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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13E-3
Rule 13e-3 Transaction Statement
(Pursuant to Section 13(e) of the Securities Exchange Act of 1934
Amendment No. 1
American Financial Corporation
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(Name of Issuer)
American Financial Group, Inc.
American Financial Corporation
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(Name of Persons Filing Statement)
Series F Cumulative Voting Preferred Stock
Series G Cumulative Voting Preferred Stock
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(Title of Class of Securities)
Series F - 026087809
Series G - 026087874
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(CUSIP Number of Class of Securities)
James C. Kennedy, Esq.
American Financial Corporation
One East Fourth Street
Cincinnati, Ohio 45202
(513) 579-2538
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications
on Behalf of Persons Filing Statement)
This Statement is filed in connection with (check the appropriate box):
a. [X] The filing of solicitation materials or an information statement
subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the
Securities Exchange Act of 1934.
b. [ ] The filing of a registration statement under the Securities Act of
1933.
c. [ ] A tender offer.
d. [ ] None of the above.
Check the following box if the soliciting materials or information statement
referred to in checking box (a) are preliminary copies: [X]
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CALCULATION OF FILING FEE
Transaction Valuation: $286,604,863 Amount of Filing Fee: $57,321
[x] Check Box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
AMOUNT PREVIOUSLY PAID: $57,321
FILING PARTY: American Financial Corporation
FORM OR REGISTRATION NO.: Preliminary Proxy Statement
DATE FILED: July 16, 1997
This Amended Rule 13e-3 Transaction Statement is being filed by American
Financial Group, Inc. and its subsidiary, American Financial Corporation, both
Ohio corporations, in connection with a proposal to cause a merger of American
Financial Corporation whereby all of its Series F and G Preferred Stock would be
converted into the right to receive cash or shares of its new Series J Preferred
Stock.
The following Cross Reference Sheet, prepared in accordance with
General Instruction F to Schedule 13E-3, shows the location in the Preliminary
Proxy Statement filed by American Financial Corporation on the date hereof of
the information required to be included in this Schedule 13E-3. The information
set forth in the Proxy Statement, including all exhibits thereto, is expressly
incorporated by reference as set forth in the Cross Reference Sheet in response
to each item of this Schedule 13E-3 and the responses to each item in this
Schedule 13E-3 are qualified in their entirety by the information contained in
the Proxy Statement.
ITEM IN SCHEDULE 3E-3 WHERE LOCATED IN PROXY STATEMENT
1(a) Cover Page
1(b) Description of Preferred Stock; Introduction -
Proposal No. 1 Adoption of the Merger Agreement;
Ownership of Preferred Stock
1(c) The Merger - Market Price and Dividend Data
1(d) The Merger - Market Price and Dividend Data
1(e) *
1(f) Ownership of Preferred Stock
2(a) Management, Principal Shareholders
2(b) Management, Principal Shareholders
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2(c) Management, Principal Shareholders
2(d) Management, Principal Shareholders
2(e) *
2(f) *
2(g) *
3(a)(1.) Certain Transactions
3(a)(2.) *
3(b) *
4(a) The Merger Agreement
4(b) *
5(a) The Merger Agreement
5(b) *
5(c) *
5(d) The Merger - Comparison of Preferred Shares and
Introduction - Proposal No. 1
5(e) *
5(f) Introduction - Proposal No. 1
5(g) *
6(a) The Merger Agreement - Expenses
6(b) The Merger Agreement - Expenses
6(c) *
6(d) *
7(a) Special Factors - The Special Committee
7(b) Special Factors - The Special Committee
7(c) Special Factors - The Special Committee
7(d) The Merger - Conflicts of Interest, Certain United
States Federal Income Tax Consequences
8(a) The Merger - Actions of the Special Committee and
Recommendation of the Board of Directors
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8(b) Special Factors - The Special Committee
8(c) Voting at the Meeting; The Merger - Vote Required;
Certain Expected Voting
8(d) Special Factors - The Special Committee
8(e) Special Factors - The Special Committee
8(f) *
9(a) Special Factors - The Special Committee
9(b) Special Factors - The Special Committee
9(c) Special Factors - Opinion of the Special Committee's
Financial Advisor
10(a) Ownership of Preferred Stock
10(b) *
11 The Merger - Vote Required; Certain Expected Voting
12(a) The Merger - Vote Required; Certain Expected Voting
12(b) The Merger - Recommendation of the Board of
Directors
13(a) The Merger Agreement - Dissenters' Rights
13(b) *
13(c) *
14(a) Selected Financial Data; Financial Statements
14(b) Pro Forma Financial Information
15(a) Voting at the Meeting - Proxies
15(b) *
16 *
17(a) *
17(b) *
17(c) *
17(d) *
17(e) The Merger - Dissenters' Rights; Exhibit C to Proxy
Statement
17(f) *
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*The item is located in the Schedule 13E-3 only.
ITEM 1. Issuer and Class of Security Subject to the Transaction
(a) See Cross Reference Sheet
(b) See Cross Reference Sheet
(c) See Cross Reference Sheet
(d) See Cross Reference Sheet
(e) In October 1996, American Financial Group, Inc. sold $100
million (proceeds to the company) of trust preferred
securities due 2026, comprised of 4 million shares sold at $25
per share. In December 1995, American Financial Group, Inc.
sold 4.6 million shares of common stock at a price of $28.875
per share, providing proceeds to the company of $110.9
million.
(f) See Cross Reference Sheet
ITEM 2. Identity and Background.
The persons filing this statement are American Financial Group, which
owns all of the Common Stock, which constitutes approximately 76% of the voting
power, of American Financial Corporation which is also a filer. American
Financial corporation is the issuer of the class of equity securities which is
the subject of the Rule 13e-3 transaction.
(a) See Cross Reference Sheet
(b) See Cross Reference Sheet.
The business address of each of the directors and executive
officers is the same as that listed for American Financial
Group, Inc.
(c) See Cross Reference Sheet
(d) See Cross Reference Sheet
(e) None of the directors or executive officers have been
convicted in a criminal proceeding (other than traffic
violations and similar misdemeanors) nor has any of them been
a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction that resulted in a judgment,
decree or final order enjoining further violations of, or
prohibiting activities subject to, federal or state securities
laws. Each is a U.S. citizen.
(f) None of the directors or executive officers have been
convicted in a criminal proceeding (other than traffic
violations and similar misdemeanors) nor has any of them been
a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction that resulted in a judgment,
decree or final order enjoining further violations of, or
prohibiting activities subject to, federal or state securities
laws. Each is a U.S. citizen.
(g) U.S.
ITEM 3. Past Contracts, Transactions or Negotiations
(a) (1) See Cross Reference Sheet
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Pursuant to an Agreement and Plan of Acquisition and
Reorganization (the "Agreement") dated as of December
9, 1994, in a series of mergers, American Premier
Underwriters, Inc. ("APU") and American Financial
Corporation ("AFC") combined their respective
businesses by becoming subsidiaries of American
Financial Group, Inc. in April 1995. Pursuant to one
merger, APU became a subsidiary of AFG with each
issued and outstanding share of APU Common Stock
being converted into one share of AFG Common Stock
and each issued and outstanding share of APU
Preferred Stock being converted into one share of
preferred stock of AFG. In another merger, AFC became
a subsidiary of AFG with each share of AFC Common
Stock being converted into the right to receive
shares of AFG Common Stock at a rate equal to 1.45
shares of AFG Common Stock for each share of AFC
Common Stock; cash was paid in lieu of fractional
shares of AFG Common Stock. The merger involving AFC
had no effect upon the AFC Preferred Stock which
remained issued and outstanding after that merger.
In the merger completed on April 3, 1995, AFG issued
71.4 million shares of its Common Stock in exchange
for all of the outstanding common stock of AFC and
APU.
(1) None.
(b) None.
ITEM 4. Terms of the Transaction.
(a) See Cross Reference Sheet
(b) None.
ITEM 5. Plans or Proposals of the Issuer or Affiliate
(a) See Cross Reference Sheet
(b) None.
(c) None.
(d) See Cross Reference Sheet
(e) None.
(f) See Cross Reference Sheet
If the merger proposal is approved, the registration under the
Securities Exchange Act of 1934 of the Series F and Series G
Preferred Stock would be terminated.
(g) The issuer expects to continue to be obligated to file reports
pursuant to Section 15(d) of the Securities Exchange Act of
1934.
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ITEM 6. Source and Amounts of Funds or Other Considerations
(a) See Cross Reference Sheet
(b) See Cross Reference Sheet
(c) Great American Holding Company, a wholly-owned subsidiary of
American Financial Corporation, has a revolving loan agreement
with a group of banks headed by The First National Bank of
Boston and Bank of America Illinois, N.A. Borrowings bear
interest at floating rates based on prime or LIBOR and are
collateralized by 50% of the stock of Great American Insurance
Company.
The facility is guaranteed by American Financial Corporation.
(d) Not applicable.
ITEM 7. Purposes, Alternatives, Reasons and Effects.
(a) See Cross Reference Sheet
(b) See Cross Reference Sheet
(c) See Cross Reference Sheet
(d) See Cross Reference Sheet
ITEM 8. Fairness of the Transaction
(a) See Cross Reference Sheet
(b) See Cross Reference Sheet
(c) See Cross Reference Sheet
(d) See Cross Reference Sheet
(e) See Cross Reference Sheet
(f) No other offer received.
ITEM 9. Reports, Opinions, Appraisals and Certain Negotiations.
(a) See Cross Reference Sheet
(b) See Cross Reference Sheet
(c) See Cross Reference Sheet
ITEM 10. Interest in Securities of the Issuer.
(a) See Cross Reference Sheet
(b) There have been no transactions in the Series F and Series G
Preferred Stock during the past 60 days by the filers of this
statement or by any pension, profit sharing or similar plan of
the issuer or any of its affiliates or any other person
enumerated in Instruction C of this Schedule 13E-3 or by any
associate or a majority-owned subsidiary of the issuer or
affiliate.
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ITEM 11. Contracts, Arrangements or Understandings with Respect to the Issuer's
Securities.
See Cross Reference Sheet
ITEM 12. Present Intention and Recommendation of Certain Persons with
Regard to the Transaction.
(a) See Cross Reference Sheet
(b) See Cross Reference Sheet
ITEM 13. Other Provisions of the Transaction
(a) See Cross Reference Sheet
(b) No provisions for access to information or counsel or
appraisal services have been afforded.
(c) Not Applicable.
ITEM 14. Financial Information
(a) See Cross Reference Sheet
(b) See Cross Reference Sheet
ITEM 15. Persons and Assets Employed, Retailed or Utilized.
(a) See Cross Reference Sheet
(b) None.
ITEM 16. Additional Information
None
ITEM 17. Material to be Filed as Exhibits.
(a) Credit Agreement dated as of December 7, 1993, as amended,
among Great American Holding Corporation, The First National
Bank of Boston and Bank of America Illinois, N.A. as managing
agents
(b) (i) Opinions of Libra Investments, Inc. and Houlihan, Lokey,
Howard & Zukin (filed as Exhibits B and D, respectively, to
the Proxy Statement) (ii) Report of Libra Investments, Inc.
(to be filed by amendment)
(c) Agreement and Plan of Merger (filed as Exhibit A to the Proxy
Statement)
(d) Proxy Statement (previously filed)
(e) Ohio Revised Code Section 1701.85 (filed as Exhibit C to the
Proxy Statement)
(f) None
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SIGNATURE
The undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: September 11, 1997 AMERICAN FINANCIAL GROUP, INC.
BY: James C. Kennedy
----------------------------------------
Name: James C. Kennedy
Title: Deputy General Counsel
and Secretary
Dated: September 11, 1997 AMERICAN FINANCIAL CORPORATION
BY: James C. Kennedy
----------------------------------------
Name: James C. Kennedy
Title: Deputy General Counsel
and Secretary
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EXHIBIT 17A
Execution Copy
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GREAT AMERICAN HOLDING CORPORATION
CREDIT AGREEMENT
Dated as of December 7, 1993
THE FIRST NATIONAL BANK OF BOSTON and
CONTINENTAL BANK N.A., as Managing Agents
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TABLE OF CONTENTS
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1. Definitions; Certain Rules of Construction.........................................................1
2. The Credits........................................................................................1
2.1. Revolving Credit........................................................................1
2.1.1. Revolving Loan...............................................................1
2.1.2. Borrowing Requests...........................................................1
2.1.3. Revolving Notes..............................................................2
2.2. Term Credit.............................................................................2
2.2.1. Term Loan....................................................................2
2.2.2. Term Note....................................................................2
2.3. Application of Proceeds.................................................................2
2.4. Nature of Obligations of Lenders to Extend Credit.......................................3
2.5. Option to Extend Maturities of Credits..................................................3
3. Interest; Pricing Options; Fees....................................................................3
3.1. Interest................................................................................3
3.2. Pricing Options.........................................................................4
3.2.1. Eurodollar Pricing Options...................................................4
3.2.2. CD Pricing Options...........................................................4
3.2.3. Notice to Lenders and Company................................................5
3.2.4. Selection of Interest Periods................................................5
3.2.5. Additional Compensation......................................................5
3.2.6. Change in Applicable Laws, Regulations, etc..................................6
3.2.7. Funding Procedure............................................................6
3.3. Commitment Fees.........................................................................6
3.4. Facility Fee............................................................................6
3.5. Capital Adequacy; Regulatory Changes....................................................7
3.5.1. Lender's Compensation........................................................7
3.5.2. Substitution or Replacement of Lender........................................7
3.6. Taxes...................................................................................8
3.7. Fees Due Date........................................................................8
3.8. Computations of Interest.............................................................9
4. Payment............................................................................................9
4.1. Payment at Maturity.....................................................................9
4.2. Mandatory Prepayments...................................................................9
4.2.1. Revolving Loan...............................................................9
4.2.2. Term Loan....................................................................9
4.3. Voluntary Prepayments of Loan...........................................................9
4.4. Reborrowing............................................................................10
4.5. Application of Payments................................................................10
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4.6. Payment and Interest Cut-off.......................................................10
5. Conditions to Extending Credit....................................................................10
5.1. Officers' Certificate..................................................................10
5.2. Revolving Notes........................................................................11
5.3. Closing Fee............................................................................11
5.4. AFC Agreement..........................................................................11
5.5. Termination of Prior Agreements........................................................11
5.6. Legal Opinions.........................................................................11
5.7. Perfection of Security.................................................................11
5.8. Legality, etc..........................................................................11
5.9. General................................................................................12
6. Security..........................................................................................12
6.1. Credit Security........................................................................12
6.2. Additional Credit Security.............................................................13
6.2.1. Additional Collateral.......................................................13
6.2.2. Further Additional Collateral...............................................13
6.2.3. Return of Additional Collateral.............................................13
6.3. Representations, Warranties and Covenants with Respect to Credit Security..............13
6.3.1. Company Pledged Stock.......................................................14
6.3.2. No Liens....................................................................14
6.3.3. Perfection of Credit Security...............................................14
6.3.4. Governmental Consents; Validity of Pledge...................................14
6.4. Administration of Credit Security......................................................15
6.4.1. Distributions...............................................................15
6.4.2. Voting......................................................................15
6.4.3. Custody of Credit Security..................................................15
6.4.4. Governmental Consents and Approvals.........................................16
6.5. Right to Realize upon Credit Security..................................................16
6.5.1. Marshaling..................................................................16
6.5.2. Sales of Credit Security....................................................17
6.5.3. Sale without Registration...................................................17
6.5.4. Application of Proceeds.....................................................18
6.6. Governmental Regulation................................................................19
7. General Covenants.................................................................................19
7.1. Taxes and Other Charges; Accounts Payable.............................................19
7.1.1. Taxes and Other Charges.....................................................19
7.1.2. Accounts Payable............................................................20
7.2. Conduct of Business, etc...............................................................20
7.2.1. Types of Business...........................................................20
7.2.2. Maintenance of Properties...................................................20
7.2.3. Statutory Compliance........................................................20
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7.3. Transactions with Affiliates...........................................................21
7.4. Insurance..............................................................................21
7.5. Financial Statements and Reports.......................................................21
7.5.1. Annual Reports..............................................................21
7.5.2. 22
7.5.3. Other Reports...............................................................23
7.5.4. Notice of Material Litigation; Notice of Defaults...........................24
7.5.5. ERISA Reports...............................................................24
7.5.6. Other Information...........................................................25
7.6. Certain Financial Tests................................................................25
7.6.1. Consolidated Net Worth......................................................25
7.6.2. Consolidated Net Loss.......................................................25
7.6.3. GAIC Statutory Surplus......................................................25
7.7. Restrictions on Indebtedness...........................................................26
7.7.1. Company Indebtedness........................................................26
7.7.2. Additional Debt Subordination...............................................26
7.8. Restrictions on Liens..................................................................26
7.9. Restrictions on Distributions..........................................................27
7.10. Merger, Consolidation and Sale of Assets..............................................27
7.11. Distributions from Subsidiaries.......................................................28
7.12. Compliance with ERISA.................................................................28
7.13. Compliance with Environmental Laws....................................................28
8. Representations and Warranties....................................................................29
8.1. Organization and Business..............................................................29
8.1.1. The Company.................................................................29
8.1.2. Subsidiaries................................................................29
8.1.3. Qualification...............................................................29
8.2. Financial Statements and Other Information; Certain Agreements.........................29
8.2.1. Financial Statements and Other Information..................................29
8.3. Licenses, etc..........................................................................30
8.4. Changes in Condition...................................................................31
8.5. Title to Assets........................................................................31
8.6. Litigation.............................................................................31
8.7. Tax Returns............................................................................31
8.8. Enforceability; No Legal Obstacle to Agreements........................................31
8.9. Defaults...............................................................................32
8.10. Burdensome Obligations................................................................32
8.11. Pension Plans.........................................................................33
8.12. Foreign Trade Regulations; Government Regulation......................................33
8.12.1. Foreign Trade Regulations..................................................33
8.12.2. Government Regulation......................................................33
8.13. Environmental Regulation..............................................................33
8.14. Disclosure............................................................................34
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9. Defaults..........................................................................................34
9.1. Events of Default......................................................................34
9.2. Certain Actions Following an Event of Default..........................................38
9.2.1. No Obligation to Extend Credit..............................................38
9.2.2. Exercise of Rights; Credit Security.........................................38
9.2.3. Acceleration................................................................38
9.2.4. Setoff......................................................................39
9.2.5. Cumulative Remedies.........................................................39
9.3. Annulment of Defaults..................................................................39
9.4. Waivers................................................................................39
10. Expenses; Indemnity..............................................................................40
10.1. Expenses..............................................................................40
10.2. General Indemnity.....................................................................40
11. Operations...................................................................................41
11.1. Interests in Credits..................................................................41
11.2. Managing Agent's Authority to Act, etc................................................42
11.3. Company to Pay Administrative Agent, etc..............................................42
11.4. Lender Operations for Advances, etc...................................................42
11.4.1. Advances...................................................................42
11.4.2. Administrative Agent to Allocate Payments..................................42
11.4.3. Delinquent Lenders.........................................................43
11.5. Sharing of Payments, etc..............................................................43
11.6. Amendments, Consents, Waivers, etc....................................................44
11.7. Managing Agent's Resignation..........................................................45
11.8. Concerning the Managing Agents........................................................46
11.8.1. Action in Good Faith, etc..................................................46
11.8.2. No Implied Duties, etc.....................................................46
11.8.3. Validity, etc..............................................................46
11.8.4. Compliance.................................................................46
11.8.5. Employment of Managing Agents and Counsel..................................47
11.8.6. Reliance on Documents and Counsel..........................................47
11.8.7. Managing Agent's Reimbursement.............................................47
11.9. Rights as a Lender....................................................................47
11.10. Independent Credit Decision..........................................................48
11.11. Indemnification......................................................................48
12. Successors and Assigns; Lender Assignments and Participations....................................48
12.1. Assignments by Lenders................................................................49
12.1.1. Assignees and Assignment Procedures........................................49
12.1.2. Terms of Assignment and Acceptance.........................................50
12.1.3. Register...................................................................51
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12.1.4. Notes......................................................................51
12.1.5. Foreign Persons............................................................51
12.1.6. Federal Reserve Bank.......................................................52
12.1.7. Further Assurances.........................................................52
12.2. Credit Participants...................................................................52
13. Confidentiality..................................................................................53
14. Notices..........................................................................................54
15. Course of Dealing, Amendments and Waivers........................................................54
16. Defeasance.......................................................................................55
17. Venue; Service of Process........................................................................55
18. WAIVER OF JURY TRIAL.............................................................................55
19. Acknowledgements.................................................................................56
20. General..........................................................................................56
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EXHIBITS
Exhibit 1 - Definitions of Capitalized Terms
Exhibit 2.1.3 - Form of Revolving Note
Exhibit 2.2.2 - Form of Term Note
Exhibit 5.1 - Form of Officers' Certificate
Exhibit 5.4 - Form of AFC Agreement
Exhibit 8.1 - Chiquita, Penn Central and Material Subsidiaries
Exhibit 8.11 - Defined Benefit Plans
Exhibit 8.13 - Environmental Disclosure
Exhibit 12.1.1 - Assignment and Acceptance
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GREAT AMERICAN HOLDING CORPORATION
CREDIT AGREEMENT
This Agreement, dated as of December 7, 1993, is among Great American
Holding Corporation, an Ohio corporation, The First National Bank of Boston, for
itself and as Administrative Agent and as Managing Agent for the Lenders (as
defined in Exhibit 1), Continental Bank N.A., for itself and as Collateral Agent
and as Managing Agent for the Lenders, and the other Lenders from time to time
party hereto. The parties agree as follows:
1. DEFINITIONS; CERTAIN RULES OF CONSTRUCTION. Except as the context otherwise
explicitly requires, (a) the capitalized term "Section" refers to sections of
this Agreement, (b) the capitalized term "Exhibit" refers to exhibits to this
Agreement, (c) references to a particular Section shall include all subsections
thereof and (d) the word "including" shall be construed as "including without
limitation". Certain capitalized terms are used in this Agreement as
specifically defined in Exhibit 1.
2. THE CREDITS.
2.1. REVOLVING CREDIT.
2.1.1. REVOLVING LOAN. Subject to all the terms and conditions
of this Agreement and so long as no Default exists, each Lender will
severally lend to the Company loans in an aggregate principal amount
not to exceed at any time outstanding such Lender's Percentage Interest
in an amount (the "Maximum Amount of Credit") equal to the lesser of:
(a) $300,000,000 or
(b) such amount (in an integral multiple of $1,000,000)
specified by irrevocable notice from the Company to the Lenders. The
aggregate principal amount of the loans made pursuant to this Section
2.1.1 at any one time outstanding is referred to as the "Revolving
Loan".
2.1.2. BORROWING REQUESTS. Revolving loans will be made to the
Company by the Lenders under Section 2.1.1 on any Banking Day on or
after the initial Closing Date and prior to the Conversion Date. Not
later than noon (Boston time) on the first Banking Day (second Banking
Day if any portion of such loan will be subject to a CD Pricing Option
and third Banking Day if any portion of such loan will be subject to a
Eurodollar Pricing Option on the requested Closing Date) prior to the
requested Closing Date for any such loan, the Company will give the
Administrative Agent notice of its request (which may be given by a
telephone call received by an Administrative
<PAGE> 9
Agent Officer and promptly confirmed in writing), specifying (a) the
amount of the requested loan (not less than $1,000,000 and an integral
multiple of $1,000,000), and (b) the requested Closing Date therefor.
Each such loan will be made at the Boston Office by depositing the
amount thereof to the general account of the Company with the
Administrative Agent. In connection with each such loan, the Company
shall furnish to the Administrative Agent a certificate dated the
applicable Closing Date in substantially the form of Exhibit 5.1,
together with any other documents required by Section 5.
2.1.3. REVOLVING NOTES. The Revolving Loan shall be evidenced
by notes in substantially the form of Exhibit 2.1.3 (the "Revolving
Notes") payable by the Company to the respective Lenders. Each Lender
shall keep a record of the date and amount of (a) each loan made by
such Lender pursuant to Section 2.1.1 and (b) each payment of principal
made pursuant to Section 4. The record made by each Lender pursuant to
this Section shall, in the absence of manifest error, be conclusive.
Prior to the transfer of any Revolving Note, the Lender shall endorse
on a schedule thereto appropriate notations evidencing such dates and
amounts; PROVIDED, HOWEVER, that the failure of any Lender to make any
such recordation or endorsement shall not affect the obligations of the
Company under this Agreement, the Notes or any other Credit Document.
2.2. TERM CREDIT.
2.2.1. TERM LOAN. Subject to all the terms and conditions
hereof and so long as no Default exists, on the Conversion Date each
Lender will severally lend to the Company as a term loan an aggregate
amount not in excess of such Lender's Percentage Interest in the
principal amount of the Revolving Loan outstanding on such date. The
aggregate principal amount of the loans made pursuant to this Section
2.2.1 at any one time outstanding is referred to as the "Term Loan".
2.2.2. TERM NOTE. The Term Loan shall be made at the Boston
Office by crediting the amount of such loan to the Revolving Loan
against delivery to the Administrative Agent of separate notes of the
Company in substantially the form of Exhibit 2.2.2 (the "Term Notes")
payable to the respective Lenders. Each Term Note shall be in a
principal amount equal to each Lender's respective Percentage Interest
in the Term Loan. In connection with the Term Loan, the Company shall
furnish to the Administrative Agent a certificate dated the Conversion
Date in substantially the form of Exhibit 5.1, together with any other
documents required by Section 5.
2.3. APPLICATION OF PROCEEDS. The Company covenants that the proceeds
of the Loan will be applied only for lawful corporate purposes of the Company,
including increasing the statutory capital of GAIC and making loans or advances
to AFC for AFC's lawful corporate purposes, and for the repayment by the Company
of all Indebtedness outstanding under the
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<PAGE> 10
Prior Credit Agreements. The Company will not directly or indirectly apply any
part of the proceeds of any extension of credit made pursuant to this Agreement
to purchase or to carry Margin Stock or to refinance any loan incurred for such
purpose or to any transaction prohibited by the Foreign Trade Regulations or by
other laws or regulations applicable to any of the Lenders.
2.4. NATURE OF OBLIGATIONS OF LENDERS TO EXTEND CREDIT. The Lenders'
obligations under this Agreement to make the Loans are several and are not joint
or joint and several. If any Lender shall fail to perform its obligations to
extend such credit, the amount of the Commitment of the Lender so failing to
perform may be assumed by the other Lenders, in their absolute discretion, in
such proportions as such Lenders may agree among themselves, so that the
aggregate amount of the Commitment to make the Loans provided for in this
Section 2 shall not be reduced and the Percentage Interest of each other Lender
shall be appropriately adjusted; PROVIDED, however, that such assumption and
adjustment shall not relieve the Lenders from any of their obligations to make
such extension of credit or to repay any Delinquent Payment required by Section
11.4.3.
2.5. OPTION TO EXTEND MATURITIES OF CREDITS. So long as no Default
exists, the Company may request by written notice to the Administrative Agent,
not more than 150 days nor less than 120 days prior to the Conversion Date and
any three-year anniversary thereafter, that the Conversion Date and the Final
Maturity Date be extended for an additional three-year period. The Lenders shall
consider such request in their sole discretion, and may propose additional
terms, including changes in the interest rates, fees and covenants as a
condition to any extension. Any decision to extend the Conversion Date and the
Final Maturity Date must be unanimously agreed to in writing by all Lenders. The
Administrative Agent on behalf of the Lenders shall provide a written response
to the Company's request not later than 60 days prior to such anniversary. In
the event that all Lenders offer to extend the maturities of the credits
pursuant hereto, the Company may accept such offer by written notice received by
the Administrative Agent not later than 30 days prior to such anniversary.
