the nature of the Company or any Subsidiary, or of any of their
respective businesses or Properties, nor any relationship between the Company or
any Subsidiary and any other Person, nor any circumstance in connection with the
offer, issue, sale or delivery of the Notes and the execution and delivery of
this Agreement, is such as to require a consent, approval or authorization of,
or filing, registration or qualification with, any Governmental Authority on the
part of the Company as a condition to the execution and delivery of this
Agreement or the offer, issue, sale or delivery of the Notes.
2.17. Private Offering.
Neither the Company nor Merrill Lynch & Company (the only Person
authorized or employed by the Company as agent, broker, dealer or otherwise in
connection with the offering or sale of the Notes or any similar Security of the
Company, other than employees of the Company) has offered any of the Notes or
any similar Security of the Company for sale to, or solicited offers to buy any
thereof from, or otherwise approached or negotiated with respect thereto with,
any prospective purchaser, other than not more than one hundred twenty five
(125) institutional investors, including you and the Other Purchasers, each of
whom was offered all or a portion of the Notes at private sale for investment.
2.18. No Defaults.
(a) The Notes. No event has occurred and no condition exists that,
upon the issue of the Notes and the execution and delivery of this
Agreement, would constitute a Default or an Event of Default.
(b) Charter Instrument, Other Agreements. Neither the Company nor
any Subsidiary is in violation in any respect of any term of any charter
instrument, limited liability company agreement or bylaw. Neither the
Company nor any Subsidiary is in violation in any material respect of any
term in any agreement or other instrument to which it is a party or by
which it or any of its Property may be bound, the violation of which would
have a material adverse effect on the business, prospects, profits,
Properties or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole, the ability of the Company to perform its
obligations set forth herein and in the Notes, or the rights and remedies
of the holders of the Notes hereunder or under the Notes.
2.19. Use of Proceeds.
(a) Use of Proceeds. The Company will use the net proceeds from the
sale of the Notes to refinance existing debt and to pay general corporate
expenses.
(b) Margin Securities. None of the transactions contemplated in the
Note Purchase Agreements (including, without limitation, the use of the
proceeds from the sale of the Notes) violates, will violate or will result
in a violation of section 7 of the Exchange Act, or any regulations issued
pursuant thereto, including, without limitation, Regulations T, U and X of
the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter
II. The Company does not own, nor with the proceeds of the sale of the
Notes does it intend to own, carry or purchase, or refinance borrowings
that were used to own, carry or purchase, any Margin Security, including
Margin Securities originally issued by the Company. The Note Purchase
Agreements and the Notes will not be secured by any Margin Security, and
no Notes are being sold on the basis of any such collateral.
(c) Absence of Foreign or Enemy Status. The Company is not, an
"enemy" or an "ally of the enemy" within the meaning of section 2 of the
Trading with the Enemy Act (50 U.S.C. App.ss.ss.1 et seq.), as amended.
The Company is not in violation of, and neither the issue and sale of the
Notes by the Company nor its use of the proceeds thereof as contemplated
hereby, will
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violate, the Trading with the Enemy Act, as amended, or any executive
orders, proclamations or regulations issued pursuant thereto, including,
without limitation, regulations administered by the Office of Foreign
Asset Control of the Department of the Treasury (31 C.F.R., Subtitle B,
Chapter V).
2.20. Solvency.
The fair value of the business and assets of the Company is in excess of
the amount that will be required to pay its liabilities (including, without
limitation, contingent, subordinated, unmatured and unliquidated liabilities on
existing debts, as such liabilities may become absolute and matured), in each
case after giving effect to the transactions contemplated by this Agreement and
the Notes. After giving effect to the transactions contemplated by this
Agreement and the Notes, the Company will not be engaged in any business or
transaction, or about to engage in any business or transaction, for which it has
an unreasonably small capital, and the Company does not have any intent to
(a) hinder, delay or defraud any entity to which it is, or will
become, on or after the Closing Date, indebted, or
(b) to incur debts that would be beyond its ability to pay as they
mature.
3. CLOSING CONDITIONS
Your obligation to purchase and pay for the Notes to be delivered to you
at the Closing is subject to the following conditions precedent:
3.1. Opinions of Counsel.
You shall have received from
(a) Drinker Biddle & Shanley LLP, outside counsel for the Company,
(b) Thornton R. Land, Executive Vice President and General Counsel
of the Company, and
(c) Bingham Dana LLP, your special counsel,
closing opinions, each dated the Closing Date and substantially in the
respective forms set forth in Exhibit B1, Exhibit B2 and Exhibit B3
hereto, and as to such other matters as you may reasonably request. The
Company hereby requests and directs its counsel named in the foregoing
clause (a) to deliver such closing opinion to you.
3.2. Warranties and Representations True; No Prohibited Action.
(a) Warranties and Representations True. The warranties and
representations of the Company contained in Section 2 hereof shall be true
on the Closing Date with the same effect as though made on and as of that
date.
(b) No Prohibited Action. Except as set forth on Annex 3 hereto, the
Company shall not have taken any action or permitted any condition to
exist that would have been prohibited by Section 7.4 through Section 7.18
hereof, inclusive, had such Sections been binding and effective at all
times during the period from December 31, 1999 to and including the
Closing Date.
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3.3. Officers' Certificates.
You shall have received:
(a) a certificate dated the Closing Date and signed by the President
or a Vice-President and Senior Vice President, Finance, or the Senior Vice
President, Investments, of the Company, substantially in the form of
Exhibit C hereto; and
(b) a certificate dated the Closing Date and signed by the Secretary
or an Assistant Secretary of the Company, substantially in the form of
Exhibit D hereto.
3.4. Legality.
The Notes shall on the Closing Date qualify as a legal investment for you
under applicable insurance law (without regard to any "basket" or "leeway"
provisions) and you shall have received from the Company such evidence as you
may reasonably request to establish compliance with this condition.
3.5. Private Placement Number.
The Company shall have obtained or caused to be obtained a private
placement number for the Series A Notes and the Series B Notes from the CUSIP
Service Bureau of Standard & Poor's, a division of McGraw-Hill, Inc., and you
shall have been informed of such private placement numbers.
3.6. Certificates; Approvals.
(a) Approvals. You shall have received an executed copy, or a copy
certified by the Secretary or an Assistant Secretary of the Company and
each Subsidiary, of each license required to conduct business as an
insurance company in the state that the Company and each Subsidiary,
respectively, is domiciled.
(b) Certificates of Incorporation and Authority. You shall have
received a copy of the certificate of incorporation of the Company
together with each amendment, if any, thereto, certified by the Secretary
of State or the Commissioner of Insurance, as the case may be, of the
state of incorporation of the Company (as of a date reasonably near the
date of the Closing Date) as being true and correct copies of such
documents on file in his/her office.
(c) Good Standing Certificates. You shall have received certificates
of good standing for the Company and each Subsidiary from the Secretaries
of State or the Commissioners of Insurance, as the case may be, of each
state where such Person is incorporated certifying that such Person is in
good standing in such states.
3.7. Compliance with this Agreement.
The Company shall have performed and complied with all agreements and
conditions contained herein that are required to be performed or complied with
by the Company on or prior to the Closing Date, and such performance and
compliance shall remain in effect on the Closing Date.
3.8. Expenses.
All fees and disbursements required to be paid pursuant to Section 1.6(b)
hereof shall have been paid in full.
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3.9. Other Purchasers.
None of the Purchasers other than you shall have failed to execute and
deliver a Note Purchase Agreement or to accept delivery of or make payment for
the Notes to be purchased by it on the Closing Date.
3.10. Proceedings Satisfactory.
All proceedings taken in connection with the issuance and sale of the
Notes and all documents and papers relating thereto shall be satisfactory to you
and your special counsel. You and your special counsel shall have received
copies of such documents and papers as you or they may reasonably request in
connection therewith or in connection with your special counsel's closing
opinion, all in form and substance reasonably satisfactory to you and your
special counsel.
4. PURCHASERS' SPECIAL RIGHTS
4.1. Direct Payment.
Notwithstanding anything to the contrary herein or the Notes, the Company
shall pay all amounts payable with respect to each Note held by an Institutional
Investor (without any presentment of such Notes and without any notation of such
payment being made thereon) by crediting, by federal funds bank wire transfer,
the account of such Institutional Investor in any bank in the United States of
America as may be designated in writing by such Institutional Investor, or in
such other manner as may be reasonably directed or to such other address in the
United States of America as may be reasonably designated in writing by such
Institutional Investor. Your address on Annex 1 hereto shall be deemed to
constitute notice, direction or designation (as appropriate) to the Company with
respect to direct payments as aforesaid. Otherwise, all amounts payable with
respect to each Note shall be made by check mailed and addressed to the
registered holder of each Note at the address shown in the register maintained
by the Company pursuant to Section 6.1 hereof.
Each holder of Notes agrees that in the event it shall sell or transfer
any Note
(a) it shall, prior to the delivery of such Note (unless it shall
have already done so), make a notation thereon of all principal, if any,
prepaid on such Note and shall also note thereon the date to which
interest shall have been paid on such Note, and
(b) it shall promptly notify the Company of the name and address of
the transferee of any such Note so transferred and the effective date of
such transfer.
4.2. Delivery Expenses.
If any holder of Notes surrenders any Note to the Company pursuant hereto,
the Company shall pay the cost of delivering to or from such holder's home
office or custodian bank from or to the Company, insured to the reasonable
satisfaction of such holder, the surrendered Note and any Note issued in
substitution or replacement for the surrendered Note.
4.3. Issue Taxes.
The Company shall pay all taxes in connection with the issuance and sale
of the Notes and in connection with any modification of this Agreement and/or
the Notes and shall save each holder of Notes harmless without limitation as to
time against any and all liabilities with respect to all such taxes. The
obligations of the Company under this Section 4.3 shall survive the payment or
prepayment of the Notes
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and the termination hereof. Payment of any such taxes in connection with the
exchange or transfer of already issued Notes shall be subject to Section 6.2
hereof.
5. PREPAYMENTS; CHANGE OF CONTROL PUT OPTION
5.1. Scheduled Required Prepayments and Payment at Maturity.
(a) Series A Notes. The Company shall pay, and there shall be due
and payable, Six Million Dollars ($6,000,000) in principal amount of the
Series A Notes on May 4 in each year beginning on May 4, 2003 and ending
on May 4, 2007, inclusive (together with the required payments described
in clause (b) below, each a "Required Principal Payment"). The entire
remaining principal of the Series A Notes outstanding on May 4, 2007, if
any, together with interest accrued and unpaid thereon, shall be due and
payable on May 4, 2007.
(b) Series B Notes. The Company shall pay, and there shall be due
and payable, Twelve Million Three Hundred Thousand Dollars ($12,300,000)
in principal amount of the Series B Notes on May 4 in each year beginning
on May 4, 2006 and ending on May 4, 2010, inclusive. The entire remaining
principal of the Series B Notes outstanding on May 4, 2010, if any,
together with interest accrued and unpaid thereon, shall be due and
payable on May 4, 2010.
Each Required Principal Payment in respect of a Note shall be at one
hundred percent (100%) of the principal amount prepaid on such Note,
together with interest accrued and unpaid thereon to the date of the
payment of such Required Principal Payment.
5.2. Optional Prepayments.
(a) Optional Prepayments. The Company may, at any time after the
Closing Date, prepay the principal amount of both (but only both) Series
of Notes in part, in an amount of not less than One Million Dollars
($1,000,000) at any time, or in whole, in each case together with:
(i) an amount equal to the sum of the Make-Whole Amounts at
such time in respect of the principal amount of the Notes of each
Series being so prepaid; and
(ii) interest on such principal amount then being prepaid
accrued to the prepayment date.
(b) Notice of Prepayment. The Company will give notice of any
prepayment of the Notes in accordance with this Section 5.2 to each holder
of the Notes not less than twenty (20) days or more than sixty (60) days
before the date fixed for prepayment, specifying:
(i) such date;
(ii) the Section hereof under which the prepayment is to be
made;
(iii) the principal amount of each Note to be prepaid on such
date;
(iv) the interest to be paid on each such Note, accrued to the
date fixed for prepayment; and
(v) the calculation of an estimated Make-Whole Amount in
respect of each Note, if any (assuming the date of prepayment was
the date of such notice), due in
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connection with such prepayment, accompanied by a copy of the
Applicable H.15 used in determining the Make-Whole Discount Rate in
respect thereof.
Such notice of prepayment shall also certify all facts that are conditions
precedent to any such prepayment. Notice of prepayment having been so
given, the aggregate principal amount of the Notes specified in such
notice, together with a Make-Whole Amount in respect of the Notes of such
Series being so prepaid, if any, and accrued interest thereon shall become
due and payable on the specified prepayment date. Contemporaneously with
any such prepayment the Company shall deliver to each holder of Notes a
certificate of a Vice-President, the Treasurer or the President of the
Company specifying the calculation of the Make-Whole Amount in respect of
each Series of Notes as of the specified prepayment date, accompanied by a
copy of the Applicable H.15 used in determining the Make-Whole Discount
Rate in respect of such Series.
(c) Effect of Partial Prepayments on Required Payments. Each partial
prepayment of the principal of the Notes made pursuant to this Section 5.2
shall be applied against and reduce each of the then remaining Required
Principal Payments by a percentage equal to the aggregate principal amount
of the Notes so prepaid divided by the aggregate principal amount of the
Notes outstanding immediately prior to such prepayment. Such calculation
shall be made, and such prepayment shall be applied, without regard to the
Series of any Note.
5.3. Partial Prepayment Pro Rata.
If, at the time any required or optional prepayment is due under Section
5.1 or Section 5.2 hereof, there is more than one Note outstanding, the
aggregate principal amount of such required or optional partial prepayment of
the Notes shall be allocated among all the holders of the Notes (without regard
to Series) at the time outstanding in proportion, as nearly as practicable, to
the respective unpaid principal amounts thereof then outstanding, with
adjustments, to the extent practicable, to equalize for any prior prepayments
not in such proportion. For the purpose of this Section 5.3 only, any Notes
reacquired by the Company shall be deemed to be outstanding for purposes of
allocating required prepayments made pursuant to Section 5.1 hereof and the
Company shall be deemed to be the holder thereof.
5.4. Notation of Notes on Prepayment.
Upon any partial prepayment of a Note, such Note may, at the option of the
holder thereof, be
(a) surrendered to the Company pursuant to Section 6.2 hereof in
exchange for a new Note of the same Series in a principal amount equal to
the principal amount remaining unpaid on the surrendered Note,
(b) made available to the Company for notation thereon of the
portion of the principal so prepaid, or
(c) marked by such holder with a notation thereon of the portion of
the principal so prepaid.
In case the entire principal amount of any Note is prepaid, such Note shall be
surrendered to the Company for cancellation and shall not be reissued, and no
Note shall be issued in lieu of the prepaid principal amount of any Note.
5.5. No Other Optional Prepayments.
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Except as provided in Section 5.2 hereof or in accordance with an offer
made in compliance with Section 7.16 hereof, the Company may not make any
optional prepayment (whether directly or indirectly by purchase or other
acquisition) in respect of the Notes.
5.6. Offer to Pay upon Change in Control Ratings Event.
(a) Notice and Offer. In the event of either:
(i) a Change in Control Ratings Event; or
(ii) the obtaining of knowledge of a Control Event by any
Senior Officer of the Company (including, without limitation, via
the receipt of notice of a Control Event from any holder of Notes);
the Company will, within five (5) Business Days of the occurrence of each of
such events, give written notice of such Change in Control Ratings Event or
Control Event to each holder of Notes in the manner set forth in Section 11.1.
In the event of a Change in Control Ratings Event, such written notice shall
contain, and such written notice shall constitute, an irrevocable offer to
prepay all, but not less than all, of the Notes of each Series held by such
holder (in this case only, "holder" in respect of any Note registered in the
name of a nominee for a disclosed beneficial owner shall mean such beneficial
owner) on a date specified in such notice (the "Control Prepayment Date") that
is not less than 40 days and not more than 60 days after the date of such
notice. If the Control Prepayment Date shall not be specified in such notice,
the Control Prepayment Date shall be the 40th day after the date of such
holder's receipt of such notice.
(b) Acceptance and Payment. To accept such offered prepayment, a
holder of Notes shall cause a notice of such acceptance (which notice of
acceptance may be in respect of one or both Series of Notes held by such
holder, but which notice need not treat Notes of both Series held by such
holder in the same manner) to be delivered to the Company, not later than
10 days before the Control Prepayment Date (it being understood that the
failure by a holder to respond to such written offer of prepayment by such
time shall be deemed to constitute a failure to accept such offer). If so
accepted, such offered prepayment shall be due and payable on the Control
Prepayment Date, together with interest on the Notes then being prepaid
accrued to the Control Prepayment Date, but without any Make-Whole Amount.
(c) Officer's Certificate. Each offer to prepay the Notes pursuant
to this Section 5.6 shall be accompanied by a certificate, executed by a
Senior Officer of the Company and dated the date of such offer,
specifying;
(i) the Control Prepayment Date;
(ii) that such payment is to be made pursuant to the
provisions of Section 5.6 of the Note Purchase Agreements;
(iii) the principal amount of each such Note offered to be
prepaid;
(iv) the unpaid interest that would be due on each such Note
offered to be prepaid, accrued to the Control Prepayment Date;
(v) that the conditions of this Section 5.6 have been
fulfilled; and
(vi) in reasonable detail, the nature and date or proposed
date of the Change in Control Ratings Event.
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(d) Deferral Pending Change in Control Ratings Event. The obligation
of the Company to prepay Notes pursuant to the offers accepted in
accordance with Section 5.6(b) is subject to the occurrence of the Change
in Control Ratings Event in respect of which such offers and acceptances
shall have been made. In the event that such Change in Control Ratings
Event does not occur on the Control Prepayment Date in respect thereof,
the prepayment shall be deferred until, and shall be made on, the date on
which such Change in Control Ratings Event occurs. The Company shall keep
each holder of Notes reasonably and timely informed of
(i) any such deferral of the date of prepayment;
(ii) the date on which such Change in Control Ratings Event
and the prepayment are expected to occur; and
(iii) any determination by the Company that efforts to effect
such Change in Control Ratings Event have ceased or been abandoned
(in which case the offers and acceptances made pursuant to this
Section 5.6 in respect of such Change in Control Ratings Event shall
be deemed rescinded).
6. REGISTRATION; SUBSTITUTION OF NOTES
6.1. Registration of Notes.
The Company shall cause to be kept at its office, maintained pursuant to
Section 7.3 hereof, a register for the registration and transfer of Notes. The
name and address of each holder of one or more Notes, the series of each Note,
each transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in the register. The Person in whose name any Note
shall be registered shall be deemed and treated as the owner and holder thereof
for all purposes hereof, and the Company shall not be affected by any notice or
knowledge to the contrary.
6.2. Exchange of Notes.
Upon surrender of any Note at the office of the Company maintained
pursuant to Section 7.3 hereof duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
his attorney duly authorized in writing, the Company shall execute and deliver,
at the Company's expense (except as provided below), a new Note or Notes of the
same Series in exchange therefor, in denominations of at least One Hundred
Thousand Dollars ($100,000) (except as may be necessary to reflect any principal
amount not evenly divisible by One Hundred Thousand Dollars ($100,000)), in an
aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be payable to such Person as such
holder may request, shall be of the same Series as the surrendered Note and
shall be substantially in the form of Exhibit A1 or Exhibit A2 hereto, as the
case may be, corresponding to the Series of the surrendered Note. Each such new
Note shall be dated and bear interest from the date to which interest shall have
been paid on the surrendered Note or dated the date of the surrendered Note if
no interest shall have been paid thereon. The Company may require payment of a
sum sufficient to cover any stamp tax or governmental charge imposed in respect
of any such transfer of Notes.
6.3. Replacement of Notes.
Upon receipt by the Company of evidence reasonably satisfactory to it of
the ownership of and the loss, theft, destruction or mutilation of any Note and
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(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if the holder of such Note is
an Institutional Investor, such holder's own agreement of indemnity shall
be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note of the same Series, dated and bearing interest from the date to which
interest shall have been paid on such lost, stolen, destroyed or mutilated Note
or dated the date of such lost, stolen, destroyed or mutilated Note if no
interest shall have been paid thereon.
7. COMPANY BUSINESS COVENANTS
The Company covenants that on and after the Closing Date and so long as
any of the Notes shall be outstanding:
7.1. Payment of Taxes and Claims.
The Company will, and will cause each Subsidiary to, pay before they
become delinquent,
(a) all taxes, assessments and governmental charges or levies
imposed upon it or its Property, and
(b) all claims or demands of materialmen, mechanics, carriers,
warehousemen, landlords and other like Persons that, if unpaid, might
result in the creation of a Lien upon its Property,
provided, that items of the foregoing description need not be paid
(i) while being contested in good faith and by appropriate
proceedings as long as adequate book reserves required to be
established and maintained in accordance with Generally Accepted
Accounting Principles have been established and maintained and exist
with respect thereto and
(ii) so long as the title of the Company or the Subsidiary, as
the case may be, to, and its right to use, such Property, is not
materially adversely affected thereby.
In the case of any item described in clause (a) or clause (b) above
involving in excess of Two Million Dollars ($2,000,000) in respect of any fiscal
year of the Company, the appropriateness of the proceedings will be supported by
an opinion of the independent counsel responsible for such proceedings and the
adequacy of all reserves of the Company and the Subsidiaries in respect of all
of the items described in clause (a) and clause (b) above will be supported by
an opinion of the independent accountants of the Company (which opinions will be
delivered to the holders of Notes as provided in Section 8.1 hereof).