3. INTEREST; PRICING OPTIONS; FEES.
3.1. INTEREST. The Loan shall accrue and bear daily interest at a rate
per annum which shall at all times equal the Applicable Rate. Prior to any
stated or accelerated maturity of the Loan, the Company will, on each Payment
Date, beginning on the first Payment Date after the initial Closing Date, pay
the accrued and unpaid interest on the portion of the Loan which was not subject
to a Pricing Option. On the last day of each Interest Period or on any earlier
termination of any Pricing Option, the Company will pay the accrued and unpaid
interest on the portion of the Loan which was subject to the Pricing Option
which expired or terminated on such date; PROVIDED, HOWEVER, that if any
Interest Period is longer than three months, the Company will also pay the
accrued and unpaid interest on the portion of the Loan subject to the Pricing
Option having such Interest Period at three month intervals, the first such
payment to be made on the last Banking Day of the three month period which
begins on the first day of
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<PAGE> 11
such Interest Period. On any stated or accelerated maturity of the Loan, the
Company will pay all accrued and unpaid interest on the Loan, including any
accrued and unpaid interest on such portion of the Loan which is subject to a
Pricing Option. In addition, the Company will, on demand, pay daily interest on
any overdue installments of principal and, to the extent not prohibited by
applicable law, on any overdue installments of interest and fees owed under any
Credit Document at a rate per annum which is at all times equal to the sum of 3%
PLUS the highest Applicable Rate then in effect. All payments of interest
hereunder shall be made to the Administrative Agent for the account of the
Lenders in accordance with the Lenders' respective Percentage Interests.
3.2. PRICING OPTIONS.
3.2.1. EURODOLLAR PRICING OPTIONS. Subject to all the terms
and conditions hereof and so long as no Default exists, the Company may
from time to time, by irrevocable notice to the Administrative Agent
received not less than three Banking Days prior to the commencement of
the Eurodollar Interest Period selected in such notice, elect to have
such portion of the Loan as the Company may specify in such notice
accrue and bear daily interest during the Eurodollar Interest Period so
selected at the Applicable Rate computed on the basis of the Eurodollar
Rate. No such election shall become effective if, prior to the
commencement of any such Eurodollar Interest Period, the Administrative
Agent determines that (a) the selecting or granting of the Eurodollar
Pricing Option in question would violate a Legal Requirement or (b)
Eurodollar deposits in an amount equal to the portion of the Loan as to
which such Eurodollar Pricing Option has been selected and which have a
term corresponding to the proposed Eurodollar Interest Period are not
readily available in the inter-bank Eurodollar market for delivery at
any Eurodollar Office or, by reason of circumstances affecting such
market, adequate and reasonable methods do not exist for ascertaining
the interest rate applicable to such deposits for the proposed
Eurodollar Interest Period.
3.2.2. CD PRICING OPTIONS. Subject to all the terms and
conditions hereof and so long as no Default exists, the Company may
from time to time, by irrevocable notice to the Administrative Agent
received not less than two Banking Days prior to the commencement of
the CD Interest Period selected in such notice, elect to have such
portion of the Loan as the Company may specify in such notice accrue
and bear daily interest during the CD Interest Period so selected at
the Applicable Rate computed on the basis of the CD Rate. No such
election shall become effective if, prior to the commencement of any
such CD Interest Period, the Administrative Agent determines that (a)
the selecting or granting of the CD Pricing Option in question would
violate a Legal Requirement; or (b) deposits in an amount equal to the
portion of the Loan as to which such CD Pricing Option has been
selected and which have a term corresponding to the proposed CD
Interest Period are not readily available in the certificate of deposit
market or, by reason of circumstances affecting such market, adequate
and reasonable
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<PAGE> 12
methods do not exist for ascertaining the interest rate applicable to
such deposits for the proposed CD Interest Period.
3.2.3. NOTICE TO LENDERS AND COMPANY. The Administrative Agent
will promptly inform each Lender (by telephone subsequently confirmed
in writing or otherwise) of each notice received by it from the Company
pursuant to Section 3.2.1 or 3.2.2, including the Interest Period
specified in such notice. Upon determination by the Administrative
Agent of the Pricing Option Rate for such Interest Period or in the
event no such election shall become effective, the Administrative Agent
will promptly notify the Company and each Lender (by telephone
subsequently confirmed in writing or otherwise) of the Pricing Option
Rate so determined or why such election did not become effective.
3.2.4. SELECTION OF INTEREST PERIODS. Interest Periods shall
be selected so that:
(i) The minimum portion of the Loan subject to any
Pricing Option shall be $5,000,000 and an integral multiple of
$1,000,000;
(ii) No more than 12 Pricing Options shall be
outstanding at any one time;
(iii) An aggregate principal amount of the Term Notes
which is at least equal to the amount of the next mandatory
prepayment required by Section 4.2 shall not be subject to a
Pricing Option on the date such mandatory prepayment is
required to be made; and
(iv) No Interest Period with respect to any portion
of the Loan subject to a Pricing Option shall expire later
than the Final Maturity Date.
If on the Conversion Date all or any portion of the Revolving
Loan is subject to one or more effective Pricing Options, then each
such Pricing Option shall apply to an equal amount of the Term Loan
until the expiration of the Interest Period for such Pricing Option.
3.2.5. ADDITIONAL COMPENSATION. If any portion of the Loan
which is subject to a Pricing Option is repaid, or assigned pursuant to
Section 3.5.2 or 12.1, or any Pricing Option is terminated on a date
which is prior to the last Banking Day of the Interest Period
applicable to such Pricing Option, the Company will pay to the
Administrative Agent for the account of each Lender, in accordance with
the Lenders' respective Percentage Interests, in addition to any
amounts of interest otherwise payable hereunder, an amount equal to
daily interest for the unexpired portion of such Interest Period on the
portion of the Loan so repaid, or as to which a Pricing Option was so
terminated, at a per annum rate equal to the excess, if any, of (a) the
Pricing
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<PAGE> 13
Option Rate calculated on the basis of the rate applicable to such
Pricing Option MINUS (b) the rate of interest obtainable by the
Administrative Agent upon the purchase of debt securities customarily
issued by the Treasury of the United States of America which have a
maturity date approximating the last Banking Day of such Interest
Period. For purposes of this Section 3.2.5, if any portion of the Loan
which was to have been subject to a Pricing Option is not outstanding
on the first day of the Interest Period applicable to such Pricing
Option, the Company shall be deemed to have terminated such Pricing
Option with respect to such principal amount. The determination by the
Administrative Agent of such amount of interest shall, in the absence
of manifest error, be conclusive.
3.2.6. CHANGE IN APPLICABLE LAWS, REGULATIONS, ETC. If any
Legal Requirement shall prevent any Lender from funding or maintaining
through the purchase or holding of Eurodollar deposits or deposits
represented by certificates of deposit any portion of the Loan subject
to a Pricing Option or otherwise from giving effect to such Lender's
obligations as contemplated hereby, (a) the Administrative Agent may
(and, upon the request of the affected Lender, shall) by notice to the
Company terminate all of the affected Pricing Options, (b) the portion
of the Loan subject to such terminated Pricing Options shall
immediately bear interest thereafter at the Applicable Rate computed on
the basis of the Base Rate and (c) the Company shall make any payment
required by Section 3.2.5.
3.2.7. FUNDING PROCEDURE. The Lenders may actually fund any
portion of the Loan subject to a Pricing Option in any manner they may
choose in their discretion. Regardless of the manner selected by any of
the Lenders to fund any portion of the Loan subject to a Pricing
Option, however, all amounts payable hereunder, including the interest
rate applicable to any such portion of the Loan and the amounts payable
under Sections 3.2.5 and 3.6, shall be computed as if each Lender had
actually funded such Lender's Percentage Interest in such portion of
the Loan through the purchase of deposits in such amount with a
maturity the same as the applicable Interest Period relating thereto
and, in the case of Eurodollar Pricing Options, through the transfer of
such deposits from an office of the Lender having the same location as
the applicable Eurodollar Office to one of such Lender's offices in the
United States of America.
3.3. COMMITMENT FEES. In consideration of the Lenders' Commitments to
make the extensions of credit provided for in Section 2.1, the Company will pay
to the Administrative Agent for the account of the Lenders, in accordance with
their respective Percentage Interests, an amount equal to the Commitment Fee
Rate for the period from and including the initial Closing Date through and
including the Conversion Date. Such commitment fees shall be payable quarterly
in arrears on the last day of each calendar quarter, and on the date of any
termination of the Commitments prior to the Conversion Date.
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<PAGE> 14
3.4. FACILITY FEE. The Company will pay to the Administrative Agent for
the account of the Lenders, in accordance with their respective Percentage
Interests, on the last day of each calendar quarter after the initial Closing
Date and on the Final Maturity Date, and in the event of the prior payment in
full of all Credit Obligations and the prior termination of this Agreement, on
the date of such payment in full, an amount equal to the Facility Fee Rate for
the three-month period or portion thereof ending on such date of payment.
3.5. CAPITAL ADEQUACY; REGULATORY CHANGES.
3.5.1. LENDER'S COMPENSATION. If any Lender shall have
determined that (a) compliance by such Lender with any applicable law,
governmental rule, regulation or order regarding capital adequacy of
banks or bank holding companies, or any interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration
thereof, or compliance by such Lender with any request or directive
regarding capital adequacy (whether or not having the force of law and
whether or not failure to comply therewith would be unlawful) of any
such authority, central bank or comparable agency, has or would have
the effect of reducing the rate of return on such Lender's capital as a
consequence of such Lender's obligations hereunder to a level below
that which such Lender could have achieved but for such adoption,
change or compliance (taking into consideration such Lender's policies
with respect to capital adequacy immediately before such compliance and
assuming that such Lender's capital was fully utilized prior to such
compliance) by any amount deemed by such Lender to be material, or (b)
any change in any Legal Requirement after the date hereof shall
directly or indirectly (i) reduce the amount of any sum received or
receivable by such Lender with respect to the Loan, (ii) impose a cost
on such Lender that is attributable to the making or maintaining of, or
such Lender's commitment to make, its portion of the Loan, or (iii)
require such Lender to make any payment on or calculated by reference
to the gross amount of any amount received by such Lender under any
Credit Document, then, in the case of clause (a) or (b), upon demand by
the Lender so affected, accompanied by the certificate referred to
below, the Company shall pay to such Lender from time to time as
specified by such Lender such additional amounts as such Lender
determines will be sufficient to fully compensate such Lender for such
reduced return, reduction, increased cost or payment, each such payment
to be made within 90 days after delivery of such notice. A certificate
of an officer of such Lender setting forth the amount to be paid to it
and the basis for computation thereof hereunder shall, in the absence
of manifest error, be conclusive. In determining such amount, such
Lender may use any reasonable averaging and attribution methods.
3.5.2. SUBSTITUTION OR REPLACEMENT OF LENDER. If any Lender
shall demand compensation under Section 3.5.1, the Company shall not be
obligated to make any payment under Section 3.5.1 if, within 90 days
after delivery of such demand:
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<PAGE> 15
(a) The Company shall have obtained a substitute Lender (which
may be one or more of the Lenders and which shall be reasonably
satisfactory to the Administrative Agent) to purchase the portion of
the Loan then held by, and to assume the Commitment of, the Lender
demanding compensation. Such substitution shall be consummated as an
assignment, with the substitute Lender paying to the Lender being
replaced the amount of principal, interest, commitment fees and
facility fees hereunder owed to the Lender being replaced, accrued
through the date of such assignment, and the Company paying to the
Lender being replaced all other Credit Obligations (including any
amounts due under Section 3.2.5) owed to the Lender being replaced,
accrued through the date of such assignment; or
(b) The Company shall have (i) repaid to the Lender demanding
compensation its Percentage Interest of the Loan, without premium (but
including any repayments required by Section 3.2.5), (ii) repaid to
such Lender all other amounts required by this Agreement, (iii)
terminated the Commitment of such Lender and (iv) reduced the Maximum
Amount of Credit then in effect by the amount of such Lender's
Commitment, at which time the remaining Lenders' respective Percentage
Interests shall be adjusted accordingly.
3.6. TAXES. If (a) any Lender shall be subject to any Tax or (b) the
Company shall be required to withhold or deduct any Tax, the Company will on
demand by the Administrative Agent (which demand shall be made by the
Administrative Agent upon request by the affected Lender), accompanied by the
certificate referred to below, pay to the Administrative Agent for such Lender's
account such additional amount as is necessary to enable such Lender to receive
on an after-Tax basis the full amount of all payments of principal, interest,
fees, expenses, indemnities and other amounts payable to such Lender under any
Credit Document. Whenever Taxes must be withheld by the Company with respect to
any payments of the Credit Obligations, the Company shall promptly furnish to
the Administrative Agent for the account of the applicable Lender official
receipts (to the extent that the relevant governmental authority delivers such
receipts) evidencing payment of any such Taxes so withheld. If the Company fails
to pay any such Taxes when due or fails to remit to the Administrative Agent for
the account of the applicable Lender the required receipts evidencing payment of
any such Taxes so withheld or deducted, the Company shall indemnify the affected
Lender for any incremental Taxes and interest or penalties that may become
payable by such Lender as a result of any such failure. Each Lender agrees that
if, after the payment by the Company of any such additional amount, any amount
identifiable as a part thereof is subsequently recovered or used as a credit by
such Lender, such Lender shall reimburse the Company to the extent of the amount
so recovered or used. A certificate of an officer of such Lender setting forth
the amount of such Tax or recovery or use and the basis therefor shall, in the
absence of manifest error, be conclusive.
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<PAGE> 16
3.7. FEES DUE DATE. If any payment of fees with respect to the Loan
shall become due on any day which is not a Banking Day, then such fees shall
instead be payable on the next succeeding Banking Day.
3.8. COMPUTATIONS OF INTEREST. For purposes of this Agreement, interest
(and any amount expressed as interest) shall be computed on a daily basis and on
the basis of a 360-day year.
4. PAYMENT.
4.1. PAYMENT AT MATURITY. On the stated or any accelerated maturity of
the Notes, the Company will pay to the Administrative Agent for the account of
each Lender an amount equal to the Loan then due, together with all accrued and
unpaid interest thereon and all other Credit Obligations then outstanding.
4.2. MANDATORY PREPAYMENTS.
4.2.1. REVOLVING LOAN. If at any time the Revolving Loan
exceeds the Maximum Amount of Credit, the Company will promptly pay the
amount of such excess to the Administrative Agent for the account of
the Lenders, in accordance with their respective Percentage Interests,
for credit to the Revolving Loan.
4.2.2. TERM LOAN. On each Payment Date after the Conversion
Date, including the Final Maturity Date, the Company will, as a
mandatory prepayment on account of the Term Loan, pay to the
Administrative Agent for the account of the Lenders, in accordance with
their respective Percentage Interests, an amount equal to the lesser of
(a) an amount equal to the percentage of the original amount of the
Term Loan set opposite such Payment Date:
<TABLE>
<CAPTION>
Payment Date Percentage
------------ ----------
<S> <C>
March 1997 through 5%
December 1997
March 1998 through 5%
December 1998
March 1999 through 5%
December 1999
March 2000 through 10%
December 2000
</TABLE>
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<PAGE> 17
or (b) the amount of the Term Loan then outstanding.
4.3. VOLUNTARY PREPAYMENTS OF LOAN. In addition to the prepayments
required by Section 4.2, the Company may from time to time prepay all or any
portion of the Loan (in a minimum amount of $1,000,000 and an integral multiple
of $1,000,000), without premium (except as provided in Section 3.2.5 with
respect to Pricing Options). The Company shall give the Administrative Agent at
least one Banking Day's prior notice of its intention to prepay (two Banking
Days' notice if any such portion of the Loan to be prepaid is subject to a CD
Pricing Option and three Banking Days' notice if any such portion of the Loan to
be prepaid is subject to a Eurodollar Pricing Option), specifying the date of
payment, the total principal amount of the Loan to be paid on such date and the
amount of interest to be paid with such prepayment.
4.4. REBORROWING. The amounts of the Revolving Loan prepaid pursuant to
Section 4.3 may be reborrowed from time to time prior to the Conversion Date in
accordance with Section 2.1. The amount of the Loan prepaid pursuant to Section
4.2 or the amount of the Term Loan prepaid pursuant to Section 4.3 may not be
reborrowed.
4.5. APPLICATION OF PAYMENTS. Any prepayment of the Loan shall be
applied (pro rata in accordance with the Lenders' respective Percentage
Interests) first to the portion of the Loan not then subject to Pricing Options,
then the balance of any such prepayment shall be applied to the portion of the
Loan then subject to Pricing Options, in the chronological order of the end of
the respective Interest Periods thereof, together with any payments required by
Section 3.2.5. Any prepayment of the principal amount of the Term Loan made
pursuant to Section 4.3 shall be credited to the payments required by Section
4.2.2 pro rata. All payments of principal hereunder shall be made to the
Administrative Agent for the account of each Lender, in accordance with the
Lenders' respective Percentage Interests.
4.6. PAYMENT AND INTEREST CUT-OFF. For all prepayments of the Term
Loan, the Company shall pay to the Administrative Agent for each Lender's
account the principal amount to be prepaid together with unpaid interest in
respect thereof accrued to the date of prepayment. Notice of prepayment having
been given in accordance with Section 4.3, and whether or not notice is given of
prepayments pursuant to Section 4.2, the amount specified to be prepaid shall
become due and payable on the date specified for prepayment.
5. CONDITIONS TO EXTENDING CREDIT. The obligations of the Lenders to make any
extension of credit pursuant to Section 2 shall be subject to the satisfaction,
on or before the Closing Date for such extension of credit, of the following
conditions:
5.1. OFFICERS' CERTIFICATE. The representations and warranties of the
Company contained in Sections 6.3 and 8 of this Agreement and the
representations and warranties of AFC contained in Sections 3.2 and 5 of the AFC
Agreement shall be true and correct on and as of each Closing Date with the same
force and effect as though originally made on and as of
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<PAGE> 18
such date; no Default shall exist on such Closing Date or will exist after
giving effect to the requested extension of credit; as of such Closing Date, and
no Material Adverse Change shall have occurred; and the Company shall have
furnished to the Administrative Agent on such Closing Date a certificate to
these effects, in substantially the form of Exhibit 5.1, signed by a Financial
Officer of the Company and, as to the representations and warranties of AFC
contained in Sections 3.2 and 5 of the AFC Agreement, signed by a Financial
Officer of AFC.
5.2. REVOLVING NOTES. On or prior to the initial Closing Date, the
Company shall have executed the Revolving Notes and delivered them to the
Administrative Agent.
5.3. CLOSING FEE. On or prior to the initial Closing Date, the Company
shall have paid to the Administrative Agent for the account of the Lenders
(other than Bank of Boston, Continental Bank, Chemical Bank, The Bank of New
York, Star Bank, N.A. and The Bank of Tokyo Trust Company), a closing fee equal
to 2% of the Lenders' respective Commitments as allocated by the Managing Agents
and the Company.
5.4. AFC AGREEMENT. On or prior to the initial Closing Date, each of
AFC and the Company shall have duly authorized, executed and delivered to the
Managing Agents an agreement (as from time to time in effect, the "AFC
Agreement") in the form of Exhibit 5.4 pursuant to which AFC shall
unconditionally guarantee the payment and performance of the Credit Obligations,
pledge certain stock to secure the Credit Obligations and subordinate any
obligations owed to it by the Company to the prior payment in full of the Credit
Obligations.
5.5. TERMINATION OF PRIOR AGREEMENTS. Contemporaneously with the
extension of credit made on the initial Closing Date, the Company shall have
paid in full all Indebtedness outstanding under the Prior Credit Agreements, and
each of the Company and AFC shall have terminated the Prior Credit Agreements
and the Prior AFC Agreements.
5.6. LEGAL OPINIONS. On or prior to the initial Closing Date, the
Lenders shall have received from the following counsel, hereby authorized and
directed by the Company with respect to its counsel, their respective opinions
with respect to the transactions contemplated by the Credit Documents, which
opinions shall be in form and substance satisfactory to the Lenders.
5.6.1. Keating, Muething & Klekamp, counsel for the Company
and AFC.
5.6.2. Ropes & Gray, special counsel for the Managing Agents.
5.7. PERFECTION OF SECURITY. Each of the Company and AFC shall have
duly authorized, executed, acknowledged, delivered, filed, registered and
recorded such security agreements, notices, financing statements, stock transfer
powers and other instruments as the Collateral Agent may have requested in order
to perfect the security interests and
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<PAGE> 19
encumbrances purported or required pursuant to the Credit Documents to be
created in the Credit Security.
5.8. LEGALITY, ETC. The making of the requested extension of credit
shall not (a) subject any Lender to any penalty or special tax (other than a Tax
for which the Company has reimbursed the Lenders under Section 3.6), (b) be
prohibited by any law or governmental order or regulation applicable to any
Lender or (c) violate any voluntary credit restraint program of the executive
branch of the government of the United States of America, the Board of Governors
of the Federal Reserve System or any other governmental or administrative agency
so long as any Lender reasonably believes that compliance therewith is in the
best interests of such Lender.
5.9. GENERAL. All legal and corporate proceedings in connection with
the transactions contemplated by this Agreement and each other Credit Document
shall be satisfactory in form and substance to the Managing Agents, and the
Lenders shall have received copies of all documents, including records of
corporate proceedings and opinions of counsel, which any Lender may have
reasonably requested in connection therewith, such documents where appropriate
to be certified by proper corporate or governmental authorities.
6. SECURITY.
6.1. CREDIT SECURITY. As security for the payment and performance of
the Credit Obligations, the Company hereby mortgages, pledges, grants and
assigns to the Collateral Agent for the benefit of the Lenders and the holders
from time to time of any Credit Obligation, and creates a first priority
security interest in, all of the Company's right, title and interest in and to
(but none of its obligations or liabilities with respect to) the following:
6.1.1. 50,000 shares or such greater number of shares of the
Common Stock of GAIC, constituting at all times at least 50% of the
issued and outstanding shares of capital stock of all classes of GAIC
and 50% of the issued and outstanding shares of capital stock entitled
to vote for the election of directors of GAIC.
6.1.2. All Distributions with respect to the stock described
in Section 6.1.1.
6.1.3. Such Additional Collateral provided by the Company as
may be necessary from time to time in order for the Company to comply
with Section 6.2.
6.1.4. All proceeds of the foregoing.
The shares of capital stock from time to time pledged hereunder
(including any shares of capital stock constituting any Additional Collateral)
are referred to as the "Company Pledged Stock", and the Company Pledged Stock,
Distributions with respect thereto, any other Additional Collateral provided by
the Company under Section 6.2 and all proceeds thereof are
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<PAGE> 20
included in the term "Credit Security". The Company has delivered to the
Collateral Agent the certificates representing the Company Pledged Stock,
together with undated stock transfer powers duly endorsed in blank, in
accordance with Section 6.3.1.
6.2. ADDITIONAL CREDIT SECURITY.
6.2.1. ADDITIONAL COLLATERAL. If GAIC shall:
(a) for any period of four consecutive fiscal
quarters incur a GAIC Net Loss (i) in excess of $25,000,000 or
(ii) less than $25,000,000 at any time when Consolidated Net
Worth at the end of such period is less than $1,000,000,000;
or
(b) receive an A.M. Best rating below any "A"
category;
(each an "Additional Collateral Event"), then, upon the written request
of the Required Majority Lenders, the Collateral Agent on behalf of the
Lenders shall by notice in writing to the Company and AFC request the
delivery of additional collateral (the "Additional Collateral"), in
form and substance satisfactory to the Required Majority Lenders, and
in any event having a Collateral Value equal to or exceeding the amount
of the Loan then outstanding in excess of $200,000,000 (the "Loan
Margin"). Upon receipt of any such notice, the Company or AFC shall
promptly, and in any event within 10 Banking Days, deliver to the
Collateral Agent the Additional Collateral.
6.2.2. FURTHER ADDITIONAL COLLATERAL. The Company covenants
that the Collateral Value of the Additional Collateral shall at all
times equal or exceed the Loan Margin. If the Collateral Agent shall at
any time give the Company and AFC notice that the aggregate Collateral
Value of the Additional Collateral is less than the Loan Margin, the
Company or AFC will promptly, and in any event within 10 Banking Days,
deliver to the Collateral Agent further Additional Collateral so that
after giving effect thereto the aggregate Collateral Value of all
Additional Collateral equals or exceeds the Loan Margin.
6.2.3. RETURN OF ADDITIONAL COLLATERAL. If after the
occurrence of an Additional Collateral Event (a) the GAIC Net Loss
Margin is less than 1/4% or (b) GAIC shall receive a rating by A.M.
Best Company in any "A" category, then, upon the written request of the
Company or AFC, so long as no Default shall exist, the Collateral Agent
shall return to the Company or AFC, as the case may be, such Additional
Collateral as the Company or AFC may so request. If the aggregate
Collateral Value of the Additional Collateral exceeds the Loan Margin
for a period of 10 Banking Days, then upon the written request of the
Company or AFC, so long as no Default shall exist, the Collateral Agent
shall return to the Company or AFC, as the case may be, such portion
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<PAGE> 21
of the Additional Collateral then in excess of the Loan Margin as the
Company or AFC may request.
6.3. REPRESENTATIONS, WARRANTIES AND COVENANTS WITH RESPECT TO CREDIT
SECURITY. The Company represents, warrants and covenants that:
6.3.1. COMPANY PLEDGED STOCK. The Company Pledged Stock is and
shall be at all times duly authorized, validly issued, fully paid and
nonassessable and is owned by the Company. The certificates delivered
to the Collateral Agent pursuant to this Section 6 evidence capital
stock that constitutes the percentages of the capital stock of GAIC
specified in Section 6.1. Contemporaneously with the issuance of any
additional capital stock by GAIC, the Company will hold in trust and
promptly deliver to the Collateral Agent certificates representing the
additional Company Pledged Stock necessary to maintain the percentages
specified in Section 6.1 (and Section 6.2, if applicable), accompanied
by undated stock transfer powers duly executed in blank, or, if the
Collateral Agent so requests, registered in its name or the name of its
nominee, as pledgee, and, if the Collateral Agent shall so request,
with the signature guaranteed, all in form and manner satisfactory to
the Collateral Agent. The Company will promptly cause the Collateral
Agent to be registered as pledgee with respect to any uncertificated
Company Pledged Stock on the transfer books of the issuer, any transfer
agent or clearing house.
6.3.2. NO LIENS. All Credit Security is and shall be free and
clear of any Liens and restrictions on the transfer thereof except for
(i) restrictions on transfer of the Company Pledged Stock imposed by
state, federal or other applicable securities or insurance laws or the
regulations of any Insurance Authority, and (ii) Liens created hereby.
6.3.3. PERFECTION OF CREDIT SECURITY. Upon the Collateral
Agent's written request from time to time, the Company will make,
execute and deliver all such instruments and documents, including
appropriate financing statements, transfer powers and notices, and take
all such action as the Collateral Agent may deem necessary or advisable
to carry out the intent and purposes of this Agreement and the other
Credit Documents or for assuring and confirming to the Lenders the
Credit Security, including any further additional collateral under
Section 6.2.2.
6.3.4. GOVERNMENTAL CONSENTS; VALIDITY OF PLEDGE. The Company
has obtained or has caused to be obtained all material approvals,
consents, orders, authorizations and licenses from, has given all
notices promptly to, has registered or filed all material agreements,
instruments or documents with, and has taken all other action with
respect to, any governmental or regulatory authority, agency or
official (including Insurance Authorities) necessary to ensure the
legality, validity, binding effect and enforceability of the grant of
the security interests in the Credit Security owned by it to the
Collateral
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<PAGE> 22
Agent for the ratable benefit of the Lenders. The provisions of this
Section 6 are effective to create in favor of the Collateral Agent for
the ratable benefit of the Lenders a legal, valid and enforceable first
priority Lien on and security interest in, all right, title and
interest of the Company in the Credit Security owned by it.
6.4. ADMINISTRATION OF CREDIT SECURITY. The Credit Security shall be
administered as follows, and if an Event of Default shall have occurred, Section
6.5 shall also apply.
6.4.1. DISTRIBUTIONS.
(i) Unless an Event of Default shall occur, the
Company shall be entitled to receive all ordinary cash
dividends (or ordinary dividends payable in marketable
securities) paid on the Company Pledged Stock as distributions
of earnings and profits. All Distributions other than such
ordinary dividends made or paid on the Company Pledged Stock
will be retained by the Collateral Agent (or if received by
the Company shall be held by the Company in trust and shall be
forthwith paid by it to the Collateral Agent in the original
form received, endorsed in blank) as a part of the Credit
Security.
(ii) If an Event of Default shall occur, all Distributions
and other payments with respect to the Company Pledged Stock
shall be retained by the Collateral Agent (or if received by
the Company shall be held by the Company in trust and shall be
forthwith paid by it to the Collateral Agent in the original
form received, endorsed in blank) as part of the Credit
Security or applied by the Collateral Agent to the payment of
the Credit Obligations in accordance with Section 6.5.4.
6.4.2. VOTING.
(i) Until an Event of Default shall occur, the
Company shall be entitled to vote or consent with respect to
the Company Pledged Stock in any manner not inconsistent with
the terms of any Credit Document, and the Collateral Agent
will, if so requested, execute appropriate revocable proxies
therefor.
(ii) If an Event of Default shall occur, and if and to the
extent that the Collateral Agent shall so notify the Company
in writing, only the Collateral Agent (with the written
consent of the Required Majority Lenders) shall be entitled to
vote or consent or take any other action with respect to the
Company Pledged Stock (and the Company will, if so requested,
execute or cause to be executed appropriate proxies therefor).
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<PAGE> 23
6.4.3. CUSTODY OF CREDIT SECURITY. The Collateral Agent will
use reasonable care in the custody and physical preservation of any
Credit Security in its possession. Except as set forth in the
immediately preceding sentence, and except as provided by applicable
law that cannot be waived, the Managing Agents and the Lenders will
have no duty with respect to the custody and protection of the Credit
Security, the collection of any part thereof or of any income thereon
or the preservation or exercise of any rights pertaining thereto,
including rights against prior parties. The Lenders will not be liable
or responsible for any loss or damage to any Credit Security, or for
any diminution in the value thereof, by reason of the act or omission
of any agent selected by the Collateral Agent.
6.4.4. GOVERNMENTAL CONSENTS AND APPROVALS. The Company will,
and will cause each of its Subsidiaries to, obtain or cause to be
obtained promptly all such material approvals, consents, orders,
authorizations and licenses from, give all such notices promptly to,
register, enroll or file all such material agreements, instruments or
documents promptly with, and promptly take all such other action with
respect to, any governmental or regulatory authority (including
Insurance Authorities), agency or official as may be required from time
to time under any provision of any applicable law:
(i) For the performance by the Company of any of its
agreements or obligations under any of the Credit Documents;
(ii) To ensure the continuing legality, validity or
binding effect or enforceability of the grant of a security
interest pursuant to this Agreement, or any other security
interests made or created in favor of the Lenders upon the
terms contained in any of the Credit Documents; and
(iii) To continue the conduct and operation of its
business in the ordinary course.
6.5. RIGHT TO REALIZE UPON CREDIT SECURITY. Except to the extent
prohibited by applicable law that cannot be waived, this Section 6.5 shall
govern the Lenders' right to realize upon the Credit Security if any Event of
Default shall have occurred until such time as such Event of Default shall have
been deemed not to exist or to have occurred pursuant to Section 9.3. The
provisions of this Section 6.5 are in addition to any rights and remedies
available at law or in equity and in addition to the provisions of any other
Credit Document. In the case of a conflict between this Section 6.5 and any
other Credit Document, this Section 6.5 shall govern.
6.5.1. MARSHALING. The Lenders shall not be required to make
any demand upon, accelerate, or pursue or exhaust any of their rights
or remedies against the Company, AFC, any Subsidiary of either of them
or any other Person with respect to the payment of the Credit
Obligations, or to pursue or exhaust any of their rights or remedies
with respect to
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<PAGE> 24
any of the collateral therefor or any direct or indirect guarantee
thereof. The Lenders shall not be required to marshal the Credit
Security or any guarantee of the Credit Obligations or to resort to the
Credit Security or any such guarantee in any particular order, and all
of their rights hereunder shall be cumulative. To the extent it may
lawfully do so, the Company hereby absolutely and irrevocably waives
and relinquishes the benefit and advantage of, and covenants not to
assert against the Managing Agents or any of the Lenders, any
valuation, stay, appraisement, extension, redemption or similar laws
now or hereafter existing which, but for this provision, might be
applicable to the sale of any Credit Security made under the judgment,
order or decree of any court, or privately under the power of sale
conferred by this Agreement, or otherwise. Without limiting the
generality of the foregoing, the Company agrees that it will not invoke
or utilize any law which might delay or impede the enforcement of the
Lenders' rights under this Agreement or any other Credit Document and
hereby waives the same. In addition, the Company hereby waives any
right to prior notice (except to the extent expressly required by this
Agreement) or judicial hearing in connection with foreclosure on or
disposition of any Credit Security, including any such right which the
Company would otherwise have under the Constitution of the United
States of America, any state or territory thereof or any other
jurisdiction.
6.5.2. SALES OF CREDIT SECURITY. Any Credit Security may be
sold for cash or other value, on credit or against future delivery
without assumption of any credit risk, in any number of lots at any
commercially reasonable public or private sale, without demand,
advertisement or notice; PROVIDED, HOWEVER, that the Collateral Agent
shall give the Company 15 days' prior written notice of the time and
place of any public sale, or the time after which a private sale or a
sale on a recognized market may be made, which notice the Company and
the Lenders hereby agree to be reasonable. At any sale of Credit
Security (except to the extent prohibited by applicable law that cannot
be waived) the Managing Agents or any of the Lenders or any of their
respective officers acting on its behalf, or their assigns, may bid for
and purchase all or any part of the property and rights so sold and
upon compliance with the terms of such sale may hold and dispose of
such property and rights without further accountability to the Company,
except for the proceeds of such sale pursuant to Section 6.5.4. The
Company acknowledges that any such sale will be made by the Collateral
Agent on an "as is" basis with disclaimers of all warranties, whether
express or implied, to the extent permitted by applicable law. The
Company will execute and deliver or cause to be executed and delivered
such instruments, documents, assignments, waivers, certificates and
affidavits, will supply or cause to be supplied such further
information and will take such further action as the Collateral Agent
shall require in connection with any such sale.
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<PAGE> 25
6.5.3. SALE WITHOUT REGISTRATION. The Company agrees that if,
at any time when the Collateral Agent shall determine to exercise its
rights hereunder to sell all or part of the securities included in the
Credit Security, the securities in question shall not be effectively
registered under the Securities Act (or other applicable law), the
Collateral Agent may, in its sole discretion, sell such securities by
private or other sale not requiring such registration in such manner
and in such circumstances as the Collateral Agent may deem necessary or
advisable in order that such sale may be effected in a commercially
reasonable manner without such registration and without the related
delays, expense and uncertainty. Without limiting the generality of the
foregoing, in any event the Collateral Agent may, in its sole
discretion, (i) approach and negotiate with one or more possible
purchasers to effect such sale and accept the first offer to purchase
by any such purchaser, (ii) restrict such sale to one or more
purchasers each of whom will represent and agree that such purchaser is
purchasing for its own account, for investment and not with a view to
the distribution or sale of such securities and (iii) cause to be
placed on certificates representing the securities in question a legend
to the effect that such securities have not been registered under the
Securities Act (or other applicable law) and may not be disposed of in
violation of the provisions thereof. The Company agrees that such
manner of disposition is commercially reasonable, that it will upon the
Collateral Agent's request give any such purchaser access to such
information regarding the issuer of the securities in question as the
Collateral Agent may reasonably request and that neither the Collateral
Agent nor any of the Lenders shall incur any responsibility for selling
all or part of the securities included in the Credit Security at any
private or other sale not requiring such registration, notwithstanding
the possibility that a substantially higher price might be realized if
the sale were deferred until after registration under the Securities
Act (or other applicable law) or until made in compliance with rules or
other exemptions from the registration provisions under the Securities
Act (or other applicable law). In the event such securities are to be
sold in a registered offering, the Company shall cooperate in preparing
such registration statement and providing access to information in
connection therewith. The Company acknowledges that no adequate remedy
at law exists for breach by it of this Section 6.5.3 and that such
breach would not be adequately compensable in damages and therefore
agrees that this Section 6.5.3 may be specifically enforced.
6.5.4. APPLICATION OF PROCEEDS. The proceeds of all sales and
collections in respect of any Credit Security, all funds collected from
the Company and any cash contained in the Credit Security, the
application of which is not otherwise specifically provided for herein,
shall be applied as follows:
First, to the payment of the costs and expenses of
such sales and collections, the reasonable expenses of the
Collateral Agent and the Managing Agents and the reasonable
fees and expenses of their special counsel;
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<PAGE> 26
Second, any surplus then remaining to the payment of
the Credit Obligations in such order and manner as the
Required Majority Lenders may in their sole discretion
determine (subject to Section 11); and
Third, any surplus then remaining shall be paid to
the Company, subject, however, to the rights of the holder of
any then existing Lien of which the Collateral Agent has
actual notice.
6.6. GOVERNMENTAL REGULATION. To the extent that Credit Security shall
include investments in or stock of an entity regulated as an insurance company
by any Insurance Authority, then, notwithstanding anything else herein contained
to the contrary, no action shall be taken by the Collateral Agent with respect
to such Company Pledged Stock unless all requirements of applicable state and
local law, and all applicable rules and regulations thereunder, requiring the
consent to or approval of such action by an Insurance Authority or of any other
governmental authority have been satisfied. Without limiting the generality of
the foregoing, the Collateral Agent will effect an acquisition of control of the
Company only with such approval or other action as may be required to be taken
by the Ohio Superintendent of Insurance pursuant to Chapter 3901.31 of Title 39
of the Ohio Revised Code (or any similar successor provision). The Company
covenants that, upon the Collateral Agent's request, it will file or cause to be
filed such applications and take such other action as the Collateral Agent may
request to obtain consent or approval of such Insurance Authority or of any
governmental authority applicable to the Company and its Subsidiaries to any
action contemplated by this Agreement and to give effect to the Lenders'
security interests, including the execution of an application for consent by
such Insurance Authority to an assignment or transfer involving a change in
ownership or control. The Collateral Agent is hereby irrevocably appointed the
true and lawful attorney of the Company, in its name and stead, to execute and
file all necessary applications with such Insurance Authority and with any other
governmental authority, the exercise of such appointment to commence only after
the occurrence of a Default.
7. GENERAL COVENANTS. The Company covenants that, until all of the Credit
Obligations shall have been paid in full and until the Lenders' Commitments to
extend credit under this Agreement and any other Credit Document shall have been
irrevocably terminated, it and its respective Subsidiaries will comply with the
following provisions:
7.1. TAXES AND OTHER CHARGES; ACCOUNTS PAYABLE.
7.1.1. TAXES AND OTHER CHARGES. Each of the Company and its
Designated Subsidiaries will duly pay and discharge, or cause to be
paid and discharged, before the same shall become in arrears, all
taxes, assessments and other governmental charges
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<PAGE> 27
imposed upon such Person and its properties, sales or activities, or
upon the income or profits therefrom, as well as all claims for labor,
materials or supplies which if unpaid might by law become a Lien upon
any of its property; PROVIDED, HOWEVER, that any such tax, assessment,
charge or claim need not be paid if the validity or amount thereof
shall at the time be contested in good faith by appropriate proceedings
and if such Person shall, in accordance with GAAP, have set aside on
its books adequate reserves with respect thereto; and PROVIDED,
FURTHER, that each of the Company and its Designated Subsidiaries will
pay or bond all such taxes, assessments, charges or other governmental
claims immediately upon the commencement of proceedings to foreclose
any Lien which may have attached as security therefor (except to the
extent such proceedings have been dismissed or stayed).
7.1.2. ACCOUNTS PAYABLE. Each of the Company and its
Designated Subsidiaries will promptly pay when due, or in conformity
with customary trade terms, all other Indebtedness incident to the
operations of such Person; PROVIDED, HOWEVER, that any such
Indebtedness need not be paid if the validity or amount thereof shall
at the time be contested in good faith by appropriate proceedings and
if such Person shall, in accordance with GAAP, have set aside on its
books adequate reserves with respect thereto.
7.2. CONDUCT OF BUSINESS, ETC.
7.2.1. TYPES OF BUSINESS. The Company and its Designated
Subsidiaries will engage in no businesses other than the businesses now
conducted by the Company and its Affiliates and described in the Annual
Report of AFC on Form 10-K for the fiscal year ended December 31, 1992.
7.2.2. MAINTENANCE OF PROPERTIES. Each of the Company and its
Designated Subsidiaries:
(a) will keep its properties in such repair, working order and
condition, and will from time to time make such repairs, replacements,
additions and improvements thereto for the efficient operation of its
businesses and will comply at all times in all material respects with
all franchises, licenses, leases and other material agreements to which
it is party so as to prevent any loss or forfeiture thereof or
thereunder, unless compliance is at the time being contested in good
faith by appropriate proceedings or unless such losses or forfeitures
have not resulted, or do not pose a material risk of resulting, in the
aggregate in any Material Adverse Change; and
(b) except to the extent permitted under Section 7.10, will do all
things necessary to preserve, renew and keep in full force and effect
and in good standing its legal existence and authority necessary to
continue its business.
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<PAGE> 28
7.2.3. STATUTORY COMPLIANCE. Each of the Company and its
Designated Subsidiaries will comply in all material respects with all
valid and applicable statutes, laws, ordinances, zoning and building
codes and other rules and regulations of the United States of America,
of the states and territories thereof and their counties,
municipalities and other subdivisions and of any foreign country or
other jurisdictions applicable to such Person, except where compliance
therewith shall at the time be contested in good faith by appropriate
proceedings or where failure so to comply has not resulted, or does not
pose a material risk of resulting, in the aggregate in any Material
Adverse Change.
7.3. TRANSACTIONS WITH AFFILIATES. Neither the Company nor any of its
Designated Subsidiaries shall effect any transaction with any Affiliate (other
than AFC, the Company or a Designated Subsidiary of the Company) on a basis less
favorable to the Company or such Designated Subsidiary than would be the case if
such transaction had been effected with a non-Affiliate, other than transactions
not involving more than $10,000,000 per year in the aggregate.
7.4. INSURANCE. Each of the Company and its Designated Subsidiaries
will maintain with financially sound and reputable insurers, insurance against
hazards and risks and liability to persons and property to the extent and in the
manner customary for companies in similar businesses similarly situated;
PROVIDED, HOWEVER, that it may effect worker's compensation insurance or similar
coverage with respect to operations in any particular state or other
jurisdiction through an insurance fund operated by such state or jurisdiction or
by meeting the self-insurance requirements of such state or jurisdiction.
7.5. FINANCIAL STATEMENTS AND REPORTS. The Company and its Subsidiaries
will maintain a system of accounting in which full and correct entries will be
made of all transactions in relation to their business and affairs in accordance
with GAAP. The fiscal year of the Company will end on December 31 in each year.
7.5.1. ANNUAL REPORTS. The Company will furnish to the Lenders
as soon as available, and in any event within 120 days after the end of
each fiscal year:
(a) The Annual Report of AFC as required by the
Exchange Act on Form 10-K for such fiscal year.
(b) The audited Consolidated financial statements of
the Company and its Subsidiaries as at the end of such fiscal
year (all in reasonable detail), together with comparative
figures for the preceding fiscal year.
(c) Unqualified reports of the Company's present
independent auditors (or other independent auditors reasonably
satisfactory to the Managing Agents), containing no material
uncertainty, to the effect that they have audited such
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<PAGE> 29
Consolidated financial statements in accordance with generally
accepted auditing standards and that such Consolidated
financial statements present fairly, in all material respects,
the financial position of the Company and its Subsidiaries at
the dates thereof and the results of their operations for the
periods covered thereby in conformity with GAAP.
(d) The statement of such accountants that they have
caused this Agreement to be reviewed and that in the course of
their audit of the Company and its Subsidiaries no facts have
come to their attention that cause them to believe that any
Default exists and in particular that they have no knowledge
of any Default under Sections 7.6 through 7.12 or, if such is
not the case, specifying such Default and the nature thereof,
it being understood that the examination of such accountants
cannot be relied upon to give such accountants knowledge of
any such Default except as it relates to accounting or
auditing matters within the scope of their audit.
(e) The internally prepared Consolidating balance
sheet of AFC, the Company and its Subsidiaries and the
Consolidating statement of earnings of AFC, the Company and
its Subsidiaries for such fiscal year (all in reasonable
detail).
(f) A certificate of a Financial Officer of the
Company to the effect that such officer has caused this
Agreement to be reviewed and has no knowledge of any Default,
or if such officer has such knowledge, specifying such Default
and the nature thereof, and what action the Company has taken,
is taking or proposes to take with respect thereto, and
stating what changes, if any, have occurred in GAAP since the
date of the financial statements described in Section
8.2.1(a).
(g) Computations by the Company demonstrating or
specifying, as the case may be, as of the close of such fiscal
year, (i) compliance with Sections 7.6 and 7.7, (ii) the GAIC
Net Loss or GAIC Net Profit, (iii) the GAIC Net Loss Margin
and (iv) the occurrence of any Additional Collateral Event.
(h) Supplements to Exhibits 8.1 and 8.13 showing any
changes in the information set forth in such Exhibits during
the last quarter of such fiscal year, as well as any changes
in the Charter, By-laws or incumbency of officers of the
Company and its Subsidiaries from those previously certified
to the Administrative Agent.
7.5.2. QUARTERLY REPORTS. The Company will furnish to the
Lenders as soon as available and, in any event, within 60 days after the end of
each of the first three fiscal quarters of the Company in each fiscal year:
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<PAGE> 30
(a) The Quarterly Report of AFC as required by the
Exchange Act on Form 10-Q for such fiscal quarter.
(b) The internally prepared Consolidated financial
statements of the Company and its Subsidiaries as of the end
of such fiscal quarter and for the portion of the fiscal year
then ending (all in reasonable detail), together with
comparative figures for the same period in the preceding
fiscal year.
(c) The internally prepared Consolidating balance
sheet of AFC, the Company and its Subsidiaries and the
Consolidating statement of earnings of AFC, the Company and
its Subsidiaries for such fiscal quarter and for such portion
of the fiscal year (all in reasonable detail).
(d) A certificate of a Financial Officer of the
Company to the effect that (i) such officer has caused this
Agreement to be reviewed and has no knowledge of any Default,
or if such officer has such knowledge, specifying such Default
and the nature thereof and what action the Company has taken,
is taking or proposes to take with respect thereto and (ii)
such financial statements have been prepared in accordance
with GAAP (subject to year-end audit adjustments and the
addition of footnotes for interim statements) and present
fairly, in all material respects, the financial position of
the Company and its Subsidiaries covered thereby at the dates
thereof and the results of their operations for the periods
covered thereby.
(e) Computations by the Company demonstrating or
specifying, as the case may be, as of the close of such
quarter, (i) compliance with Sections 7.6 and 7.7, (ii) the
GAIC Net Loss or GAIC Net Profit, (iii) the GAIC Net Loss
Margin and (iv) the occurrence of any Additional Collateral
Event.
(f) Supplements to Exhibits 8.1 and 8.13 showing any
changes in the information set forth in such Exhibits during
such fiscal quarter, as well as any changes in the Charter,
By-laws or incumbency of officers of the Company and its
Subsidiaries from those previously certified to the
Administrative Agent.
7.5.3. OTHER REPORTS. The Company will furnish to the Lenders
as soon as available copies of:
(a) within 90 days after the end of each of the first
three fiscal quarters of the Company and 150 days after the
end of each fiscal year of the Company, cash flow work sheets
for the portion of the fiscal year then ended or for such
fiscal year, as the case may be (including inter-company
transactions involving
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<PAGE> 31
cash and marketable securities) for AFC and the Company (all
in reasonable detail);
(b) all quarterly and annual financial statements,
including all exhibits and schedules thereto, registration
statements and other reports of GAIC in the form filed with
the Superintendent of Insurance of the State of Ohio; and
(c) all registration statements, proxy statements,
financial statements and reports, including reports on Form
8-K, as may be filed with the Securities and Exchange
Commission by AFC, as the Managing Agents may request from
time to time.
7.5.4. NOTICE OF MATERIAL LITIGATION; NOTICE OF DEFAULTS. The
Company will promptly furnish to the Lenders notice of the occurrence
of any litigation or any administrative or arbitration proceeding to
which the Company or any of its Subsidiaries may hereafter become a
party which may involve any material risk of any material final
judgment or liability not adequately covered by insurance or which may
otherwise result in a Material Adverse Change or which questions the
validity or enforceability of any Credit Document. Promptly upon
acquiring knowledge thereof, the Company will notify the Lenders of the
existence of any Default, specifying the nature thereof and what action
the Company has taken, is taking or proposes to take with respect
thereto.
7.5.5. ERISA REPORTS. The Company will:
(a) Furnish the Lenders with a copy of any request
for a waiver of the funding standards or an extension of the
amortization period required by sections 303 and 304 of ERISA
or section 412 of the Code, promptly after any ERISA Group
Member submits such request to the Department of Labor or the
Internal Revenue Service.
(b) Notify the Lenders of any reportable event (as
defined in section 4043 of ERISA), unless the notice
requirement with respect thereto has been waived by
regulation, promptly after any ERISA Group Member learns of
such reportable event; and furnish the Lenders with a copy of
the notice of such reportable event required to be filed with
the PBGC, promptly after such notice is required to be given.
(c) Furnish the Lenders with a copy of any notice
received by any ERISA Group Member that the PBGC has
instituted or intends to institute proceedings under section
4042 of ERISA to terminate any Plan, or that any Multiemployer
Plan is insolvent or in reorganization status under Title IV
of ERISA, promptly after receipt of such notice.
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<PAGE> 32
(d) Notify the Lenders of the possibility of the
termination of any Plan by its administrator pursuant to
section 4041 of ERISA, as soon as any ERISA Group Member
learns of such possibility and in any event prior to such
termination; and furnish the Lenders with a copy of any notice
to the PBGC that a Plan is to be terminated, promptly after
any ERISA Group Member files a copy of such notice.
(e) Notify the Lenders of the intention of any ERISA
Group Member to withdraw, in whole or in part, from any
Multiemployer Plan which may result in the incurrence by the
Company or any of its Subsidiaries of withdrawal liability in
excess of $10,000,000 under Subtitle E of Title IV of ERISA,
or of the termination, insolvency or reorganization status of
any Multiemployer Plan under such Subtitle E which may result
in liability to the Company or any of its Subsidiaries in
excess of $10,000,000 and, upon any Lender's request from time
to time, of the extent of the liability, if any, of such
Person as a result of such withdrawal, to the best of such
Person's knowledge at such time.
7.5.6. OTHER INFORMATION. From time to time upon request of
any authorized officer of any of the Lenders, the Company will furnish
to the Lenders such other information regarding the business, affairs
and financial condition of the Company and its Subsidiaries as such
officer may reasonably request. The Managing Agents' respective
authorized officers and representatives shall have the right during
normal business hours to examine the books and records of the Company
and its Subsidiaries, to make copies, notes and abstracts therefrom and
to make an independent examination of its books and records, for the
purpose of verifying the accuracy of the reports delivered by any of
the Company and its Subsidiaries pursuant to this Section 7.5 or
otherwise and ascertaining compliance with this Agreement.
7.6. CERTAIN FINANCIAL TESTS.
7.6.1. CONSOLIDATED NET WORTH. Consolidated Net Worth of the
Company and its Subsidiaries shall at all times be equal to or greater
than $800,000,000.
7.6.2. CONSOLIDATED NET LOSS. Consolidated Net Loss of the
Company and its Subsidiaries, as reported in its most recent annual
reports furnished pursuant to Section 7.5.1 or referred to in Section
8.2.1, shall not exceed (a) $150,000,000 for any fiscal year and (b)
$250,000,000 on a cumulative basis for any two consecutive fiscal
years. The Company and its Subsidiaries shall not in any event incur a
Consolidated Net Loss for any three consecutive fiscal years.
7.6.3. GAIC STATUTORY SURPLUS. The Company will cause GAIC to
maintain its surplus with respect to policyholders, calculated in
accordance with the applicable
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<PAGE> 33
statutes of the State of Ohio as in effect on January 1, 1993, at all
times in an amount in excess of the applicable amount specified in the
table below:
<TABLE>
<CAPTION>
Calendar Year Amount
------------- ------
<S> <C>
1993 $625,000,000
1994 $650,000,000
1995 $675,000,000
1996 $700,000,000
1997 $725,000,000
1998 $750,000,000
1999 $775,000,000
2000 $800,000,000
</TABLE>
7.7. RESTRICTIONS ON INDEBTEDNESS.
7.7.1. COMPANY INDEBTEDNESS. Indebtedness of the Company (on a
holding company only basis) shall at no time exceed 60% of its Net
Worth.
7.7.2. ADDITIONAL DEBT SUBORDINATION. The Company shall not
create, incur, suffer or permit to exist any Indebtedness to any
Affiliate of the Company except (a) Indebtedness which is subordinated
on terms substantially similar to the manner in which the Company's
Indebtedness to AFC is subordinated under the AFC Agreement, (b)
Indenture Indebtedness held from time to time by an Affiliate of the
Company other than AFC or any of AFC's Designated Subsidiaries, and (c)
Indenture Indebtedness held from time to time by AFC or any of AFC's
Designated Subsidiaries, such Indenture Indebtedness being subordinated
in accordance with the terms and conditions of the AFC Agreement.
7.8. RESTRICTIONS ON LIENS. Neither the Company nor any Subsidiary
shall create, incur or enter into, or suffer to be created or incurred or to
exist, any Lien (including any arrangement or agreement which prohibits it from
creating any Lien), except the following:
7.8.1. Liens on the Credit Security created by the Credit
Documents which secure the Credit Obligations and restrictions on Liens
contained in the Credit Documents.
7.8.2. Liens on assets (other than the stock of any Wholly
Owned Subsidiary and any other Credit Security), so long as no Default
exists either before or immediately after giving effect to the creation
of such security interests.
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7.8.3. Liens on assets (other than the stock of any Wholly
Owned Subsidiary and any other Credit Security) securing Indebtedness
of the Company's Subsidiaries owing to the Company.