For purposes of this Section 7.1, an "item" in any fiscal year of the
Company shall include all amounts claimed by any obligee or payee in respect of
any of the foregoing described liabilities or claims in clause (a) or clause (b)
above.
7.2. Maintenance of Properties and Corporate Existence.
The Company shall, and shall cause each Subsidiary to,
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(a) Property -- maintain its Property in good condition and make all
necessary renewals, replacements, additions, betterments and improvements
thereto;
(b) Insurance -- maintain, with financially sound and reputable
insurers accorded a rating by A.M. Best Company of "A-" or better and a
size rating of VIII or better (or a comparable rating by any comparable
successor rating agency)(such insurers are hereinafter referred to as
"Financially Sound/Reputable Insurers"), insurance with respect to its
Property and business against such casualties and contingencies, of such
types (including, without limitation, loss or damage, public liability,
workers compensation, business interruption, larceny, embezzlement or
other criminal misappropriation) and in such amounts and subject to such
terms and conditions as are customary in the case of corporations engaged
in the same or a similar business and similarly situated, provided,
however, that in lieu of the aforesaid Property and business insurance
maintained with Financially Sound/Reputable Insurers, the Company or any
such Subsidiary may maintain a system or systems of self-insurance which
are in accord with sound financial practices of similarly situated
corporations of established reputations maintaining similar such systems
and with respect thereto shall maintain adequate insurance reserves in
accordance with Generally Accepted Accounting Principles and in accordance
with sound actuarial and insurance principles, provided further, however,
that all of such self-insurance shall be effected by insurance policies
written and issued by one or more insurance Subsidiaries which satisfy the
criteria of a Financially Sound/Reputable Insurer and shall be subject to
such insurance Subsidiary's normal reinsurance treaties and agreements;
(c) Financial Records -- keep true books of records and accounts in
which full and correct entries shall be made of all its business
transactions and which will permit the provision of accurate and complete
financial statements in accordance with Generally Accepted Accounting
Principles and Statutory Financial Statement Accounting Procedures, as the
case may be, provided that if such books of records and accounts are
maintained on a cash basis, this Section 7.2(c) shall be deemed not to be
contravened if the Company maintains (and makes available to you and the
other holders of Notes, upon your request, for your inspection) all
necessary working papers, lists of non-ledger assets, claims registers,
policy reserve files and other ledgers and records necessary to conform
such cash basis books of records and accounts to the standards (including,
without limitation, the accrual standards) required by Generally Accepted
Accounting Principles and Statutory Financial Statement Accounting
Procedures, as the case may be;
(d) Existence and Rights -- do or cause to be done all things
necessary
(i) to preserve and keep in full force and effect its
existence, rights and franchises and
(ii) to maintain each Subsidiary as a Subsidiary,
except as otherwise permitted by Section 7.9 and Section 7.12 hereof; and
(e) Compliance with Law -- not be in violation of any law, ordinance
or governmental rule or regulation to which it is subject and not fail to
obtain or maintain any license, certificate, permit, franchises or other
governmental authorization necessary to the ownership of its Properties or
to the conduct of its business (including, without limitation, its
property/casualty insurance business), which violation or failure to
obtain or maintain would materially adversely affect the business,
prospects, profits, Properties or condition (financial or otherwise) of
the Company and the Subsidiaries or the ability of the Company to perform
its obligations set forth in this Agreement and in the Notes, or the
rights and remedies of the holders of the Notes hereunder or under the
Notes.
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7.3. Payment of Notes and Maintenance of Office.
The Company will punctually pay, or cause to be paid, the principal and
interest (and Make-Whole Amount, if any) to become due in respect of the Notes
according to the terms of the Notes and will maintain an office at the address
of the Company set forth in Section 11.1 hereof where notices, presentations and
demands in respect hereof or the Notes may be made upon it. Such office will be
maintained at such address until such time as the Company shall notify the
holders of the Notes of any change of location of such office, which will in any
event be located within the United States of America.
7.4. Liens.
(a) Negative Pledge. The Company will not, and will not permit any
Subsidiary to, at any time, cause or permit to exist, or agree or consent
to cause or permit to exist in the future (upon the happening of a
contingency or otherwise), any of their Property, whether now owned or
hereafter acquired, to be subject to a Lien except:
(i) Liens in existence on the Closing Date and described on
Part 7.4 of Annex 3 hereto;
(ii) Purchase Money Liens, if, after giving effect thereto and
to any concurrent transactions, each such Purchase Money Lien
secures Debt of the Company and/or any Subsidiary in an amount not
exceeding one-hundred percent (100%) of the cost of acquisition of
the particular Property to which such Debt relates;
(iii) Liens existing on Property of any corporation at the
time it becomes a Subsidiary, provided that
(A) no such Lien shall extend to or cover any Property
other than the Property subject to such Lien at the time of
any such transaction,
(B) the amount of Debt secured by any such Lien shall
not exceed the Fair Market Value (as determined in good faith
by the Board of Directors or the board of directors of such
Subsidiary) of the Property subject thereto, determined at the
time of any such transaction,
(C) such Lien shall not have been created in
contemplation of any such transaction, and
(D) after giving effect to such corporation becoming a
Subsidiary, no Default or Event of Default would exist;
(iv) Liens permitted by the foregoing clause (i) through
clause (iii), inclusive, of this Section 7.4, securing Debt of the
Company and/or any Subsidiary that is being renewed, extended or
refunded, provided that
(A) the amount of the Debt secured thereby at the time
of such renewal, extension or refunding is not increased, and
(B) such Liens are not extended to any Property not
subject thereto at the time of such renewal, extension or
refunding;
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(v) Liens on Property of a Subsidiary, provided that such
Liens secure only Debt owing to the Company or a Wholly-Owned
Subsidiary;
(vi) Liens incurred or deposits made in the ordinary course of
business
(A) in connection with worker's compensation,
unemployment insurance, social security and other like laws,
(B) to secure the performance of letters of credit,
bids, tenders, sales contracts, leases, statutory obligations,
surety and performance bonds (other than as contemplated in
clause (vii)(B) of this Section 7.4(a)) and other similar
obligations not incurred in connection with the borrowing of
money, the obtaining of advances or the payment of the
deferred purchase price of Property,
(C) to secure the claims or demands of materialmen,
mechanics, carriers, warehousemen, landlords and other like
Persons, provided that the payment thereof is not at the time
required by Section 7.1 hereof,
(D) in the nature of reservations, exceptions,
encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases and other similar title
exceptions or encumbrances affecting real property, provided
that such exceptions and encumbrances do not in the aggregate
materially detract from the value of said Properties or
materially interfere with the use of such Property in the
ordinary conduct of the business of the Company and the
Subsidiaries, and
(E) in favor of any Governmental Authority resulting
from acceptance of progress or partial payments in the
ordinary course of business under contracts with such
Governmental Authority;
(vii) (A) Liens arising from judicial attachments and
judgments and other similar Liens arising in connection with court
proceedings, provided that the execution or other enforcement of
such Liens is effectively stayed and the claims secured thereby are
being actively contested in good faith and by appropriate
proceedings; and
(B) Liens to secure appeal bonds, supersedeas bonds and
other similar Liens arising in connection with court
proceedings (including, without limitation, surety bonds and
letters of credit) or any other instrument serving a similar
purpose,
so long as the aggregate amount so secured by the Liens described in
this clause (vii) shall not at any time exceed Ten Million Dollars
($10,000,000);
(viii) Liens securing taxes, assessments or governmental
charges or levies, provided that the payment thereof is not at the
time required by Section 7.1 hereof;
(ix) Liens created, incurred or assumed in connection with any
issuance of industrial revenue, pollution control or development
bonds by any Governmental Authority, provided that the net proceeds
from the issuance of such bonds are used to acquire or construct
fixed assets for use by the Company or one or more Subsidiaries;
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(x) Liens securing Capitalized Lease Obligations of the
Company and/or any Subsidiary permitted by Section 7.10(a) hereof;
and
(xi) Liens, not otherwise permitted by the provisions of this
Section 7.4, provided that, after giving effect to the imposition of
such Lien, the sum, without duplication, of
(A) the aggregate amount of Debt of the Company and/or
any Subsidiary secured by Liens permitted by Section
7.4(a)(ii) hereof, plus
(B) the aggregate amount of Debt or other obligations of
the Company and/or any Subsidiary secured by Liens permitted
only by this Section 7.4(a)(xi), plus
(C) the aggregate amount of Unsecured Subsidiary Debt,
plus
(D) the aggregate amount of Capitalized Lease
Obligations of the Company and/or any Subsidiary permitted by
Section 7.10(b) hereof,
shall not exceed fifteen percent (15%) of Consolidated
Capitalization, in each case determined at the time any such Lien is
created.
Nothing in this Section 7.4 shall be construed to permit the incurrence or
existence of any Debt not otherwise permitted by this Agreement.
(b) Equal and Ratable Lien; Equitable Lien. In case any Property
shall be subjected to a Lien in violation of this Section 7.4, the Company
will forthwith make or cause to be made, to the fullest extent permitted
by applicable law, provision whereby the Notes will be secured equally and
ratably with all other obligations secured thereby pursuant to such
agreements and instruments as shall be approved by the Required Holders,
and the Company will cause to be delivered to each holder of a Note an
opinion of independent counsel to the effect that such agreements and
instruments are enforceable in accordance with their terms, and in any
such case the Notes shall have the benefit, to the full extent that, and
with such priority as, the holders of Notes may be entitled under
applicable law, of an equitable Lien on such Property securing the Notes.
Such violation of this Section 7.4 will constitute an Event of Default
hereunder, whether or not any such provision is made pursuant to this
Section 7.4(b).
(c) Financing Statements. The Company will not, and will not permit
any Subsidiary to, at any time, sign or file a financing statement under
the Uniform Commercial Code of any jurisdiction that names the Company or
such Subsidiary as debtor, or sign any security agreement authorizing any
secured party thereunder to file any such financing statement, except, in
any such case, a financing statement filed or to be filed to perfect or
protect a security interest that the Company or such Subsidiary is
entitled to create, assume or incur, or permit to exist, under the
foregoing provisions of this Section 7.4 or to evidence for informational
purposes a lessor's interest in Property leased to the Company or any such
Subsidiary.
(d) Liens of Subsidiaries. Each Person which becomes a Subsidiary
after the Closing Date will be deemed to have granted on the date such
Person becomes a Subsidiary all the Liens in existence on its Property on
such date.
7.5. Limitation on Indebtedness.
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The Company will not, and will not permit any Subsidiary to, at any time
incur, assume, guarantee or otherwise become liable with respect to, any Debt
(other than Permitted Intercompany Funded Debt), unless, after giving effect to
such transaction and to any concurrent repayment of Debt of the Company, and/or
any Subsidiary,
(a) (i) Consolidated Debt will not be greater than thirty percent
(30%) of Consolidated Capitalization, in each case determined at the time
of such transaction, or
(ii) such Debt is a renewal, refunding or extension of Debt of
the Company and/or any Subsidiary outstanding on the Closing Date or
initially incurred by the Company or such Subsidiary after the
Closing Date in accordance with Section 7.5(a)(i) so long as, after
giving effect to such renewal, refunding or extension
(A) the principal amount of such Debt does not exceed
the principal amount of the Debt being so renewed, refunded or
extended at the time of such renewal, refunding or extension,
(B) such Debt does not have a scheduled maturity earlier
than, and does not have a weighted average life to maturity
(calculated in accordance with accepted financial practice)
less than the Debt being so renewed, refunded or extended, and
(C) such Debt has the benefit of collateral and
guaranties to no greater extent than the Debt being so
renewed, refunded or extended, and
(b) no Default or Event of Default shall then exist.
Each Person which becomes a Subsidiary after the Closing Date will be deemed to
have incurred on the date such Person becomes a Subsidiary all the Debt of such
Person in existence on such date.
Anything contained in this Agreement to the contrary notwithstanding, the
Company will not at any time incur, assume, guarantee or otherwise become liable
with respect to, any Debt (other than Permitted Intercompany Funded Debt) owing
to a Subsidiary.
7.6. Net Worth Maintenance.
The Company will not permit at any time Consolidated Tangible Net Worth to
be less than the sum of
(a) Three Hundred Fifty Million Dollars ($350,000,000); plus
(b) an aggregate amount equal to twenty-five percent (25%) of
Consolidated Net Income (but, in each case, only if a positive number) for
each completed fiscal year of the Company ended after the date of Closing.
7.7. Maintenance of Debt to Capitalization Ratio.
The Company will not at any time permit Consolidated Debt at such time to
exceed forty percent (40%) of Consolidated Capitalization at such time.
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7.8. Limitation on Subsidiary Indebtedness.
The Company will not permit any Subsidiary, at any time, to incur, assume,
guarantee or otherwise become liable with respect to, any Debt, provided that a
Subsidiary may become liable in respect of
(a) Non-Basket Secured Subsidiary Debt, if, after giving effect to
such transaction and to any concurrent repayment of Debt of such
Subsidiary, no Default or Event of Default would exist, and
(b) Basket Secured Subsidiary Debt and Unsecured Subsidiary Debt,
provided that, after giving effect to such transaction and to any
concurrent repayment of Debt of the Company and Subsidiaries, the sum,
without duplication, of
(i) the aggregate amount of Debt of the Company and/or any
Subsidiary secured by Liens permitted by Section 7.4(a)(ii) hereof,
plus
(ii) the aggregate amount of Debt or other obligations of the
Company and/or any Subsidiary secured by Liens permitted only by
Section 7.4(a)(xi) hereof, plus
(iii) the aggregate amount of Unsecured Subsidiary Debt, plus
(iv) the aggregate amount of Capitalized Lease Obligations of
the Company and/or any Subsidiary permitted by Section 7.10(b)
hereof,
shall not exceed fifteen percent (15%) of Consolidated Capitalization, in
each case determined at such time and no Default or Event of Default would
exist.
Each Person which becomes a Subsidiary after the Closing Date will be
deemed to have incurred on the date such Person becomes a Subsidiary all the
Debt of such Person in existence on such date.
7.9. Disposition of Assets.
(a) Disposal of Ownership of a Subsidiary. The Company will not, and
will not permit any Subsidiary to, at any time, sell or otherwise dispose
of any shares of the stock (or any options or warrants to purchase stock
or other Securities exchangeable for or convertible into stock) of a
Subsidiary (said stock, options, warrants and other Securities herein
called "Subsidiary Stock"), nor will it permit any Subsidiary to issue,
sell or otherwise dispose of any shares of its own Subsidiary Stock, if
the effect of the transaction would be to reduce the proportionate
interest of the Company and the other Subsidiaries in the outstanding
Subsidiary Stock of the Subsidiary whose shares are the subject of the
transaction, provided that the foregoing restrictions do not apply to:
(i) the issue of directors' qualifying shares; and
(ii) the sale for an Acceptable Consideration of the entire
Investment (whether represented by stock, debt, claims or otherwise)
of the Company and its other Subsidiaries in any Subsidiary, if all
of the following conditions are met:
(A) such sale satisfies the requirements of a Transfer
under subclause (vi) of clause (b) below;
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(B) in the good faith opinion of the Board of Directors,
such sale is in the best interests of the Company; and
(C) the Subsidiary being disposed of has no continuing
Investment in any other Subsidiary not being simultaneously
disposed of or in the Company.
(b) Disposal of Ownership of Assets. The Company will not, and will
not permit any Subsidiary to, sell, lease as lessor, transfer or otherwise
dispose of any asset (collectively, "Transfers"), except
(i) a Transfer by a Subsidiary to the Company or another
Subsidiary,
(ii) as provided in Section 7.9(a),
(iii) as provided in Section 7.9(c),
(iv) as provided in Section 7.10 hereof,
(v) as provided in Section 7.12 hereof, or
(vi) with respect to a Transfer of an asset for an Acceptable
Consideration if the conditions specified in subclause (A),
subclause (B), subclause (C) and subclause (D) below would be
satisfied with respect to such Transfer:
(A) the sum of
(I) the current net book value of such asset, plus
(II) the aggregate net book value of each other
asset Transferred under or pursuant to this subclause
(vi) (such net book value being determined at the time
of the Transfer of each such other asset) after the
fiscal year end of the Company immediately preceding the
date of such Transfer, including, without limitation,
any Transfer pursuant to clause (a)(ii) above,
would not exceed ten percent (10%) of Consolidated Net
Tangible Assets determined as of the last day of the then
mostly recently ended fiscal year of the Company or, if more
recent, as of the date of the then most recently audited
consolidated financial statement of the Company and the
Subsidiaries;
(B) immediately before and after the consummation of
such Transfer, and after giving effect thereto, no Default or
Event of Default would exist;
(C) in the good faith opinion of the Board of Directors,
such Transfer is in the best interests of the Company; and
(D) immediately after giving effect to such Transfer,
the Company would be able to borrow $1.00 of additional Debt
without violating Section 7.5 hereof,
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provided that, in the case that the Company cannot satisfy subclause (A)
above with respect to a Transfer of an asset of the Company (but has
satisfied subclause (B), subclause (C) and subclause (D) above with
respect to such Transfer), the Company may nonetheless make such Transfer
of such asset if, but only if, the Company shall have undertaken in a
writing delivered to each holder of Notes contemporaneously with the
consummation of such Transfer to apply, within thirty (30) days following
the consummation of such Transfer, the 10% Excess Proceeds determined in
respect of such Transfer to either or both
(y) the acquisition by the Company of assets to be used in the
ordinary course of business of the Company or in which the Company
would otherwise invest in the ordinary course of its business or
(z) the prepayment of Senior Debt of the Company owing to
Persons other than the Company, any Subsidiary or any Affiliate, the
holders of which Senior Debt shall have received a written offer
from the Company to prepay a Ratable Portion of the Senior Debt of
each such holder (without any prepayment premium but including
accrued and unpaid interest on such Ratable Portion) and shall have
accepted such offer in writing in accordance with the terms of such
offer.
The Company agrees, in connection with its election to pursue clause (z)
above, to make the written offer of prepayment contemplated therein on or
prior to the date of consummation of the related Transfer, to deliver such
offer to each holder of its Senior Debt (including, without limitation,
the holders of Notes but excluding any such holder which is the Company,
any Subsidiary or any Affiliate), to limit the terms of such offer to the
terms contemplated in clause (z) and in this sentence and to require in
such written offer all acceptances thereof to have been delivered not
later than twenty-five (25) days following the consummation of such
Transfer, provided that, in any instance in which the Company may require
any holder of Senior Debt to accept its Ratable Portion as a prepayment
therefor, such written offer as to such holder shall be deemed accepted.
The Ratable Portion of Senior Debt of the Company held by any holder which
shall have rejected the prepayment offer of the Company pursuant to clause
(z) above, or shall have failed to have accepted the prepayment offer of
the Company pursuant to clause (z) above in accordance with the terms
thereof, shall be applied by the Company as provided in clause (y) above
on or prior to the thirtieth (30th) day following the consummation of the
Transfer related thereto. The Company's undertakings in respect of the
aforesaid writing (including its undertaking to extend an offer to ratably
prepay its Senior Debt and the obligation of the Company to ratably prepay
any such Senior Debt, the holders of which shall have accepted or been
deemed to have accepted such offer) is, and shall be deemed to be, a
covenant of the Company under this Section 7.9.
Dispositions of assets constituting Subsidiary Preferred Stock or
Debt of Subsidiaries shall be subject to clause (d) of this Section 7.9.
With respect to any Transfer of assets which is part of a series of
directly related Transfers and which shall occur in the fiscal year
following the fiscal year in which the first Transfer of such series of
related Transfers occurred, the determination under this clause (vi) as to
whether such Transfer exceeds the aforesaid calculation of ten percent
(10%) of Consolidated Net Tangible Assets shall be made as if such
Transfer occurred on the date of the first Transfer of such series of
directly related Transfers and Consolidated Net Tangible Assets at the end
of the fiscal year in which said first Transfer occurred shall be
accordingly adjusted to reflect such Transfer for purposes of applying
this clause (v) to any Transfer of assets occurring subsequent to such
Transfer.
(c) Marketable Securities. Anything contained in this Section 7.9 to
the contrary notwithstanding, Marketable Investment Securities of the
Company may be Transferred by the Company without any limitation imposed
by this Section 7.9.
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(d) Subsidiary Debt; Preferred Stock. Except as contemplated in
Section 7.9(a) hereof, the Company will not sell, transfer or otherwise
dispose of, any Debt of a Subsidiary, and no Subsidiary will sell,
transfer or otherwise dispose of, any Debt of another Subsidiary, except
if such sale, transfer or other disposition is to the Company or a
Wholly-Owned Subsidiary. The Company will not permit any Subsidiary to
issue or have outstanding any Subsidiary Preferred Stock if such
Subsidiary Preferred Stock is to be held by a Person other than the
Company or a Wholly-Owned Subsidiary and, subject to Section 7.9(a)
hereof, the Company shall not sell, or permit any Subsidiary to sell, any
Subsidiary Preferred Stock of any Subsidiary to any Person other than to
the Company or to a Wholly-Owned Subsidiary.