7.8.4. Purchase money Liens (including mortgages, conditional
sales, Capitalized Leases and any other title retention or deferred
purchase devices) on property of the Company or a Subsidiary existing
or created at the time of acquisition thereof, and the extension and
refunding of any such Lien in an amount not exceeding the amount
thereof remaining unpaid immediately prior to such extension or
refunding; PROVIDED, HOWEVER, that the principal amount of Indebtedness
(including Indebtedness in respect of Capitalized Lease Obligations)
secured by each such security interest in each item of property shall
not exceed the cost (including all such Indebtedness secured thereby,
whether or not assumed) of the item subject thereto.
7.9. RESTRICTIONS ON DISTRIBUTIONS. Neither the Company nor any of its
Designated Subsidiaries shall make any Distribution unless no Default exists
both before and immediately after giving effect to such Distribution, except
that a Designated Subsidiary may at any time make a Distribution to another
Designated Subsidiary or to the Company.
7.10. MERGER, CONSOLIDATION AND SALE OF ASSETS. Neither the Company nor
any of its Designated Subsidiaries will become party to any merger or
consolidation or sell, sell and lease back, lease, sublease or otherwise dispose
of any assets, except that, so long as immediately before and after giving
effect thereto no Default shall exist:
7.10.1. Any Subsidiary of the Company, other than a Subsidiary
whose shares of capital stock are included from time to time in the
Pledged Stock, may be merged into or consolidated with, or may sell,
lease or otherwise dispose of any of its assets to, the Company or any
Wholly Owned Subsidiary of the Company; PROVIDED, HOWEVER, that in any
such merger or consolidation to which the Company is party, the Company
shall be the surviving or resulting corporation.
7.10.2. The Company may become party to any merger or
consolidation of which the Company is the surviving or resulting Person
if, after giving effect thereto, the Company shall continue to be a
Wholly Owned Subsidiary of AFC.
7.10.3. The Company may sell or dispose of any shares of
capital stock of GAIC pursuant to Liens permitted by Section 7.8.1.
7.10.4. The Company and its Subsidiaries may sell or dispose
of inventory in the ordinary course of business.
7.10.5. The Company and its Subsidiaries may dispose of assets
in the ordinary course of business that are no longer used or useful in
such business.
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7.10.6. The Company and its Designated Subsidiaries may from
time to time sell or dispose of assets (other than stock of GAIC) on
arm's length terms; PROVIDED, HOWEVER, that the assets sold pursuant to
this Section 7.10.6 on a cumulative basis (a) shall not represent net
book value, determined in accordance with GAAP, exceeding 50% of the
net book value of all assets of the Company and its Designated
Subsidiaries as of December 31, 1992 (other than assets constituting
American Business Insurance, Inc. or any of its Subsidiaries) and (b)
shall not have contributed revenue, determined in accordance with GAAP,
over the period of four fiscal quarters prior to the respective sales
exceeding 50% of the revenue of the Company and its Designated
Subsidiaries for the four fiscal quarters ended December 31, 1992
(other than revenue attributable to American Business Insurance, Inc.
or any of its Subsidiaries).
7.11. DISTRIBUTIONS FROM SUBSIDIARIES. The Company will not permit any
of its Subsidiaries to enter into or be bound by any agreement (including
covenants requiring the maintenance of specified amounts of net worth or working
capital) which materially burdens or restricts the right or ability of any
Subsidiary to pay Distributions to another Subsidiary or to the Company, subject
to any limitations imposed by applicable insurance laws.
7.12. COMPLIANCE WITH ERISA. The Company will cause all ERISA Group
Members to meet all minimum funding requirements applicable to them with respect
to any Plan pursuant to section 302 of ERISA or section 412 of the Code, without
giving effect to any waivers of such requirements or extensions of the related
amortization periods which may be granted. Each Plan maintained from time to
time will be a qualified plan under section 401(a) of the Code and will comply
in all material respects with the provisions of ERISA and the Code applicable to
each Plan. At no time shall the Accumulated Benefit Obligations under any Plan
that is not a Multiemployer Plan exceed the fair market value of the assets of
such Plan allocable to such benefits by more than $10,000,000.
7.13. COMPLIANCE WITH ENVIRONMENTAL LAWS. The Company will, and will
cause each of its Subsidiaries to:
(a) Use and operate all of its facilities and properties in
material compliance with all Environmental Laws, keep all necessary
permits, approvals, certificates, licenses and other authorizations
relating to environmental matters in effect and remain in material
compliance therewith, and handle all Hazardous Materials in material
compliance with all applicable Environmental Laws;
(b) Immediately notify the Administrative Agent, and provide
copies upon receipt, of all written claims, complaints, notices or
inquiries relating to the condition of its facilities and properties or
compliance with Environmental Laws, and shall promptly cure and have
dismissed with prejudice to the satisfaction of the
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Administrative Agent any actions and proceedings relating to compliance
with Environmental Laws; and
(c) Provide such information and certifications which the
Administrative Agent may reasonably request from time to time to
evidence compliance with this Section 7.13.
8. REPRESENTATIONS AND WARRANTIES. In order to induce the Lenders to extend
credit to the Company hereunder, the Company represents and warrants that:
8.1. ORGANIZATION AND BUSINESS.
8.1.1. THE COMPANY. The Company is a duly organized and
validly existing corporation, in good standing under the laws of the
State of Ohio, with all power and authority, corporate or otherwise,
necessary to (a) enter into and perform this Agreement and each other
Credit Document to which it is party and make any borrowings hereunder,
(b) grant the Lenders the security interests in the Credit Security
owned by it to secure the Credit Obligations and (c) own its properties
and carry on the business now conducted or proposed to be conducted by
it. The Company has taken all corporate action required to execute,
deliver and perform this Agreement and each other Credit Document to
which it is party, to make any borrowings hereunder, and to grant to
the Lenders a first priority security interest in the Credit Security
owned by it. Certified copies of the Charter and By-laws of the Company
have been previously delivered to the Administrative Agent and are
correct and complete.
8.1.2. SUBSIDIARIES. Exhibit 8.1, as supplemented from time to
time, sets forth the name, jurisdiction of organization and ownership
of Chiquita, Penn Central and each Material Subsidiary of the Company.
Each Material Subsidiary of the Company is a duly organized and validly
existing corporation, in good standing under the laws of the
jurisdiction of its incorporation, with all power and authority,
corporate or otherwise, necessary to own its properties and carry on
the business now conducted or proposed to be conducted by it.
8.1.3. QUALIFICATION. Except as set forth on Exhibit 8.1, each
of the Company and each of its Material Subsidiaries is duly and
legally qualified to do business as a foreign corporation and is in
good standing in each state or jurisdiction in which such qualification
is required and is duly authorized, qualified and licensed under all
laws, regulations, ordinances or orders of public authorities, or
otherwise, to carry on its business in the places and in the manner in
which it is conducted.
8.2. FINANCIAL STATEMENTS AND OTHER INFORMATION; CERTAIN AGREEMENTS.
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8.2.1. FINANCIAL STATEMENTS AND OTHER INFORMATION. The Company
has previously furnished to the Lenders copies of the following:
(a) The audited Consolidated financial statements of
the Company and its Subsidiaries as at December 31 in each of
1991 and 1992, accompanied by reports of the Company's
independent auditors;
(b) The Annual Report of AFC on Form 10-K for the
fiscal year ended December 31, 1992 ("AFC's 1992 Form 10-K");
(c) The Quarterly Report of AFC on Form 10-Q for the
fiscal quarter ended June 30, 1993;
(d) The internally prepared quarterly report of the
Company for the fiscal quarter ended June 30, 1993; and
(e) The June 30, 1993 quarterly and December 31, 1992
annual financial statements of GAIC in the form filed with the
Superintendent of Insurance of the State of Ohio.
The financial statements (including the notes thereto)
referred to in clauses (a), (b), (c) and (d) above have been prepared
in accordance with GAAP, and the financial statements (including the
notes thereto) referred to in clause (e) above have been prepared in
accordance with applicable statutory accounting principles (in each
case, subject to year-end audit adjustments and the absence of
footnotes for interim statements) and the financial statements
(including the notes thereto) referred to in clauses (a), (b), (c) and
(d) above fairly present the financial condition of the Persons covered
thereby at the dates thereof and the results of their operations for
the periods covered thereby, and the financial statements (including
the notes thereto) referred to in clause (e) above present the
financial condition of the Persons covered thereby at the dates thereof
and the results of their operations for the periods covered thereby in
compliance with applicable statutory regulations and guidelines.
Neither the Company nor any of its Subsidiaries has any known material
contingent liabilities which are not referred to in said financial
statements or in the notes thereto.
AFC's 1992 Form 10-K (including all of the financial
statements and schedules included therein) contains all information
which is required to be stated therein in accordance with the Exchange
Act, and conforms in all material respects to the requirements thereof;
and AFC's 1992 Form 10-K did not when filed include any untrue
statement of a material fact or omit to state a material fact which was
required to be stated therein or was necessary to make the statements
therein not misleading in the light of the circumstances in which they
were made.
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8.3. LICENSES, ETC. The Company and its Designated Subsidiaries have
all trademarks, trademark rights, trade names, trade name rights, service marks,
service mark rights, copyrights, licenses, permits, authorizations and other
rights, as are necessary for the conduct of their respective businesses. All of
the foregoing are in full force and effect, and the Company and each of its
Designated Subsidiaries is in substantial compliance without any known conflict
with the valid rights of or by others which could result in a Material Adverse
Change.
8.4. CHANGES IN CONDITION. No Material Adverse Change has occurred, and
since December 31, 1992, except as previously disclosed to the Lenders, neither
the Company nor any of its Designated Subsidiaries has entered into any material
transaction outside the ordinary course of business.
8.5. TITLE TO ASSETS. Each of the Company and its Designated
Subsidiaries has good and marketable title to all assets necessary for or used
in the operations of their businesses as now conducted or proposed to be
conducted by them and reflected in the most recent balance sheet referred to in
Section 8.2.1(a) (or the balance sheet most recently furnished to the Lenders
pursuant to Section 7.5.1 or 7.5.2), and to all assets acquired subsequent to
the date of such balance sheet, subject to no Liens except for those permitted
by Section 7.8.
8.6. LITIGATION. No litigation, at law or in equity, or any proceeding
before any federal, state, provincial or municipal court, board or other
governmental or administrative agency or any arbitrator is pending or to the
knowledge of the Company threatened which may involve any material risk of any
final judgment or liability not adequately covered by insurance or which may
otherwise result in any Material Adverse Change, or which questions the validity
or enforceability of any Credit Document, and no judgment, decree, or order of
any federal, state, provincial or municipal court, board or other governmental
or administrative agency or arbitrator has been issued against the Company,
GAIC, AFC or any of their respective Designated Subsidiaries which has resulted,
or poses a material risk of resulting in, any Material Adverse Change.
8.7. TAX RETURNS. The Company and its Designated Subsidiaries have
filed all tax returns which are required to be filed and have paid, or made
adequate provision for the payment of, all taxes which have or may become due
pursuant to said returns or to assessments received. The federal tax returns of
the Company for which the applicable period of limitations have not expired have
not been audited by the Internal Revenue Service. The Company knows of no
material additional assessments or basis therefor. The Company has made adequate
provision for all current taxes, and in the opinion of the Company there will
not be any material additional assessments for any fiscal periods prior to and
including the fiscal year ended December 31, 1992 in excess of the amounts
reserved therefor in the balance sheet as at such date.
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8.8. ENFORCEABILITY; NO LEGAL OBSTACLE TO AGREEMENTS. Each of this
Agreement, the Notes and each other Credit Document to which the Company, AFC or
any of their respective Subsidiaries is party is the legal, valid and binding
obligation of such Person, enforceable against it in accordance with its terms.
Neither the execution and delivery of this Agreement or any other Credit
Document, nor the making of any borrowings hereunder, nor the securing of the
Credit Obligations with the Credit Security, nor the consummation of any
transaction referred to in or contemplated by this Agreement or any other Credit
Document, nor the fulfillment of the terms hereof or thereof or of any other
agreement, instrument, deed or lease referred to in this Agreement or any other
Credit Document, has constituted or resulted, or will constitute or result in:
(a) any breach or termination of the provisions of any
agreement, instrument, deed or lease to which the Company or any of its
Subsidiaries or AFC is a party or by which it is bound, or of the
Charter or By-laws of the Company or any of its Subsidiaries or AFC;
(b) the violation of any law, statute, judgment, decree or
governmental order, rule or regulation applicable to the Company or any
of its Subsidiaries or AFC;
(c) the creation under any agreement, instrument, deed or
lease of any Lien (other than Liens on the Credit Security which secure
the Credit Obligations) upon any of the assets of the Company or any of
its Subsidiaries or AFC; or
(d) any redemption, retirement or other repurchase obligation
of the Company or any of its Subsidiaries or AFC under any Charter,
By-law, agreement, instrument, deed or lease.
No approval, authorization or other action by, or declaration to or filing with,
any governmental or administrative authority or any other Person (including
Insurance Authorities) is required to be obtained or made by the Company or any
of its Subsidiaries in connection with the execution, delivery and performance
of this Agreement or any other Credit Document, the transactions contemplated
hereby or thereby or the making of any borrowing or the granting of any security
interest by the Company or any of its Subsidiaries hereunder or thereunder, or
the validity or enforceability of any Credit Document.
8.9. DEFAULTS. Neither the Company nor any of its Designated
Subsidiaries nor AFC is in default under any provision of its Charter or By-laws
or of this Agreement or any other Credit Document. Neither the Company nor any
of its Designated Subsidiaries nor AFC is in default under any provision of any
agreement, instrument, deed or lease to which it is party or by which it or its
property is bound, or has violated any law, judgment, decree or governmental
order, rule or regulation, so as to result, or pose a material risk of
resulting, in any Material Adverse Change.
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8.10. BURDENSOME OBLIGATIONS. Neither the Company nor any of its
Designated Subsidiaries is party to or bound by any agreement, instrument, deed
or lease or is subject to any Charter, By-law or other restriction which, in the
opinion of AFC's management, is so unusual or burdensome as in the foreseeable
future to result, or pose a material risk of resulting, in a Material Adverse
Change. The Company does not presently anticipate that future expenditures of
the Company and its Designated Subsidiaries needed to meet the provisions of any
federal or state statutes, orders, rules or regulations will be so burdensome as
to result, or pose a material risk of resulting, in a Material Adverse Change.
8.11. PENSION PLANS. Each Plan maintained by the Company or any ERISA
Group Member is in material compliance with the applicable provisions of ERISA
and the Code. Neither the Company nor any ERISA Group Member (except American
Empire Insurance Company as set forth in Exhibit 8.11) maintains, contributes
to, or participates in any Plan that is a "defined benefit plan" as defined in
ERISA, or is a Multiemployer Plan. The Company and each ERISA Group Member have
met all of the funding standards applicable to such Plans, and no event or
condition exists which would permit the institution of proceedings to terminate
any Plan under section 4042 of ERISA. The current value of the Accumulated
Benefit Obligations under each of the Plans does not exceed the current value of
such Plans' assets allocable to such benefits by more than $1,000,000.
8.12. FOREIGN TRADE REGULATIONS; GOVERNMENT REGULATION.
8.12.1. FOREIGN TRADE REGULATIONS. Neither the execution and
delivery of this Agreement or any other Credit Document, nor the making
by the Company of any borrowings hereunder, nor the securing of the
Credit Obligations with the Credit Security, has constituted or
resulted in or will constitute or result in the violation of any
Foreign Trade Regulation.
8.12.2. GOVERNMENT REGULATION. Neither the Company nor any of
its Subsidiaries, nor any Person controlling the Company or any of its
Subsidiaries or under common control with the Company or any of its
Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act of 1935, the Investment
Company Act of 1940, the Interstate Commerce Act or any statute or
regulation which regulates the incurring by the Company of Financing
Debt as contemplated by this Agreement and the other Credit Documents.
Various aspects of the business conducted by the Company and its
Subsidiaries, including the nature of the services required to be
furnished and the rates that may be charged therefor, are subject to
regulation by the Superintendent of Insurance of the State of Ohio and
by similar authorities in other jurisdictions in which the Company and
its Subsidiaries conduct business.
8.13. ENVIRONMENTAL REGULATION. Except as set forth in Exhibit 8.13 and
to the best of the Company's knowledge:
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(a) There have been no past, and there are no pending
or threatened:
(i) claims, complaints, notices or requests
for information received by the Company or any of its
Designated Subsidiaries with respect to any alleged
violation of any Environmental Law that, singly or in
the aggregate, have resulted in, or may reasonably be
expected to result in, any Material Adverse Change,
or
(ii) complaints, notices or inquiries to the
Company or any of its Designated Subsidiaries
regarding potential liability under any Environmental
Law that, singly or in the aggregate, have resulted
in, or may reasonably be expected to result in, any
Material Adverse Change;
(b) No property now or previously owned or leased by
the Company or any of its Designated Subsidiaries is listed or
proposed for listing (with respect to owned property only) on
the National Priorities List pursuant to CERCLA, on CERCLIS or
on any similar state list of sites requiring investigation or
clean-up; and
(c) Neither the Company nor any of its Designated
Subsidiaries has directly transported or directly arranged for
the transportation of any Hazardous Material to any location
which is listed or proposed for listing on the National
Priorities List pursuant to CERCLA, on CERCLIS or on any
similar state list or which is the subject of federal, state
or local enforcement actions or other investigations which may
lead to material claims against the Company or such Subsidiary
for any remedial work, damage to natural resources or personal
injury, including claims under CERCLA.
8.14. DISCLOSURE. Neither this Agreement nor any other Credit Document
to be furnished to the Lenders by or on behalf of the Company or any of its
Subsidiaries in connection with the transactions contemplated hereby or by such
Credit Document contains any untrue statement of material fact or omits to state
a material fact necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances under which they were made.
No fact is actually known to the Company which has resulted, or in the future
(so far as the Company can reasonably foresee) will result, or poses a material
risk of resulting, in any Material Adverse Change, except to the extent that
present or future general economic conditions may result in a Material Adverse
Change.
9. DEFAULTS.
9.1. EVENTS OF DEFAULT. The following events are herein referred to as
"Events of Default":
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9.1.1. The Company shall fail to make any payment in respect
of: (a) interest on any of the Credit Obligations as the same shall
become due and payable and such failure shall continue for a period of
five consecutive days, (b) any fee or any expense or indemnity in
respect of any of the Credit Obligations as the same shall become due
and payable and such failure shall continue for a period of five
consecutive days after notice thereof by the Managing Agents to the
Company (which notice shall be given upon the request of the Required
Majority Lenders), or (c) principal of any of the Credit Obligations as
the same shall become due, whether at maturity or by acceleration or
otherwise.
9.1.2. The Company or any of its Subsidiaries shall fail to
perform or observe any of the provisions of Sections 7.6 through 7.13
to be performed or observed by it or AFC shall fail to perform or
observe any of the provisions of Section 6.4 or 6.5 of the AFC
Agreement.
9.1.3. The Company or any of its Subsidiaries or AFC shall
fail to perform or observe any other covenant, agreement or provision
to be performed or observed by it under this Agreement or any other
Credit Document, and such failure shall not be rectified or cured to
the written satisfaction of the Required Majority Lenders within 20
days after notice thereof by the Managing Agents to the Company (which
notice shall be given upon the request of the Required Majority
Lenders).
9.1.4. Any representation or warranty of or with respect to
the Company or any of its Subsidiaries or AFC in connection with this
Agreement or any other Credit Document shall be materially false or
materially misleading on the date as of which it was made.
9.1.5. (a) The Company or any of its Designated Subsidiaries
or AFC shall fail to make any payment when due (after giving
effect to any applicable grace periods) in respect of any
Financing Debt (other than the Credit Obligations) outstanding
in an aggregate amount of principal and accrued and unpaid
interest exceeding $1,000,000;
(b) The Company or any of its Designated Subsidiaries
or AFC shall fail to perform or observe the terms of any
agreement or guarantee relating to such Financing Debt, and
such failure or condition shall continue, without having been
duly cured, waived or consented to, beyond the period of
grace, if any, specified in such agreement, and such failure
or condition shall permit the acceleration of such Financing
Debt;
(c) Any such Financing Debt of the Company or any of
its Designated Subsidiaries or AFC shall be accelerated or
become due or payable prior to its
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stated maturity for any reason whatsoever (other than
voluntary prepayments thereof);
(d) Any Lien on any property of the Company or any of
its Designated Subsidiaries or AFC securing any such Financing
Debt shall be enforced by foreclosure or similar action; or
(e) Any holder of any such Financing Debt shall
exercise any right of rescission with respect to the issuance
thereof.
9.1.6. AFC shall cease to own beneficially all of the voting
securities of the Company or GAIC.
9.1.7. (i) Lindner Family Members or direct or indirect
Subsidiaries of Lindner Family Members shall cease to own, in the
aggregate, beneficially (A) at least 35% of the outstanding Common
Stock of AFC entitled to vote generally and (B) a sufficient number of
shares of such voting Common Stock of AFC so that such Lindner Family
Members or direct or indirect Subsidiaries thereof, in the aggregate,
shall own more shares of such Common Stock than any other Person or
group of Persons by a margin of at least 10% of the total number of
shares of such voting Common Stock of AFC then outstanding, or (ii) a
majority of the members of the Board of Directors of AFC shall not
actually consist of Lindner Family Members or their nominees or
representatives.
9.1.8. Except as permitted by Section 7.10, the Company shall
cease to own, directly or indirectly, the capital stock of Chiquita,
Penn Central or any of the Company's Material Subsidiaries that it owns
on the initial Closing Date.
9.1.9. Any Credit Document shall cease, for any reason to be
in full force and effect, or the Company or any of its Subsidiaries or
AFC shall so assert, or the security interests created by this
Agreement and the other Credit Documents shall cease to be enforceable
and of the same effect and priority purported to be created hereby.
9.1.10. A final judgment (a) which, with other outstanding
final judgments against the Company or any of its Designated
Subsidiaries or AFC, exceeds an aggregate of $5,000,000 shall be
rendered against the Company or any of its Designated Subsidiaries or
AFC, or (b) which grants injunctive relief that results, or poses a
material risk of resulting, in a Material Adverse Change, and (c)
which, within 60 days after entry thereof, has not been discharged or
execution thereof stayed pending appeal, or if, within 60 days after
the expiration of any such stay, such judgment shall not have been
discharged.
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9.1.11. The Company or any ERISA Group Member shall fail to
pay when due amounts aggregating in excess of $10,000,000 which it
shall have become liable to pay to the PBGC or to a Plan under Title IV
of ERISA; or notice of intent to terminate a Plan shall be filed under
Title IV of ERISA by the Company or any ERISA Group Member or any
administrator; or the PBGC shall institute proceedings under Title IV
of ERISA to terminate or to cause a trustee to be appointed to
administer any Plan or a proceeding shall be instituted by a fiduciary
of any Plan against the Company or any ERISA Group Member to enforce
section 515 or 4219(c)(5) of ERISA and such proceeding shall not have
been dismissed within 30 days thereafter; or a Lien shall be imposed
under section 302(f) of ERISA; or a condition shall exist by reason of
which the PBGC would be entitled to obtain a decree adjudicating that
any Plan must be terminated.
9.1.12. GAIC or any of its Designated Insurance Subsidiaries
shall, at any time after the date hereof, be prohibited by law from
engaging in the business of effecting and carrying out contracts of
insurance, and such prohibition would result in a Material Adverse
Change.
9.1.13. Any court or any Insurance Authority or any other
governmental or regulatory authority, agency or official of competent
jurisdiction shall issue an order or decree which shall require GAIC or
any of its Designated Insurance Subsidiaries to reduce or to terminate
all or any substantial part of its insurance business, and such
reduction or termination would result in a Material Adverse Change.
9.1.14. (a) The Company, AFC, GAIC, Chiquita, Penn Central or
any Material Subsidiary of the Company or of AFC (other than Great
American Communications Company and its Subsidiaries with respect to
its prepackaged bankruptcy filing made on November 5, 1993) shall:
(i) Commence a voluntary case under the
Bankruptcy Code or authorize, by appropriate
proceedings of its board of directors or other
governing body, the commencement of such a voluntary
case;
(ii) Have filed against it a petition
commencing an involuntary case under the Bankruptcy
Code which shall not have been dismissed within 60
days after the date on which such petition is filed;
or file an answer or other pleading within such
60-day period admitting or failing to deny the
material allegations of such a petition or seeking,
consenting to or acquiescing in the relief therein
provided;
(iii) Have entered against it an order for
relief in any involuntary case commenced under the
Bankruptcy Code;
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(iv) Seek relief as a debtor under any
applicable law, other than the Bankruptcy Code, of
any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or
alteration of the rights of creditors, or consent to
or acquiesce in such relief;
(v) Have entered against it an order by a
court of competent jurisdiction (A) finding it to be
bankrupt or insolvent, (B) ordering or approving its
liquidation, reorganization or any modification or
alteration of the rights of its creditors or (C)
assuming custody of, or appointing a receiver or
other custodian for, all or a substantial portion of
its property;
(vi) Make an assignment for the benefit of,
or enter into a composition with, its creditors, or
appoint, or consent to the appointment of, or suffer
to exist a receiver or other custodian for, all or a
substantial portion of its property; or
(vii) Become insolvent or generally fail to
pay, or admit in writing its inability or
unwillingness to pay, debts as they become due; or
(b) Any applicable insurance regulatory authority
shall take action to intervene into the management or business
affairs of GAIC.
9.2. CERTAIN ACTIONS FOLLOWING AN EVENT OF DEFAULT. If any one or more
Events of Default shall occur, then in each and every such case:
9.2.1. NO OBLIGATION TO EXTEND CREDIT. Upon notice by the
Managing Agents to the Company (which notice shall be given upon the
request of the Required Majority Lenders), the obligations of the
Lenders to make any further extensions of credit hereunder shall
automatically terminate; PROVIDED, HOWEVER, that if a Bankruptcy
Default shall have occurred, the Commitments (if not theretofore
terminated) shall automatically terminate.
9.2.2. EXERCISE OF RIGHTS; CREDIT SECURITY. Upon the written
request of the Required Majority Lenders, the Managing Agents shall
proceed to protect and enforce the Lenders' rights by suit in equity,
action at law and/or other appropriate proceeding, either for specific
performance of any covenant or condition contained in this Agreement or
any other Credit Document or in any instrument or assignment delivered
to the Lenders pursuant to this Agreement or any other Credit Document,
or in aid of the exercise of any power granted in this Agreement or any
other Credit Document or any such instrument or assignment. Upon the
written request of the Required Majority
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<PAGE> 46
Lenders, the Collateral Agent shall proceed to enforce payment of the
unpaid Credit Obligations and to realize upon any and all rights in the
Credit Security.
9.2.3. ACCELERATION. Upon the written request of the Required
Majority Lenders, the Managing Agents on behalf of the Lenders shall by
notice in writing to the Company declare all or any part of the unpaid
balance of the Credit Obligations then outstanding to be immediately
due and payable, and thereupon such unpaid balance or part thereof
shall become so due and payable without presentment, protest or further
demand or notice of any kind, all of which are hereby expressly waived;
PROVIDED, HOWEVER, that if a Bankruptcy Default shall have occurred,
the unpaid balance of the Credit Obligations shall automatically become
immediately due and payable without presentment, protest, or other
demand or notice of any kind, all of which are expressly waived.
9.2.4. SETOFF. If all or any part of the unpaid balance of the
Credit Obligations shall have become due and payable pursuant to
Section 9.2.3, each Lender may offset and apply toward the payment of
such balance or part thereof (and/or toward the curing of any Event of
Default) any Indebtedness from such Lender to the Company, including
any Indebtedness represented by deposits in any account maintained with
such Lender, regardless of the adequacy of any security for the Credit
Obligations, and no Lender shall have any duty to determine the
adequacy of any such security in connection with any such offset.