7.10. Limitation on Sale-Leaseback.
The Company will not, and will not permit any Subsidiary to, enter into
any Sale and Leaseback Transaction if the lease arising therefrom has an
original term in excess of three (3) years unless either
(a) the net proceeds arising therefrom have been applied, within
thirty (30) days following the consummation of such Sale and Leaseback
Transaction (or are concurrently with the consummation of such Sale and
Leaseback Transaction being applied) to the prepayment of Senior Debt of
the Company and the Subsidiaries owing to Persons other than the Company,
any Subsidiary or any Affiliate, the holders of which Senior Debt shall
have received a written offer from the Company to prepay a S/L Ratable
Portion of the Senior Debt of each such holder (without any prepayment
premium but including accrued and unpaid interest on such S/L Ratable
Portion) and shall have accepted such offer in writing in accordance with
the terms of such offer; the Company agrees, in connection with its
election under this clause (a), to make the written offer of prepayment
contemplated above on or prior to the date of consummation of the related
Sale and Leaseback Transaction, to deliver such offer to each holder of
its Senior Debt (including, without limitation, the holders of Notes but
excluding any such holder which is the Company, any Subsidiary or any
Affiliate), to limit the terms of such offer to the terms contemplated in
this clause (a) and to require in such written offer all acceptances
thereof to have been delivered not later than twenty-five (25) days
following the consummation of such Sale and Leaseback Transaction,
provided that, in any instance in which the Company may require any holder
of Senior Debt to accept its S/L Ratable Portion as a prepayment therefor,
such written offer as to such holder shall be deemed accepted; or
(b) if such proceeds are not applied as provided in Section 7.10(a)
or if Section 7.10(a) shall have been elected and less than all of such
proceeds shall have been used to prepay Senior Debt as contemplated in
Section 7.10(a) as a result of the rejection or deemed rejection of one or
more offers by the Company to prepay Senior Debt thereunder, and after
giving effect to such Sale and Leaseback Transaction, the sum, without
duplication, of
(i) the aggregate amount of Debt of the Company and/or any
Subsidiary secured by Liens permitted by Section 7.4(a)(ii) hereof,
(ii) the aggregate amount of Debt or other obligations of the
Company and/or any Subsidiary secured by Liens permitted only by
Section 7.4(a)(xi) hereof,
(iii) the aggregate amount of Unsecured Subsidiary Debt, plus
(iv) the aggregate amount of Capitalized Lease Obligations of
the Company and/or any Subsidiary permitted by this Section 7.10(b),
shall not exceed fifteen percent (15%) of Consolidated Capitalization, in
each case determined at the time of such Sale and Leaseback Transaction.
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7.11. Restricted Payments.
(a) Except as otherwise provided in clause (b) and clause (c) of
this Section 7.11, the Company will not declare or make any Restricted
Payment at any time unless
(i) immediately after, and after giving effect to, such
Restricted Payment, the aggregate amount of all Restricted Payments
declared or made after the Closing Date would not exceed the sum of
(A) seventy-five percent (75%) of Consolidated Net
Income (or, in case such Consolidated Net Income shall be a
deficit, minus 100% of such deficit) for the period commencing
on December 31, 1999 and ending on the last day of the fiscal
quarter of the Company most recently ended at the time such
Restricted Payment is declared or made, inclusive, plus
(B) (i) one hundred percent (100%) of the aggregate
amount of cash proceeds received by the Company from the sale
of shares of Company Common Stock after December 31, 1999;
(ii) together with the aggregate principal amount of
Debt Securities of the Company converted into such shares after
December 31, 1999 in each case net of reasonable and ordinary
transaction costs and expenses incurred by the Company in connection
with such sale or conversion; plus
(C) One Hundred Million Dollars ($100,000,000);
(ii) at the time of such declaration and immediately before,
and after giving effect to, such Restricted Payment, no Default or
Event of Default exists or would exist; and
(iii) immediately after giving effect to such Restricted
Payment, the Company would be able to borrow $1.00 of additional
Debt without violating Section 7.5 hereof.
(b) The restrictions set forth in clause (a) of this Section 7.11
notwithstanding, the Company may make Restricted Payments in the nature of
cash dividends or mandatory sinking fund or mandatory redemption payments
required to be paid or made in respect of Company Preferred Stock,
provided that, at the time of such payment, and after giving effect
thereto (but without testing such payment under clause (a) of this Section
7.11), no Default or Event of Default exists and the Company would,
immediately after giving effect to such payment, be able to borrow $1.00
of additional Debt without violating Section 7.5 hereof, and provided
further, that Restricted Payments made pursuant to this clause (b) shall
be included in the calculation of aggregate Restricted Payments required
by clause (a) of this Section 7.11 for purposes of determining whether any
future Restricted Payment is permitted under said clause (a).
(c) The Company will not declare a dividend payment in respect of
Company Common Stock which is not payable within ninety (90) days of
declaration, provided that the foregoing shall not prevent the payment of
any such dividend within ninety (90) days after the date of declaration
thereof, if at said date of declaration such payment complied with clause
(a) of this Section 7.11.
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7.12. Merger.
The Company will not, nor will it permit any Subsidiary to, merge with or
into, consolidate with, or sell, lease, transfer or otherwise dispose of all or
substantially all of its assets to, any other Person or permit any other Person
to merge into or consolidate with it; provided that the foregoing restriction
shall not apply to:
(a) the merger or consolidation of the Company into or with, or the
sale by the Company of all or substantially all of its assets to, another
corporation, if:
(i) the corporation that results from such merger or
consolidation or that purchases all or substantially all of such
assets (the "Surviving Corporation") is organized under the laws of
the United States of America or any jurisdiction thereof;
(ii) all approvals, consents, authorizations, registrations
and/or filings in respect of such merger, consolidation or sale
shall have been obtained and/or made, as the case may be, with all
appropriate Governmental Authorities in accordance with all
applicable laws and regulations;
(iii) the due and punctual payment of the principal of and
Make-Whole Amount, if any, and interest on all of the Notes,
according to their tenor, and the due and punctual performance and
observance of all the covenants in the Notes and this Agreement to
be performed or observed by the Company, are expressly assumed by
the Surviving Corporation pursuant to such agreements and
instruments as shall be approved by the Required Holders, and the
Company will cause to be delivered to each holder of Notes an
opinion of independent counsel to the effect that such agreements
and instruments are enforceable in accordance with their terms;
(iv) immediately prior to, and immediately after the
consummation of the transaction, and after giving effect thereto,
(A) no Default or Event of Default exists or would exist
under any provision hereof, and
(B) the Surviving Corporation could incur at least $1.00
of additional Debt without violating Section 7.5 hereof; and
(b) a merger of a Subsidiary into, or a consolidation of a
Subsidiary with, the Company (with the Company being the survivor thereof)
or a Wholly-Owned Subsidiary (with the Wholly-Owned Subsidiary being the
survivor thereof) or the sale of all or substantially all of its assets to
the Company or a Wholly-Owned Subsidiary.
7.13. ERISA.
(a) Compliance. The Company will, and will cause each ERISA
Affiliate to, at all times with respect to each Pension Plan,
(i) make timely payment of contributions required to meet the
minimum funding standard set forth in ERISA or the IRC with respect
thereto and
(ii) comply in all material respects with all other applicable
provisions of ERISA.
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(b) Relationship of Vested Benefits to Pension Plan Assets. The
Company will not at any time permit the present value of all employee
benefits vested under each Pension Plan to exceed the assets of such
Pension Plan allocable to such vested benefits at such time, in each case
determined pursuant to Section 7.13(c) hereof.
(c) Valuations. All assumptions and methods used to determine the
actuarial valuation of vested employee benefits under Pension Plans and
the present value of assets of Pension Plans will be reasonable in the
good faith judgment of the Company and will comply with all requirements
of law.
(d) Prohibited Actions. The Company will not, and will not permit
any ERISA Affiliate to:
(i) engage in any "prohibited transaction" (as such term is
defined in section 406 of ERISA or section 4975 of the IRC) that
would result in the imposition of a material tax or penalty on the
Company or any ERISA Affiliate;
(ii) incur with respect to any Pension Plan any "accumulated
funding deficiency" (as such term is defined in section 302 of
ERISA), whether or not waived;
(iii) terminate any Pension Plan in a manner that would result
in
(A) the imposition of a Lien on the Property of the
Company or any Subsidiary pursuant to section 4068 of ERISA or
(B) the creation of any liability under section 4062 of
ERISA that would reasonably be expected to have a materially
adverse effect on the business, prospects, profits, Properties
or condition (financial or otherwise) of the Company and the
Subsidiaries the ability of the Company to perform its
obligations set forth in this Agreement and in the Notes, or
the rights and remedies of the holders of the Notes hereunder
or under the Notes;
(iv) fail to make any payment required by section 515 of
ERISA; or
(v) incur any withdrawal liability under Title IV of ERISA
with respect to any Multiemployer Plan or any liability as a result
of the termination of any Multiemployer Plan.
7.14. Line of Business.
The Company will not, and will not permit any Subsidiary to, engage in any
business other than (a) businesses engaged in by the Company and the
Subsidiaries described in Section 2.1 hereof, (b) insurance-related businesses,
services and activities and (c) businesses not referred to in clause (a) or
clause (b) of this Section 7.14 if, but only if, the aggregate amount of assets
of the Company and the Subsidiaries employed to engage in such businesses shall
not at any time exceed ten percent (10%) of Consolidated Total Assets.
7.15. Transactions with Affiliates.
The Company will not, and will not permit any Subsidiary to, enter into
any transaction, including, without limitation, the purchase, sale or exchange
of Property or the rendering of any service, with any Affiliate, except in the
ordinary course of and pursuant to the reasonable requirements of the Company's
or
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such Subsidiary's business and upon fair and reasonable terms no less favorable
to the Company or such Subsidiary than would obtain in a comparable arm's-length
transaction with a Person not an Affiliate.
7.16. Pro-Rata Offers.
The Company will not, nor will it permit any Subsidiary or any Affiliate
to, directly or indirectly, acquire or make any offer to acquire any Notes
unless the Company or such Subsidiary or Affiliate shall have offered to acquire
Notes, pro rata, from all holders of the Notes and upon the same terms. In case
the Company, any Subsidiary or any Affiliate acquires any Notes, such Notes will
thereafter be cancelled and no Notes will be issued in substitution therefor.
Any Notes so acquired by the Company, any Subsidiary or any Affiliate shall be
deemed not to be outstanding under this Agreement for purposes of voting.
7.17. Private Offering.
The Company will not, nor will it permit any Person acting on its behalf
to, offer the Notes or any part thereof or any similar Securities for issue or
sale to, or solicit any offer to acquire any of the same from, any Person so as
to bring the issuance and sale of the Notes within the provisions of section 5
of the Securities Act.
7.18. Tax Consolidation.
The Company shall not file or consent to the filing of any consolidated
income tax return with any Person other than the Subsidiaries.
7.19. Pari Passu Ranking.
The Company covenants that its obligations under and in respect of this
Agreement and the Notes do and will rank at least pari passu in right of payment
with all of its other present and future unsecured and unsubordinated Debt.
8. INFORMATION AS TO COMPANY
8.1. Financial and Business Information.
The Company shall deliver to each holder of Notes:
(a) Quarterly Statements -- as soon as practicable after the end of
each quarterly fiscal period in each fiscal year of the Company, and in
any event within fifty (50) days thereafter, duplicate copies of:
(i) (A) a consolidated balance sheet of the Company and the
Subsidiaries as at the end of such quarter, and
(B) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and the
Subsidiaries, for such quarter and (in the case of the second and
third quarters) for the portion of the fiscal year ending with such
quarter, and
setting forth in the case of clause (A) and clause (B) above in
comparative form the figures for the corresponding periods in the previous
fiscal year, all in reasonable detail, prepared in accordance with
Generally Accepted Accounting Principles, and certified as complete and
correct, subject to changes resulting from year-end adjustments, by a
principal financial officer of the Company, provided, however, that
delivery of copies of the Company's Quarterly Report on Form 10-Q
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(without the exhibits thereto, unless requested by such holder) filed with
the Securities and Exchange Commission within the time period specified
above shall be deemed to satisfy the requirements of this Section 8.1(a),
and
(ii) such quarterly statements as are filed by any insurance
Subsidiary with the National Association of Insurance Commissioners
on the forms provided for by the National Association of Insurance
Commissioners for such quarter;
(b) Annual Statements -- as soon as practicable after the end of
each fiscal year of the Company, and in any event within ninety-five (95)
days thereafter, four copies of:
(i) (A) a consolidated balance sheet of the Company and the
Subsidiaries, as at the end of such year, and
(B) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and the
Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail and accompanied by, in the
case of such consolidated statements, an opinion thereon of either of the
accountants named in Section 2.2 hereof or other independent certified
public accountants of recognized national standing selected by the
Company, which opinion shall, without qualification, state that such
financial statements fairly present the financial condition of the
companies being reported upon and have been prepared in accordance with
Generally Accepted Accounting Principles consistently applied (except for
changes in application in which such accountants concur) and that the
examination of such accountants in connection with such financial
statements shall have been made in accordance with generally accepted
auditing standards; provided; however, that the delivery of Company's
Annual Report on Form 10-K (without the exhibits thereto, unless requested
by such holder) for such fiscal year filed with the Securities and
Exchange Commission within the time period specified above shall be deemed
to satisfy the requirements of this Section 8.1(b); and
(ii) the Statutory Annual Financial Statements of each
insurance Subsidiary for such year;
(c) Opinions of Independent Accountants and Counsel -- as soon as
practicable after the end of each fiscal year of the Company, and in any
event within ninety-five (95) days thereafter, duplicate copies of all
opinions of independent accountants and counsel required pursuant to
Section 7.1 hereof;
(d) Audit Reports -- promptly upon receipt thereof, a copy of each
other report submitted to the Board of Directors by independent
accountants in connection with any audit made by them of the books of the
Company or any Subsidiary, provided that for so long as any Event of
Default shall exist, the Company shall deliver, promptly upon receipt
thereof, a copy of each other report submitted to the Company or any
Subsidiary by independent accountants in connection with any annual,
interim or special audit made by them of the books of the Company or any
Subsidiary;
(e) SEC and Other Reports -- promptly upon their becoming available
one copy of each financial statement, report, notice or proxy statement
sent by the Company or any Subsidiary to stockholders generally, and of
each regular or periodic report and any registration statement, prospectus
or written communication (other than transmittal letters and other than
registration statements on Form S-8) in respect thereof filed by the
Company or any Subsidiary with, or received by, such Person in connection
therewith from, the National Association of
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Securities Dealers, any securities exchange or the Securities and Exchange
Commission or any successor agency;
(f) ERISA -- immediately upon becoming aware of the occurrence of
any
(i) "reportable event" (as such term is defined in section
4043 of ERISA) or
(ii) "prohibited transactions" (as such term is defined in
section 406 or section 4975 of the IRC)
in connection with any Pension Plan or any trust created thereunder, in
both of the cases specified in the foregoing clauses (i) and (ii), where
the effect of such events or transactions, or events or transactions
related thereto, would reasonably be expected to have a material adverse
effect on the business, prospects, profits, Properties or condition
(financial or otherwise) of the Company and the Subsidiaries, taken as a
whole, the ability of the Company to perform its obligations set forth
herein and in the Notes, or the rights and remedies of the holders of the
Notes hereunder or under the Notes, a written notice specifying the nature
thereof, what action the Company is taking or proposes to take with
respect thereto, and, when known, any action taken by the IRS, the United
States Department of Labor or the PBGC with respect thereto;
(g) ERISA Waivers -- prompt written notice of and a description of
any request pursuant to section 303 of ERISA or section 412 of the IRC
for, or notice of the granting pursuant to said section 303 or section 412
of, a waiver in respect of all or part of the minimum funding standard set
forth in ERISA or the IRC, as the case may be, of any Pension Plan, and,
in connection with the granting of any such waiver, the amount of any
waived funding deficiency (as such term is defined in said section 303 or
said section 412) and the terms of such waiver, in each of the cases
specified in this clause (g), where the effect of such conditions or
events or of events or conditions related thereto would reasonably be
expected to have a material adverse effect on the business, prospects,
profits, Properties or condition (financial or otherwise) of the Company
and the Subsidiaries, taken as a whole, the ability of the Company to
perform its obligations set forth herein and in the Notes, or the rights
and remedies of the holders of the Notes hereunder or under the Notes;
(h) Other ERISA Notices -- prompt written notice of and, where
applicable, a description of
(i) any notice from the PBGC in respect of the commencement of
any proceedings pursuant to section 4042 of ERISA to terminate any
Pension Plan or for the appointment of a trustee to administer any
Pension Plan,
(ii) any distress termination notice delivered to the PBGC
under section 4041 of ERISA in respect of any Pension Plan, and any
determination of the PBGC in respect thereof,
(iii) the placement of any Multiemployer Plan in
reorganization status under Title IV of ERISA,
(iv) any Multiemployer Plan becoming "insolvent" (as such term
is defined in section 4245 of ERISA under Title IV of ERISA),
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(v) the whole or partial withdrawal of the Company or any
ERISA Affiliate from any Multiemployer Plan and the withdrawal
liability incurred in connection therewith, and
(vi) the withdrawal of the Company or any ERISA Affiliate from
any Multiple Employer Pension Plan and the withdrawal liability
under ERISA incurred in connection therewith;
in each of the cases specified in the foregoing clauses (i) through (vi),
inclusive, where the effect of such conditions or events or of events or
conditions related thereto would reasonably be expected to have a material
adverse effect on the business, prospects, profits, Properties or
condition (financial or otherwise) of the Company and the Subsidiaries,
taken as a whole, the ability of the Company to perform its obligations
set forth herein and in the Notes, or the rights and remedies of the
holders of the Notes hereunder or under the Notes;
(i) Notice of Default or Event of Default -- immediately upon
becoming aware of the existence of any condition or event which
constitutes a Default or an Event of Default, a written notice specifying
the nature and period of existence thereof and what action the Company is
taking or proposes to take with respect thereto;
(j) Notice of Claimed Default -- immediately upon becoming aware
that the holder of any Note, or of any evidence of Debt or other Security
of the Company or any Subsidiary, shall have given notice or taken any
other action with respect to a claimed Event of Default, Default, event of
default or default (as the case may be), a written notice specifying the
notice given or action taken by such holder and the nature of the claimed
Event of Default, Default, event of default and/or default and what action
the Company is taking or proposes to take with respect thereto;
(k) Best's Rating -- promptly upon the Company's or any insurance
Subsidiary's receipt of a rating from A.M. Best Company (or any nationally
recognized successor agency which rates the ability of insurance companies
to comply with their policy obligations) lower than such Person's rating
(or such Person's comparable rating by such successor agency) as existed
(or would have existed in the case of such successor rating) on the
Closing Date, written notice of such lower rating; and
(l) Requested Information -- with reasonable promptness, such other
data and information as from time to time may be reasonably requested,
including, without limitation, information required by 17 C.F.R.
ss.230.144A, as amended from time to time.
8.2. Officers' Certificates.
Each set of financial statements delivered to you or any other
institutional holder of the Notes pursuant to Section 8.1(a) or Section
8.1(b)(i) hereof shall be accompanied by a certificate of the President or a
Vice-President and the Chief Financial Officer or Comptroller of the Company
setting forth:
(a) Covenant Compliance -- the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of Section 7 hereof during the period
covered by the income statement then being furnished; and
(b) Event of Default -- that the signers have reviewed the relevant
terms of this Agreement and have made, or caused to be made, under their
supervision, a review of the transactions and conditions of the Company
and the Subsidiaries from the beginning of the accounting period covered
by the income statements being delivered therewith to the date of the
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certificate and that such review shall have not disclosed the existence
during such period of any condition or event which constitutes a Default
or an Event of Default or, if any such condition or event existed or
exists, specifying the nature and period of existence thereof and what
action the Company shall have taken or proposes to take with respect
thereto.
8.3. Accountants' Certificates.
Each set of annual financial statements delivered pursuant to Section
8.1(b)(i) hereof shall, be accompanied by a certificate of the accountants who
certify such financial statements, stating that they have reviewed this
Agreement and stating further, whether, in making their audit, such accountants
have become aware of any condition or event which then constitutes a Default or
an Event of Default in respect of Section 7.4(a)(xi), Section 7.5, Section 7.6,
Section 7.7, Section 7.8, Section 7.9, Section 7.10 or Section 7.11 hereof, and,
if such accountants are aware that any such condition or event then exists,
specifying the nature and period of existence thereof. In making such statements
in respect of Section 7.4(a)(xi) hereof, such accountants may rely on an
officer's certificate of the Company as to the existence of Liens not otherwise
permitted by the provisions of Section 7.4(a)(i) through Section 7.4(a)(x),
inclusive, hereof.
8.4. Inspection.
The Company shall permit the representatives of any holder of Notes, at
the expense of such holder or, so long as an Event of Default shall exist, at
the Company's expense, to visit and inspect any of the Properties of the Company
or any Subsidiary, to examine all their respective books of account, records,
reports and other papers, to make copies and extracts therefrom, and to discuss
their respective affairs, finances and accounts with their respective officers,
employees and independent public accountants (and by this provision the Company
authorizes said accountants to discuss the finances and affairs of the Company
and the Subsidiaries) all at such reasonable times and as often as may be
reasonably requested.