9.2.5. CUMULATIVE REMEDIES. To the extent not prohibited by
applicable law which cannot be waived, all of the Lenders' rights
hereunder and under each other Credit Document shall be cumulative.
9.3. ANNULMENT OF DEFAULTS. Any Default or Event of Default shall be
deemed not to exist or to have occurred for any purpose of this Agreement if the
required holders of the Credit Obligations in accordance with Section 11.6 or
the Managing Agents (with any consent of holders of Credit Obligations required
by Section 11.6) shall have waived such Default or Event of Default in writing,
stated in writing that the same has been cured to such Lenders' reasonable
satisfaction or entered into an amendment to this Agreement which by its express
terms cures such Default or Event of Default. No such action by the Lenders or
the Managing Agents shall extend to or affect any subsequent Default or Event of
Default or impair any rights of the Lenders upon the occurrence thereof. The
making of any extension of credit during the existence of any Default or Event
of Default shall not constitute a waiver thereof.
9.4. WAIVERS. The Company hereby waives to the extent not prohibited by
applicable law:
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(a) All presentments, demands for performance, notices of
nonperformance (except to the extent required by the provisions of this
Agreement or any other Credit Document), protests, notices of protest
and notices of dishonor;
(b) Any requirement of diligence or promptness on the part of
any Lender in the enforcement of its rights under this Agreement, the
Notes or any other Credit Document;
(c) Any and all notices of every kind and description which
may be required to be given by any statute or rule of law; and
(d) Any defense of any kind (other than indefeasible payment
in full) which it may now or hereafter have with respect to its
liability under this Agreement, the Notes or any other Credit Document
or with respect to the Credit Obligations.
10. EXPENSES; INDEMNITY.
10.1. EXPENSES. The Company will bear:
(a) All reasonable expenses of the Managing Agents (including
the reasonable fees and disbursements of the special counsel to the
Managing Agents, but excluding fees and expenses of counsel to the
other Lenders) in connection with the preparation and duplication of
this Agreement, each other Credit Document (including any amendment to
or waiver under any Credit Document), the transactions contemplated
hereby and thereby and operations hereunder and thereunder;
(b) All recording and filing fees and transfer and documentary
stamp and similar taxes at any time payable in respect of this
Agreement, any other Credit Document, any Credit Security or the
incurrence of the Credit Obligations; and
(c) To the extent not prohibited by applicable law that cannot
be waived, all other reasonable expenses incurred by the Lenders or the
holder of any Credit Obligation in connection with the enforcement of
any rights hereunder or under any other Credit Document (including,
during the existence of a Default, the Managing Agents' examination
rights provided in Section 7.5.6), including costs of collection and
reasonable attorneys' fees (including a reasonable allowance for the
hourly cost of attorneys employed by the Managing Agents on a salaried
basis) and expenses.
10.2. GENERAL INDEMNITY. The Company will indemnify each Managing Agent
and each Lender, and each of the Managing Agents' and the Lenders' respective
directors, officers and employees, and each Person, if any, who controls any
Managing Agent or Lender (each Managing Agent and each Lender and each of their
respective directors, officers, employees and control Persons is referred to as
an "Indemnitee") and hold each of them harmless from
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and against any and all claims, damages, liabilities and reasonable expenses
(including reasonable fees and disbursements of counsel with whom any Indemnitee
may consult in connection therewith and all expenses of litigation or
preparation therefor) which any Indemnitee may incur or which may be asserted
against any Indemnitee in connection with any litigation or investigation
involving AFC, the Company or any of their respective Subsidiaries, or any
officer, director or employee thereof (including the Managing Agents' or
Lenders' compliance with or contest of any subpoena or other process issued
against it in any proceeding involving AFC, the Company or any of their
respective Subsidiaries), whether or not such Indemnitees are parties thereto,
or any penalties or other matters involving the transactions contemplated hereby
or in connection with the existence or exercise of any rights with respect to
the Credit Security in accordance with the provisions of the Credit Documents,
other than litigation commenced by the Company against the Lenders or the
Managing Agents which seeks enforcement of any of the rights of the Company
hereunder or under any other Credit Document and is finally determined adversely
to the Lenders or the Managing Agents and except to the extent such claims,
damages, liabilities and expenses result from a Managing Agent's or Lender's
gross negligence or willful misconduct.
11. OPERATIONS.
11.1. INTERESTS IN CREDITS. The percentage interest of each Lender in
the Loan shall be computed based on the Commitment for each Lender as follows:
<TABLE>
<CAPTION>
Commitment Percentage
Lender Amount Interest
- ------ ------ --------
<S> <C> <C>
Continental Bank N.A. $62,500,000 20.8334%
The First National $62,500,000 20.8334%
Bank of Boston
Chemical Bank $30,000,000 10.0000%
The Bank of New York $25,000,000 8.3333%
NationsBank of
Georgia, N.A. $25,000,000 8.3333%
Credit Lyonnais $25,000,000 8.3333%
Cayman Island Branch
The Chase Manhattan $25,000,000 8.3333%
Bank, N.A.
</TABLE>
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<PAGE> 49
<TABLE>
<S> <C> <C>
Star Bank, N.A. $20,000,000 6.6667%
The Bank of Tokyo Trust $15,000,000 5.0000%
Company
Society National Bank $10,000,000 3.3333%
----------- -------
Total $300,000,000 100%
============ ====
</TABLE>
The foregoing percentage interests, as adjusted pursuant to the terms of this
Agreement and otherwise as the Lenders may from time to time agree among
themselves, are referred to as the "Percentage Interests" with respect to all or
any portion of the Loan. References in any Credit Document to the Lenders'
respective Percentage Interests are to such interests as from time to time in
effect.
11.2. MANAGING AGENT'S AUTHORITY TO ACT, ETC. Each of the Lenders
hereby appoints and authorizes the Managing Agents to act for the Lenders as the
Lenders' Managing Agents in connection with the transactions contemplated by
this Agreement and the other Credit Documents on the terms set forth herein. In
acting hereunder, each Managing Agent is acting for its own account to the
extent of its Percentage Interest and for the accounts of the other Lenders to
the extent of the Lenders' respective Percentage Interests, and all action in
connection with the enforcement of, or the exercise of any remedies (other than
each Lender's rights of set-off as provided in Section 9.2.4 or in any Credit
Document) in respect of the Credit Obligations and Credit Documents shall be
taken by the Managing Agents, as provided for in this Agreement.
11.3. COMPANY TO PAY ADMINISTRATIVE AGENT, ETC. The Company shall be
fully protected in making all payments and providing all notices in respect of
the Credit Obligations to the Administrative Agent, in relying upon consents,
modifications and amendments executed by the Administrative Agent purportedly on
the Lenders' behalf, and in dealing with the Managing Agents as herein provided.
The Administrative Agent shall charge the account of the Company, on the dates
when the amounts thereof become due and payable, with the amounts of the
principal of and interest on the Loan, the commitment fees and all other fees
and amounts owing under any Credit Document.
11.4. LENDER OPERATIONS FOR ADVANCES, ETC.
11.4.1. ADVANCES. Upon receipt of a borrowing request by the
Administrative Agent under Section 2.1, the Administrative Agent shall
promptly notify each of the Lenders (by telephone confirmed in writing
or otherwise). On each Closing Date, each Lender shall advance to the
Administrative Agent in immediately available funds such Lender's
Percentage Interest in the portion of the Loan to be advanced on such
Closing
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<PAGE> 50
Date prior to 10:00 a.m. (Boston time). If such funds are not received
from any Lender at such time, but all the conditions set forth in
Section 5 have been satisfied, such Lender hereby authorizes and
requests the Administrative Agent to advance for such Lender's account,
pursuant to the terms hereof, such Lender's respective Percentage
Interest in such portion of the Loan and agrees to reimburse the
Administrative Agent in immediately available funds for the amount
thereof prior to 2:00 p.m. (Boston time) on the day any such portion of
the Loan is advanced hereunder.
11.4.2. ADMINISTRATIVE AGENT TO ALLOCATE PAYMENTS. Subject to
Section 11.4.3, all payments of principal and interest in respect of
the extensions of credit made pursuant to this Agreement and commitment
fees and other fees under this Agreement shall, as a matter of
convenience, be made by the Company to the Administrative Agent in
immediately available funds, and the share of each Lender shall be
credited to such Lender by the Administrative Agent in immediately
available funds in such manner that the principal amount, interest and
fees in respect of the Credit Obligations to be paid shall be paid
proportionately in accordance with the Lenders' respective Percentage
Interests.
11.4.3. DELINQUENT LENDERS. In the event that any Lender fails
to reimburse the Administrative Agent pursuant to Section 11.4.1 for
the Percentage Interest of such Lender (the "Delinquent Lender") in any
portion of the Loan advanced by the Administrative Agent pursuant to
this Section 11, overdue amounts (the "Delinquent Payment") due from
the Delinquent Lender to the Administrative Agent shall bear interest,
payable by the Delinquent Lender on demand, at a per annum rate equal
to (a) the Federal Funds Rate for the first three days overdue and (b)
the sum of 2% PLUS the Federal Funds Rate for any longer period. Such
interest shall be payable to the Administrative Agent for the account
of each party making reimbursements or otherwise bearing the credit
risk of such Delinquent Payment as provided below for the period
commencing on the date of the Delinquent Payment and ending on the date
the Delinquent Lender reimburses such other parties on account of the
Delinquent Payment and the accrued interest thereon (the "Delinquency
Period"), whether pursuant to the assignments referred to below or
otherwise. During the Delinquency Period, in order to make
reimbursements for the Delinquent Payment and accrued interest thereon,
the Delinquent Lender shall be deemed to have assigned to the
Administrative Agent all payments which would have thereafter otherwise
been payable under the Credit Documents to the Delinquent Lender, and
the Administrative Agent shall credit a portion of such payments to
each Lender that is not a Delinquent Lender (a "Performing Lender") in
an amount equal to the Percentage Interest of such Performing Lender
divided by one MINUS the Percentage Interest of the Delinquent Lender.
Upon notice by the Administrative Agent, the Company will pay
to the Administrative Agent the principal (but not interest) portion of
the Delinquent
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Payment. The Administrative Agent will promptly notify each Lender of the
Administrative Agent's determination of the Federal Funds Rate.
The foregoing provisions shall be in addition to any other remedies
the Administrative Agent, the Performing Lenders or the Company may have
under law or equity against the Delinquent Lender as a result of the
Delinquent Payment.
11.5. SHARING OF PAYMENTS, ETC. Subject to Section 11.4.3, each Lender
agrees that (a) if by exercising any right of set-off or counterclaim or
otherwise, it shall receive payment of a proportion of the aggregate amount of
principal, interest and fees due with respect to its Percentage Interest which
is greater than the proportion received by any other Lender in respect of the
aggregate amount of principal, interest and fees due with respect to the
Percentage Interest of such other Lender and (b) if such inequality shall
continue for more than three Banking Days, the Lender receiving such
proportionately greater payment shall purchase participations in the Percentage
Interests held by the other Lenders, and such other adjustments shall be made
from time to time (including rescission of such purchases of participations in
the event that the unequal payment originally received is recovered from such
Lender through bankruptcy proceedings or otherwise), as may be required so that
all such payments of principal, interest and fees with respect to the Loan held
by the Lenders shall be shared by the Lenders pro rata in accordance with their
respective Percentage Interests. The Company agrees, to the fullest extent
permitted by applicable law, that any Credit Participant and any Lender
purchasing a participation from another Lender pursuant to this Section 11.5 may
exercise all rights of payment (including the right of set-off), and shall be
obligated to share payments under this Section 11.5, with respect to its
participation as fully as if such Credit Participant or such Lender were the
direct creditor of the Company and a Lender hereunder in the amount of such
participation.
11.6. AMENDMENTS, CONSENTS, WAIVERS, ETC. Except as otherwise set forth
herein, the Managing Agents may (and upon the written request of the Required
Majority Lenders, the Managing Agents shall) take or refrain from taking any
action under this Agreement or any other Credit Document, including giving their
written consent to any modification of or amendment to and waiving in writing
compliance with any covenant or condition in this Agreement or any other Credit
Document or any Default or Event of Default, all of which actions shall be
binding upon all of the Lenders; PROVIDED, HOWEVER, that:
(a) Except as provided below, without the written consent of the
Required Majority Lenders, no modification of or amendment to, or waiver of
compliance with, any of the Credit Documents, or of a Default, shall be
made.
(b) Without the written consent of such Lenders as own 100% of the
Percentage Interests (other than Delinquent Lenders during the existence of
a Delinquency Period so long as such Delinquent Lender is treated the same
as the other Lenders with respect to any actions enumerated below):
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(i) No reduction in the interest rate or the fees with respect to
the Loan shall be made.
(ii) No extension or postponement of the stated time of payment
of all or any portion of the Loan or interest thereon or any fees
shall be made.
(iii) No waiver or forgiveness of payment of any portion of the
Loan shall be made.
(iv) No increase in the amount, or extension of the term
(including any extension under Section 2.5), of the Lenders'
Commitments beyond that provided for under Section 2 shall be made.
(v) No alteration of the Lenders' several rights of set-off
contained in Section 9.2.4 shall be made.
(vi) No release of any Credit Security other than as permitted by
Section 7.10 shall be made.
(vii) No amendment to Section 2.4, 3.2.5, 3.2.6, 3.5, 3.6, 4.5,
10, 11.5, 11.6 or 16, or to the definition of "Required Majority
Lenders" in Exhibit 1, or to any other Section hereof which specifies
that the action of all Lenders is required as to any matter, shall be
made.
(viii) No release, amendment or modification of the obligations
of AFC under the AFC Agreement shall be made.
(ix) No assignment by the Company or AFC of its rights or
delegation of its duties under any Credit Document shall be made.
(c) Without the written consent of the Managing Agents, no amendment
to Section 11.2, 11.7, 11.8, 11.9, 11.10 or 11.11 shall be made.
11.7. MANAGING AGENT'S RESIGNATION. Any Managing Agent may resign at any
time by giving at least 60 days' prior written notice of its intention to do so
to the other Managing Agent, to each Lender and to the Company and upon the
appointment by the Required Majority Lenders of a successor Managing Agent which
shall be the non-resigning Managing Agent, or in the event the non-resigning
Managing Agent refuses in writing such appointment, another financial
institution satisfactory to the Company. If no successor Managing Agent shall
have been so appointed and shall have accepted such appointment within 45 days
after the retiring Managing Agent's giving of such notice of resignation, then
the retiring Managing Agent may, with the consent of the Company, which consent
shall not be unreasonably withheld, appoint a successor Managing Agent which
shall be a bank or a trust company organized under the laws of the United States
of America or any state thereof and having a combined capital, surplus and
undivided profit of at least $500,000,000 and a tier one ratio of
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<PAGE> 53
equity to risk-weighted assets ranking in the top half of all domestic banks
having greater than $1,000,000,000 in assets pursuant to regulations issued by
the federal Comptroller of the Currency, the Board of Governors of the Federal
Reserve System or other applicable federal bank regulatory agencies; PROVIDED,
HOWEVER, that any successor Managing Agent appointed under this sentence may be
removed upon the written request of the Required Majority Lenders, which request
shall also appoint a successor Managing Agent satisfactory to the Company. Upon
the appointment of a new Managing Agent hereunder, the term "Administrative
Agent" or "Collateral Agent", as the case may be, shall for all purposes of this
Agreement thereafter mean such successor. After any retiring Managing Agent's
resignation hereunder as a Managing Agent, or the removal hereunder of any
successor Managing Agent, the provisions of this Agreement shall continue to
inure to the benefit of such Managing Agent as to any actions taken or omitted
to be taken by it while it was a Managing Agent under this Agreement.
11.8. CONCERNING THE MANAGING AGENTS.
11.8.1. ACTION IN GOOD FAITH, ETC. Each Managing Agent and its
officers, directors, employees and agents shall be under no liability to
any of the Lenders or to any future holder of any interest in the Credit
Obligations for any action or failure to act taken or suffered in good
faith, and any action or failure to act in accordance with an opinion of
its counsel shall conclusively be deemed to be in good faith. Each Managing
Agent shall in all cases be entitled to rely, and shall be fully protected
in relying, on instructions given to such Managing Agent by the required
holders of Credit Obligations as provided in this Agreement.
11.8.2. NO IMPLIED DUTIES, ETC. Each Managing Agent shall have and may
exercise such powers as are specifically delegated to such Managing Agent
under this Agreement or any other Credit Document, together with all other
powers incidental thereto. Each Managing Agent shall have no implied duties
to any Person or any obligation to take any action under this Agreement or
any other Credit Document except for action specifically provided for in
this Agreement or any other Credit Document to be taken by such Managing
Agent. Before taking any action under this Agreement or any other Credit
Document, any Managing Agent may request an appropriate specific indemnity
satisfactory to it from each Lender in addition to the general indemnity
provided for in Section 11.11, and until such Managing Agent has received
such specific indemnity, such Managing Agent shall not be obligated to take
(although it may in its sole discretion take) any such action under this
Agreement or any other Credit Document; PROVIDED, HOWEVER, that no such
indemnity shall extend to actions or omissions which are taken by such
Managing Agent with gross negligence or willful misconduct.
11.8.3. VALIDITY, ETC. Subject to Section 11.8.1, no Managing Agent
shall be responsible to any Lender or any future holder of any interest in
the Credit Obligations (a) for the legality, validity, enforceability or
effectiveness of this Agreement or any
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<PAGE> 54
other Credit Document, (b) for any recitals, reports, representations,
warranties or statements contained in or made in connection with this
Agreement or any other Credit Document, (c) for the existence or value of
any assets included in any security for the Credit Obligations, (d) for the
perfection or effectiveness of any Lien purported to be included in such
security or (e) for the specification or failure to specify any particular
assets to be included in such security.
11.8.4. COMPLIANCE. No Managing Agent shall be obligated to ascertain
or inquire as to the performance or observance of any of the terms of this
Agreement or any other Credit Document; and in connection with any
extension of credit under this Agreement or any other Credit Document, the
Administrative Agent shall be fully protected in relying on a certificate
of the Company as to the fulfillment by the Company of any conditions to
such extension of credit.
11.8.5. EMPLOYMENT OF MANAGING AGENTS AND COUNSEL. Each Managing Agent
may execute any of its duties as a Managing Agent under this Agreement or
any other Credit Document by or through employees, agents and
attorneys-in-fact and shall not be responsible to any of the Lenders, the
Company or any of its Subsidiaries or AFC (except as to money or securities
received by such Managing Agent or such Managing Agent's authorized agents)
for the default or misconduct of any such agents or attorneys-in-fact
selected by such Managing Agent, except where such Managing Agent has acted
with gross negligence or willful misconduct. Each Managing Agent shall be
entitled to advice of counsel concerning all matters pertaining to the
agencies hereby created and its respective duties hereunder or under any
other Credit Document.
11.8.6. RELIANCE ON DOCUMENTS AND COUNSEL. Each Managing Agent shall
be entitled to rely, and shall be fully protected in relying, upon any
affidavit, certificate, cablegram, consent, instrument, letter, notice,
order, document, statement, telecopy, telegram, telex or teletype message
or writing reasonably believed in good faith by such Managing Agent to be
genuine and correct and to have been signed, sent or made by the Person in
question, including without limitation any telephonic or oral statement
made by such Person, and, with respect to legal matters, upon the opinion
of counsel selected by such Managing Agent.
11.8.7. MANAGING AGENT'S REIMBURSEMENT. Each of the Lenders severally
agrees to reimburse each Managing Agent, in the amount of such Lender's
Percentage Interest, for any expenses not reimbursed by the Company
(without limiting the obligation of the Company to make such
reimbursement): (a) for which such Managing Agent is entitled to
reimbursement by the Company under this Agreement or any other Credit
Document, and (b) after the occurrence of a Default, for any other expenses
incurred by such Managing Agent on the Lenders' behalf in connection with
the enforcement of the Lenders' rights under this Agreement or any other
Credit Document; PROVIDED, HOWEVER, that no such reimbursement shall apply
to actions or
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omissions which are taken by such Managing Agent with gross negligence or
willful misconduct.
11.9. RIGHTS AS A LENDER. With respect to any credit extended by it
hereunder, the Managing Agent Institutions shall have the same rights,
obligations and powers hereunder as any other Lenders and may exercise such
rights and powers as though they were not the Managing Agents, and unless the
context otherwise specifies, the Managing Agent Institutions shall be treated in
their respective individual capacities as though they were not the Managing
Agents hereunder. Without limiting the generality of the foregoing, the
Percentage Interest of the Managing Agent Institutions shall be included in any
computations of Percentage Interests. The Managing Agent Institutions and their
respective Affiliates may accept deposits from, lend money to, act as trustee
for and generally engage in any kind of banking or trust business with the
Company or any of its Subsidiaries or any other Person, including any Person who
may do business with or own an equity interest in the Company or any of its
Subsidiaries, all as if such banks were not the Managing Agents and without any
duty to account therefor to the other Lenders.
11.10. INDEPENDENT CREDIT DECISION. Each of the Lenders acknowledges that
it has independently and without reliance upon the Managing Agents, based on the
financial statements and other documents referred to in Section 8.2, on the
other representations and warranties contained herein and on such other
information with respect to the Company and its Subsidiaries as such Lender
deemed appropriate, made such Lender's own credit analysis and decision to enter
into this Agreement and to make the extensions of credit provided for hereunder.
Each Lender represents to the Managing Agents that such Lender will continue to
make its own independent credit and other decisions in taking or not taking
action under this Agreement or any other Credit Document. Each Lender expressly
acknowledges that no Managing Agent nor any of its respective officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to such Lender, and no act by any Managing Agent
taken under this Agreement or any other Credit Document, including any review of
the affairs of the Company and its Subsidiaries, shall be deemed to constitute
any representation or warranty by such Managing Agent. Except for notices,
reports and other documents expressly required to be furnished to each Lender by
any Managing Agent under this Agreement or any other Credit Document, such
Managing Agent shall not have any duty or responsibility to provide any Lender
with any credit or other information concerning the business, operations,
property, condition, financial or otherwise, or credit worthiness of the Company
or any of its Subsidiaries which may come into the possession of such Managing
Agent or any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
11.11. INDEMNIFICATION. The holders of the Credit Obligations hereby agree
to indemnify each Managing Agent (to the extent not reimbursed by the Company
and without limiting the obligation of the Company to do so), pro rata according
to their respective Percentage Interests, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever
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which may at any time be imposed on, incurred by or asserted against such
Managing Agent relating to or arising out of this Agreement, any other Credit
Document, the transactions contemplated hereby or thereby, or any action taken
or omitted by such Managing Agent in connection with any of the foregoing;
PROVIDED, HOWEVER, that the foregoing shall not extend to actions or omissions
which are taken by such Managing Agent with gross negligence or willful
misconduct.
12. SUCCESSORS AND ASSIGNS; LENDER ASSIGNMENTS AND PARTICIPATIONS. Any reference
in this Agreement to any of the parties hereto shall be deemed to include the
successors and assigns of such party, and all covenants and agreements by or on
behalf of the Company or any of its Subsidiaries, the Managing Agents or the
Lenders that are contained in this Agreement shall bind and inure to the benefit
of their respective successors and assigns; PROVIDED, HOWEVER, that no party may
assign its rights or obligations under this Agreement except to the extent set
forth below in this Section 12.
12.1. ASSIGNMENTS BY LENDERS.
12.1.1. ASSIGNEES AND ASSIGNMENT PROCEDURES. Each Lender may, with the
written consent of the Company and the Managing Agents in the case of
assignments to a Person other than an Affiliate of such Lender (which
consent will not be unreasonably withheld or delayed), in compliance with
applicable laws in connection with such assignment, assign to one or more
assignees which are Qualified Institutional Buyers (each, an "Assignee")
all or a portion of its interests, rights and obligations under this
Agreement and the other Credit Documents, its Commitment, the portion of
the Loan at the time owing to it and the Notes held by it; PROVIDED,
HOWEVER, that:
(a) If less than the entire interests, rights and obligations of
a Lender are assigned, the aggregate amount of the Commitment and the
Loan of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect
to such assignment is delivered to the Administrative Agent) shall not
be less than $15,000,000 (except that each of the Managing Agent
Institutions may assign to no more than two Assignees a portion of its
Commitment and the Loan owing to it, in each case equal to
$10,000,000) and in increments of $1,000,000;
(b) If less than the entire interests, rights and obligations of
a Lender are assigned, after giving effect to such assignment, the
portion of the Commitment retained by the assigning Lender shall not
be less than 50% of its original Commitment; and
(c) The parties to each such assignment shall execute and deliver
to the Administrative Agent an Assignment and Acceptance (the
"Assignment and Acceptance") substantially in the form of Exhibit
12.1.1A or 12.1.1B, as applicable, together with the Notes subject to
such assignment and a processing
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and recordation fee of $3,000; PROVIDED, HOWEVER, that no such
processing and recordation fee shall be payable upon any such
assignment effected pursuant to Section 3.5.2(a).
Upon acceptance and recording pursuant to Section 12.1.3, from and after
the assignment date specified in each Assignment and Acceptance (which
assignment date shall be at least five Banking Days after the execution
thereof):
(i) The Assignee shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement,
(ii) The assigning Lender shall, to the extent provided in
such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be
entitled to the benefits of Sections 3.2.5, 3.5, 3.6 and 10, as
well as to any interest and fees accrued for its account
hereunder and not yet paid), and
(iii) Section 11.1 shall be deemed to be amended to give
effect to the change in the Commitments and Percentage Interests
contemplated by such Assignment and Acceptance.
12.1.2. TERMS OF ASSIGNMENT AND ACCEPTANCE. By executing and
delivering an Assignment and Acceptance, the assigning Lender and Assignee
shall be deemed to confirm to and agree with each other and the other
parties hereto as follows:
(a) Other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim, such assigning Lender makes such
assignment without recourse and makes no representation or warranty
and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this
Agreement or any other Credit Document or any other instrument or
document furnished pursuant hereto or thereto, or the execution,
legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement, any other Credit Document or any other instrument
or document furnished pursuant hereto or thereto;
(b) Such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of
AFC, the Company or any of their respective Subsidiaries or the
performance or observance by the Company or AFC of any of its
obligations under this
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Agreement, any other Credit Document or any other instrument or
document furnished pursuant hereto or thereto;
(c) Such Assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial
statements delivered pursuant to Section 7.5 or referred to in Section
8.2 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance;
(d) Such Assignee will independently and without reliance upon
the Managing Agents, such assigning Lender or any other Lender and
based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement;
(e) Such Assignee appoints and authorizes each Managing Agent to
take such action as agent on its behalf and to exercise such powers
under this Agreement as are delegated to such Managing Agent by the
terms hereof, together with such powers as are reasonably incidental
thereto; and
(f) Such Assignee agrees that it will perform in accordance with
the terms of this Agreement all the obligations which are required to
be performed by it as a Lender.
12.1.3. REGISTER. The Administrative Agent shall maintain at the
Boston Office a register (the "Register") for the recordation of (a) the
names and addresses of the Lenders and the Assignees which assume rights
and obligations pursuant to an assignment under Section 12.1.1, (b) the
Percentage Interest and Commitment of each such Lender as set forth in
Section 11.1 and (c) the amount of the Loan owing to each Lender from time
to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Company, the Managing Agents and the Lenders may
treat each Person whose name is registered therein for all purposes as a
party to this Agreement. The Register shall be available for inspection by
the Company or any Lender at any reasonable time and from time to time upon
reasonable prior notice. The Administrative Agent agrees to provide the
Company with notice of any changes in the information required by the
Register, as set forth in items (a) and (b) above.
12.1.4. NOTES. Upon its receipt of a completed Assignment and
Acceptance executed by an assigning Lender and an Assignee, together with
the Notes subject to such assignment and the processing and recordation fee
referred to in Section 12.1.1, the Administrative Agent shall (a) accept
such Assignment and Acceptance, (b) record the information contained
therein in the Register and (c) give prompt notice thereof to the Company.
Within five Banking Days after receipt of such notice, the Company, at its
own expense, shall execute and deliver to the Administrative Agent, in
exchange
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for the surrendered Notes, a new Note to the order of such Assignee in a
principal amount equal to the applicable Commitment and Loan assumed by it
pursuant to such Assignment and Acceptance and, if the assigning Lender has
retained a Commitment and Loan, a new Note to the order of such assigning
Lender in a principal amount equal to the applicable Commitment and Loan
retained by it. Such new Notes shall be in an aggregate principal amount
equal to the aggregate principal amount of such surrendered Notes, and
shall be dated the date of the surrendered Notes which they replace.
12.1.5. FOREIGN PERSONS. If any assignment is made under this Section
12.1 to any Person which is not incorporated or organized under the laws of
the United States of America or a state thereof, the Lender making such
assignment shall cause such Person to agree that, on or prior to the
effective date of such assignment, to the extent necessary to receive
payments under this Agreement and the Notes without deduction or
withholding of any United States federal income taxes, it will deliver to
the Company and the Administrative Agent:
(a) Two duly completed copies of United States Internal Revenue
Service Form 1001 or 4224 or successor form, as the case may be,
certifying in each case that such Person is entitled to receive
payments under this Agreement and the Notes without deduction or
withholding of any United States federal income taxes; and
(b) A duly completed Internal Revenue Service Form W-8 or W-9 or
successor form, as the case may be, to establish an exemption from
United States backup withholding tax.
12.1.6. FEDERAL RESERVE BANK. Notwithstanding the foregoing provisions
of this Section 12, any Lender may at any time pledge or assign all or any
portion of such Lender's rights under this Agreement and the other Credit
Documents to a Federal Reserve Bank; PROVIDED, HOWEVER, that no such pledge
or assignment shall release such Lender from such Lender's obligations
hereunder or under any other Credit Document.
12.1.7. FURTHER ASSURANCES. The Company and its Subsidiaries shall
sign such documents and take such other actions from time to time
reasonably requested by an Assignee to enable it to share in the benefits
of the rights created by the Credit Documents.
12.2. CREDIT PARTICIPANTS. Each Lender may, without the consent of the
Company or the Managing Agents, in compliance with applicable laws in connection
with such participation, sell to one or more Qualified Institutional Buyers
(each a "Credit Participant") participations in a portion of its interests,
rights and obligations under this Agreement and the other Credit Documents
(including a portion of its Commitment and the Loan owing to it and the Notes
held by it); PROVIDED, HOWEVER, that:
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(a) The amount of such participation shall not be less than
$15,000,000 and in an increment of $1,000,000;
(b) After giving effect to such participation, the portion of the
Commitment retained by such Lender shall not be less than 50% of its
original Commitment;
(c) Such Lender's obligations under this Agreement shall remain
unchanged;
(d) Such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations;
(e) The Company, the Managing Agents and the other Lenders shall
continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement or any other
Credit Document, and such Lender shall retain the sole right to enforce the
obligations of the Company relating to the Loan and the Notes and to
approve any amendment, modification or waiver of any provision of this
Agreement or any other Credit Document, except that such Lender may agree
with any of its Credit Participants that, without the consent of such
Credit Participant, such Lender will not approve any amendments,
modifications or waivers with respect to a reduction in any fees payable
hereunder or the amount of principal of or the rate at which interest is
payable on the Loan, or any extension or postponement of the dates fixed
for payments of principal of, interest on, or fees with respect to the
Loan, or the release of any Credit Security; and
(f) Such Credit Participant shall not grant further participations
with respect to its participation interest except to Affiliates of such
Credit Participant.
13. CONFIDENTIALITY. Each Lender agrees that it will make no disclosure of any
information furnished to it by the Company or AFC or any of their respective
Affiliates unless such information shall have become public, except:
(a) In connection with operations under or the enforcement of this
Agreement, the AFC Agreement or any other Credit Document;
(b) To any proposed Assignee or Credit Participant who agrees (subject
to the exceptions provided in this Agreement) to preserve the
confidentiality of any confidential information relating to AFC, the
Company, Chiquita, Penn Central or any of their respective Affiliates
received from such Lender;
(c) To the applicable bank regulatory or other governmental agencies
relating to such Lender or pursuant to any statutory or regulatory
requirement or any mandatory court order, subpoena or other legal process;
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(d) To any parent or corporate Affiliate of such Lender; PROVIDED,
HOWEVER, that any such Person shall also agree to comply with the
restrictions set forth in this Section 13 with respect to such information;
(e) To its independent counsel, auditors and other professional
advisors with an instruction to such Person to keep such information
confidential;
(f) In connection with any litigation or arbitration proceedings to
which such Lender is a party; and
(g) With the prior written consent of the Company or AFC, to any other
Person.
Notwithstanding the foregoing, this Section shall not apply to information which
is obtained or was previously obtained by a Lender from a third person who,
insofar as is known to such Lender, is not subject to a duty of confidentiality.
14. NOTICES. Except as otherwise specified in this Agreement, any notice
required to be given pursuant to this Agreement shall be given in writing. Any
notice, demand or other communication in connection with this Agreement shall be
deemed to be given if given in writing (including telex, telecopy (confirmed by
telephone or writing) or similar teletransmission) addressed as provided below
(or to the addressee at such other address as the addressee shall have specified
by notice actually received by the addressor), and if either (a) actually
delivered in fully legible form to such address (evidenced in the case of a
telex by receipt of the correct answerback) or (b) in the case of a letter, five
days shall have elapsed after the same shall have been deposited in the United
States mails, with first-class postage prepaid and registered or certified.
If to the Company, to it at the following address:
Great American Holding Corporation
One East Fourth Street
Cincinnati, Ohio 45202
ATTENTION: Fred J. Runk
With a copy to:
Keating, Muething & Klekamp
1800 Provident Tower
One East Fourth Street
Cincinnati, Ohio 45202
ATTENTION: Paul V. Muething
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If to the Administrative Agent, the Collateral Agent, any Managing
Agent or any Lender, to it at its address set forth on the signature page
of this Agreement, to the attention of the account officer specified on the
signature page, with a copy to the Managing Agents.
15. COURSE OF DEALING, AMENDMENTS AND WAIVERS. No course of dealing between any
Lender and the Company or any of its Subsidiaries shall operate as a waiver of
any of the Lenders' rights under this Agreement or any other Credit Document or
with respect to the Credit Obligations. The Company acknowledges that if the
Lenders, without being required to do so by this Agreement or any other Credit
Document, give any notice or information to any of the Company and its
Subsidiaries, or obtain any consent from any of them, the Lenders shall not by
implication have amended, waived or modified any provision of this Agreement or
any other Credit Document, or created any duty to give any such notice or
information or to secure any such consent on any future occasion. No delay or
omission in exercising any right, or any partial exercise of any right, on the
part of any Lender under this Agreement or any other Credit Document or with
respect to the Credit Obligations shall operate as a waiver of such right or any
other right, or preclude the further exercise of such right or any other right,
hereunder or thereunder. A waiver on any one occasion shall not be construed as
a bar to or waiver of any right or remedy on any future occasion. No waiver,
consent or amendment with respect to this Agreement or any other Credit Document
shall be binding unless it is in writing and signed by the Managing Agents or
the holders of the required Credit Obligations.
16. DEFEASANCE. When all Credit Obligations have been paid, performed and
reasonably determined by the Lenders to have been indefeasibly discharged in
full, and if at the time no Lender continues to be committed to extend any
credit to the Company hereunder or under any other Credit Document, this
Agreement shall terminate and, at the Company's written request, accompanied by
such certificates and opinions as the Managing Agents shall reasonably deem
necessary, the Credit Security shall revert to the Company and the right, title
and interest of the Lenders therein shall terminate; PROVIDED, HOWEVER, that
Sections 3.2.5, 3.5, 3.6, 10, 11.8.7, 11.11, 13, 17 and 18 shall survive the
termination of this Agreement. Thereupon, on the Company's demand and at its
cost and expense, each Managing Agent shall execute proper instruments,
acknowledging satisfaction of and discharging this Agreement, and the Collateral
Agent shall redeliver to the Company any Credit Security then in its possession.
17. VENUE; SERVICE OF PROCESS. The Company by its execution hereof:
(a) Irrevocably submits to the nonexclusive jurisdiction of the state
courts of The Commonwealth of Massachusetts and to the nonexclusive
jurisdiction of the United States District Court for the District of
Massachusetts for the purpose of any suit, action or other proceeding
arising out of or based upon this Agreement or any other Credit Document or
the subject matter hereof or thereof; and
(b) Waives to the extent not prohibited by applicable law, and agrees
not to assert, by way of motion, as a defense or otherwise, in any such
proceeding brought in any of the above-named courts, any claim that it is
not subject personally to the
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jurisdiction of such court, that its property is exempt or immune from
attachment or execution, that such proceeding is brought in an inconvenient
forum, that the venue of such proceeding is improper, or that this
Agreement or any other Credit Document, or the subject matter hereof or
thereof, may not be enforced in or by such court.
The Company hereby consents to service of process in any such proceeding in any
manner permitted by Chapter 223A of the General Laws of The Commonwealth of
Massachusetts and agrees that service of process by registered or certified
mail, return receipt requested, at its address specified in or pursuant to
Section 14 is reasonably calculated to give actual notice.
18. WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT
CANNOT BE WAIVED, EACH OF THE COMPANY AND THE LENDERS HEREBY WAIVES, AND
COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR
OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE,
CLAIM, DEMAND OR ACTION ARISING OUT OF THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT OR THE SUBJECT MATTER HEREOF OR THEREOF OR ANY CREDIT OBLIGATION OR IN
ANY WAY CONNECTED WITH THE DEALINGS OF THE LENDERS OR THE COMPANY IN CONNECTION
WITH ANY OF THE ABOVE, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING
AND WHETHER IN CONTRACT OR TORT OR OTHERWISE. The Company acknowledges that it
has been informed by the Lenders that the provisions of this Section 18
constitute a material inducement upon which each of the Lenders has relied, is
relying and will rely in entering into this Agreement and any other Credit
Document, and that it has reviewed the provisions of this Section 18 with its
counsel. Any Lender or the Company may file an original counterpart or a copy of
this Section 18 with any court as written evidence of the consent of the Company
and the Lenders to the waiver of their rights to trial by jury.
19. ACKNOWLEDGEMENTS. The Company hereby acknowledges:
(a) It has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Credit Documents;
(b) No Lender has a fiduciary relationship to the Company, and the
relationship between any Lender, on the one hand, and the Company on the
other hand, is solely that of debtor and creditor; and
(c) No joint venture exists between the Company and any Lender.
20. GENERAL. All covenants, agreements, representations and warranties made in
this Agreement or any other Credit Document or in certificates delivered
pursuant hereto or thereto shall be deemed to have been material and relied on
by each Lender, notwithstanding any investigation made by any Lender on its
behalf, and shall survive the execution and delivery to the Lenders hereof and
thereof. The invalidity or unenforceability of any term or provision
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hereof shall not affect the validity or enforceability of any other term or
provision hereof. The table of contents and headings in this Agreement are for
convenience of reference only and shall not limit, alter or otherwise affect the
meaning hereof. This Agreement and the other Credit Documents constitute the
entire understanding of the parties with respect to the subject matter hereof
and thereof and supersede all prior and current understandings and agreements,
whether written or oral with respect to such subject matter. This Agreement may
be executed in any number of counterparts which together shall constitute one
instrument. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS (OTHER THAN THE CONFLICT OF LAWS RULES) OF THE COMMONWEALTH OF
MASSACHUSETTS.
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Each of the undersigned has caused this Agreement to be executed and
delivered by its duly authorized officer as an agreement under seal as of the
date first above written.
GREAT AMERICAN HOLDING CORPORATION
By ____________________________
Vice President & Treasurer
CONTINENTAL BANK N.A., in its
Agent
By ___________________________
Managing Director
231 LaSalle Street
9Q
Chicago, Illinois 60697
Telecopy: (312) 987-0303
THE FIRST NATIONAL BANK OF BOSTON,
Agent
By ___________________________
Director
Media and Communications Division
Mail Stop 01-08-08
100 Federal Street
Boston, Massachusetts 02110
Telecopy: (617) 434-3401
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CHEMICAL BANK
By ___________________________
Vice President
270 Park Avenue
New York, New York 10017
Telecopy: (212) 972-0009
THE BANK OF NEW YORK
By ___________________________
Vice President
One Wall Street
New York, New York 10286
Telecopy: (212) 809-9520
NATIONSBANK, N.A.
By ___________________________
Vice President
600 Peachtree Street
Atlanta, Georgia 30308
Telecopy: (404) 607-6318
CREDIT LYONNAIS CAYMAN ISLAND BRANCH
By ___________________________
Authorized Signature
c/o Credit Lyonnais
New York Branch
Credit Lyonnais Building
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1301 Avenue of the Americas
New York, New York 10019
Telecopy: (212) 459-3176
THE CHASE MANHATTAN BANK, N.A.
By ___________________________
Vice President
Insurance Corporate
Finance Division
One Chase Manhattan Plaza
New York, New York 10081
Telecopy: (212) 552-1999
STAR BANK, N.A.
By ___________________________
Senior Vice President
425 Walnut Street
Cincinnati, Ohio 45201-1038
Telecopy: (513) 632-2068
THE BANK OF TOKYO TRUST COMPANY
By ___________________________
Vice President
1251 Avenue of the Americas
New York, New York 10116-3138
Telecopy:
with notice to:
600 Vine Street
Suite 1908
Cincinnati, Ohio 45202
Telecopy: (513) 579-9204
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SOCIETY NATIONAL BANK
By ___________________________
Vice President
525 Vine Street
Cincinnati, Ohio 45202
Telecopy: (513) 762-8222
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EXHIBIT 1
---------
DEFINITIONS OF CAPITALIZED TERMS
1. "ACCUMULATED BENEFIT OBLIGATIONS" means the actuarial present value of
the accumulated benefit obligations under any Plan, calculated in a manner
consistent with Statement No. 87 of the Financial Accounting Standards Board.
2. "ADDITIONAL COLLATERAL" has the meaning provided in Section 6.2.1.
3. "ADDITIONAL COLLATERAL EVENT" has the meaning provided in Section 6.2.1.
4. "ADMINISTRATIVE AGENT" means Bank of Boston in its capacity as
administrative agent for the Lenders under this Agreement, as well as its
successors and assigns in such capacity pursuant to Section 11.7.
5. "ADMINISTRATIVE AGENT OFFICER" shall mean any vice president or
assistant vice president of the Administrative Agent or any other officers or
employees of the Administrative Agent from time to time designated by it in
writing to the Company.
6. "AFC" means American Financial Corporation, an Ohio corporation.
7. "AFC AGREEMENT" has the meaning provided in Section 5.4.
8. "AFFILIATE" means, with respect to any Person, any other Person directly
or indirectly controlling, controlled by or under direct or indirect common
control with such Person, and shall include (a) any officer or director or
general partner of such Person and (b) any Person of which such Person or any
Affiliate (as defined in clause (a) above) of such Person shall, directly or
indirectly, beneficially own either (i) at least 35% of the outstanding equity
securities having the general power to vote or (ii) at least 35% of all equity
interests.
9. "APPLICABLE RATE" means:
(a) with respect to any portion of the Loan outstanding prior to the
Conversion Date, the Revolving Rate; and
(b) with respect to any portion of the Loan outstanding on or after
the Conversion Date, the Term Rate.
10. "ASSESSMENT RATE" means for any CD Interest Period, the net annual
assessment rate (rounded if necessary to the nearest 1/100%), as from time to
time in effect, payable
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by the Managing Agent Institutions to the Federal Deposit Insurance Corporation
(or any similar insurer) for the insurance of nonpersonal time deposits in an
amount of at least $100,000 with a term corresponding to such CD Interest
Period.
11. "ASSIGNEE" has the meaning provided in Section 12.1.1.
12. "ASSIGNMENT AND ACCEPTANCE" has the meaning provided in Section 12.1.1.
13. "BANK OF BOSTON" means The First National Bank of Boston.
14. "BANKING DAY" means any day on which banks are open to conduct business
in Boston, Massachusetts, Chicago, Illinois and New York, New York and, if such
term is used with reference to a Eurodollar Pricing Option, any day on which
dealings are effected in the Eurodollars in question by first class banks in the
inter-bank Eurodollar market in New York, New York and at the location of the
applicable Eurodollar Office.
15. "BANKRUPTCY CODE" means Title 11 of the United States Code (or any
successor statute) and the rules and regulations thereunder, all as from time to
time in effect.
16. "BANKRUPTCY DEFAULT" means an Event of Default referred to in Section
9.1.14.
17. "BASE RATE" means, on any day, the greater of (a) the rate of interest
announced by Bank of Boston at the Boston Office as its Base Rate, or (b) the
Federal Funds Rate PLUS 2%.
18. "BASIC CD RATE" means as applied to any CD Interest Period, the rate
determined by ascertaining the respective prevailing rates at which two or more
New York certificate of deposit dealers of recognized standing bid at
approximately 10:00 a.m. (Eastern Time) on the first Banking Day of the CD
Interest Period in question for certificates of deposit issued in United States
Funds by the Managing Agent Institutions in face amount equal to the Managing
Agent Institutions' Percentage Interests in the portion of the Loan as to which
a CD Pricing Option has been elected and having a term corresponding to the CD
Interest Period in question, all as determined by the Managing Agent
Institutions on the basis of quotations for such prevailing bid rates. Each
determination by the Managing Agent Institutions of any Basic CD Rate pursuant
to the foregoing sentence shall, in the absence of manifest error, be
conclusive.
19. "BASIC EURODOLLAR RATE" means, as applied to any Eurodollar Interest
Period, the rate of interest at which Eurodollar deposits in an amount equal to
the Managing Agent Institutions' Percentage Interests in the portion of the Loan
as to which a Eurodollar Pricing Option has been elected and which have a term
corresponding to the Eurodollar Interest Period in question are offered to the
Managing Agent Institutions by first class banks in the inter-bank Eurodollar
market for delivery in immediately available funds at a Eurodollar Office on the
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first day of such Eurodollar Interest Period as determined by the Managing Agent
Institutions at approximately 10:00 a.m. (Boston time) two Banking Days prior to
the date upon which the Eurodollar Interest Period in question is to commence,
which determination by the Managing Agent Institutions shall, in the absence of
manifest error, be conclusive.
20. "BOSTON OFFICE" means the principal banking office of the
Administrative Agent in Boston, Massachusetts.
21. "BY-LAWS" means all written rules, regulations, procedures and by-laws
and all other documents relating to the management, governance or internal
regulation of any Person other than an individual, or interpretive of the
Charter of such Person, all as from time to time in effect.
22. "CAPITALIZED LEASE" means any lease which is required to be capitalized
on the balance sheet of the lessee in accordance with GAAP and Statement Nos. 13
and 97 of the Financial Accounting Standards Board.
23. "CAPITALIZED LEASE OBLIGATIONS" means the amount of the liability
reflecting the aggregate discounted amount of future payments under all
Capitalized Leases calculated in accordance with GAAP and Statement Nos. 13 and
97 of the Financial Accounting Standards Board.
24. "CD INTEREST PERIOD" means any period selected as provided in Section
3.2.2 and in Section 3.2.4 of 30, 60 or 90 days, commencing on any Banking Day;
PROVIDED, HOWEVER, that subject to Section 3.2.4, if any CD Interest Period so
selected would otherwise end on a date which is not a Banking Day, such CD
Interest Period shall instead end on the next succeeding Banking Day; and
PROVIDED, FURTHER that if any CD Interest Period so selected would extend beyond
the Final Maturity Date, the last day of such CD Interest Period shall be the
Final Maturity Date.
25. "CD PRICING OPTION" means the options granted pursuant to Section 3.2.2
to have the interest on all or any portion of the Loan computed on the basis of
a CD Rate.
26. "CD RATE" for any CD Interest Period means the sum of (a) the
Assessment Rate, PLUS (b) the rate, rounded if necessary to the nearest 1/100%,
obtained by dividing (i) the Basic CD Rate for such CD Interest Period by (ii)
an amount equal to 1 MINUS the CD Reserve Rate; PROVIDED, HOWEVER, that if at
any time during such CD Interest Period the Assessment Rate or the CD Reserve
Rate changes, the CD Rate for such CD Interest Period shall automatically be
adjusted to reflect such change. Each determination by the Managing Agent
Institutions of a CD Rate pursuant to the foregoing sentence shall, in the
absence of manifest error, be conclusive.
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27. "CD RESERVE RATE" means the stated maximum rate as changed from time to
time (expressed as a decimal) of all reserves (including any basic,
supplemental, marginal or emergency reserve or any reserve asset) required by
any Legal Requirement to be maintained by any Lender against nonpersonal time
deposits in an amount of at least $100,000 with a term corresponding to such CD
Interest Period, or against the principal amount of or interest on any portion
of the Loan subject to a CD Pricing Option.
28. "CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 (or any successor statute) and the rules and
regulations thereunder, all as from time to time in effect.
29. "CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
30. "CHARTER" means the articles of organization, certificate of
incorporation, statute, constitution, joint venture or partnership agreement, or
other charter of any Person other than an individual, each as from time to time
in effect.
31. "CHIQUITA" means Chiquita Brands International Inc., a New Jersey
corporation.
32. "CLOSING DATE" means any date on which any extension of credit is made
pursuant to Section 2.
33. "CODE" means, collectively, the federal Internal Revenue Code of 1986
(or any successor statute) and the rules and regulations thereunder, all as from
time to time in effect.
34. "COLLATERAL AGENT" means Continental Bank in its capacity as collateral
agent for the Lenders hereunder as well as its successors and assigns in such
capacity pursuant to Section 11.7.
35. "COLLATERAL VALUE" means:
(a) with respect to any share of stock:
(i) the last reported sales price on the most recent trading day
of the principal national securities exchange on which such shares are
listed or admitted to trading, or
(ii) if such shares are not listed or admitted to trading on a
national securities exchange, the reported bid price as reported by
the National Association of Securities Dealers, Inc. Automated
Quotation System, or
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(iii) in the absence of any of the foregoing, as determined by
the Required Majority Lenders in such manner as they may determine in
their sole discretion; or
(b) with respect to any other asset, as determined by the Required
Majority Lenders in such manner as they may determine in their sole
discretion.
36. "COMMITMENT" means, with respect to any Lender, such Lender's
Percentage Interest in the obligations to extend the credit contemplated by this
Agreement.
37. "COMMITMENT FEE RATE" means, on any date, an amount equal to daily
interest at the rate of 1/4% per annum on the amount, if any, by which (i) the
daily Maximum Amount of Credit during the three-month period ending on such date
exceeds (ii) the daily Revolving Loan during such period.
38. "COMPANY" means Great American Holding Corporation, an Ohio
corporation.
39. "COMPANY PLEDGED STOCK" has the meaning provided in Section 6.1.
40. "CONSOLIDATED" and "CONSOLIDATING", when used with reference to any
term, mean that term (or the terms "combined" and "combining", as the case may
be, in the case of partnerships and joint ventures) as applied to the accounts
of the Company (or other specified Person) and all of its Subsidiaries (or other
specified Persons), or such of its Subsidiaries as may be specified,
consolidated (or combined) in accordance with GAAP and with appropriate
deductions for minority interests in Subsidiaries.
41. "CONTINENTAL BANK" means Continental Bank N.A.
42. "CONSOLIDATED NET LOSS" means, for any period, the net loss of the
Company and its Subsidiaries, determined in accordance with GAAP on a
Consolidated basis.
43. "CONSOLIDATED NET WORTH" means, on any date, the excess of (a) total
assets appearing on the Consolidated balance sheet of the Company and its
Subsidiaries, over (b) the aggregate of all liabilities appearing on such
Consolidated balance sheet, but in no event including amounts appearing under
the caption "Total Shareholder's Equity", all determined in accordance with
GAAP.
44. "CONVERSION DATE" means December 31, 1996 or such later date as
determined in accordance with Section 2.5.
45. "CREDIT DOCUMENTS" means:
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(a) This Agreement, the Notes and the AFC Agreement, each as from time
to time in effect;
(b) All financial statements, reports, notices, mortgages,
assignments, Uniform Commercial Code financing statements or certificates
delivered to any of the Lenders by the Company, any Subsidiary, AFC or any
other Person as a guarantor, pledgor or other obligor in connection with
this Agreement; and
(c) Any other present or future agreement or instrument from time to
time entered into among any Managing Agent or all the Lenders, on the one
hand, and the Company, any Subsidiary, AFC or any other Person as a
guarantor, pledgor or other obligor, on the other hand, relating to,
amending or modifying this Agreement or any other Credit Document referred
to above or which is stated to be a Credit Document, each as from time to
time in effect.
46. "CREDIT OBLIGATIONS" means all present and future liabilities,
obligations and Indebtedness of the Company, any Subsidiary, AFC or any other
Person becoming party to a Credit Document as a guarantor, pledgor or other
obligor owing to the Lenders or any of them under or in connection with this
Agreement or any other Credit Document, including obligations in respect of
principal, interest, commitment fees, amounts provided for in Sections 3.2.5,
3.5 and 3.6, and other fees, charges, indemnities and expenses from time to time
owing hereunder or under any other Credit Document.
47. "CREDIT PARTICIPANT" has the meaning provided in Section 12.2.
48. "CREDIT SECURITY" means all assets now or from time to time hereafter
subjected to a security interest or charge (or intended or required so to be
pursuant to this Agreement, the AFC Agreement or any other Credit Document) to
secure the payment or performance of any of the Credit Obligations.
49. "DEFAULT" means any Event of Default and any event or condition which
with the passage of time or giving of notice, or both, would become an Event of
Default.
50. "DELINQUENCY PERIOD" has the meaning provided in Section 11.4.3.
51. "DELINQUENT LENDER" has the meaning provided in Section 11.4.3.
52. "DELINQUENT PAYMENT" has the meaning provided in Section 11.4.3.
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53. "DESIGNATED INSURANCE SUBSIDIARY" means any Person engaged primarily in
the insurance business and licensed as an insurance company in one or more
states, of which GAIC shall at the time, directly or indirectly through one or
more of its Subsidiaries, (a) own more than 80% of the outstanding capital stock
(or other shares of beneficial interest) or more than 80% of such stock (or
other shares of beneficial interest) entitled to vote generally or (b) hold more
than 80% of the partnership, joint venture or similar interests.
54. "DESIGNATED SUBSIDIARY" means any Person of which the Company (or other
specified Person) shall at the time, directly or through one or more of its
Designated Subsidiaries (a) own more than 80% of the outstanding capital stock
(or other shares of beneficial interest) or more than 80% of such stock (or
other shares of beneficial interest) entitled to vote generally or (b) hold more
than 80% of the partnership, joint venture or similar interests.