8.5. Report to NAIC.
Concurrently with the delivery to you of each annual statement required by
Section 8.1(b)(i) hereof, the Company shall deliver a copy thereof to:
Securities Valuation Office, National Association of Insurance Commissioners,
195 Broadway, New York, New York 10007.
9. EVENTS OF DEFAULT
9.1. Nature of Events.
An "Event of Default" shall exist if any of the following occurs and is
continuing:
(a) Principal or Make-Whole Amount Payments -- the Company shall
fail to make any payment of principal or Make-Whole Amount on any Note on
or before the date such payment is due;
(b) Interest Payments -- the Company shall fail to make any payment
of interest on any Note on or before five (5) Business Days after the date
such payment is due;
(c) Particular Covenant Defaults -- the Company or any Subsidiary
shall fail to perform or observe any covenant contained in Section 7.4
through Section 7.12 hereof, inclusive, or in Section 8.1(i) or Section
8.1(j) hereof;
(d) Other Defaults -- the Company or any Subsidiary shall fail to
comply with any other provision hereof not referred to in clause (a),
clause (b) or clause (c) above, and such failure
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continues for more than thirty (30) days after such failure shall first
become known to any officer of the Company;
(e) Warranties or Representations -- any warranty, representation or
other statement by or on behalf of the Company contained herein or in any
instrument furnished in compliance with or in reference hereto shall have
been false or misleading in any material respect when made;
(f) Default on Indebtedness or Other Security -
(i) any event shall occur or any condition shall exist in
respect of Debt or any Security of the Company or any Subsidiary, or
under any agreement securing or relating to such Debt or Security,
that immediately or after the expiration of any grace period in
respect thereof:
(A) causes (or permits any one or more of the holders
thereof or a trustee therefor to cause) such Debt or Security,
or a portion thereof, to become due prior to its stated
maturity or prior to its regularly scheduled date or dates of
payment
(B) permits any one or more of the holders thereof or a
trustee therefor to elect any of the directors on the Board of
Directors or the board of directors of such Subsidiary; or
(C) permits any one or more of the holders thereof or a
trustee therefor to require the Company or any Subsidiary to
repurchase such Debt or Securities from such holder;
provided that the aggregate amount of all obligations in respect of such
Debt and Securities exceeds at such time One Million Dollars ($1,000,000);
(g) Involuntary Bankruptcy Proceedings --
(i) a receiver, liquidator, custodian or trustee of the
Company, or any Subsidiary, or of all or any of the Property of
either, shall be appointed by court order and such order remains in
effect for more than sixty (60) days; or an order for relief shall
be entered with respect to the Company or any Subsidiary, or the
Company or any Subsidiary shall be adjudicated a bankrupt or
insolvent; or
(ii) any of the Property of either shall be sequestered by
court order and such order remains in effect for more than sixty
(60) days; or
(iii) a petition shall be filed against the Company or any
Subsidiary under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law of
any jurisdiction, whether now or hereafter in effect, and shall not
be dismissed within sixty (60) days after such filing;
(h) Voluntary Petitions -- the Company or any Subsidiary shall file
a petition in voluntary bankruptcy or seeking relief under any provision
of any bankruptcy, reorganization, arrangement, insolvency, readjustment
of debt, dissolution or liquidation law of any jurisdiction, whether now
or hereafter in effect, or shall consent to the filing of any petition
against it under any such law;
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(i) Assignments for Benefit of Creditors, etc. -- the Company or a
Subsidiary shall make an assignment for the benefit of its creditors, or
admits in writing its inability, or fails, to pay its debts generally as
they become due, or shall consent to the appointment of a receiver,
liquidator or trustee of the Company or a Subsidiary or of all or any part
of the Property of either; or
(j) Licenses -- any Material Insurance License held by any insurance
Subsidiary on the Closing Date or acquired by such insurance Subsidiary
thereafter,
(i) shall be revoked by the state issuing such Material
Insurance License, or
(ii) shall not be reissued or renewed by such state ninety
(90) days after the expiration thereof; or
(k) Undischarged Final Judgments -- final judgment or final
judgments for the payment of money aggregating in excess of One Million
Dollars ($1,000,000) is or are outstanding against one or more of the
Company and the Subsidiaries and any one of such judgments shall have been
outstanding for more than thirty (30) days from the date of its entry and
shall not have been discharged in full or stayed.
9.2. Default Remedies.
(a) Acceleration on Event of Default.
(i) If an Event of Default specified in clause (g), (h) and
(i) of Section 9.1 hereof shall exist, all of the Notes at the time
outstanding shall automatically become immediately due and payable
together with interest accrued thereon and, to the extent permitted
by law, the Make-Whole Amount at such time with respect to the
principal amount of such Notes, without presentment, demand, protest
or notice of any kind, all of which are hereby expressly waived,
and,
(ii) If an Event of Default other than those specified in
clause (g), (h) or (i) of Section 9.1 hereof shall exist, the
Required Holders may exercise any right, power or remedy permitted
to such holder or holders by law, and shall have, in particular,
without limiting the generality of the foregoing, the right to
declare the entire principal of, and all interest accrued on, all
the Notes then outstanding to be, and such Notes shall thereupon
become, forthwith due and payable, without any presentment, demand,
protest or other notice of any kind, all of which are hereby
expressly waived, and the Company shall forthwith pay to the holder
or holders of all the Notes then outstanding the entire principal
of, and interest accrued on, the Notes and, to the extent permitted
by law, the Make-Whole Amount at such time with respect to such
principal amount of such Notes.
(b) Acceleration on Payment Default. During the existence of an
Event of Default described in Section 9.1(a) or Section 9.1(b) hereof, and
irrespective of whether the Notes then outstanding shall have been
declared to be due and payable pursuant to Section 9.2(a)(ii) hereof, any
holder of Notes who or which shall have not consented to any waiver with
respect to such Event of Default may, at his or its option, by notice in
writing to the Company, declare the Notes then held by such holder to be,
and such Notes shall thereupon become, forthwith due and payable together
with all interest accrued thereon, without any presentment, demand,
protest or other notice of any kind, all of which are hereby expressly
waived, and the Company shall forthwith pay to such holder the entire
principal of and interest accrued on such Notes and, to the extent
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permitted by law, the Make-Whole Amount at such time with respect to such
principal amount of such Notes.
(c) Valuable Rights. The Company acknowledges, and the parties
hereto agree, that the right of each holder to maintain its investment in
the Notes free from prepayment by the Company (except as herein
specifically provided for) is a valuable right and that the provision for
payment of a Make-Whole Amount by the Company in the event that the Notes
are prepaid or are accelerated as a result of an Event of Default, is
intended to provide compensation for the deprivation of such right under
such circumstances.
(d) Other Remedies. During the existence of an Event of Default and
irrespective of whether the Notes then outstanding shall have been
declared to be due and payable pursuant to Section 9.2(a)(ii) hereof and
irrespective of whether any holder of Notes then outstanding shall
otherwise have pursued or be pursuing any other rights or remedies, any
holder of Notes may proceed to protect and enforce its rights hereunder
and under such Notes by exercising such remedies as are available to such
holder in respect thereof under applicable law, either by suit in equity
or by action at law, or both, whether for specific performance of any
agreement contained herein or in aid of the exercise of any power granted
herein, provided that the maturity of such holder's Notes may be
accelerated only in accordance with Section 9.2(a) and Section 9.2(b)
hereof.
(e) Nonwaiver and Expenses. No course of dealing on the part of any
holder of Notes nor any delay or failure on the part of any holder of
Notes to exercise any right shall operate as a waiver of such right or
otherwise prejudice such holder's rights, powers and remedies. If the
Company shall fail to pay when due any principal of, or Make-Whole Amount
or interest on, any Note, or shall fail to comply with any other provision
hereof, the Company shall pay to each holder of Notes, to the extent
permitted by law, such further amounts as shall be sufficient to cover the
costs and expenses, including but not limited to reasonable attorneys'
fees, incurred by such holder in collecting any sums due on such Notes or
in otherwise assessing, analyzing or enforcing any rights or remedies that
are or may be available to it.
9.3. Annulment of Acceleration of Notes.
If a declaration is made pursuant to Section 9.2(a)(ii) hereof, then and
in every such case, the holders of at least fifty-one percent (51%) in principal
amount of the Notes at the time outstanding (exclusive of Notes then owned by
any one or more of the Company, any Subsidiary and any Affiliate) may, by
written instrument filed with the Company, rescind and annul such declaration,
and the consequences thereof, provided that at the time such declaration is
annulled and rescinded:
(a) no judgment or decree shall have been entered for the payment of
any moneys due on or pursuant hereto or the Notes;
(b) all arrears of interest upon all the Notes and all other sums
payable hereunder and under the Notes (except any principal of, or
interest or Make-Whole Amount on, the Notes which shall have become due
and payable by reason of such declaration under Section 9.2(a)(ii) hereof)
shall have been duly paid; and
(c) each and every other Default and Event of Default shall have
been waived pursuant to Section 11.5 hereof or otherwise made good or
cured,
and provided further that no such rescission and annulment shall extend to or
affect any subsequent Default or Event of Default or impair any right consequent
thereon.
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10. INTERPRETATION OF THIS AGREEMENT
10.1. Terms Defined.
As used herein, the following terms have the respective meanings set forth
below or set forth in the Section hereof following such term:
Acceptable Consideration -- means, with respect to the Transfer of any
asset of the Company or a Subsidiary, cash consideration, payable at the initial
closing of the transaction in question, in an amount determined by the Board of
Directors, in its good faith opinion, to be not less than the Fair Market Value
of such asset.
Affiliate -- means, at any time, a Person (other than a Subsidiary)
(a) that directly or indirectly through one or more intermediaries
Controls, or is Controlled by, or is under common Control with, the
Company,
(b) that beneficially owns or holds ten percent (10%) or more of any
class of the Voting Stock of the Company, or
(c) ten percent (10%) or more of the Voting Stock (or in the case of
a Person that is not a corporation, ten percent (10%) or more of the
equity interest) of which is beneficially owned or held by the Company or
a Subsidiary,
at such time. As used in this definition,
Control -- means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
Agreement, this -- means this agreement, as it may be amended and restated
from time to time.
Applicable H.15 -- means, at any time, United States Federal Reserve
Statistical Release H.15(519) or its successor publication most recently
published and available to the public at such time, or if no such successor
publication is available, then any other source of current information in
respect of interest rates on securities of the United States of America that is
generally available and, in the judgment of the Required Holders, provides
information reasonably comparable to the H.15(519) report.
Basket Secured Subsidiary Debt -- means, at any time, Debt of a Subsidiary
that is secured by a Lien permitted only by Section 7.4(a)(xi) hereof.
Board of Directors -- means, at any time, the board of directors of the
Company or any committee thereof that, in the instance, shall have the lawful
power to exercise the power and authority of such board of directors.
Business Day -- means, at any time, a day other than a Saturday, a Sunday
or a day on which any bank located in Newark, New Jersey, or any other bank in
the United States of America, which bank shall have been designated by any
holder of Notes to receive payments in respect of the Notes held by such holder,
is required by law (other than a general banking moratorium or holiday for a
period exceeding four (4) consecutive days) to be closed.
Capitalized Lease Obligation -- means, with respect to a lease for which
the lessee is required to recognize the acquisition of an asset and the
incurrence of a liability in accordance with Generally Accepted Accounting
Principles, the obligation of such lessee in respect of such liability.
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Change in Control Ratings Event -- means, at any time, the existence of
both of the following conditions:
(a) any person (as such term is used in section 13(d) and section
14(d)(2) of the Exchange Act as in effect on the date of the Closing) or
related persons constituting a group (as such term is used in Rule 13d-5
of the Exchange Act as in effect on the date of the Closing) become the
"beneficial owners" (as such term is used in Rule 13d-3 of the Exchange
Act as in effect on the date of the Closing), directly or indirectly, of
more than 50% of the Company's then outstanding Voting Stock (herein
referred to as the "Acquisition" and the surviving entity resulting from
the Acquisition shall be referred to as the "Survivor"); and
(b) Standard & Poor's Rating Group, a Division of McGraw Hill, Inc.
("S&P") and Moody's Investors Services, Inc. ("Moody's") shall have failed
to designate the senior unsecured debt obligations of the Survivor at
least A- (in the case of S&P) and A3 (in the case of Moody's) within the
period commencing on the date of the Acquisition and ending either (x) 90
days after such date or (y) if both Moody's and S&P shall have both
publicly announced that they are considering the establishment of a rating
for such senior unsecured debt obligations of the Survivor within said 90
day period, the first day when either shall have ceased their efforts to
establish such rating; provided this condition (b) shall be deemed not to
exist if
(i) the Survivor has no senior unsecured debt obligations
outstanding on the date of the Acquisition, and
(ii) within 90 days of the date of the Acquisition A.M. Best
shall have established a claims payable rating of at least A+ for
either (A) the Survivor or (B) each insurance company which is a
Wholly Owned Subsidiary and which, together with all other Wholly
Owned Subsidiaries which are insurance companies, contributes
substantially all of the revenue of the Survivor's consolidated
group.
Closing -- Section 1.2(b) hereof.
Closing Date -- Section 1.2(b) hereof.
Company -- has the meaning specified in the introductory sentence hereof.
Company Common Stock -- means
(a) the Common Stock, par value Two Dollars ($2.00) per share, of
the Company as constituted on the Closing Date and
(b) on any date after the Closing Date, any stock into which such
Common Stock shall have been changed or any stock resulting from any
reclassification of such Common Stock, and all other stock of any class or
classes (however designated) of the Company the holders of which are
ordinarily, in the absence of contingencies, entitled to elect corporate
directors (or Persons performing similar functions).
Company Preferred Stock -- means any class of capital stock of the Company
which is preferred over any other class of capital stock of the Company as to
the payment of dividends and/or the payment of any amount upon liquidation or
dissolution of such corporation.
Consolidated Capitalization -- means, at any time, the sum of
(i) the par value at such time (or value stated on the books of the
corporation) of the capital stock of the Company and the Subsidiaries plus
(or minus in the case of a deficit),
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(ii) the amount of additional paid-in capital and retained earnings
(or, in the case of negative retained earnings, minus such negative
amount) at such time of the Company and the Subsidiaries, plus
(iii) the aggregate amount of the liability of deferred taxes, if
any, of the Company and the Subsidiaries at such time, plus
(iv) the aggregate amount of Funded Debt of the Company and the
Subsidiaries at such time,
all determined on a consolidated basis in accordance with Generally Accepted
Accounting Principles.
Consolidated Debt -- means, at any time, the amount of Debt of the Company
and the Subsidiaries, determined at such time on a consolidated basis in
accordance with Generally Accepted Accounting Principles.
Consolidated Net Income -- means, for any period, net earnings (or loss)
after income taxes of the Company and the Subsidiaries determined on a
consolidated basis in accordance with Generally Accepted Accounting Principles,
but excluding:
(a) any gain or loss resulting from the sale, conversion or other
disposition of Capital Assets;
(b) any extraordinary or nonrecurring gains or losses;
(c) any gain arising from any reappraisal or write-up of assets;
(d) any gain or loss during such period resulting from the receipt
of any proceeds of any insurance policy;
(e) any earnings of any Person acquired by the Company or any
Subsidiary through purchase, merger or consolidation or otherwise, or
earnings of any Person substantially all of whose assets have been
acquired by the Company or any Subsidiary, for any period prior to the
date of acquisition;
(f) net earnings of any Person (other than a Subsidiary) in which
the Company or any Subsidiary shall have an ownership interest unless such
net earnings shall have actually been received by the Company or such
Subsidiary in the form of cash distributions;
(g) any portion of the net earnings of any Subsidiary that for any
reason is unavailable for payment of dividends to the Company or any other
Subsidiary, provided that, if any such Subsidiary shall be an insurance
Subsidiary, no portion of the net earnings of such insurance Subsidiary
shall be subject to this clause (g) (and hence excluded from Consolidated
Net Income) solely by virtue of any insurance statute or regulation that
restricts the dividends that such insurance Subsidiary may declare without
regulatory approval to a percentage of its surplus (as defined by such
statute or regulation) or all or a percentage of its net income (as
defined by such statute or regulation) for its then current annual fiscal
period or one or more of its prior 12-month fiscal periods; it being the
intention of the parties hereto that effect not being given to statutes
such as ss.17:27A-4c of the N.J. Rev. Stat., as in effect on the Closing
Date, which requires regulatory approval for the declaration of an
"extraordinary dividend," as defined in said statute; but it is likewise
the intent of the parties hereto that full effect be given to
(i) all other statutes or regulations that prohibit the
payment of dividends by insurance Subsidiaries, including, without
limitation, prohibitions on the payment of
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dividends during, or which create a state of, insolvency of an
insurance Subsidiary or pursuant to an administrative or court order
or injunction or
(ii) restrictions on the payment of dividends set forth in any
contract, agreement, debenture, certificate or articles of
incorporation or bylaws to which such insurance Subsidiary is a
party or which may be applicable to such insurance Subsidiary;
(h) any portion of the net earnings of the Company or any Subsidiary
that cannot be freely converted into United States dollars.
(i) any gain arising from the acquisition of any Securities of the
Company or any Subsidiary; and
(j) any income or loss assignable to a minority interest.
As used in this definition,
Capital Asset -- means, at any time, any asset of the Company or any
Subsidiary other than Marketable Investment Securities.
Consolidated Net Tangible Assets -- means, at any time, the remainder of
(a) Consolidated Total Assets, determined at such time, minus
(b) the total amount of all Intangible Assets of the Company and the
Subsidiaries (less depreciation, depletion, amortization and other
properly deductible valuation reserves),
determined on a consolidated basis in accordance with Generally Accepted
Accounting Principles.
Consolidated Tangible Net Worth -- means, at any time,
(a) the sum of
(i) the par value at such time (or value stated on the books
of the corporation) of the capital stock of the Company and the
Subsidiaries plus (or minus in the case of a deficit),
(ii) the amount of additional paid-in capital and retained
earnings (or, in the case of negative retained earnings, minus such
negative amount) at such time of the Company and the Subsidiaries,
plus
(iii) aggregate amount of net unrealized gains (or minus, in
the case of a loss) on equity Securities (net of deferred income
taxes), minus
(b) the sum, without duplication, of
(i) the net book value at such time (after deducting related
depreciation, obsolescence, amortization, valuation and other proper
reserves) of all Intangible Assets of the Company and the
Subsidiaries, plus
(ii) except as expressly provided in clause (a)(iii) above,
the aggregate amount of all write-ups of assets subsequent to the
Closing Date,
all determined on a consolidated basis in accordance with Generally Accepted
Accounting Principles.
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Consolidated Total Assets -- means, at any time, the total amount of all
assets of the Company and the Subsidiaries (less depreciation, depletion,
amortization and other properly deductible valuation reserves), determined on a
consolidated basis in accordance with Generally Accepted Accounting Principles.
Control Event -- means the execution of any written agreement that, when
fully performed by the parties thereto, would result in a Change in Control
Ratings Event.
Control Prepayment Date -- Section 5.6(a).
Current Debt -- with respect to any Person means, at any time:
(a) its liabilities in respect of borrowed money;
(b) any liabilities for borrowed money secured by any Lien existing
on Property owned by such Person (whether or not such liabilities have
been assumed by such Person);
(c) Capitalized Lease Obligations;
(d) the present value of all payments due under any arrangement for
retention of title or any conditional sale agreement (other than a lease
giving rise to a Capitalized Lease Obligation) discounted at the implicit
rate, if known, with respect thereto or, if unknown, at eight percent (8%)
per annum; and
(e) Guaranties of obligations described above,
provided that, in each such case, such liabilities are either payable on demand
or within one (1) year from the creation thereof and are not renewable or
extendible at the option of such Person to a date more than one (1) year from
the date of creation thereof. Any such liability which is renewable or
extendible at the option of such Person to a date more than one (1) year from
the date of creation thereof shall be deemed to be Funded Debt. If any
indebtedness in respect of any of the foregoing liabilities is expressed to
mature more than one (1) year from the date of its creation but, as of any date
of determination, has principal due and payable within one (1) year of such date
of determination, "Current Debt" shall not include such principal payable within
such one (1) year period but rather such principal payable within such one (1)
year period shall be deemed to be "Funded Debt."
The aggregate unpaid balances from time to time outstanding in respect of
any notes receivable, premiums receivable or accounts receivable arising in the
ordinary course of business and discounted or sold by such Person (whether or
not such discounting or sale was with full, limited or no recourse to such
Person), shall be included in Current Debt and shall be deemed to be secured
Current Debt for all purposes under this Agreement if such notes receivable,
premiums receivable or accounts receivable are due within one (1) year from such
time, but notes receivable, premiums receivable or accounts receivable shall be
excluded from Current Debt if such sale or assignment is of delinquent notes
receivable, premiums receivable or accounts receivable to a collection agency or
similar service.
Debt -- means, with respect to any Person, at any time, without
duplication, all Funded Debt and Current Debt of such Person at such time.
Default -- means an event or condition the occurrence of which would, with
the lapse of time or the giving of notice or both, become an Event of Default.
Environmental Protection Law -- means any federal, state, county, regional
or local law, statute, or regulation (including, without limitation, CERCLA,
RCRA and SARA) enacted in connection with or relating to the protection or
regulation of the environment, including, without limitation, those laws,
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statutes, and regulations regulating the disposal, removal, production, storing,
refining, handling, transferring, processing, or transporting of Hazardous
Substances, and any regulations, issued or promulgated in connection with such
statutes by any Governmental Authority and any orders, decrees or judgments
issued by any court of competent jurisdiction in connection with any of the
foregoing. As used in this definition:
CERCLA -- means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended from time to time (by
SARA or otherwise), and all rules and regulations promulgated in
connection therewith;
RCRA -- means the Resource Conservation and Recovery Act of 1976, as
amended, and any rules and regulations issued in connection therewith; and
SARA -- means the Superfund Amendments and Reauthorization Act of
1986, as amended from time to time, and all rules and regulations
promulgated in connection therewith.
ERISA -- means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
ERISA Affiliate -- means any corporation or trade or business that
(i) is a member of the controlled group of corporations (within the
meaning of Section 414(b) of the IRC) which includes the Company,
(ii) is under common control (within the meaning of Section 414(c)
of the IRC with the Company,
(iii) is a member of an affiliated service group (within the meaning
of Section 414(m) of the IRC) which includes the Company, or
(iv) is required to be aggregated with the Company pursuant to U.S.
Treasury regulations under Section 414(o) of the IRC.
Event of Default -- Section 9.1 hereof.
Exchange Act -- means the Security Act of 1934, as amended.
Fair Market Value -- means, at any time, with respect to any Property, the
sale value of such Property that would be realized in an arm's-length sale at
such time between an informed and willing buyer and an informed and willing
seller, under no compulsion to buy or sell, respectively.
Financially Sound/Reputable Insurers -- Section 7.2(b) hereof.
Funded Debt -- means, at any time with respect to any Person, without
duplication,
(a) its liabilities for borrowed money, other than Current Debt;
(b) any liabilities for borrowed money secured by any Lien existing
on Property owned by such Person (whether or not such liabilities have
been assumed by such Person) other than Current Debt;
(c) any obligations in respect of any Capitalized Lease Obligation
of such Person, other than Current Debt;
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(d) the present value of all payments due under any arrangement for
retention of title or any conditional sale agreement (other than a lease
giving rise to a Capitalized Lease Obligation) discounted at the implicit
rate, if known, with respect thereto or, if unknown, at eight percent (8%)
per annum, other than Current Debt; and
(e) any Guaranty of such Person of any obligation of another Person
constituting obligations of a type set forth above.
The aggregate unpaid balances from time to time outstanding in respect of
any notes receivable, premiums receivable or accounts receivable arising in the
ordinary course of business and discounted or sold by such Person (whether or
not such discounting or sale was with full, limited or no recourse to such
Person), shall be included in Funded Debt and shall be deemed to be secured
Funded Debt for all purposes under this Agreement unless such balance is
included in Current Debt at such time (and only to the extent of such inclusion)
or unless such sale or assignment is of delinquent notes receivable, premiums
receivable or accounts receivable to a collection agency or similar service.
Generally Accepted Accounting Principles -- means generally accepted
accounting principles as set forth from time to time in the opinions of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements of the Financial Accounting Standards Board or in
such opinions and statements of such other entities as shall be approved by a
significant segment of the accounting profession.
Governmental Authority -- means
(a) the government of
(i) the United States of America and any State or other
political subdivision thereof, or
(ii) any jurisdiction in which the Company or any Subsidiary
conducts all or any part of its business, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
Guaranty -- means with respect to any Person (for the purposes of this
definition, the "Guarantor") any obligation (except the endorsement in the
ordinary course of business of negotiable instruments for deposit or collection)
of such Person guaranteeing or in effect guaranteeing any indebtedness, dividend
or other obligation of any other Person (the "Primary Obligor") in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by the Guarantor:
(a) to purchase such indebtedness or obligation or any Property or
assets constituting security therefor;
(b) to advance or supply funds
(i) for the purpose of payment of such indebtedness or
obligation, or
(ii) to maintain working capital or other balance sheet
condition or any income statement condition of the Primary Obligor
or otherwise to advance or make available funds for the purchase or
payment of such indebtedness or obligation;
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(c) to lease Property or to purchase Securities or other Property or
services primarily for the purpose of assuring the owner of such
indebtedness or obligation of the ability of the Primary Obligor to make
payment of the indebtedness or obligation; or
(d) otherwise to assure the owner of the indebtedness or obligation
of the Primary Obligor against loss in respect thereof.
For purposes of computing the amount of any Guaranty, in connection with any
computation of indebtedness or other liability, it shall be assumed that the
indebtedness or other liabilities that are the subject of such Guaranty are
direct obligations of the issuer of such Guaranty.
Hazardous Substances -- means any and all pollutants, contaminants, toxic
or hazardous wastes or any other substances that might pose a hazard to health
or safety, the removal of which may be required or the generation, manufacture,
refining, production, processing, treatment, storage, handling, transportation,
transfer, use, disposal, release, discharge, spillage, seepage, or filtration of
which is or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
Institutional Investor -- means you, any of your affiliates and any other
holder of Notes that is a bank, trust company, insurance company, fraternal
benefit society, pension fund, investment company, mutual fund or other similar
institutional investor or any portfolio or fund managed by any one or more of
the foregoing.
Intangible Assets -- means, at any time, the following:
(a) patents, copyrights, trademarks, trade names, service marks,
brand names, franchises, goodwill, experimental expenses and other similar
intangibles;
(b) unamortized debt discount and expense; and
(c) all other Property that would be considered to be intangible
under Generally Accepted Accounting Principles.
The determination of the amount of the above items in this definition of
"Intangible Assets" shall be for the Company and the Subsidiaries on a
consolidated basis and shall be in accordance with Generally Accepted Accounting
Principles.
Investment -- means any investment, made in cash or by delivery of
Property, by the Company or any Subsidiary
(a) in any Person, whether by acquisition of stock, indebtedness or
other obligation or Security, or by loan, Guaranty, advance or capital
contribution, or otherwise, or
(b) in any Property.
IRC -- means the Internal Revenue Code of 1986, together with all rules
and regulations promulgated pursuant thereto, as amended from time to time.
IRS -- means the Internal Revenue Service and any successor agency.
Lien -- means any interest in Property securing an obligation owed to, or
a claim by, a Person other than the owner of the Property, whether such interest
is based on the common law, statute or contract, and including but not limited
to the security interest lien arising from a mortgage, encumbrance, pledge,
conditional sale or trust receipt or a lease, consignment or bailment for
security purposes, and the filing of
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any financing statement under the Uniform Commercial Code of any jurisdiction,
or an agreement to give any of the foregoing. The term "Lien" includes
reservations, exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases and other title exceptions and encumbrances
(including, with respect to stock, stockholder agreements, voting trust
agreements, buy-back agreements and all similar arrangements) affecting
Property. For the purposes hereof, the Company and each Subsidiary is deemed to
be the owner of any Property that it shall have acquired or holds subject to a
conditional sale agreement, a lease giving rise to a Capitalized Lease
Obligation or other arrangement pursuant to which title to the Property has been
retained by or vested in some other Person for security purposes, and such
retention or vesting is deemed a Lien. The term "Lien" does not include negative
pledge clauses in agreements relating to the borrowing of money.
Make-Whole Amount -- means, at any time, with respect to a principal
amount of Notes of any Series becoming due in whole or in part, whether by
prepayment or acceleration, the greater of
(a) Zero Dollars ($0), and
(b) the remainder of
(i) the sum of the present values of the then remaining scheduled
payments of principal and interest that would be payable in respect of
such principal amount of the Notes of such Series but for the prepayment
or acceleration of such principal amount of Notes of such Series being
prepaid or accelerated, minus
(ii) (A) the aggregate principal amount of the Notes of such Series
so prepaid or accelerated, plus
(B) interest on such principal amount of the Notes of such
Series accrued during the period beginning on the date of the
scheduled payment of interest on the Notes of such Series most
nearly preceding the date such principal amount of Notes of such
Series is to become due as a result of such prepayment or
acceleration, and ending on such date such principal amount of Notes
of such Series is to so become due.
In determining such present values, a discount rate equal to the Make-Whole
Discount Rate divided by two (2), and a discount period of six (6) months of
thirty (30) days each, shall be used.
Make-Whole Discount Rate -- means, at any time, with respect to a
principal amount of Notes of any Series being prepaid or accelerated,
(a) the per annum percentage rate (rounded to the nearest three
decimal places) equal to
(i) the annual yield to maturity at such time of the United
States Treasury obligation listed in the then Applicable H.15 for
the most recent available day in such Applicable H.15 with a
Treasury Constant Maturity (as such term is defined in such
Applicable H.15) equal to the Weighted Average Life to Maturity of
the principal amount of the Notes of such Series then being prepaid
or accelerated, or, if no such United States Treasury obligation is
so listed, then
(ii) the annual yield to maturity at such time determined by
interpolating between
(A) the annual yield to maturity of the United States
Treasury obligations listed in such Applicable H.15 with a
Treasury Constant Maturity (as such term is defined in such
Applicable H.15) most nearly equal to and less than
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the Weighted Average Life to Maturity of the principal amount
of Notes of such Series then being prepaid or accelerated, and
(B) the annual yield to maturity of the United States
Treasury obligations listed in such Applicable H.15 with a
Treasury Constant Maturity (as such term is defined in such
Applicable H.15) most nearly equal to and greater than the
Weighted Average Life to Maturity of the principal amount of
Notes of such Series then being prepaid or accelerated,
plus
(b) fifty one-hundredths percent (0.50%) per annum.
As used in this definition,
Remaining Dollar-Years -- means, at any time with respect to a
principal amount of Notes of any Series being prepaid or accelerated, the
result obtained by
(a) multiplying
(i) an amount equal to the remainder of (1) the amount of
principal that would have become due on each scheduled payment date
and at maturity if such prepayment or acceleration had not been
made, minus (2) the amount of principal on the Notes of such Series
scheduled to become due on each such date after giving effect to
such prepayment or acceleration and the application thereof in
accordance with the provisions of this Agreement, by
(ii) the number of years (calculated to the nearest
one-twelfth) that will elapse between such time and the date each
such scheduled principal payment or maturity payment is due, and
(b) calculating the sum of each of the products obtained in the
preceding subsection (a).
Weighted Average Life to Maturity -- means, at any time, with
respect to any Note of any Series, the number of years obtained by
dividing the then Remaining Dollar-Years at such time of such Note by the
then outstanding principal amount of such Note.
Margin Security -- means "margin stock" within the meaning of Regulations
T, U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R.,
Chapter II, as amended from time to time.
Marketable Investment Security -- means, with respect to the Company
and/or any Subsidiary, any debt or equity Security that is publicly traded on a
national securities exchange or quoted in an automated inter-dealer quotation
system in the United States of America and which shall have been purchased in
accordance with the established investment guidelines and procedures of the
Company or such Subsidiary and in accordance with applicable regulatory law and
regulations, as the case may be. Subsidiary Stock and Subsidiary Preferred Stock
shall be excluded from this definition of "Marketable Investment Security."
Material Insurance License -- means any license issued by a state to any
insurance Subsidiary that permits such insurance Subsidiary to transact
insurance business in such state and in respect of which the premiums written
under the authority of such license account for more than twenty-five percent
(25%) of Aggregate Premiums Written during the then most recently ended fiscal
year of the Company. As used in this definition,
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<PAGE> 56
Aggregate Premiums Written -- means, with respect to any fiscal
period of the Company, the total of all premiums written by insurance
Subsidiaries during such fiscal period, determined in accordance with
Statutory Financial Statement Accounting Procedures.
Multiemployer Plan -- means any multiemployer plan (as defined in section
3(37) of ERISA) in respect of which the Company or any ERISA Affiliate is an
"employer" (as such term is defined in section 3 of ERISA).
Multiple Employer Pension Plan -- means any employee benefit plan within
the meaning of section 3(3) of ERISA (other than a Multiemployer Pension Plan),
subject to Title IV of ERISA, to which the Company or any ERISA Affiliate and an
employer (as such term is defined in section 3 of ERISA) other than an ERISA
Affiliate or the Company contribute.
Non-Basket Secured Subsidiary Debt -- means, at any time, Debt secured by
Liens on the Property of a Subsidiary permitted by Section 7.4(a)(i) through
Section 7.4(a)(x) hereof, at such time.
Note -- Section 1.1 hereof.
Note Purchase Agreement -- Section 1.2(c) hereof.
Other Purchaser -- Section 1.2(c) hereof.
PBGC -- means the Pension Benefit Guaranty Corporation and any successor
corporation or governmental agency.
Pension Plan -- means, at any time, any "employee pension benefit plan"
(as such term is defined in section 3 of ERISA) maintained at such time by the
Company or any ERISA Affiliate for employees of the Company or such ERISA
Affiliate, excluding any Multiemployer Plan, but including, without limitation,
any Multiple Employer Pension Plan.
Permitted Intercompany Funded Debt -- means, at any time, any obligation
in respect of a liability of the Company or a Subsidiary described in clause (a)
or (c) of the definition of "Funded Debt" herein that is outstanding at such
time so long as no Default shall have occurred and be continuing at such time:
(a) by a Subsidiary to the Company;
(b) by the Company to a Subsidiary; or
(c) by a Subsidiary to another Subsidiary.
Person -- means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization, or a government or
agency or political subdivision thereof.
Placement Memorandum -- Section 2.1 hereof.
Property -- means any interest in any kind of property or asset, whether
real, personal or mixed, and whether tangible or intangible (including, without
limitation, any improvements or accessions thereto).
PTE -- Section 1.4(a) hereof.
Purchase Money Lien -- means a Lien held by any Person (whether or not the
seller of such assets) on Property acquired or constructed by the Company or any
Subsidiary, which Lien secures all or a portion of the related purchase price or
construction costs of such Property, provided that such Purchase
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<PAGE> 57
Money Lien encumbers only Property purchased after the Closing Date and acquired
with the proceeds of the Debt secured thereby, and provided that such Lien is
not extended to any other Property.
Purchaser -- means the Persons listed as purchasers of Notes on Annex 1
hereto.
QPAM -- Section 1.4(d) hereof.
Ratable Portion -- means, with respect to any Transfer of an asset under
Section 7.9 hereof producing 10% Excess Proceeds and with respect to any holder
of Debt of the Company, the product of (a) the portion of such 10% Excess
Proceeds which the Company has allocated to clause (z) in said Section 7.9 times
(b) a fraction, in which the numerator equals the principal amount of all Debt
of the Company held by such holder and in which the denominator equals the
aggregate amount of all Debt of the Company (excluding therefrom any such Debt
held by the Company, any Subsidiary or any Affiliate). The determinations of the
amounts of Debt of the Company in clause (b) shall be as at the time of the
consummation of such Transfer.
Required Holders -- means, at any time, the holders of at least sixty-six
and two-third percent (662/3%) in principal amount of the Notes at the time
outstanding (exclusive of Notes then owned by any one or more of the Company,
any Subsidiary and any Affiliate), without regard to the Series of such
outstanding Notes.
Required Principal Payment -- Section 5.1(a) hereof.
Restricted Payment -- means
(a) any payment, dividend or other distribution (whether in the form
of cash or any other Property), direct or indirect, on account of any
shares of capital stock of the Company, except a dividend payable solely
in shares of Company Common Stock, and
(b) any optional or mandatory redemption, retirement, purchase or
other acquisition, direct or indirect, of any shares of capital stock of
the Company now or hereafter outstanding, or of any warrants, rights, or
options to acquire any shares of such capital stock.
S/L Ratable Portion -- means, with respect to any Sale and Leaseback
Transaction under Section 7.10 hereof and with respect to any holder of Debt of
the Company and the Subsidiaries, the product of
(a) the net proceeds from such Sale and Leaseback Transaction times
(b) a fraction, in which the numerator equals the principal amount
of all Debt of the Company and the Subsidiaries held by such holder and in
which the denominator equals the aggregate amount of all Debt of the
Company and the Subsidiaries (excluding therefrom any such Debt held by
the Company, any Subsidiary or any Affiliate).
The determinations of the amounts of Debt of the Company and the Subsidiaries in
clause (b) shall be as at the time of the consummation of such Sale and
Leaseback Transaction.
Sale and Leaseback Transactions -- means any transaction or series of
related transactions in which the Company or a Subsidiary sells or transfers any
of its Property to any Person (other than to the Company or to a Subsidiary) and
concurrently with such sale or transfer, or thereafter, rents or leases such
transferred Property or substantially similar Property from any Person.
Securities Act -- means the Securities Act of 1933, as amended.
Security -- means "security" as defined by Section 2(1) of the Securities
Act.
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<PAGE> 58
Senior Debt -- means the Notes and any Debt of the Company or its
Subsidiaries that by its terms is not in any manner subordinated in right of
payment to any other unsecured Debt of the Company or any Subsidiary.
Senior Officer -- means, with respect to any Person, any one of the
chairman of the board of directors, the chief executive officer, the chief
operating officer, the chief financial officer and the president of such Person.
Series -- means any one or more of the series of Notes issued hereunder.
Series A Notes -- Section 1.1(a) hereof.
Series B Notes -- Section 1.1(b) hereof.
Source -- Section 1.4.
Statutory Annual Financial Statements -- means, with respect to any
insurance Subsidiary, the annual fiscal year-end financial statements required
by the Statutory Financial Statement Accounting Procedures applicable thereto to
be filed with the appropriate regulatory body of the state in which such
insurance Subsidiary is organized and licensed to sell insurance.
Statutory Financial Statement Accounting Procedures -- with respect to any
Subsidiary that is an insurance company means, at any time, accounting
procedures required by the insurance statutes and regulations of the state in
which such insurance company is organized and licensed to sell insurance.
Subsidiary -- means, at any time, a corporation of which the Company owns,
directly or indirectly, more than fifty percent (50%) (by number of votes) of
each class of Voting Stock at such time.
Subsidiary Preferred Stock -- means any class of capital stock of any
Subsidiary which is preferred over any other class of capital stock of the
Subsidiary as to the payment of dividends and/or the payment of any amount upon
liquidation or dissolution of such corporation.
Subsidiary Stock -- Section 7.9(a) hereof.
Surviving Corporation -- Section 7.12(a)(i) hereof.
10% Excess Proceeds -- means, with respect to any Transfer of an asset of
the Company, an amount equal to
(a) the greater of
(i) the entire proceeds of such Transfer (net of reasonable
and ordinary transaction costs and expenses incurred in connection
with such Transfer and any outstanding Debt secured by a Purchase
Money Lien encumbering the asset being so Transferred) or
(ii) the net book value in respect of the asset being so
Transferred determined at the time of such Transfer,
multiplied by
(b) (i) the amount of the net book value in respect of the asset
being so Transferred under clause (b)(vi)(A)(I) of Section 7.9 that when
aggregated with the aggregate net book values under clause (b)(vi)(A)(II)
of Section 7.9 hereof would be in excess of ten percent
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<PAGE> 59
(10%) of Consolidated Net Tangible Assets determined as of the fiscal-year
end immediately preceding such Transfer or, if more recent, determined as
of the date of the then most recently audited consolidated financial
statement of the Company and the Subsidiaries (it being understood that if
the aggregate net book values under clause (b)(vi)(A)(II) of Section 7.9
hereof exceed ten percent (10%) of such Consolidated Net Tangible Assets
that the amount being determined under this subclause (i) would equal the
entire net book value of the asset then being Transferred), divided by
(ii) the net book value in respect of the asset being so
Transferred determined at the time of such Transfer.
Transfers -- Section 7.9(b) hereof.
Unsecured Subsidiary Debt -- means, at any time, Debt of a Subsidiary not
secured by a Lien on the Property of the Company or a Subsidiary at such time.
Voting Stock -- means, in the case of a corporation, capital stock of any
class or classes of a corporation the holders of which are ordinarily, in the
absence of contingencies, entitled to elect any of the corporate directors (or
Persons performing similar functions), and in the case of a limited liability
company, membership interests which have the right, directly or indirectly, to
direct or cause the direction of the management or policies of such limited
liability company.
Wholly-Owned Subsidiary -- means, at any time, any Subsidiary one hundred
percent (100%) of all of the equity membership interests and/or equity
Securities (except directors' qualifying shares) and voting membership interests
and/or voting Securities of which are owned by any one or more of the Company
and the Company's other Wholly-Owned Subsidiaries at such time.
10.2. Generally Accepted Accounting Principles.
Where the character or amount of any asset or liability or item of income
or expense, or any consolidation or other accounting computation is required to
be made for any purpose hereunder, it shall be done in accordance with Generally
Accepted Accounting Principles as in effect on the date of, or at the end of the
period covered by, the financial statements from which such asset, liability,
item of income, or item of expense, is derived, or, in the case of any such
computation, as in effect on the date as of which such computation is required
to be determined, provided, that if any term defined herein includes or excludes
amounts, items or concepts that would not be included in or excluded from such
term if such term was defined with reference solely to Generally Accepted
Accounting Principles, such term will be deemed to include or exclude such
amounts, items or concepts as set forth herein.
10.3. Directly or Indirectly.
Where any provision herein refers to action to be taken by any Person, or
which such Person is prohibited from taking, such provision shall be applicable
whether such action is taken directly or indirectly by such Person, including
actions taken by or on behalf of any partnership in which such Person is a
general partner.
10.4. Section Headings and Table of Contents and Construction.
(a) Section Headings and Table of Contents, etc.. The titles of the
Sections and the Table of Contents appear as a matter of convenience only,
do not constitute a part hereof and shall not affect the construction
hereof. The words "herein," "hereof," "hereunder" and "hereto" refer to
this Agreement as a whole and not to any particular Section or other
subdivision.
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<PAGE> 60
(b) Construction. Each covenant contained herein shall be construed
(absent an express contrary provision herein) as being independent of each
other covenant contained herein, and compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with one or more other covenants.