55. "DISTRIBUTION" means:
(a) The declaration or payment of any dividend, on or in respect of
any shares of any class of capital stock of the Company or any Subsidiary,
other than dividends payable solely in shares of common stock of the payor;
(b) The purchase or other retirement of any shares of any class of
capital stock of the Company or any Subsidiary directly or indirectly
through a Subsidiary or otherwise;
(c) Any other distribution on or in respect of any shares of any class
of capital stock of the Company or any Subsidiary; or
(d) Any payment of principal of or interest or premium on, or any
purchase or other retirement of, any Indebtedness required to be
subordinated to any Credit Obligations.
56. "ENVIRONMENTAL LAWS" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules, regulations and guidelines (including
consent decrees and administrative orders) relating to public health and safety
and protection of the environment.
57. "ERISA" means, collectively, the Employee Retirement Income Security
Act of 1974 (or any successor statute) and the rules and regulations thereunder,
all as from time to time in effect.
58. "ERISA GROUP MEMBER" means AFC and any of its Subsidiaries and any
Person which is a member of the controlled group or under common control with
AFC or any of its Subsidiaries within the meaning of sections 414(b) or 414(c)
of the Code or section 4001(a)(14) of ERISA.
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59. "EURODOLLAR INTEREST PERIOD" means any period, selected as provided in
Section 3.2.1, of one, two, three or six months commencing on any Banking Day;
PROVIDED, HOWEVER, that subject to Section 3.2.4, if any Eurodollar Interest
Period so selected would otherwise begin or end on a date which is not a Banking
Day, such Eurodollar Interest Period shall instead begin or end, as the case may
be, on the next succeeding Banking Day unless such next succeeding Banking Day
would fall in the next calendar month, in which case such Eurodollar Interest
Period shall end on the next preceding Banking Day, and if there exists no day
numerically corresponding to the commencement date of such Eurodollar Interest
Period in the month in which the last day of such Eurodollar Interest Period
would otherwise fall, such Eurodollar Interest Period shall end on the last
Banking Day of such month; PROVIDED, HOWEVER, that if any Eurodollar Interest
Period would extend beyond the Final Maturity Date, the last day of such
Eurodollar Interest Period shall be the Final Maturity Date, all in accordance
with the then current banking practice in the inter-bank Eurodollar market with
respect to Eurodollar deposits at the applicable Eurodollar Office.
60. "EURODOLLAR OFFICE" means such non-United States office or
international banking facility of any Lender as such Lender may from time to
time select.
61. "EURODOLLAR PRICING OPTIONS" means the options granted pursuant to
Section 3.2.1 to have the interest on all or any portion of the Loan computed on
the basis of a Eurodollar Rate.
62. "EURODOLLAR RATE" for any Eurodollar Interest Period means the rate,
rounded to the nearest 1/100%, obtained by dividing (a) the Basic Eurodollar
Rate for such Eurodollar Interest Period by (b) an amount equal to 1 MINUS the
Eurodollar Reserve Rate; PROVIDED, HOWEVER, that if at any time during such
Eurodollar Interest Period the Eurodollar Reserve Rate applicable to any
outstanding Eurodollar Pricing Option changes, the Eurodollar Rate for such
Eurodollar Interest Period shall automatically be adjusted to reflect such
change, effective as of the date of such change.
63. "EURODOLLAR RESERVE RATE" means the stated maximum rate (expressed as a
decimal) of all reserves (including any basic, supplemental, marginal or
emergency reserve or any reserve asset), if any, as from time to time in effect,
required by any Legal Requirement to be maintained by any Lender against (a)
"Eurocurrency liabilities" as specified in Regulation D of the Board of
Governors of the Federal Reserve System, (b) any other category of liabilities
that includes deposits by reference to which the interest rate on portions of
the Loan subject to Eurodollar Pricing Options is determined, (c) the principal
amount of or interest on any portion of the Loan subject to a Eurodollar Pricing
Option, or (d) any other category of extensions of credit, or other assets, that
includes loans by a non-United States office of any of the Lenders to United
States residents.
64. "EURODOLLARS" means, with respect to any Lender, deposits of United
States Funds in a non-United States office or an international banking facility
of such Lender.
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65. "EVENT OF DEFAULT" has the meaning provided in Section 9.1.
66. "EXCHANGE ACT" means, collectively, the federal Securities Exchange Act
of 1934 (or any successor statute) and the rules and regulations thereunder, all
as from time to time in effect.
67. "FACILITY FEE RATE" means an amount equal to daily interest at the rate
of 3/8% per annum (a) on and prior to the Conversion Date, on the Maximum Amount
of Credit and (b) after the Conversion Date, on the Term Loan.
68. "FEDERAL FUNDS RATE" means, for any day, (a) the rate equal to the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as such
weighted average is published for such day (or, if such day is not a Banking
Day, for the immediately preceding Banking Day) by the Federal Reserve Bank of
New York or (b) if such rate is not so published for such Banking Day, as
determined by the Managing Agent Institutions using any reasonable means of
determination. Each determination by the Managing Agent Institutions of the
Federal Funds Rate shall, in the absence of manifest error, be conclusive.
69. "FINAL MATURITY DATE" means December 31, 2000 or such later date as
determined in accordance with Section 2.5.
70. "FINANCIAL OFFICER" means, with respect to any Person, the chief
financial officer or treasurer of such Person or a vice president whose primary
responsibility is for the financial affairs of such Person.
71. "FINANCING DEBT" means:
(a) Indebtedness for borrowed money;
(b) Indebtedness evidenced by notes, debentures or similar
instruments;
(c) Indebtedness in respect of Capitalized Leases;
(d) Indebtedness for the deferred purchase price of assets (other than
normal trade accounts payable in the ordinary course of business); and
(e) Indebtedness in respect of mandatory redemption or dividend rights
on capital stock (or other equity).
72. "FOREIGN TRADE REGULATIONS" means, collectively and as from time to
time in effect (including any successor statutes or regulations), (a) the
federal Comprehensive Anti-Apartheid Act of 1986, (b) the regulations with
respect to certain prohibited foreign trade transactions set
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forth at 31 C.F.R. Parts 500-565 et seq. and (c) any order, regulation, ruling,
interpretation, license, direction, instruction or notice relating to any of the
foregoing.
73. "GAAP" means generally accepted accounting principles, as defined by
the Financial Accounting Standards Board, as from time to time in effect.
74. "GAIC" means Great American Insurance Company, an Ohio corporation.
75. "GAIC NET LOSS" means, for any period, the net loss of GAIC (on an
individual basis) determined in accordance with statutory accounting principles,
excluding realized gains or losses of GAIC from the sale of Designated Insurance
Subsidiaries to the extent that such Designated Insurance Subsidiaries have
either (a) assets in excess of 20% of GAIC's assets (on a Consolidated basis) at
the time of such sale or (b) premium revenue for such period in excess of 20% of
GAIC's premium revenue (on a Consolidated basis) for such period.
76. "GAIC NET LOSS MARGIN" on any date:
(a) When, for the most recently completed period of four consecutive
fiscal quarters for which financial statements have been furnished to the
Lenders pursuant to Section 7.5.1 or 7.5.2, GAIC shall have incurred a GAIC
Net Loss less than $25,000,000 and at the end of such period Consolidated
Net Worth exceeded $1,000,000,000, means 1/8%;
(b) When, for the most recently completed period of four consecutive
fiscal quarters for which financial statements have been furnished to the
Lenders pursuant to Section 7.5.1 or 7.5.2, GAIC shall have incurred a GAIC
Net Loss less than $25,000,000 and at the end of such period Consolidated
Net Worth was less than $1,000,000,000, means 1/4%;
(c) When, for the most recently completed period of four consecutive
fiscal quarters for which financial statements have been furnished to the
Lenders pursuant to Section 7.5.1 or 7.5.2, GAIC shall have incurred a GAIC
Net Loss of $25,000,000 or more, means 1/4%;
(d) When, for the most recently completed period of four consecutive
fiscal quarters for which financial statements have been furnished to the
Lenders pursuant to Section 7.5.1 or 7.5.2, GAIC shall have incurred a GAIC
Net Loss for any two fiscal quarters during such period, but neither
paragraph (b) nor (c) above applies to such period, means 1/8%; and
(e) At any other time, means zero;
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PROVIDED, HOWEVER, that the applicable GAIC Net Loss Margin may not decrease
until such time as no Default exists and the most recent financial statements
furnished to the Lenders pursuant to Section 7.5.1 or 7.5.2 demonstrate a GAIC
Net Profit for each of the two most recently completed fiscal quarters.
The applicable GAIC Net Loss Margin shall be effective on the earlier of
the date on which the most recent financial statements required by Section 7.5.1
or 7.5.2 are furnished or deemed furnished to the Lenders under Section 14.
77. "GAIC NET PROFIT" means, for any period, the net profit of GAIC (on an
individual basis) determined in accordance with statutory accounting principles,
excluding realized gains or losses of GAIC from the sale of Designated Insurance
Subsidiaries to the extent that such Designated Insurance Subsidiaries have
either (a) assets in excess of 20% of GAIC's assets (on a Consolidated basis) at
the time of such sale or (b) premium revenue for such period in excess of 20% of
GAIC's premium revenue (on a Consolidated basis) for such period.
78. "HAZARDOUS MATERIAL" means:
(a) Any "hazardous substance", as defined by CERCLA;
(b) Any "hazardous waste", as defined by the Resource Conservation and
Recovery Act;
(c) Any petroleum product; or
(d) Any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material or substance within the meaning of any other applicable
federal, state or local law, regulation, ordinance or requirement
(including consent decrees and administrative orders) relating to or
imposing liability or standards of conduct concerning any hazardous, toxic
or dangerous waste, substance or material, all as amended or hereafter
amended.
79. "INDEBTEDNESS" means all obligations, contingent or otherwise, which in
accordance with GAAP should be classified upon the obligor's balance sheet as
liabilities, but in any event including:
(a) Liabilities secured by any Lien existing on property owned or
acquired by the obligor or any Subsidiary thereof, whether or not the
liability secured thereby shall have been assumed;
(b) Capitalized Lease Obligations;
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(c) Mandatory redemption, repurchase or dividend obligations with
respect to capital stock (or other evidence of beneficial interest); and
(d) All guarantees and endorsements in respect of Indebtedness of
others.
80. "INDEMNITEE" has the meaning provided in Section 10.2.
81. "INDENTURE INDEBTEDNESS" means Indebtedness of the Company outstanding
from time to time under (a) the Indenture dated as of August 15, 1988 between
the Company and Star Bank, National Association, Cincinnati, as Trustee (the
"Indenture Trustee"), providing for the issuance of the Company's 11% Notes due
August 15, 1998 in the original aggregate principal amount of $220,000,000 and
(b) the Indenture dated as of September 15, 1988 between the Company and the
Indenture Trustee, providing for the issuance of the Company's Floating Rate
Notes due September 15, 1995 in the original aggregate principal amount of
$75,000,000, each as in effect on December 7, 1993, and previously furnished to
the Managing Agents.
82. "INSURANCE AUTHORITIES" means collectively, in relation to any
particular jurisdiction, the insurance regulatory authorities, commissions,
agencies, departments, boards or other authorities of or in that jurisdiction.
83. "INTEREST PERIOD" means each Eurodollar Interest Period and each CD
Interest Period.
84. "LEGAL REQUIREMENT" means any requirement imposed upon any of the
Lenders by any law of the United States of America or any jurisdiction in which
any Eurodollar Office is located or by any regulation, order, interpretation,
ruling or official directive of the Board of Governors of the Federal Reserve
System or any other board or governmental or administrative agency of the United
States of America, any central bank or of any jurisdiction in which any
Eurodollar Office is located, or of any political subdivision of any of the
foregoing. Any requirement imposed by any such regulation, order,
interpretation, ruling or official directive not having the force of law shall
be deemed to be a Legal Requirement if any of the Lenders reasonably believes
that compliance therewith is in the best interest of such Lender.
85. "LENDERS" means the Managing Agent Institutions and the other banks and
other Persons owning a Percentage Interest and their respective successors and
assigns, including Assignees under Section 12.1.
86. "LIEN" means, with respect to any Person:
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(a) Any encumbrance, mortgage, pledge, lien, charge or other security
interest of any kind upon any property or assets of such Person, whether
now owned or hereafter acquired, or upon the income or profits or proceeds
therefrom;
(b) Any arrangement or agreement which prohibits such Person from
creating encumbrances, mortgages, pledges, liens, charges or other security
interests;
(c) The acquisition of, or the agreement or option to acquire, any
property or assets upon conditional sale or subject to any other title
retention agreement, device or arrangement (including a Capitalized Lease);
and
(d) The sale, assignment, pledge or transfer for security of any
accounts, general intangibles or chattel paper of such Person, with or
without recourse.
87. "LINDNER FAMILY MEMBERS" means, collectively, Carl H. Lindner, Richard
E. Lindner, Robert D. Lindner, Carl H. Lindner III, S. Craig Lindner and Keith
E. Lindner, the respective estates, spouses, heirs, ancestors, lineal
descendants, legatees and legal representatives of any of the foregoing and the
trustee of any bona fide trust of which one or more of the foregoing are the
sole beneficiaries or the grantors thereof.
88. "LOAN" means the Revolving Loan or the Term Loan, as applicable.
89. "LOAN MARGIN" has the meaning provided in Section 6.2.1.
90. "MANAGING AGENTS" means, collectively, the Administrative Agent and the
Collateral Agent.
91. "MANAGING AGENT INSTITUTIONS" means, collectively, Bank of Boston and
Continental Bank, in their respective individual capacities.
92. "MARGIN STOCK" means "margin stock" within the meaning of Regulation G,
T, U or X (or any successor provisions) of the Board of Governors of the Federal
Reserve System, or any regulations, interpretations or rulings thereunder, all
as from time to time in effect.
93. "MATERIAL ADVERSE CHANGE" means a material adverse change since
December 31, 1992 in the business, assets, financial condition, income or
prospects of the Company, GAIC and AFC and their respective Subsidiaries (on a
Consolidated basis), whether as a result of (a) general economic conditions
affecting the industries in which such Persons or the businesses in which they
have made their principal investments operate, (b) difficulties in obtaining
supplies and raw materials by the Company and its Subsidiaries or such
businesses, (c) fire, flood or other natural calamities, (d) environmental
pollution, (e) regulatory changes, judicial decisions, war or other governmental
action or (f) any other event or development, whether or not related to those
enumerated above.
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94. "MATERIAL SUBSIDIARY" means any Subsidiary (including its Subsidiaries)
which meets the following condition: the Company's and its other Subsidiaries'
proportionate ownership share of the total assets (after intercompany
eliminations) of such Subsidiary exceeds ten percent of the total assets of the
Company and all of its Subsidiaries consolidated as of the end of the most
recently completed fiscal year.
95. "MAXIMUM AMOUNT OF CREDIT" has the meaning provided in Section 2.1.1.
96. "MULTIEMPLOYER PLAN" means any Plan which is a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA.
97. "NET WORTH" means, at any date, the amount set forth on the balance
sheet of the Company (on an unconsolidated basis), prepared in accordance with
GAAP, as "Total Shareholder's Equity".
98. "NOTES" means each of the Revolving Notes and the Term Notes.
99. "PAYMENT DATE" means the last Banking Day of each March, June,
September and December of each year.
100. "PBGC" means the Pension Benefit Guaranty Corporation or any successor
entity.
101. "PENN CENTRAL" means The Penn Central Corporation, a Pennsylvania
corporation.
102. "PERCENTAGE INTEREST" has the meaning provided in Section 11.1.
103. "PERFORMING LENDER" has the meaning provided in Section 11.4.3.
104. "PERSON" means any present or future natural person or any
corporation, association, partnership, joint venture, company, business trust,
trust, organization, business, individual or government or any governmental
agency or political subdivision thereof.
105. "PLAN" means, at any time, any pension or other employee benefit plan
subject to Title IV of ERISA maintained, or to which contributions have been
made, by the Company or any of its Subsidiaries within six years prior to such
time.
106. "PRIOR AFC AGREEMENTS" means, collectively (a) the Guarantee, Security
and Subordination Agreement dated as of September 30, 1991, as in effect on the
date hereof, among the Company, AFC and Bank of Boston, as agent and (b) the
Guarantee, Security and
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Subordination Agreement dated as of September 30, 1991 as in effect on the date
hereof, among the Company, AFC and Continental Bank, as agent.
107. "PLEDGED STOCK" means the Company Pledged Stock and the AFC Pledged
Stock (as defined in the AFC Agreement).
108. "PRICING OPTIONS" means each of the Eurodollar Pricing Options and the
CD Pricing Options.
109. "PRICING OPTION RATE" means the Eurodollar Rate or the CD Rate, as the
case may be.
110. "PRIOR CREDIT AGREEMENTS" means, collectively (a) the Credit Agreement
dated as of September 30, 1991, as in effect on the date hereof, among the
Company and a group of lenders for which Bank of Boston is acting as agent and
(b) the Credit Agreement dated as of September 30, 1991, as in effect on the
date hereof, among the Company and a group of lenders for which Continental Bank
is acting as agent.
111. "QUALIFIED INSTITUTIONAL BUYER" means:
(a) A duly authorized domestic bank, savings and loan association,
registered investment company, registered investment adviser or registered
dealer, acting for its own account or the accounts of other Qualified
Institutional Buyers, which in the aggregate owns and invests on a
discretionary basis at least $100 million in securities and (if a bank or
savings and loan association) which has a net worth of at least $100
million;
(b) A foreign bank or savings and loan association or equivalent
institution, acting for its own account or the account of other Qualified
Institutional Buyers, which in the aggregate owns and invests on a
discretionary basis at least $100 million in securities and has a net worth
of at least $100 million; or
(c) Any other entity which also constitutes a "qualified institutional
buyer" as defined in Rule 144A under the Securities Act.
112. "REGISTER" has the meaning provided in Section 12.1.3.
113. "RELEASE" means a "release", as defined in CERCLA.
114. "REQUIRED MAJORITY LENDERS" means such Lenders as own at least 67% of
the Percentage Interests.
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115. "RESOURCE CONSERVATION AND RECOVERY ACT" means the Resource
Conservation and Recovery Act, 42 U.S.C. Section 690, ET SEQ. (or any successor
statute) and the rules and regulations thereunder, each as in effect from time
to time.
116. "REVOLVING LOAN" has the meaning provided in Section 2.1.1.
117. "REVOLVING NOTE" has the meaning provided in Section 2.1.3.
118. "REVOLVING RATE" means the sum of:
(a) (i) With respect to any such portion of the Loan which is at
the time subject to an effective Eurodollar Pricing Option, the sum of
1 3/8% PLUS the Eurodollar Rate;
(ii) With respect to any such portion of the Loan which is at the
time subject to an effective CD Pricing Option, the sum of 1 1/2% PLUS
the CD Rate; and
(iii) With respect to any other such portion of the Loan, the
Base Rate; PLUS
(b) the GAIC Net Loss Margin, if any.
119. "SECURITIES ACT" means, collectively, the federal Securities Act of
1933 (or any successor statute) and the rules and regulations thereunder, all as
from time to time in effect.
120. "SUBSIDIARY" means any Person of which the Company (or other specified
Person) shall at the time, directly or indirectly through one or more of its
Subsidiaries, (a) own more than 50% of the outstanding capital stock (or other
shares of beneficial interest) or more than 50% of such stock (or other shares
of beneficial interest) entitled to vote generally, (b) hold more than 50% of
the partnership, joint venture or similar interests or (c) be a general partner
or joint venturer.
121. "TAX" means any tax, levy, impost, duty, deduction, withholding or
other charge of whatever nature at any time required by any Legal Requirement
(a) to be paid by any Lender or (b) to be withheld or deducted from any payment
otherwise required hereby to be made by the Company to any Lender, in each case
on or with respect to (i) any Eurodollar deposit purchased in the inter-bank
Eurodollar market which was used to fund any portion of the Loan subject to a
Eurodollar Pricing Option, (ii) any deposit represented by a certificate of
deposit purchased in New York, New York or Boston, Massachusetts, which was used
to fund any portion of the Loan subject to a CD Pricing Option, (iii) any
portion of the Loan subject to a Eurodollar Pricing Option or a CD Pricing
Option funded with the proceeds of any such Eurodollar deposit or deposit
evidenced by a certificate of deposit, as applicable, (iv) the
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principal amount of or interest on any portion of the Loan, or (v) funds
transferred from a non-United States office or an international banking facility
to a United States office of such Lender in order to fund a portion of the Loan
subject to a Eurodollar Pricing Option; PROVIDED, HOWEVER, that the term "Tax"
shall not include (1) taxes imposed upon or measured by the net income or net
worth of such Lender, (2) taxes which would have been imposed even if there had
been no provision for Pricing Options in this Agreement or (3) amounts required
to be withheld by such Lender from payments of interest to Persons from whom
Eurodollar deposits or deposits represented by certificates of deposit were
purchased by such Lender.
122. "TERM LOAN" has the meaning provided in Section 2.2.1.
123. "TERM NOTE" has the meaning provided in Section 2.2.2.
124. "TERM RATE" means the sum of 1/8% PLUS the Revolving Rate.
125. "UNITED STATES FUNDS" means such coin or currency of the United States
of America as at the time shall be legal tender therein for the payment of
public and private debts.
126. "WHOLLY OWNED SUBSIDIARY" means any Subsidiary of which all of the
outstanding capital stock (or other shares of beneficial interest) entitled to
vote generally (other than directors' qualifying shares) is owned by the Company
(or other specified Person) directly, or indirectly through one or more Wholly
Owned Subsidiaries.
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EXHIBIT 2.1.3
-------------
REVOLVING NOTE
R- December __, 1993
FOR VALUE RECEIVED, the undersigned, GREAT AMERICAN HOLDING CORPORATION, an
Ohio corporation (the "Company"), hereby promises to pay [INSERT LENDER] (the
"Lender") or order, on the Conversion Date, the aggregate unpaid principal
amount of the loans made by the Lender to the Company pursuant to the Credit
Agreement referred to below. The Company promises to pay daily interest from the
date hereof, computed as provided in such Credit Agreement, on the aggregate
principal amount of such loans from time to time unpaid at the per annum rate
applicable to such unpaid principal amount as provided in such Credit Agreement
and to pay interest on overdue principal and, to the extent not prohibited by
applicable law, on overdue installments of interest and principal and fees at
the rate specified in such Credit Agreement, all such interest being payable at
the times specified in such Credit Agreement, except that all accrued interest
shall be paid at the stated or accelerated maturity hereof or upon the
prepayment in full hereof.
Payments hereunder shall be made to The First National Bank of Boston, as
Administrative Agent for the payee hereof, at 100 Federal Street, Boston,
Massachusetts 02110.
All loans made by the Lender pursuant to the Credit Agreement referred to
below and all repayments of the principal thereof shall be recorded by the
Lender and, prior to any transfer hereof, appropriate notations to evidence the
foregoing information with respect to each such loan then outstanding shall be
endorsed by the Lender on the schedule attached hereto or on a continuation of
such schedule attached to and made a part hereof; PROVIDED, HOWEVER, that the
failure of the Lender to make any such recordation or endorsement shall not
affect the obligations of the Company under this Note, such Credit Agreement or
under any other Credit Document.
This Note evidences borrowings under, and is entitled to the benefits and
security of, and is subject to the provisions of, the Credit Agreement dated as
of December 7, 1993, as from time to time in effect (the "Credit Agreement"),
among the maker, the payee hereof, the Managing Agents and certain other
lenders. The principal of this Note is prepayable in the amounts and under the
circumstances set forth in the Credit Agreement, and may be prepaid in whole or
from time to time in part, all as set forth in the Credit Agreement. Terms
defined in the Credit Agreement and not otherwise defined herein are used herein
with the meanings so defined.
<PAGE> 87
In case an Event of Default shall occur, the entire principal of this Note
may become or be declared due and payable in the manner and with the effect
provided in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
(OTHER THAN THE CONFLICT OF LAWS RULES) OF THE COMMONWEALTH OF MASSACHUSETTS.
The parties hereto, including the Company and all guarantors and endorsers,
hereby waive presentment, demand, notice, protest and all other demands and
notices in connection with the delivery, acceptance, performance and enforcement
of this Note, except as specifically otherwise provided in the Credit Agreement,
and assent to extensions of time of payment, or forbearance or other indulgence
without notice.
GREAT AMERICAN HOLDING CORPORATION
By________________________________
Vice President & Treasurer
-2-
<PAGE> 88
LOAN AND PAYMENTS OF PRINCIPAL
- ------------------------------------------------------------
Amount Amount of Unpaid
of Principal Principal Notation
Date Loan Repaid Balance Made By
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
-3-
<PAGE> 89
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
-4-
<PAGE> 90
EXHIBIT 2.2.2
-------------
TERM NOTE
T-__ , 199_
FOR VALUE RECEIVED, the undersigned, GREAT AMERICAN HOLDING CORPORATION, an
Ohio corporation (the "Company"), hereby promises to pay [INSERT LENDER] (the
"Lender") or order, on the Final Maturity Date, the aggregate unpaid principal
amount of the loans made by the Lender to the Company pursuant to the Credit
Agreement referred to below. The Company promises to pay daily interest from the
date hereof, computed as provided in such Credit Agreement, on the aggregate
principal amount of such loans from time to time unpaid at the per annum rate
applicable to such unpaid principal amount as provided in such Credit Agreement
and to pay interest on overdue principal and, to the extent not prohibited by
applicable law, on overdue installments of interest and principal and fees at
the rate specified in such Credit Agreement, all such interest being payable at
the times specified in such Credit Agreement, except that all accrued interest
shall be paid at the stated or accelerated maturity hereof or upon the
prepayment in full hereof.
Payments hereunder shall be made to The First National Bank of Boston, as
Administrative Agent for the payee hereof, at 100 Federal Street, Boston,
Massachusetts 02110.
This Note evidences borrowings under, and is entitled to the benefits and
security of, and is subject to the provisions of, the Credit Agreement dated as
of December 7, 1993, as from time to time in effect (the "Credit Agreement"),
among the maker, the payee hereof, the Managing Agents and certain other
lenders. The principal of this Note is prepayable in the amounts and under the
circumstances set forth in Section 4 of the Credit Agreement (including the
prepayments of principal required by Section 4.2.2 of the Credit Agreement), and
may be prepaid in whole or from time to time in part, all as set forth in the
Credit Agreement. Terms defined in the Credit Agreement and not otherwise
defined herein are used herein with the meanings so defined.
In case an Event of Default shall occur, the entire principal of this Note
may become or be declared due and payable in the manner and with the effect
provided in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
(OTHER THAN THE CONFLICT OF LAWS RULES) OF THE COMMONWEALTH OF MASSACHUSETTS.
<PAGE> 91
The parties hereto, including the Company and all guarantors and endorsers,
hereby waive presentment, demand, notice, protest and all other demands and
notices in connection with the delivery, acceptance, performance and enforcement
of this Note, except as specifically otherwise provided in the Credit Agreement,
and assent to extensions of time of payment, or forbearance or other indulgence
without notice.
GREAT AMERICAN HOLDING CORPORATION
By________________________________
Vice President & Treasurer
-2-
<PAGE> 92
EXHIBIT 5.1
FORM OF OFFICERS' CERTIFICATE
Pursuant to Section 2.1.2 of the Credit Agreement dated as of December 7,
1993, as now in effect (the "Credit Agreement"), among the undersigned Great
American Holding Corporation (the "Company"), The First National Bank of Boston
for itself and as Administrative Agent and as Managing Agent, Continental Bank
N.A., for itself and as Collateral Agent and as Managing Agent, and certain
other Lenders, the Company requests that a loan be made on the date specified
below (the "Closing Date") in the following amount:
Closing Date:
Total amount of loan requested: $_____________
In connection with the foregoing request, the Company represents and
warrants that the representations and warranties contained in Sections 6.3 and 8
of the Credit Agreement are true and correct on and as of the date hereof with
the same force and effect as though originally made on and as of the date
hereof; no Default exists on the date hereof or will exist after giving effect
to the extension of credit requested hereby; and no Material Adverse Change has
occurred.