10.5. Governing Law.
THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, INTERNAL NEW YORK LAW, WITHOUT REGARD TO CHOICE OF
LAW OR ANY OTHER PROVISION THEREOF THAT WOULD PERMIT OR REQUIRE THE APPLICATION
OF THE LAW OF ANY OTHER JURISDICTION.
11. MISCELLANEOUS
11.1. Communications.
(a) Method; Address. All communications hereunder or under the Notes
shall be in writing, shall be hand delivered, deposited into the United
States mail (registered or certified mail), postage prepaid, or sent by
overnight courier, and shall be addressed,
(i) if to the Company,
Wantage Avenue
Branchville, New Jersey 07890
Attention: General Counsel
or at such other address as the Company shall have furnished in
writing to all holders of the Notes at the time outstanding,
(ii) if to any of the holders of the Notes,
(A) if such holders are the Purchasers, at their
respective addresses set forth on Annex 1 hereto, and further
including any parties referred to on such Annex 1 that are
required to receive notices in addition to such holders of the
Notes, and
(B) if such holders are not the Purchasers, at their
respective addresses set forth in the register for the
registration and transfer of Notes maintained pursuant to
Section 7.3 hereof,
or to any such party at such other address as such party may
designate by notice duly given in accordance with this Section 11.1
to the Company (which other address shall be entered in such
register).
(b) When Given. Any communication so addressed and deposited in the
United States mail, postage prepaid, by registered or certified mail (in
each case, with return receipt requested) shall be deemed to be received
on the third (3rd) succeeding Business Day after the day of such deposit
(not including the date of such deposit). Any notice so addressed and
otherwise delivered shall be deemed to be received when actually received
at the address of the addressee.
11.2. Reproduction of Documents.
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<PAGE> 61
This Agreement and all documents relating thereto, including, without
limitation,
(a) consents, waivers and modifications that may hereafter be
executed,
(b) documents received by you at the closing of your purchase of the
Notes (except the Notes themselves), and
(c) financial statements, certificates and other information
previously or hereafter furnished to you or any other holder of Notes,
may be reproduced by any holder of Notes by any photographic, photostatic,
microfilm, micro-card, miniature photographic, digital or other similar process
and each holder of Notes may destroy any original document so reproduced. The
Company agrees and stipulates that any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by such holder of Notes in the regular course of business)
and that any enlargement, facsimile or further reproduction of such reproduction
shall likewise be admissible in evidence.
11.3. Survival.
All warranties, representations, certifications and covenants made by the
Company herein or in any certificate or other instrument delivered by it or on
its behalf hereunder shall be considered to have been relied upon by you and
shall survive the delivery to you of the Notes regardless of any investigation
made by you or on your behalf. All statements in any such certificate or other
instrument shall constitute warranties and representations by the Company
hereunder.
11.4. Successors and Assigns.
This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties hereto. The provisions hereof are
intended to be for the benefit of all holders, from time to time, of Notes, and
shall be enforceable by any such holder, whether or not an express assignment to
such holder of rights hereunder shall have been made by you or your successor or
assign.
11.5. Amendment and Waiver.
(a) Requirements. This Agreement may be amended, and the observance
of any term hereof may be waived, with (and only with) the written consent
of the Company and the Required Holders; provided that no such amendment
or waiver of any of the provisions of Section 1 through Section 5 hereof,
inclusive, or any defined term used therein, shall be effective as to any
holder of Notes unless consented to by such holder in writing; and
provided further that no such amendment or waiver shall, without the
written consent of the holders of all Notes (exclusive of Notes held by
the Company, any Subsidiary or any Affiliate) at the time outstanding,
(i) subject to Section 9.3 hereof, change the amount or time
of any prepayment or payment of principal or Make-Whole Amount or
the rate or time of payment of interest,
(ii) amend or waive Section 9 hereof,
(iii) amend or waive the definition of Required Holders, or
(iv) amend or waive this Section 11.5.
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<PAGE> 62
The holder of any Note may specify that any such written consent executed
by it shall be effective only with respect to a portion of the Notes held
by it (in which case it shall specify, by dollar amount, the aggregate
principal amount of Notes with respect to which such consent shall be
effective) and in the event of any such specification such holder shall be
deemed to have executed such written consent only with respect to the
portion of the Notes so specified.
(b) Solicitation of Noteholders.
(i) Solicitation. The Company shall not solicit, request or
negotiate for or with respect to any proposed waiver or amendment of
any of the provisions hereof or the Notes unless each holder of the
Notes (irrespective of the amount of Notes then owned by it) shall
be informed thereof by the Company with sufficient information to
enable it to make an informed decision with respect thereto.
Executed or true and correct copies of any waiver or consent
effected pursuant to the provisions of this Section 11.5 shall be
delivered by the Company to each holder of outstanding Notes
forthwith following the date on which the same shall have been
executed and delivered by all holders of outstanding Notes required
to consent or agree to such waiver or consent.
(ii) Payment. The Company shall not, directly or indirectly,
pay or cause to be paid any remuneration, whether by way of
supplemental or additional interest, fee or otherwise, or grant any
security, to any holder of Notes as consideration for or as an
inducement to the entering into by any holder of Notes of any waiver
or amendment of any of the terms and provisions hereof unless such
remuneration is concurrently paid, or security is concurrently
granted, on the same terms, ratably to the holders of all Notes then
outstanding.
(iii) Scope of Consent. Any consent made pursuant to this
Section 11.5 by a holder of Notes that has transferred or has agreed
to transfer its Notes to the Company, any Subsidiary or any
Affiliate and has provided or has agreed to provide such written
consent as a condition to such transfer shall be void and of no
force and effect except solely as to such holder, and any amendments
effected or waivers granted or to be effected or granted that would
not have been or would not be so effected or granted but for such
consent (and the consents of all other holders of Notes that were
acquired under the same or similar conditions) shall be void and of
no force and effect, retroactive to the date such amendment or
waiver initially took or takes effect, except solely as to such
holder.
(c) Binding Effect. (d) Except as provided in Section 11.5(b)
hereof, any amendment or waiver consented to as provided in this Section
11.5 shall apply equally to all holders of Notes and shall be binding upon
them and upon each future holder of any Note and upon the Company whether
or not such Note shall have been marked to indicate such amendment or
waiver. No such amendment or waiver shall extend to or affect any
obligation, covenant, agreement, Default or Event of Default not expressly
amended or waived or impair any right consequent thereon.
11.6. Payments, When Received.
(a) Payments Due on Holidays. If any payment due on, or with respect
to, any Note shall fall due on a day other than a Business Day, then such
payment shall be made on the first Business Day following the day on which
such payment shall have so fallen due; provided that if all or any portion
of such payment shall consist of a payment of interest, for purposes of
calculating such interest, such payment shall be deemed to have been
originally due on such first following Business Day, such interest shall
accrue and be payable to (but not including) the actual
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<PAGE> 63
date of payment, and the amount of the next succeeding interest payment
shall be adjusted accordingly.
(b) Payments, When Received. Any payment to be made to the holders
of Notes hereunder or under the Notes shall be deemed to have been made
when received by such holder on the Business Day such payment actually
becomes available to such holder at such holder's bank prior to 11:00 a.m.
(local time of such bank).
11.7. Entire Agreement.
This Agreement constitutes the final written expression of all of the
terms hereof and is a complete and exclusive statement of those terms.
11.8. Duplicate Originals, Execution in Counterpart.
Two or more duplicate originals hereof may be signed by the parties, each
of which shall be an original but all of which together shall constitute one and
the same instrument. This Agreement may be executed in one or more counterparts
and shall be effective when at least one counterpart shall have been executed by
each party hereto, and each set of counterparts which, collectively, show
execution by each party hereto shall constitute one duplicate original.
12. CONFIDENTIAL INFORMATION.
For the purposes of this Section 12, "Confidential Information" means
information delivered to you by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary in nature and that was clearly marked or labeled
or otherwise adequately identified when received by you as being confidential
information of the Company or such Subsidiary, provided that such term does not
include information that (a) was publicly known or otherwise known to you prior
to the time of such disclosure, (b) subsequently becomes publicly known through
no act or omission by you or any Person acting on your behalf, (c) otherwise
becomes known to you other than through disclosure by the Company or any
Subsidiary or (d) constitutes financial statements delivered to you under
Section 8.1 that are otherwise publicly available. You will maintain the
confidentiality of such Confidential Information in accordance with procedures
adopted by you in good faith to protect confidential information of third
parties delivered to you, provided that you may deliver or disclose Confidential
Information to (i) your directors, officers, employees, agents, attorneys and
affiliates (to the extent such disclosure reasonably relates to the
administration of the investment represented by your Notes), (ii) your financial
advisors and other professional advisors who agree to hold confidential the
Confidential Information substantially in accordance with the terms of this
Section 12, (iii) any other holder of any Note, (iv) any Person to which you
sell or offer to sell such Note or any part thereof or any participation therein
(if such Person has agreed in writing prior to its receipt of such Confidential
Information to be bound by the provisions of this Section 12, (v) any Person
from which you offer to purchase any security of the Company (if such Person has
agreed in writing prior to its receipt of such Confidential Information to be
bound by the provisions of this Section 12), (vi) any federal or state
regulatory authority having jurisdiction over you, (vii) the National
Association of Insurance Commissioners or any similar organization, or any
nationally recognized rating agency that requires access to information about
your investment portfolio or (viii) any other Person to which such delivery or
disclosure may be necessary or appropriate (w) to effect compliance with any
law, rule, regulation or order applicable to you, (x) in response to any
subpoena or other legal process, (y) in connection with any litigation to which
you are a party or (z) if an Event of Default has occurred and is continuing, to
the extent you may reasonably determine such delivery and disclosure to be
necessary or appropriate in the enforcement or for the protection of the rights
and remedies under your Notes and this Agreement. Each holder of a Note, by its
acceptance of a Note, will be deemed to have agreed to be bound by and to be
entitled to the benefits of this Section 12 as though it were a party to this
Agreement. On reasonable request by the Company in connection with the delivery
to any holder of a Note of information required to
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<PAGE> 64
be delivered to such holder under this Agreement or requested by such holder
(other than a holder that is a party to this Agreement or its nominee), such
holder will enter into an agreement with the Company embodying the provisions of
this Section 12.
[Remainder of page intentionally blank; next page is signature page]
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<PAGE> 65
If this Agreement is satisfactory to you, please so indicate by signing
the acceptance at the foot of a counterpart hereof and returning such
counterpart to the Company, whereupon this Agreement shall become binding
between us in accordance with its terms.
Very truly yours,
SELECTIVE INSURANCE GROUP, INC.
By__________________________________
Name:
Title:
Accepted:
TEACHERS INSURANCE AND ANNUITY ASSOCIATION
OF AMERICA
By__________________________________
Name:
Title:
[Signature Page to Note Purchase Agreement]
<PAGE> 66
If this Agreement is satisfactory to you, please so indicate by signing
the acceptance at the foot of a counterpart hereof and returning such
counterpart to the Company, whereupon this Agreement shall become binding
between us in accordance with its terms.
Very truly yours,
SELECTIVE INSURANCE GROUP, INC.
By__________________________________
Name:
Title:
Accepted:
TIAA-CREF LIFE INSURANCE COMPANY
By__________________________________
Name:
Title:
[Signature Page to Note Purchase Agreement]
<PAGE> 67
If this Agreement is satisfactory to you, please so indicate by signing
the acceptance at the foot of a counterpart hereof and returning such
counterpart to the Company, whereupon this Agreement shall become binding
between us in accordance with its terms.
Very truly yours,
SELECTIVE INSURANCE GROUP, INC.
By__________________________________
Name:
Title:
Accepted:
MINNESOTA LIFE INSURANCE COMPANY
By: Advantus Capital Management, Inc.
By__________________________________
Name:
Title:
[Signature Page to Note Purchase Agreement]
<PAGE> 68
If this Agreement is satisfactory to you, please so indicate by signing
the acceptance at the foot of a counterpart hereof and returning such
counterpart to the Company, whereupon this Agreement shall become binding
between us in accordance with its terms.
Very truly yours,
SELECTIVE INSURANCE GROUP, INC.
By__________________________________
Name:
Title:
Accepted:
NATIONAL TRAVELERS LIFE COMPANY
By: Advantus Capital Management, Inc.
By__________________________________
Name:
Title:
[Signature Page to Note Purchase Agreement]
<PAGE> 69
If this Agreement is satisfactory to you, please so indicate by signing
the acceptance at the foot of a counterpart hereof and returning such
counterpart to the Company, whereupon this Agreement shall become binding
between us in accordance with its terms.
Very truly yours,
SELECTIVE INSURANCE GROUP, INC.
By__________________________________
Name:
Title:
Accepted:
MTL INSURANCE COMPANY
By: Advantus Capital Management, Inc.
By__________________________________
Name:
Title:
[Signature Page to Note Purchase Agreement]
<PAGE> 70
If this Agreement is satisfactory to you, please so indicate by signing
the acceptance at the foot of a counterpart hereof and returning such
counterpart to the Company, whereupon this Agreement shall become binding
between us in accordance with its terms.
Very truly yours,
SELECTIVE INSURANCE GROUP, INC.
By__________________________________
Name:
Title:
Accepted:
UNITY MUTUAL LIFE INSURANCE COMPANY-ANNUITY PORTFOLIO
By: Advantus Capital Management, Inc.
By__________________________________
Name:
Title:
[Signature Page to Note Purchase Agreement]
<PAGE> 71
If this Agreement is satisfactory to you, please so indicate by signing
the acceptance at the foot of a counterpart hereof and returning such
counterpart to the Company, whereupon this Agreement shall become binding
between us in accordance with its terms.
Very truly yours,
SELECTIVE INSURANCE GROUP, INC.
By__________________________________
Name:
Title:
Accepted:
FARM BUREAU GENERAL INSURANCE COMPANY OF MICHIGAN
By: Advantus Capital Management, Inc.
By__________________________________
Name:
Title:
[Signature Page to Note Purchase Agreement]
<PAGE> 72
If this Agreement is satisfactory to you, please so indicate by signing
the acceptance at the foot of a counterpart hereof and returning such
counterpart to the Company, whereupon this Agreement shall become binding
between us in accordance with its terms.
Very truly yours,
SELECTIVE INSURANCE GROUP, INC.
By__________________________________
Name:
Title:
Accepted:
FARM BUREAU MUTUAL INSURANCE COMPANY OF MICHIGAN
By: Advantus Capital Management, Inc.
By__________________________________
Name:
Title:
[Signature Page to Note Purchase Agreement]
<PAGE> 73
If this Agreement is satisfactory to you, please so indicate by signing
the acceptance at the foot of a counterpart hereof and returning such
counterpart to the Company, whereupon this Agreement shall become binding
between us in accordance with its terms.
Very truly yours,
SELECTIVE INSURANCE GROUP, INC.
By__________________________________
Name:
Title:
Accepted:
FARM BUREAU LIFE INSURANCE COMPANY OF MICHIGAN
By: Advantus Capital Management, Inc.
By__________________________________
Name:
Title:
[Signature Page to Note Purchase Agreement]
<PAGE> 74
If this Agreement is satisfactory to you, please so indicate by signing
the acceptance at the foot of a counterpart hereof and returning such
counterpart to the Company, whereupon this Agreement shall become binding
between us in accordance with its terms.
Very truly yours,
SELECTIVE INSURANCE GROUP, INC.
By__________________________________
Name:
Title:
Accepted:
INTER-STATE ASSURANCE COMPANY/LIFE & CAPITAL
By: Advantus Capital Management, Inc.
By__________________________________
Name:
Title:
[Signature Page to Note Purchase Agreement]
<PAGE> 75
If this Agreement is satisfactory to you, please so indicate by signing
the acceptance at the foot of a counterpart hereof and returning such
counterpart to the Company, whereupon this Agreement shall become binding
between us in accordance with its terms.
Very truly yours,
SELECTIVE INSURANCE GROUP, INC.
By__________________________________
Name:
Title:
Accepted:
AMERICAN FIDELITY ASSURANCE COMPANY
By: Advantus Capital Management, Inc.
By__________________________________
Name:
Title:
[Signature Page to Note Purchase Agreement]
<PAGE> 76
If this Agreement is satisfactory to you, please so indicate by signing
the acceptance at the foot of a counterpart hereof and returning such
counterpart to the Company, whereupon this Agreement shall become binding
between us in accordance with its terms.
Very truly yours,
SELECTIVE INSURANCE GROUP, INC.
By__________________________________
Name:
Title:
Accepted:
AMERICAN REPUBLIC INSURANCE COMPANY
By: Advantus Capital Management, Inc.
By__________________________________
Name:
Title:
[Signature Page to Note Purchase Agreement]
<PAGE> 77
If this Agreement is satisfactory to you, please so indicate by signing
the acceptance at the foot of a counterpart hereof and returning such
counterpart to the Company, whereupon this Agreement shall become binding
between us in accordance with its terms.
Very truly yours,
SELECTIVE INSURANCE GROUP, INC.
By__________________________________
Name:
Title:
Accepted:
NORTHERN LIFE INSURANCE COMPANY
By__________________________________
Name:
Title:
[Signature Page to Note Purchase Agreement]
<PAGE> 78
If this Agreement is satisfactory to you, please so indicate by signing
the acceptance at the foot of a counterpart hereof and returning such
counterpart to the Company, whereupon this Agreement shall become binding
between us in accordance with its terms.
Very truly yours,
SELECTIVE INSURANCE GROUP, INC.
By__________________________________
Name:
Title:
Accepted:
RELIASTAR LIFE INSURANCE COMPANY
By__________________________________
Name:
Title:
[Signature Page to Note Purchase Agreement]
<PAGE> 79
If this Agreement is satisfactory to you, please so indicate by signing
the acceptance at the foot of a counterpart hereof and returning such
counterpart to the Company, whereupon this Agreement shall become binding
between us in accordance with its terms.
Very truly yours,
SELECTIVE INSURANCE GROUP, INC.
By__________________________________
Name:
Title:
Accepted:
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
By__________________________________
Name:
Title:
[Signature Page to Note Purchase Agreement]
<PAGE> 80
If this Agreement is satisfactory to you, please so indicate by signing
the acceptance at the foot of a counterpart hereof and returning such
counterpart to the Company, whereupon this Agreement shall become binding
between us in accordance with its terms.
Very truly yours,
SELECTIVE INSURANCE GROUP, INC.
By__________________________________
Name:
Title:
Accepted:
SECURITY CONNECTICUT LIFE INSURANCE COMPANY
By__________________________________
Name:
Title:
[Signature Page to Note Purchase Agreement]
<PAGE> 81
If this Agreement is satisfactory to you, please so indicate by signing
the acceptance at the foot of a counterpart hereof and returning such
counterpart to the Company, whereupon this Agreement shall become binding
between us in accordance with its terms.
Very truly yours,
SELECTIVE INSURANCE GROUP, INC.
By__________________________________
Name:
Title:
Accepted:
WOODMEN OF THE WORLD LIFE INSURANCE SOCIETY
By__________________________________
Name:
Title:
By__________________________________
Name:
Title:
[Signature Page to Note Purchase Agreement]
<PAGE> 82
If this Agreement is satisfactory to you, please so indicate by signing
the acceptance at the foot of a counterpart hereof and returning such
counterpart to the Company, whereupon this Agreement shall become binding
between us in accordance with its terms.
Very truly yours,
SELECTIVE INSURANCE GROUP, INC.
By__________________________________
Name:
Title:
Accepted:
LUTHERAN BROTHERHOOD
By__________________________________
Name:
Title:
[Signature Page to Note Purchase Agreement]
<PAGE> 83
If this Agreement is satisfactory to you, please so indicate by signing
the acceptance at the foot of a counterpart hereof and returning such
counterpart to the Company, whereupon this Agreement shall become binding
between us in accordance with its terms.
Very truly yours,
SELECTIVE INSURANCE GROUP, INC.
By__________________________________
Name:
Title:
Accepted:
THE OHIO NATIONAL LIFE INSURANCE COMPANY
By__________________________________
Name:
Title:
[Signature Page to Note Purchase Agreement]
<PAGE> 84
If this Agreement is satisfactory to you, please so indicate by signing
the acceptance at the foot of a counterpart hereof and returning such
counterpart to the Company, whereupon this Agreement shall become binding
between us in accordance with its terms.
Very truly yours,
SELECTIVE INSURANCE GROUP, INC.
By__________________________________
Name:
Title:
Accepted:
SECURITY FINANCIAL LIFE INSURANCE CO.
By__________________________________
Name:
Title:
[Signature Page to Note Purchase Agreement]
<PAGE> 85
If this Agreement is satisfactory to you, please so indicate by signing
the acceptance at the foot of a counterpart hereof and returning such
counterpart to the Company, whereupon this Agreement shall become binding
between us in accordance with its terms.
Very truly yours,
SELECTIVE INSURANCE GROUP, INC.
By__________________________________
Name:
Title:
Accepted:
BERKSHIRE LIFE INSURANCE COMPANY
By__________________________________
Name:
Title:
[Signature Page to Note Purchase Agreement]
<PAGE> 86
If this Agreement is satisfactory to you, please so indicate by signing
the acceptance at the foot of a counterpart hereof and returning such
counterpart to the Company, whereupon this Agreement shall become binding
between us in accordance with its terms.
Very truly yours,
SELECTIVE INSURANCE GROUP, INC.
By__________________________________
Name:
Title:
Accepted:
THE UNION CENTRAL LIFE INSURANCE COMPANY
By__________________________________
Name: Gary Rodmaker
Title: Second Vice President
[Signature Page to Note Purchase Agreement]
<PAGE> 87
ANNEX 1
INFORMATION AS TO PURCHASERS
<TABLE>
<CAPTION>
===============================================================================================
Purchaser Name TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA
-----------------------------------------------------------------------------------------------
<S> <C>
Name in Which Note is Registered Teachers Insurance and Annuity Association of America
-----------------------------------------------------------------------------------------------
Note Registration Number; RA-1; $20,000,000
Principal Amount
-----------------------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information Chase Manhattan Bank
ABA No. 021-000-021
New York, NY
Account of: Teachers Insurance and Annuity Association
Account No.: 900-9-000200
For Further Credit to: G07040
-----------------------------------------------------------------------------------------------
Accompanying Information Name of Company: Selective Insurance Group, Inc.
Description of
Security: 8.63% Series A Senior Notes due May 2007
Security Number: 816300 A@ 6
Due Date and Application (as among principal, premium and
interest) of the payment being made:
-----------------------------------------------------------------------------------------------
Address for Notices Related to Teachers Insurance and Annuity Association of America
Payments 730 Third Avenue
New York, NY 10017-3206
Attn: Securities Accounting Division
Tel: 212.916.6004
Fax: 212.916.6955
-----------------------------------------------------------------------------------------------
Address for All other Notices Teachers Insurance and Annuity Association of America
730 Third Avenue
New York, NY 10017-3206
Attn: Securities Division
Tel: 212.916.6578
Fax: 212.916.6582
-----------------------------------------------------------------------------------------------
Other Instructions None
-----------------------------------------------------------------------------------------------
Instructions re Delivery of Teachers Insurance and Annuity Association of America
Notes
-----------------------------------------------------------------------------------------------
Tax Identification Number 13-1624203
===============================================================================================
</TABLE>
Annex 1-1
<PAGE> 88
<TABLE>
<CAPTION>
===============================================================================================
Purchaser Name TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA
-----------------------------------------------------------------------------------------------
<S> <C>
Name in Which Note is Registered Teachers Insurance and Annuity Association of America
-----------------------------------------------------------------------------------------------
Note Registration Number; RA-2; $7,500,000
Principal Amount
-----------------------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information The Chase Manhattan Bank
ABA #021000021
New York, New York
Account #900-9-000200
For Further Credit to Account Number 607320
-----------------------------------------------------------------------------------------------
Accompanying Information Name of Company: Selective Insurance Group, Inc.
Description of
Security: 8.63 % Series A Senior Notes due May 2007
Security Number: 816300 A@ 6
Due Date and Application (as among principal, premium and
interest) of the payment being made:
-----------------------------------------------------------------------------------------------
Address for Notices Related to Teachers Insurance and Annuity Association of America
Payments 730 Third Avenue
New York, New York 10017-3206
Attn: Securities Accounting Division
Tel: 212.916.6004
Fax: 212.916.6955
-----------------------------------------------------------------------------------------------
Address for All other Notices Teachers Insurance and Annuity Association of America
730 Third Avenue
New York, New York 10017-3206
Attn: Securities Division
Tel: 212.916.6578
Fax: 212.916.6582
-----------------------------------------------------------------------------------------------
Other Instructions None
-----------------------------------------------------------------------------------------------
Instructions re elivery of Teachers Insurance and Annuity Association of America
Notes
-----------------------------------------------------------------------------------------------
Tax Identification Number 13-1624203
===============================================================================================
</TABLE>
Annex 1-2
<PAGE> 89
<TABLE>
<CAPTION>
===============================================================================================
Purchaser Name TIAA-CREF LIFE INSURANCE COMPANY
-----------------------------------------------------------------------------------------------
<S> <C>
Name in Which Note is Registered TIAA-CREF Life Insurance Company
-----------------------------------------------------------------------------------------------
Note Registration Number; RA-3; $2,500,000
Principal Amount
-----------------------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information The Chase Manhattan Bank
ABA #021000021
Account #910-2-796068
Account Name: T-C Life PA Select
ISA Code: 400
G/L Account: 06020057
-----------------------------------------------------------------------------------------------
Accompanying Information Name of Company: Selective Insurance Group, Inc.
Description of
Security: 8.63 % Series A Senior Notes due May 2007
Security Number: 816300 A@ 6
Due Date and Application (as among principal, premium and
interest) of the payment being made:
-----------------------------------------------------------------------------------------------
Address for Notices Related to TIAA-CREF Life Insurance Company
Payments c/o Teachers Insurance and Annuity Association of America
730 Third Avenue
New York, New York 10017-3206
Attn: Securities Accounting Division
Tel: 212.916.6004
Fax: 212.916.6955
-----------------------------------------------------------------------------------------------
Address for All other Notices TIAA-CREF Life Insurance Company
c/o Teachers Insurance and Annuity Association of America
730 Third Avenue
New York, New York 10017-3206
Attn: Securities Division
Tel: 212.916.6578
Fax: 212.916.6582
-----------------------------------------------------------------------------------------------
Signature Block Information TIAA-CREF LIFE INSURANCE COMPANY
By: __________________________________
-----------------------------------------------------------------------------------------------
Instructions re Delivery of Jane J. Dickson
Notes Teachers Insurance and Annuity Association of America
-----------------------------------------------------------------------------------------------
Tax Identification Number 13-1624203
===============================================================================================
</TABLE>
Annex 1-3
<PAGE> 90
ANNEX 1
INFORMATION AS TO PURCHASERS
<TABLE>
<CAPTION>
===============================================================================================
Purchaser Name MINNESOTA LIFE INSURANCE COMPANY
-----------------------------------------------------------------------------------------------
<S> <C>
Name in Which Note is Registered Minnesota Life Insurance Company
-----------------------------------------------------------------------------------------------
Note Registration Number; RB-1; $7,500,000.00
Principal Amount
-----------------------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information U.S. Bank Trust N.A.
Minneapolis, Minnesota
ABA #091000022
BNF Minnesota Life Insurance Company
Account #1801-10-00600-4
-----------------------------------------------------------------------------------------------
Accompanying Information Name of Company: Selective Insurance Group, Inc.
Description of
Security: 8.87 % Series B Senior Notes due May 2010
Security Number: 816300 B* 7
Due Date and Application (as among principal, premium and
interest) of the payment being made:
-----------------------------------------------------------------------------------------------
Address for Notices Related to Minnesota Life Insurance Company
Payments 400 Robert Street North
St. Paul, Minnesota 55101
Attention: Advantus Capital Management, Inc.
Fax: 651.223.5959
-----------------------------------------------------------------------------------------------
Address for All other Notices Minnesota Life Insurance Company
400 Robert Street North
St. Paul, Minnesota 55101
Attention: Advantus Capital Management, Inc.
-----------------------------------------------------------------------------------------------
Signature Block Information Minnesota Life Insurance Company
By: Advantus Capital Management, Inc.
By: __________________________________
-----------------------------------------------------------------------------------------------
Instructions re Delivery of Minnesota Life Insurance Company
Notes 400 Robert Street North
St. Paul, Minnesota 55101
Attention: Advantus Capital Management, Inc.
-----------------------------------------------------------------------------------------------
Tax Identification Number 41-0417830
===============================================================================================
</TABLE>
Annex 1-4
<PAGE> 91
ANNEX 1
INFORMATION AS TO PURCHASERS
<TABLE>
<CAPTION>
===============================================================================================
Purchaser Name NATIONAL TRAVELERS LIFE COMPANY
-----------------------------------------------------------------------------------------------
<S> <C>
Name in Which Note is Registered Var & Co.
-----------------------------------------------------------------------------------------------
Note Registration Number; RB-2; $1,000,000.00
Principal Amount
-----------------------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information U.S. Bank, N.A.
Minneapolis, Minnesota
ABA #091000022
For credit to: U.S. Bank Trust, N.A.
Account #180121167365
TSU: 47300050
For further credit to: National Travelers Life Company
Account #12609110
Attn: Juleah Foss
651-244-5958
-----------------------------------------------------------------------------------------------
Accompanying Information Name of Company: Selective Insurance Group, Inc.
Description of
Security: 8.87 % Series B Senior Notes due May 2010
Security Number: 816300 B* 7
Due Date and Application (as among principal, premium and
interest) of the payment being made:
-----------------------------------------------------------------------------------------------
Address for Notices Related to National Travelers Life Company
Payments c/o Advantus Capital Management, Inc.
400 Robert Street North
St. Paul, Minnesota 55101
Attn: Client Administrator
-----------------------------------------------------------------------------------------------
Address for All other Notices National Travelers Life Company
c/o Advantus Capital Management, Inc.
400 Robert Street North
St. Paul, Minnesota 55101
Attn: Client Administrator
-----------------------------------------------------------------------------------------------
Signature Block Information National Travelers Life Company
By: Advantus Capital Management, Inc.
By: __________________________________
-----------------------------------------------------------------------------------------------
Instructions re Delivery of U.S. Bank Trust, N.A.
Notes 180 East Fifth Street
St. Paul, MN 55101
Attention: Connie Kemp (SPFT 0901)
-----------------------------------------------------------------------------------------------
Tax Identification Number 42-0432940
===============================================================================================
</TABLE>
Annex 1-5
<PAGE> 92
ANNEX 1
INFORMATION AS TO PURCHASERS
<TABLE>
<CAPTION>
===============================================================================================
Purchaser Name MTL INSURANCE COMPANY
-----------------------------------------------------------------------------------------------
<S> <C>
Name in Which Note is Registered ELL & Co.
-----------------------------------------------------------------------------------------------
Note Registration Number; RB-3; $2,000,000.00
Principal Amount
-----------------------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information The Northern Chgo/Trust
ABA #071-000-152
For credit to Account Number: 5186041000
For further credit to: MTL Insurance Company
Account Number: 26-00621
Attn: Income Collections
-----------------------------------------------------------------------------------------------
Accompanying Information Name of Company: Selective Insurance Group, Inc.
Description of
Security: 8.87 % Series B Senior Notes due May 2010
Security Number: 816300 B* 7
Due Date and Application (as among principal, premium and
interest) of the payment being made:
-----------------------------------------------------------------------------------------------
Address for Notices Related to MTL Insurance Company
Payments c/o Advantus Capital Management, Inc.
400 Robert Street North
St. Paul, Minnesota 55101
Attn: Client Administrator
-----------------------------------------------------------------------------------------------
Address for All other Notices MTL Insurance Company
c/o Advantus Capital Management, Inc.
400 Robert Street North
St. Paul, Minnesota 55101
Attn: Client Administrator
-----------------------------------------------------------------------------------------------
Signature Block Information MTL Insurance Company
By: Advantus Capital Management, Inc.
By: __________________________________
-----------------------------------------------------------------------------------------------
Instructions re Delivery of Northern Trust Company of New York
Notes 40 Broad Street, 8th Floor
New York, NY 10004
Attention: Settlements for Account #26-00621,
MTL Ins. Company
-----------------------------------------------------------------------------------------------
Tax Identification Number 36-1516780
===============================================================================================
</TABLE>
Annex 1-6
<PAGE> 93
ANNEX 1
INFORMATION AS TO PURCHASERS
<TABLE>
<CAPTION>
===============================================================================================
Purchaser Name UNITY MUTUAL LIFE INSURANCE COMPANY-ANNUITY PORTFOLIO
-----------------------------------------------------------------------------------------------
<S> <C>
Name in Which Note is Registered Trulin & Co.
-----------------------------------------------------------------------------------------------
Note Registration Number; RB-4; $1,000,000.00
Principal Amount
-----------------------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information Chase NYC
ABA #021-000-021
For credit to: Chase Rochester
DDA# 0000400044
Attn: Ms. Roni Norkus (716) 258-7784
For further credit to: Unity Mutual Life Insurance
Company Annuity Portfolio
Advantus - 611002310
-----------------------------------------------------------------------------------------------
Accompanying Information Name of Company: Selective Insurance Group, Inc.
Description of
Security: 8.87 % Series B Senior Notes due May 2010
Security Number: 816300 B* 7
Due Date and Application (as among principal, premium and
interest) of the payment being made:
-----------------------------------------------------------------------------------------------
Address for Notices Related to Unity Mutual Life Insurance Company-Annuity Portfolio
Payments c/o Advantus Capital Management, Inc.
400 Robert Street North
St. Paul, Minnesota 55101
Attn: Client Administrator
-----------------------------------------------------------------------------------------------
Address for All other Notices Unity Mutual Life Insurance Company Annuity Portfolio
c/o Advantus Capital Management, Inc.
400 Robert Street North
St. Paul, Minnesota 55101
Attn: Client Administrator
-----------------------------------------------------------------------------------------------
Signature Block Information Unity Mutual Life Insurance Company-Annuity Portfolio
By: Advantus Capital Management, Inc.
By: __________________________________
-----------------------------------------------------------------------------------------------
Instructions re Delivery of Chase Manhattan Bank
Notes Attn: Ms. Roni Norkus
One Chase Square T-10
Rochester, NY 14643
-----------------------------------------------------------------------------------------------
Tax Identification Number 15-0475585
===============================================================================================
</TABLE>
Annex 1-7
<PAGE> 94
ANNEX 1
INFORMATION AS TO PURCHASERS
<TABLE>
<CAPTION>
===============================================================================================
Purchaser Name FARM BUREAU GENERAL INSURANCE COMPANY OF MICHIGAN
-----------------------------------------------------------------------------------------------
<S> <C>
Name in Which Note is Registered Farm Bureau General Insurance Company of Michigan
-----------------------------------------------------------------------------------------------
Note Registration Number; RB-5; $1,000,000.00
Principal Amount
-----------------------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information Comerica Bank
Detroit, Michigan
ABA #072-000-096
For credit to: Trust Operation - Fixed Income
Unit Cost Center 98530
Account Number: 21585-98530
For further credit to: Farm Bureau General Insurance
Company of Michigan -
Account Number: 011000312140
-----------------------------------------------------------------------------------------------
Accompanying Information Name of Company: Selective Insurance Group, Inc.
Description of
Security: 8.87 % Series B Senior Notes due May 2010
Security Number: 816300 B* 7
Due Date and Application (as among principal, premium and
interest) of the payment being made:
-----------------------------------------------------------------------------------------------
Address for Notices Related to Farm Bureau General Insurance Company of Michigan
Payments c/o Advantus Capital Management, Inc.
400 Robert Street North
St. Paul, Minnesota 55101
Attention: Client Administrator
-----------------------------------------------------------------------------------------------
Address for All other Notices Farm Bureau General Insurance Company of Michigan
c/o Advantus Capital Management, Inc.
400 Robert Street North
St. Paul, Minnesota 55101
Attention: Client Administrator
-----------------------------------------------------------------------------------------------
Signature Block Information Farm Bureau General Insurance Company of Michigan
By: Advantus Capital Management, Inc.
By: __________________________________
-----------------------------------------------------------------------------------------------
Instructions re Delivery of Comerica Bank
Notes Attn: Dan Molnar MC 3462
411 West Lafayette
Detroit, MI 48226-3462
Reference: Farm Bureau General Insurance Company of
Michigan Internal Account Number
011000312140
-----------------------------------------------------------------------------------------------
Tax Identification Number 38-6056228
===============================================================================================
</TABLE>
Annex 1-8
<PAGE> 95
ANNEX 1
INFORMATION AS TO PURCHASERS
<TABLE>
<CAPTION>
===============================================================================================
Purchaser Name FARM BUREAU MUTUAL INSURANCE COMPANY OF MICHIGAN
-----------------------------------------------------------------------------------------------
<S> <C>
Name in Which Note is Registered Farm Bureau Mutual Insurance Company of Michigan
-----------------------------------------------------------------------------------------------
Note Registration Number; RB-6; $1,000,000.00
Principal Amount
-----------------------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information Comerica Bank
Detroit, Michigan
ABA #072-000-096
For credit to: Trust Operation - Fixed Income
Unit Cost Center 98530
Account Number: 21585-98530
For further credit to: Farm Bureau Mutual Insurance
Company of Michigan -
Account Number: 011000312132
-----------------------------------------------------------------------------------------------
Accompanying Information Name of Company: Selective Insurance Group, Inc.
Description of
Security: 8.87 % Series B Senior Notes due May 2010
Security Number: 816300 B* 7
Due Date and Application (as among principal, premium and
interest) of the payment being made:
-----------------------------------------------------------------------------------------------
Address for Notices Related to Farm Bureau Mutual Insurance Company of Michigan
Payments c/o Advantus Capital Management, Inc.
400 Robert Street North
St. Paul, Minnesota 55101
Attention: Client Administrator
-----------------------------------------------------------------------------------------------
Address for All other Notices Farm Bureau Mutual Insurance Company of Michigan
c/o Advantus Capital Management, Inc.
400 Robert Street North
St. Paul, Minnesota 55101
Attention: Client Administrator
-----------------------------------------------------------------------------------------------
Signature Block Information Farm Bureau Mutual Insurance Company of Michigan
By: Advantus Capital Management, Inc.
By: __________________________________
-----------------------------------------------------------------------------------------------
Instructions re Delivery of Comerica Bank
Notes Trust Securities Services MC 3404
411 West Lafayette
Detroit, MI 48275-3404
Reference: Farm Bureau Mutual Insurance Company of
Michigan Internal Account Number:
011000312132
Attn: Dan Molnar 313-222-7946
-----------------------------------------------------------------------------------------------
Tax Identification Number 38-1316179
===============================================================================================
</TABLE>
Annex 1-9
<PAGE> 96
ANNEX 1
INFORMATION AS TO PURCHASERS
<TABLE>
<CAPTION>
===============================================================================================
Purchaser Name FARM BUREAU LIFE INSURANCE COMPANY OF MICHIGAN
-----------------------------------------------------------------------------------------------
<S> <C>
Name in Which Note is Registered Farm Bureau Life Insurance Company of Michigan
-----------------------------------------------------------------------------------------------
Note Registration Number; RB-7; $3,000,000.00
Principal Amount
-----------------------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information Comerica Bank
Detroit, Michigan
ABA #072-000-096
For credit to: Trust Operation - Fixed Income
Unit Cost Center 98530
Account Number: 21585-98530
For further credit to: Farm Bureau Life Insurance
Company of Michigan -
Account Number: 011000312124
-----------------------------------------------------------------------------------------------
Accompanying Information Name of Company: Selective Insurance Group, Inc.
Description of
Security: 8.87 % Series B Senior Notes due May 2010
Security Number: 816300 B* 7
Due Date and Application (as among principal, premium and
interest) of the payment being made:
-----------------------------------------------------------------------------------------------
Address for Notices Related to Farm Bureau Life Insurance Company of Michigan
Payments c/o Advantus Capital Management, Inc.
400 Robert Street North
St. Paul, Minnesota 55101
Attention: Client Administrator
-----------------------------------------------------------------------------------------------
Address for All other Notices Farm Bureau Life Insurance Company of Michigan
c/o Advantus Capital Management, Inc.
400 Robert Street North
St. Paul, Minnesota 55101
Attention: Client Administrator
-----------------------------------------------------------------------------------------------
Signature Block Information Farm Bureau Life Insurance Company of Michigan
By: Advantus Capital Management, Inc.
By: __________________________________
-------------------------------------------- ---------------------------------------------------
Instructions re Delivery of Comerica Bank
Notes Attn: Dan Molnar MC 3462
411 West Lafayette
Detroit, MI 48275-3404
Reference: Farm Bureau Life Insurance Company of
Michigan Internal Account Number
011000312124
-----------------------------------------------------------------------------------------------
Tax Identification Number 38-6053670
===============================================================================================
</TABLE>
Annex 1-10
<PAGE> 97
ANNEX 1
INFORMATION AS TO PURCHASERS
<TABLE>
<CAPTION>
===============================================================================================
Purchaser Name INTER-STATE ASSURANCE COMPANY/LIFE & CAPITAL
-----------------------------------------------------------------------------------------------
<S> <C>
Name in Which Note is Registered Salkeld & Co.
-----------------------------------------------------------------------------------------------
Note Registration Number; RB-8; $3,000,000.00
Principal Amount
-----------------------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information Deutsche Bank
New York, NY
ABA #021-001-033
Account: 99-911-145
Ref: Inter-State Assurance Company/Life & Capital
Acct. #98954
-----------------------------------------------------------------------------------------------
Accompanying Information Name of Company: Selective Insurance Group, Inc.
Description of
Security: 8.87 % Series B Senior Notes due May 2010
Security Number: 816300 B* 7
Due Date and Application (as among principal, premium and
interest) of the payment being made:
-----------------------------------------------------------------------------------------------
Address for Notices Related to Inter-State Assurance Company/Life & Capital
Payments c/o Advantus Capital Management, Inc.
400 Robert Street North
St. Paul, Minnesota 55101
Attention: Client Administrator
-----------------------------------------------------------------------------------------------
Address for All other Notices Inter-State Assurance Company/Life & Capital
c/o Advantus Capital Management, Inc.
400 Robert Street North
St. Paul, Minnesota 55101
Attention: Client Administrator
-----------------------------------------------------------------------------------------------
Signature Block Information Inter-State Assurance Company/Life & Capital
By: Advantus Capital Management, Inc.
By: __________________________________
------------------------------------------------------- ----------------------------------------
Instructions re Delivery of Deutsche Bank
Notes 16 Wall Street
4th Floor, Window 44
Reference: Inter-State Assurance Company/Life & Capital
(98954)
New York, NY 10005
-----------------------------------------------------------------------------------------------
Tax Identification Number 04-1867050
===============================================================================================
</TABLE>
Annex 1-11
<PAGE> 98
ANNEX 1
INFORMATION AS TO PURCHASERS
<TABLE>
<CAPTION>
===============================================================================================
Purchaser Name AMERICAN FIDELITY ASSURANCE COMPANY
-----------------------------------------------------------------------------------------------
<S> <C>
Name in Which Note is Registered Booth & Co.
-----------------------------------------------------------------------------------------------
Note Registration Number; RB-9; $2,000,000.00
Principal Amount
-----------------------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information First Fidelity Bank, N.A.
5800 N.W. 39th
Oklahoma City, OK 73122-2120
ABA #1030-0269-1
For credit to: American Fidelity Assurance Company
Account Number: 52010414
Attn: Tina Swaim & Ron Mitchell
For further credit to: InvesTrust
Account Number: 52010414
Attn: Trust Operations
-----------------------------------------------------------------------------------------------
Accompanying Information Name of Company: Selective Insurance Group, Inc.
Description of
Security: 8.87 % Series B Senior Notes due May 2010
Security Number: 816300 B* 7
Due Date and Application (as among principal, premium and
interest) of the payment being made:
-----------------------------------------------------------------------------------------------
Address for Notices Related to American Fidelity Assurance Company
Payments c/o Advantus Capital Management, Inc.
400 Robert Street North
St. Paul, Minnesota 55101
Attention: Client Administrator
-----------------------------------------------------------------------------------------------
Address for All other Notices American Fidelity Assurance Company
c/o Advantus Capital Management, Inc.
400 Robert Street North
St. Paul, Minnesota 55101
Attention: Client Administrator
-----------------------------------------------------------------------------------------------
Signature Block Information American Fidelity Assurance Company
By: Advantus Capital Management, Inc.
By: __________________________________
-----------------------------------------------------------------------------------------------
Instructions re Delivery of Northern Trust Company of New York
Notes 40 Broad Street, 8th Floor
New York, NY 10004-2315
Attn: Settlements for Account #1746957
American Fidelity Assurance Company
-----------------------------------------------------------------------------------------------
Tax Identification Number 73-0714500
===============================================================================================
</TABLE>
Annex 1-12
<PAGE> 99
ANNEX 1
INFORMATION AS TO PURCHASERS
<TABLE>
<CAPTION>
===============================================================================================
Purchaser Name AMERICAN REPUBLIC INSURANCE COMPANY
-----------------------------------------------------------------------------------------------
<S> <C>
Name in Which Note is Registered EMSEG & Co.
-----------------------------------------------------------------------------------------------
Note Registration Number; RB-10; $1,000,000.00
Principal Amount
-----------------------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information Norwest Bank Minnesota, N.A.
ABA #091000019
BNFA=0000840245 (include all 10 digits)
BNF=Trust Clearing Account
FFC Attn: Income Collections, a/c #20983400
For further credit to: American Republic Insurance Co.
Account Number: 20983400
-----------------------------------------------------------------------------------------------
Accompanying Information Name of Company: Selective Insurance Group, Inc.
Description of
Security: 8.87 % Series B Senior Notes due May 2010
Security Number: 816300 B* 7
Due Date and Application (as among principal, premium and
interest) of the payment being made:
-----------------------------------------------------------------------------------------------
Address for Notices Related to American Republic Insurance Company
Payments c/o Advantus Capital Management, Inc.
400 Robert Street North
St. Paul, Minnesota 55101
Attention: Client Administrator
-----------------------------------------------------------------------------------------------
Address for All other Notices American Republic Insurance Company
c/o Advantus Capital Management, Inc.
400 Robert Street North
St. Paul, Minnesota 55101
Attention: Client Administrator
-----------------------------------------------------------------------------------------------
Signature Block Information American Republic Insurance Company
By: Advantus Capital Management, Inc.
By: __________________________________
-----------------------------------------------------------------------------------------------
Instructions re Delivery of Norwest Bank Minnesota, N.A.
Notes MAC N9306-050
733 Marquette Ave. 5th Floor
Investors Bldg. Attn: Brandi Pickel
Minneapolis, MN 55479
-----------------------------------------------------------------------------------------------
Tax Identification Number 42-0113630
===============================================================================================
</TABLE>
Annex 1-13
<PAGE> 100
ANNEX 1
INFORMATION AS TO PURCHASERS
<TABLE>
<CAPTION>
===============================================================================================
Purchaser Name NORTHERN LIFE INSURANCE COMPANY
-----------------------------------------------------------------------------------------------
<S> <C>
Name in Which Note is Registered Northern Life Insurance Company
-----------------------------------------------------------------------------------------------
Note Registration Number; RB-11; $5,000,000
Principal Amount
-----------------------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information US Bank N.A./Mpls.
601 2nd Ave.S.
Acct# 160232376105
Bank ABA # 091000022
Attn: Securities Accounting
-----------------------------------------------------------------------------------------------
Accompanying Information Name of Company: Selective Insurance Group, Inc.
Description of
Security: 8.87% Series B Senior Notes due May 2010
Security Number: 816300 B* 7
Due Date and Application (as among principal, premium and
interest) of the payment being made:
-----------------------------------------------------------------------------------------------
Address for Notices Related to ReliaStar Investment Research, Inc.
Payments 100 Washington Avenue South, Suite 800
Minneapolis, MN 55401-2121
Fax: 612.372.5368
-----------------------------------------------------------------------------------------------
Address for All other Notices ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, MN 55401-2121
-----------------------------------------------------------------------------------------------
Other Instructions None
-----------------------------------------------------------------------------------------------
Instructions re Delivery of ReliaStar Investment Research, Inc.
Notes Attn: Bret Brunner
-----------------------------------------------------------------------------------------------
Tax Identification Number 41-1295933
===============================================================================================
</TABLE>
Annex 1-14
<PAGE> 101
ANNEX 1
INFORMATION AS TO PURCHASERS
<TABLE>
<CAPTION>
===============================================================================================
Purchaser Name RELIASTAR LIFE INSURANCE COMPANY
-----------------------------------------------------------------------------------------------
<S> <C>
Name in Which Note is Registered ReliaStar Life Insurance Company
-----------------------------------------------------------------------------------------------
Note Registration Number; RB-12; $3,000,000
Principal Amount
-----------------------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information US Bank N.A./Mpls.
601 2nd Ave.S., Mpls, MN
Bank ABA # 091000022
Acct. Name: ReliaStar Life Insurance Co.
Acct# 110240014461
Attn: Securities Accounting
-----------------------------------------------------------------------------------------------
Accompanying Information Name of Company: Selective Insurance Group, Inc.
Description of
Security: 8.87% Series B Senior Notes due May 2010
Security Number: 816300 B* 7
Due Date and Application (as among principal, premium and
interest) of the payment being made:
-----------------------------------------------------------------------------------------------
Address for Notices Related to Reliastar Investment Research
Payments 100 Washington Avenue South
Suite 800
Minneapolis, MN 55401-2121
Fax: 612.372.5368
-----------------------------------------------------------------------------------------------
Address for All other Notices Reliastar Investment Research
100 Washington Avenue South
Suite 800
Minneapolis, MN 55401-2121
-----------------------------------------------------------------------------------------------
Other Instructions None
-----------------------------------------------------------------------------------------------
Instructions re Delivery of ReliaStar Investment Research, Inc.
Notes Attn: Bret Brunner
-----------------------------------------------------------------------------------------------
Tax Identification Number 41-0451140
===============================================================================================
</TABLE>
Annex 1-15
<PAGE> 102
ANNEX 1
INFORMATION AS TO PURCHASERS
<TABLE>
<CAPTION>
===============================================================================================
Purchaser Name RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
-----------------------------------------------------------------------------------------------
<S> <C>
Name in Which Note is Registered Sigler & Co.
-----------------------------------------------------------------------------------------------
Note Registration Number; RB-13; $2,000,000
Principal Amount
-----------------------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information Chase Manhattan Bank
New York, NY
Bank ABA # 021000021
A/C # 900-9-000200
F/F/C #G53095 ReliaStar Life of New York
-----------------------------------------------------------------------------------------------
Accompanying Information Name of Company: Selective Insurance Group, Inc.
Description of
Security: 8.87% Series B Senior Notes due May 2010
Security Number: C816300 B* 7
Due Date and Application (as among principal, premium and
interest) of the payment being made:
-----------------------------------------------------------------------------------------------
Address for Notices Related to Reliastar Investment Research
Payments 100 Washington Avenue South
Suite 800
Minneapolis, MN 55401-2121
Fax: 612.372.5368
-----------------------------------------------------------------------------------------------
Address for All other Notices Reliastar Investment Research
100 Washington Avenue South
Suite 800
Minneapolis, MN 55401-2121
-----------------------------------------------------------------------------------------------
Other Instructions None
-----------------------------------------------------------------------------------------------
Instructions re Delivery of ReliaStar Investment Research, Inc.
Notes Attn: Bret Brunner
-----------------------------------------------------------------------------------------------
Tax Identification Number 53-0242530
===============================================================================================
</TABLE>
Annex 1-16
<PAGE> 103
ANNEX 1
INFORMATION AS TO PURCHASERS
<TABLE>
<CAPTION>
===============================================================================================
Purchaser Name SECURITY CONNECTICUT LIFE INSURANCE COMPANY
-----------------------------------------------------------------------------------------------
<S> <C>
Name in Which Note is Registered Sigler & Co.
-----------------------------------------------------------------------------------------------
Note Registration Number; RB-14; $2,000,000
Principal Amount
-----------------------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information Chase Manhattan Bank
New York, NY
Bank ABA # 021000021
Beneficiary A/C # 900-9-000200
Reference: Sigler & Co.
Tax I.D. # 13-3641527
F/C #G54426
-----------------------------------------------------------------------------------------------
Accompanying Information Name of Company: Selective Insurance Group, Inc.
Description of
Security: 8.87% Series B Senior Notes due May 2010
Security Number: 816300 B* 7
Due Date and Application (as among principal, premium and
interest) of the payment being made:
-----------------------------------------------------------------------------------------------
Address for Notices Related to Reliastar Investment Research
Payments 100 Washington Avenue South
Suite 800
Minneapolis, MN 55401-2121
Fax: 612.372.5368
-----------------------------------------------------------------------------------------------
Address for All other Notices Reliastar Investment Research
100 Washington Avenue South
Suite 800
Minneapolis, MN 55401-2121
-----------------------------------------------------------------------------------------------
Other Instructions None
-----------------------------------------------------------------------------------------------
Instructions re Delivery of ReliaStar Investment Research, Inc.
Notes Attn: Bret Brunner
-----------------------------------------------------------------------------------------------
Tax Identification Number 35-1468921
===============================================================================================
</TABLE>
Annex 1-17
<PAGE> 104
ANNEX 1
INFORMATION AS TO PURCHASERS
<TABLE>
<CAPTION>
===============================================================================================
Purchaser Name WOODMEN OF THE WORLD LIFE INSURANCE SOCIETY
-----------------------------------------------------------------------------------------------
<S> <C>
Name in Which Note is Registered Woodmen of the World Life Insurance Society
-----------------------------------------------------------------------------------------------
Note Registration Number; RB-15; $10,000,000
Principal Amount
-----------------------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information U.S. Bank
ABA No. 104000029
1700 Farnam Street
Omaha, Nebraska 68102
For the Account of WOW
Account No. 1-487-477-7-0730
-----------------------------------------------------------------------------------------------
Accompanying Information Name of Company: Selective Insurance Group, Inc.
Description of
Security: 8.87% Series B Senior Notes due May 2010
Security Number: 816300 B* 7
Due Date and Application (as among principal, premium and
interest) of the payment being made:
-----------------------------------------------------------------------------------------------
Address for Notices Related to Woodmen of the World Life Insurance Society
Payments Attn: Securities Department
1700 Farnam Street
Omaha, Nebraska 68102
-----------------------------------------------------------------------------------------------
Address for All other Notices Woodmen of the World Life Insurance Society
Attn: Securities Department
1700 Farnam Street
Omaha, Nebraska 68102
-----------------------------------------------------------------------------------------------
Other Instructions 2 signature lines
-----------------------------------------------------------------------------------------------
Instructions re Delivery of Woodmen of the World Life Insurance Society
Notes
-----------------------------------------------------------------------------------------------
Tax Identification Number 47-0339250
===============================================================================================
</TABLE>
Annex 1-18
<PAGE> 105
ANNEX 1
INFORMATION AS TO PURCHASERS
<TABLE>
<CAPTION>
===============================================================================================
Purchaser Name LUTHERAN BROTHERHOOD
-----------------------------------------------------------------------------------------------
<S> <C>
Name in Which Note is Registered Lutheran Brotherhood
-----------------------------------------------------------------------------------------------
Note Registration Number; RB-16; $6,000,000
Principal Amount
-----------------------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information Norwest Bank Minnesota, N.A.
ABA # 091000019
For Credit to Trust Clearing Account # 0000840245
Attn: Sarah Corcoran
For Credit to: Lutheran Brotherhood
Acct. No.: 12651300
-----------------------------------------------------------------------------------------------
Accompanying Information Name of Company: Selective Insurance Group, Inc.
Description of
Security: 8.87% Series B Senior Notes due May 2010
Security Number: 816300 B* 7
Due Date and Application (as among principal, premium and
interest) of the payment being made:
-----------------------------------------------------------------------------------------------
Address for Notices Related to Lutheran Brotherhood
Payments Attn: Investment Accounting/Trading Administrator
625 Fourth Avenue South
10th Floor
Minneapolis, MN 55415
-----------------------------------------------------------------------------------------------
Address for All other Notices Lutheran Brotherhood
Attn: Investment Division
625 Fourth Avenue South
Minneapolis, MN 55415
Fax: 612.340.5776
-----------------------------------------------------------------------------------------------
Other Instructions None
-----------------------------------------------------------------------------------------------
Instructions re Delivery of Norwest Bank Minnesota, N.A.
Notes 733 Marquette Avenue
Attn: Client Services - Sarah Corcoran
5th Floor, Window 1
Investors Building
Minneapolis, MN 55479-0051
Fax: 612.667.0550
with a copy to Lutheran Brotherhood in-house attorney
-----------------------------------------------------------------------------------------------
Tax Identification Number 41-0385700
===============================================================================================
</TABLE>
Annex 1-19
<PAGE> 106
ANNEX 1
INFORMATION AS TO PURCHASERS
<TABLE>
<CAPTION>
===============================================================================================
Purchaser Name THE OHIO NATIONAL LIFE INSURANCE COMPANY
-----------------------------------------------------------------------------------------------
<S> <C>
Name in Which Note is Registered The Ohio National Life Insurance Company
-----------------------------------------------------------------------------------------------
Note Registration Number; RB-17; $5,000,000
Principal Amount
-----------------------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information Firstar, NA (ABA# 042-000013)
5th & Walnut Streets
Cincinnati, OH 45212
For Credit to The Ohio National Life Insurance Company
Account # 910-275-7
-----------------------------------------------------------------------------------------------
Accompanying Information Name of Company: Selective Insurance Group, Inc.
Description of
Security: 8.87% Series B Senior Notes due May 2010
Security Number: 816300 B* 7
Due Date and Application (as among principal, premium and
interest) of the payment being made:
-----------------------------------------------------------------------------------------------
Address for Notices Related to The Ohio National Life Insurance Company
Payments P.O. Box 237
Cincinnati, OH 45210
Attn: Investment Department
-----------------------------------------------------------------------------------------------
Address for All other Notices The Ohio National Life Insurance Company
P.O. Box 237
Cincinnati, OH 45210
Attn: Investment Department
-----------------------------------------------------------------------------------------------
Other Instructions None
-----------------------------------------------------------------------------------------------
Instructions re Delivery of The Ohio National Life Insurance Company
Notes
-----------------------------------------------------------------------------------------------
Tax Identification Number 31-0397080
===============================================================================================
</TABLE>
Annex 1-20
<PAGE> 107
ANNEX 1
INFORMATION AS TO PURCHASERS
<TABLE>
<CAPTION>
===============================================================================================
Purchaser Name SECURITY FINANCIAL LIFE INSURANCE CO.
-----------------------------------------------------------------------------------------------
<S> <C>
Name in Which Note is Registered Security Financial Life Insurance Co.
-----------------------------------------------------------------------------------------------
Note Registration Number; RB-18; $2,000,000
Principal Amount
-----------------------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information National Bank of Commerce
13th and O Streets
Lincoln, Nebraska 68508
ABA No. 104-000-045
Account of: Security Financial Life
Account No.: 40-797-624
-----------------------------------------------------------------------------------------------
Accompanying Information Name of Company: Selective Insurance Group, Inc.
Description of
Security: 8.87% Senior Notes due May 2010
Security Number: 816300 B* 7
Due Date and Application (as among principal, premium and
interest) of the payment being made:
-----------------------------------------------------------------------------------------------
Address for Notices Related to Security Financial Life Insurance Co.
Payments 4000 Pine Lake Road
Lincoln, NE 68516
Attn: Investment Division
Fax: 402.434.9599
Phone: 402.434.9500
-----------------------------------------------------------------------------------------------
Address for All other Notices Security Financial Life Insurance Co.
4000 Pine Lake Road
Lincoln, NE 68516
-----------------------------------------------------------------------------------------------
Other Instructions None
-----------------------------------------------------------------------------------------------
Instructions re Delivery of Security Financial Life Insurance Co.
Notes
-----------------------------------------------------------------------------------------------
Tax Identification Number 47-0293990
===============================================================================================
</TABLE>
Annex 1-21
<PAGE> 108
ANNEX 1
INFORMATION AS TO PURCHASERS
<TABLE>
<CAPTION>
===============================================================================================
Purchaser Name THE UNION CENTRAL LIFE INSURANCE COMPANY
-----------------------------------------------------------------------------------------------
<S> <C>
Name in Which Note is Registered Hare & Co.
-----------------------------------------------------------------------------------------------
Note Registration Number; RB-19; $2,000,000
Principal Amount
-----------------------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information Hare BNF / 10C 566
New York, NY
ABA # 021-000-018
Credit:
The Union Central Life Insurance Company
Account # 367614
Attn: P&L Department
-----------------------------------------------------------------------------------------------
Accompanying Information Name of Company: Selective Insurance Group, Inc.
Description of
Security: 8.87% Senior Notes due May 2010
Security Number: 816300 B* 7
Due Date and Application (as among principal, premium and
interest) of the payment being made:
-----------------------------------------------------------------------------------------------
Address for Notices Related to The Union Central Life Insurance Company
Payments 1876 Waycross Road
Cincinnati, OH 45240
Attn: Treasury Department
Fax: 513.674.5275
-----------------------------------------------------------------------------------------------
Address for All other Notices Summit Investment Partners, Inc.
312 Elm Street
Suite 1212
Cincinnati, OH 45202
Attn: Gary Rodmaker
Fax: 513.632.1610
-----------------------------------------------------------------------------------------------
Other Instructions None
-----------------------------------------------------------------------------------------------
Instructions re Delivery of The Bank of New York
Notes 1 Wall Street - 3rd Floor
Window A
New York, NY 10286
RE: Union Central Life Acct. # 367614
-----------------------------------------------------------------------------------------------
Tax Identification Number 31-0472910
===============================================================================================
</TABLE>
Annex 1-22
<PAGE> 109
ANNEX 1
INFORMATION AS TO PURCHASERS
<TABLE>
<CAPTION>
===============================================================================================
Purchaser Name BERKSHIRE LIFE INSURANCE COMPANY
-----------------------------------------------------------------------------------------------
<S> <C>
Name in Which Note is Registered Berkshire Life Insurance Company
-----------------------------------------------------------------------------------------------
Note Registration Number; RB-20; $2,000,000
Principal Amount
-----------------------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information Berkshire Life Insurance Company
Acct. No. 002-4-020877
The Chase Manhattan Bank, N.A.
ABA# 021000021
-----------------------------------------------------------------------------------------------
Accompanying Information Name of Company: Selective Insurance Group, Inc.
Description of
Security: 8.87% Series B Senior Notes due May 2010
Security Number: 816300 B* 7
Due Date and Application (as among principal, premium and
interest) of the payment being made:
-----------------------------------------------------------------------------------------------
Address for Notices Related to Berkshire Life Insurance Company
Payments Attn: Securities Department
700 South Street
Pittsfield, MA 01201
Fax: 413.442.9763
Phone: 413.499.4321
-----------------------------------------------------------------------------------------------
Address for All other Notices Berkshire Life Insurance Company
Attn: Securities Department
700 South Street
Pittsfield, MA 01201
-----------------------------------------------------------------------------------------------
Other Instructions None
-----------------------------------------------------------------------------------------------
Instructions re Delivery of Berkshire Life Insurance Company
Notes
-----------------------------------------------------------------------------------------------
Tax Identification Number 04-1083480
===============================================================================================
</TABLE>
Annex 1-23
<PAGE> 110
ANNEX 2
PAYMENT INSTRUCTIONS AT CLOSING
Bank: State Street Bank & Trust Company
Address: Boston, Massachusetts
ABA: 011-000-028
Account Name: Selective Insurance Group, Inc.
Address: Branchville, NJ
Account #: 6170-830-1
Annex 2-1
<PAGE> 111
ANNEX 3
INFORMATION AS TO COMPANY
Annex 3-2