AFC represents and warrants that the representations and warranties
contained in Sections 3.2 and 5 of the AFC Agreement are true and correct on and
as of the date hereof with the same force and effect as though originally made
on and as of the date hereof.
The foregoing representations and warranties shall be deemed made by each
of the Company and AFC on the requested Closing Date unless the Company or AFC
shall have notified the Administrative Agent in writing to the contrary prior to
such Closing Date.
Terms defined in the Credit Agreement and not otherwise defined herein are
used herein with the meanings so defined.
<PAGE> 93
This certificate has been executed by a duly authorized Financial Officer
of each of the Company and AFC this day of , 19 .
GREAT AMERICAN HOLDING CORPORATION
By________________________________
Vice President & Treasurer
AMERICAN FINANCIAL CORPORATION
By________________________________
Vice President & Treasurer
-2-
<PAGE> 94
EXHIBIT 8.1
-----------
<TABLE>
<CAPTION>
Chief Executive Number of
Name and Jurisdiction Office and Chief Authorized and
of Incorporation Place of Business Issued Shares Ownership
- --------------------- ----------------- -------------- ---------
<S> <C> <C> <C>
1) Great American 580 Walnut Street 100,000 100%
Insurance Company, Cincinnati, Ohio
Ohio 45202
2) American Annuity 250 East Fifth 35,097,447 82%
Group, Inc., Street
Ohio Cincinnati, Ohio
45202
3) The Penn Central One East Fourth 45,742,102 41%
Corporation, Street
Pennsylvania Cincinnati, Ohio
45202
4) Chiquita Brands 250 East Fifth 48,137,780 40%
International Street
Inc., Cincinnati, Ohio
New Jersey 45202
5) American Financial One East Fourth 13,291,117 83%
Enterprises, Inc., Street
Connecticut Cincinnati, Ohio
45202
</TABLE>
-1-
<PAGE> 95
EXHIBIT 8.11
------------
DEFINED BENEFIT PLANS
The Retirement Plan for Salaried Employees of American Empire Insurance
Company is a single-employer, defined benefit plan.
<PAGE> 96
EXHIBIT 8.13
------------
ENVIRONMENTAL DISCLOSURE
[To be provided]
<PAGE> 97
EXHIBIT 12.1.1A
---------------
FORM OF ASSIGNMENT AND ACCEPTANCE
(MULTIPLE ASSIGNORS)
______________, 19___
Great American Holding Corporation
One East Fourth Street
Cincinnati, Ohio 45202
The First National Bank of
Boston, as Administrative Agent
and as Managing Agent
100 Federal Street
Boston, Massachusetts 02110
Continental Bank N.A.,
as Collateral Agent and
as Managing Agent
231 LaSalle Street, 9Q
Chicago, Illinois 60697
Re: ASSIGNMENT UNDER THE CREDIT AGREEMENT REFERRED TO BELOW
Ladies and Gentlemen:
Reference is made to Section 12.1 of the Credit Agreement dated as of
December 7, 1993, as from time to time in effect (the "Credit Agreement"), among
Great American Holding Corporation, an Ohio corporation, certain lenders (the
"Lenders"), and The First National Bank of Boston as administrative agent (the
"Administrative Agent") and as managing agent, and Continental Bank N.A. as
collateral agent and as managing agent (collectively, the "Managing Agents").
Unless otherwise defined herein or the context otherwise requires, terms used
herein shall have the meanings provided in the Credit Agreement.
Each of ______________________________________ (collectively, the
"Assignors") hereby assigns to ____________________________ (the "Assignee") and
the Assignee hereby purchases and assumes from the Assignors, a portion of the
Percentage Interests in the Loan and the Commitments of the Assignors. The
Assignors and the Assignee hereby agree that such assignment and acceptance
shall be effective on the Assignment Date (as defined below). After giving
effect to such assignment and acceptance, the Assignors' and Assignee's
respective Commitments and Percentage Interests for the purposes of the Credit
Agreement will be as follows:
[Insert Table]
The Assignors hereby instruct the Administrative Agent to make all payments
after the Assignment Date in respect of the interests assigned hereby directly
to the Assignee. The Assignors and the Assignee agree that all interest on, and
fees with respect to, the Loan,
-1-
<PAGE> 98
accrued to, but not including, the Assignment Date, are the property of the
respective Assignors, and not the Assignee. The Assignee agrees that, upon
receipt of any such interest or fees, the Assignee will promptly remit the same
to the Assignors.
On the Assignment Date, the Assignee shall pay to the Administrative Agent
for the benefit of each Assignor, in immediately available funds, an amount
equal to the purchase price (the "Purchase Price") of the assigned Percentage
Interests in the Loan and the Commitments, each Assignor's portion thereof to be
equal to the outstanding principal amount being assigned by it as set forth
below. Upon receipt thereof, the Administrative Agent shall remit such Purchase
Price to each Assignor.
Each of the Assignors:
(a) represents that as of the date hereof, its Commitment (without
giving effect to assignments thereof which have not yet become effective)
and the outstanding principal balance of its Percentage Interest in the
Loan (unreduced by any assignments thereof which have not yet become
effective) are as follows:
[Insert Table]
(b) makes this assignment without recourse and makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit
Agreement or any other Credit Document or any other instrument furnished
pursuant thereto, or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement or the other
Credit Documents or any other instrument or document furnished pursuant
thereto, other than that it is the legal and beneficial owner of the
interest being assigned by it hereunder and that such interest is free and
clear of any adverse claim; and
(c) makes no representation or warranty and assumes no responsibility
with respect to the financial condition of AFC, the Company or any of their
respective Subsidiaries or the performance of any of their obligations
under the Credit Agreement, any of the other Credit Documents or any other
instrument or document furnished pursuant thereto.
The Assignee:
(a) represents and warrants that it is legally authorized to enter
into this agreement;
(b) confirms that it has received a copy of the Credit Agreement and
certain other Credit Documents it has requested, together with copies of
the most recent financial statements delivered pursuant to Section 7.5 or
referred to in Section 8.2 of the Credit Agreement and such other documents
and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this agreement;
(c) agrees that it will, independently and without reliance upon the
Managing Agents, the Assignors or any other Lender, and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under the Credit Agreement and other Credit Documents;
<PAGE> 99
(d) appoints and authorizes each Managing Agent to take such action on
its behalf and to exercise such powers under the Credit Agreement as are
delegated to such Managing Agent by the terms of the Credit Agreement,
together with such powers as are reasonably incidental thereto;
(e) agrees that it will be bound by the provisions of the Credit
Agreement and will perform in accordance with their terms all the
obligations which by the terms of the Credit Agreement and the other Credit
Documents are required to be performed by it as a Lender; and
(f) represents and warrants that it is a Qualified Institutional
Buyer.
The effective date of this agreement shall be _____________, 19___ (the
"Assignment Date").
Except as otherwise provided in the Credit Agreement, as of the Assignment
Date:
(a) the Assignee (i) shall be deemed automatically to have become a
party to the Credit Agreement and have all the rights and obligations of a
"Lender" under the Credit Agreement and under the other Credit Documents as
if it were an original signatory thereto to the extent specified in the
second paragraph hereof; and (ii) assumes and agrees to be bound by the
terms and conditions set forth in the Credit Agreement as if it were an
original signatory thereto; and
(b) each Assignor shall relinquish its rights and be released from its
obligations under the Credit Agreement and the other Credit Documents to
the extent permitted under the Credit Agreement and as specified in the
second paragraph hereof.
[The payment of the processing and recordation fee referred to in Section
12.1.1 of the Credit Agreement shall be a condition to the effectiveness of this
assignment.]
The Assignee hereby advises each of you of the following administrative
details with respect to the assigned Percentage Interest in the Loan and in the
Commitments of the Assignors:
(A) Address for Notices:
Institution Name:
Address:
Attention:
Telephone:
Facsimile:
(B) Payment Instructions:
-3-
<PAGE> 100
[The Assignee has delivered to the Company and the Administrative Agent (or
is delivering to the Company and the Administrative Agent concurrently herewith)
the tax forms referred to in Section 12.1.5 of the Credit Agreement.]*
Each of the Assignors and the Assignee agree to execute and deliver such
other instruments and documents and to take such other actions as any party
hereto may reasonably request in connection with the transactions contemplated
by this agreement.
This agreement is a Credit Document and may be executed in any number of
counterparts, which together shall constitute one instrument. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS.
Please evidence your [consent to and] acceptance of the assignment and
acceptance set forth herein by signing and returning counterparts hereof to the
Assignors and the Assignee.
- --------------------
* Insert bracketed paragraph if Assignee is organized under the law of a
jurisdiction other than the United States of America.
-4-
<PAGE> 101
[ASSIGNORS]
By_____________________________
Title:
By_____________________________
Title:
[ASSIGNEE]
By_____________________________
Title:
[Street Address
City, State Zip Code]
Telecopy:
Telex:
The foregoing is hereby [approved and] accepted:
[GREAT AMERICAN HOLDING CORPORATION
By_____________________________
Vice President & Treasurer]
THE FIRST NATIONAL BANK
OF BOSTON, as Administrative Agent
and as Managing Agent
By_____________________________
Director
CONTINENTAL BANK N.A., as Collateral
Agent and as Managing Agent
By_____________________________
Managing Director
-5-
<PAGE> 102
EXHIBIT 12.1.1B
---------------
FORM OF ASSIGNMENT AND ACCEPTANCE
(SINGLE ASSIGNOR)
________________, 19___
Great American Holding Corporation
One East Fourth Street
Cincinnati, Ohio 45202
The First National Bank of
Boston, as Administrative Agent
and as Managing Agent
100 Federal Street
Boston, Massachusetts 02110
Continental Bank N.A.,
as Collateral Agent and
as Managing Agent
231 LaSalle Street, 9Q
Chicago, Illinois 60697
Re: ASSIGNMENT UNDER THE CREDIT AGREEMENT REFERRED TO BELOW
Ladies and Gentlemen:
Reference is made to Section 12.1 of the Credit Agreement dated as of
December 7, 1993, as from time to time in effect (the "Credit Agreement"), among
Great American Holding Corporation, an Ohio corporation, certain lenders (the
"Lenders"), and The First National Bank of Boston as administrative agent (the
"Administrative Agent") and as managing agent, and Continental Bank N.A. as
collateral agent and as managing agent (collectively, the "Managing Agents").
Unless otherwise defined herein or the context otherwise requires, terms used
herein shall have the meanings provided in the Credit Agreement.
_________________________ (the "Assignor") hereby assigns to________________
(the "Assignee") and the Assignee hereby purchases and assumes from the Assignor
a ___% Percentage Interest in the Loan and the Commitment of ________________
(the "Assignor"). The Assignor and the Assignee hereby agree that such
assignment and acceptance shall become effective on the Assignment Date (as
defined below). After giving effect to such assignment and acceptance, the
Assignor's and the Assignee's respective Percentage Interests for purposes of
the Credit Agreement will be as follows:
[Insert Table]
The Assignor hereby instructs the Administrative Agent to make all payments
after the Assignment Date (as specified below) in respect of the interests
assigned hereby directly to the Assignee. The Assignor and the Assignee agree
that all interest on, and fees with respect to, the Loan, accrued to, but not
including, the Assignment Date, are the property of the Assignor,
-1-
<PAGE> 103
and not the Assignee. The Assignee agrees that, upon receipt of any such
interest or fees, the Assignee will promptly remit the same to the Assignor.
On the Assignment Date, the Assignee shall pay to the Administrative Agent
for the benefit of the Assignor, in immediately available funds, an amount equal
to the purchase price (the "Purchase Price") of the assigned Percentage
Interests in the Loan and the Commitments, the Assignor's portion thereof to be
equal to the outstanding principal amount being assigned by it as set forth
below. Upon receipt thereof, the Administrative Agent shall remit the Purchase
Price to the Assignor.
The Assignor:
(a) represents that as of the date hereof, its Commitment (without
giving effect to assignments thereof which have not yet become effective)
and the outstanding principal balance of its Percentage Interest in the
Loan (unreduced by any assignments thereof which have not yet become
effective) are as follows:
[Insert Table]
(b) makes this assignment without recourse and makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit
Agreement or the other Credit Document or any other instrument furnished
pursuant thereto, or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement or the other
Credit Documents or any other instrument or document furnished pursuant
thereto, other than that it is the legal and beneficial owner of the
interest being assigned by it hereunder and that such interest is free and
clear of any adverse claim; and
(c) makes no representation or warranty and assumes no responsibility
with respect to the financial condition of AFC, the Company or any of their
respective Subsidiaries or the performance of any of their obligations
under the Credit Agreement, any of the other Credit Documents or any other
instrument or document furnished pursuant thereto.
The Assignee:
(a) represents and warrants that it is legally authorized to enter
into this agreement;
(b) confirms that it has received a copy of the Credit Agreement and
certain other Credit Documents it has requested, together with copies of
the most recent financial statements delivered pursuant to Section 7.5 or
referred to in Section 8.2 of the Credit Agreement and such other documents
and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this agreement;
(c) agrees that it will, independently and without reliance upon the
Managing Agents, the Assignor or any other Lender, and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under the Credit Agreement and other Credit Documents;
(d) appoints and authorizes each Managing Agent to take such action on
its behalf and to exercise such powers under the Credit Agreement as are
delegated to such
<PAGE> 104
Managing Agent by the terms of the Credit Agreement, together with such
powers as are reasonably incidental thereto;
(e) agrees that it will be bound by the provisions of the Credit
Agreement and will perform in accordance with their terms all the
obligations which by the terms of the Credit Agreement and the other Credit
Documents are required to be performed by it as a Lender; and
(f) represents and warrants that it is a Qualified Institutional
Buyer.
The effective date of this agreement shall be _____________, 19___ (the
"Assignment Date").
Except as otherwise provided in the Credit Agreement, on the Assignment
Date:
(a) the Assignee (i) shall be deemed automatically to have become a party
to the Credit Agreement and have all the rights and obligations of a
"Lender" under the Credit Agreement and under the other Credit
Documents as if it were an original signatory thereto to the extent
specified in the second paragraph hereof; and (ii) assumes and agrees
to be bound by the terms and conditions set forth in the Credit
Agreement as if it were an original signatory thereto; and
(b) the Assignor shall relinquish its rights and be released from its
obligations under the Credit Agreement and the other Credit Documents
to the extent permitted under the Credit Agreement and as specified in
the second paragraph hereof.
[The payment of the processing and recordation fee referred to in Section
12.1.1 of the Credit Agreement shall be a condition to the effectiveness of this
assignment.]
The Assignee hereby advises you of the following administrative details
with respect to the assigned Percentage Interest in the Loan and in the
Commitment of the Assignor:
(A) Address for Notices:
Institution Name:
Address:
Attention:
Telephone:
Facsimile:
(B) Payment Instructions:
[The Assignee has delivered to the Company and the Administrative Agent (or
is delivering to the Company and the Administrative Agent concurrently herewith)
the tax forms referred to in Section 12.1.5 of the Credit Agreement.]**
- --------------------
** Insert bracketed paragraph if Assignee is organized under the law of a
jurisdiction other than the United States of America.
<PAGE> 105
The Assignor and the Assignee agree to execute and deliver such other
instruments and documents and to take such other actions as any party hereto may
reasonably request in connection with the transactions contemplated by this
agreement.
This agreement is a Credit Document and may be executed in any number of
counterparts, which together shall constitute one instrument. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS.
Please evidence your [consent to and] acceptance of the assignment and
acceptance set forth herein by signing and returning counterparts hereof to the
Assignor and the Assignee.
-4-
<PAGE> 106
[ASSIGNOR]
By_____________________________
Title:
[ASSIGNEE]
By_____________________________
Title:
[Street Address
City, State Zip Code]
Telecopy:
Telex:
The foregoing is hereby [approved and] accepted:
[GREAT AMERICAN HOLDING CORPORATION
By_____________________________
Vice President & Treasurer]
THE FIRST NATIONAL BANK
OF BOSTON, as Administrative Agent
and as Managing Agent
By_____________________________
Director
CONTINENTAL BANK N.A., as Collateral
Agent and as Managing Agent
By_____________________________
Managing Director
-5-
<PAGE> 107
Exhibit 5.4
-----------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AMERICAN FINANCIAL CORPORATION
GREAT AMERICAN HOLDING CORPORATION
GUARANTEE, SECURITY AND SUBORDINATION AGREEMENT
Dated as of December 7, 1993
THE FIRST NATIONAL BANK OF BOSTON and
CONTINENTAL BANK N.A., as Managing Agents
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 108
TABLE OF CONTENTS
PAGE
1. Definitions, etc.................................................. 1
1.1. Reference to Credit Agreement; Definitions.................. 1
1.1.1. "Holder of Subordinated Indebtedness"............ 1
1.1.2. "Obligor"........................................ 1
1.1.3. "Reorganization"................................. 1
1.1.4. "Senior Indebtedness"............................ 2
1.1.5. "Subordinated Indebtedness"...................... 2
2. Guarantee.............................................................. 2
2.1. Guarantee of Credit Obligations............................. 2
2.2. Continuing Obligation; Reinstatement........................ 3
2.3. Waivers with Respect to Credit Obligations.................. 3
3. Security............................................................... 5
3.1. Credit Security............................................. 5
3.2. Representations, Warranties and Covenants with
Respect to Credit Security............................ 5
3.2.1. AFC Pledged Stock................................ 5
3.2.2. No Liens......................................... 6
3.2.3. Perfection of Credit Security.................... 6
3.2.4. Indemnity........................................ 6
3.2.5. Governmental Consents; Validity of Pledge........ 7
3.3. Administration of Credit Security........................... 7
3.3.1. Distributions.................................... 7
3.3.2. Voting........................................... 8
3.3.3. Custody of Credit Security....................... 8
3.3.4. Governmental Consents and Approvals.............. 8
3.4. Right to Realize upon Credit Security....................... 9
3.4.1. Marshaling....................................... 9
3.4.2. Sales of Credit Security......................... 10
3.4.3. Sale without Registration........................ 10
-i-
<PAGE> 109
3.4.4. Application of Proceeds.......................... 11
3.5. Governmental Regulation..................................... 12
4. Subordination Covenants........................................... 12
4.1. Subordination............................................... 12
4.2. Restricted Payments......................................... 13
4.3. Reorganization.............................................. 13
4.4. Specific Powers in Reorganization........................... 13
4.5. Payments Held in Trust...................................... 14
4.6. No Security................................................. 14
4.7. Restrictions on Remedies.................................... 14
4.8. Restrictions on Acceleration................................ 15
4.9. Payment in Full............................................. 15
4.10. Effect of Provisions....................................... 15
4.11. Further Assurances......................................... 15
4.12. Legend..................................................... 15
4.13. Financial Statements....................................... 16
5. Representations and Warranties......................................... 16
5.1. Organization and Business................................... 16
5.2. Financial Statements and Other Information;
Certain Agreements.................................... 16
5.3. Changes in Condition........................................ 17
5.4. Litigation.................................................. 17
5.5. Enforceability; No Legal Obstacle to Agreements............. 18
5.6. Tax Returns................................................. 18
6. General Covenants...................................................... 19
-ii-
<PAGE> 110
6.1. Preservation of Corporate Existence, etc.................... 19
6.2. Taxes and Other Charges; Accounts Payable................... 19
6.2.1. Taxes and Other Charges.......................... 19
6.2.2. Accounts Payable................................. 19
6.3. Financial Statements and Reports............................ 20
6.3.1. Annual Reports................................... 20
6.3.2. Quarterly Reports................................ 20
6.3.3. Other Information................................ 20
6.3.4. Other Reports.................................... 20
6.3.5. Notice of Material Litigation; Notice of
Defaults; etc.............................. 20
6.3.6. ERISA Reports.................................... 21
6.4. Merger, Consolidation and Sale of Assets.................... 22
6.5. Compliance with ERISA....................................... 22
6.6. Transactions with Affiliates................................ 23
7. Confidentiality................................................... 23
8. Information Regarding the Company................................. 24
9. Continuing Agreement, etc......................................... 24
10. Waivers; Powers, etc.............................................. 25
10.1. Specific Performance....................................... 25
10.2. Consent to Credit Agreement................................ 25
10.3. Power to Modify, etc....................................... 25
10.4. No Subrogation............................................. 26
11. Transfers; Successors and Assigns................................. 26
11.1. Transfers.................................................. 26
11.2. Successors and Assigns..................................... 26
-iii-
<PAGE> 111
12. Notices............................................................... 26
13. Defeasance............................................................ 27
14. Venue; Service of Process............................................. 28
15. WAIVER OF JURY TRIAL.................................................. 28
16. General............................................................... 29
-iv-
<PAGE> 112
AMERICAN FINANCIAL CORPORATION
GREAT AMERICAN HOLDING CORPORATION
GUARANTEE, SECURITY AND SUBORDINATION AGREEMENT
This Agreement, dated as of December 7, 1993, is among American
Financial Corporation, an Ohio corporation ("AFC"), Great American Holding
Corporation, an Ohio corporation (the "Company"), The First National Bank of
Boston, as administrative agent (the "Administrative Agent") and as managing
agent (a "Managing Agent"), and Continental Bank, N.A., as collateral agent (the
"Collateral Agent") and as managing agent (a "Managing Agent", and together with
The First National Bank of Boston as Managing Agent, collectively, the "Managing
Agents"), for the ratable benefit of the Lenders under the Credit Agreement (as
defined below). The parties agree as follows:
1. DEFINITIONS, ETC.
1..1. REFERENCE TO CREDIT AGREEMENT; DEFINITIONS. Reference is made to
the Credit Agreement dated as of the date hereof, as from time to time in effect
(the "Credit Agreement"), among the Company, the Administrative Agent and
Managing Agent, the Collateral Agent and Managing Agent, and certain Lenders
party thereto. Except as the context otherwise explicitly requires, (i) the
capitalized term "Section" refers to sections of this Agreement, (ii) references
to a particular Section shall include all subsections thereof and (iii) the word
"including" shall be construed as "including without limitation". Capitalized
terms defined in the Credit Agreement are used herein with the meanings so
defined. Certain other capitalized terms used in this Agreement shall have the
meanings specified below:
1..1..1. "HOLDER OF SUBORDINATED INDEBTEDNESS" means: (i) AFC and (ii)
each Person becoming a party to this Agreement pursuant to Section 11.1.
1..1..2. "OBLIGOR" means the Company and its successors and assigns.
1..1..3. "REORGANIZATION" means any voluntary or involuntary
dissolution, winding-up, total or partial liquidation or reorganization or
restructuring, whether by judicial proceedings or otherwise, or bankruptcy,
insolvency, receivership or other statutory or common law proceedings or
arrangements, including any proceeding under the Bankruptcy Code or any similar
law of any other jurisdiction, involving the Obligor or any guarantor of the
Subordinated Indebtedness or any of their present or future Subsidiaries or the
readjustment of the respective liabilities of the Obligor or any such other
Person or any assignment for the benefit of creditors or any marshaling of the
assets or liabilities of the Obligor or any such other Person; provided,
however, that a Reorganization resulting solely from the filing of a petition
against the Obligor commencing an involuntary case under the Bankruptcy Code
shall
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cease to constitute a Reorganization for purposes of this Agreement if
such case has been dismissed within 60 days after such petition is filed.
1..1..4. "SENIOR INDEBTEDNESS" means: (i) the principal of and premium,
if any, on any Indebtedness of the Obligor to any Lender under the Credit
Agreement or any other Credit Document and all other Credit Obligations,
including without limitation the Indebtedness evidenced by the Notes; (ii) all
renewals, extensions, restructurings, refinancings and refundings of Senior
Indebtedness as defined in clause (i) above; (iii) all fees, costs, expenses and
other obligations payable under the Credit Agreement or any other Credit
Document or otherwise with respect to Senior Indebtedness as defined in clauses
(i) and (ii) above, accrued to the date of payment, whether before or after the
institution by or against the Obligor of proceedings under the Bankruptcy Code;
and (iv) all interest arising on or with respect to Senior Indebtedness as
defined in clauses (i), (ii) and (iii) above accrued to the date of payment,
whether before or after the institution by or against the Obligor of a
Reorganization.
1..1..5. "SUBORDINATED INDEBTEDNESS" means (i) the principal of and
premium, if any, and interest, fees and other obligations arising on or with
respect to all Indebtedness of the Obligor to AFC and its Affiliates (other than
Indenture Indebtedness held from time to time by an Affiliate other than AFC or
any of AFC's Designated Subsidiaries), (ii) all obligations of the Obligor to
issue securities upon conversion of or in exchange for any Subordinated
Indebtedness as defined in clause (i) above, (iii) Investments by AFC and its
Affiliates in the Obligor other than Investments consisting of common stock of
the Obligor and (iv) any and all claims, damages and liabilities of any nature
whatsoever arising hereunder or with respect to any Subordinated Indebtedness as
defined in clauses (i), (ii) and (iii) above which the Holder of Subordinated
Indebtedness may now or hereafter have against the Obligor.
2. GUARANTEE.
2..1. GUARANTEE OF CREDIT OBLIGATIONS. AFC hereby unconditionally,
absolutely and irrevocably guarantees that the Credit Obligations will be
performed and will be paid in full by AFC in cash when due and payable, whether
at the stated or accelerated maturity thereof or otherwise, this guarantee being
a guarantee of payment and not of collectability and being absolute and in no
way conditional or contingent, such guarantee payments to be made as follows: in
the event any part of the Credit Obligations shall not have been paid in full
when due and payable, AFC will, not later than five days after written notice by
the Administrative Agent (which notice shall be given upon the request of the
Required Majority Lenders), pay or cause to be paid to the Administrative Agent
for the Lenders' account the amount of such Credit Obligations which are then
due and payable and unpaid. The obligations of AFC hereunder shall not be
affected by the irregularity, illegality, invalidity, unenforceability or
irrecoverability of any of the Credit Obligations as against the Company, any
other guarantor thereof or any other Person. For purposes hereof, the Credit
Obligations shall be due and payable when and as the same shall be due and
payable under the terms of the Credit Agreement or any other Credit Document
notwithstanding the fact that the collection or enforcement thereof may be
stayed or enjoined under the Bankruptcy Code, as from time to time in effect, or
other applicable law.
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2..2. CONTINUING OBLIGATION; REINSTATEMENT. AFC acknowledges that the
Lenders have entered into the Credit Agreement (and, to the extent that the
Lenders may enter into any future Credit Document, will have entered into such
agreement) in reliance on this Agreement being a continuing irrevocable
agreement, and AFC agrees that its guarantee may not at any time be revoked in
whole or in part. The obligations of AFC hereunder shall terminate when the
commitment of the Lenders to extend credit under the Credit Agreement shall have
terminated and all of the Credit Obligations have been indefeasibly paid in full
in cash and discharged; provided, HOWEVER, that if the Lenders repay or return,
or become liable to repay or return, any amounts or property (including interest
thereon) received by the Lenders from any source on account of any of the Credit
Obligations, then AFC shall remain liable under this Agreement for, and this
Agreement shall be reinstated in respect of, the amounts so repaid or returned
or the amounts for which the Lenders become liable (such amounts being deemed
part of the Credit Obligations) to the same extent as if such amounts had never
been received by the Lenders, notwithstanding any termination hereof or the
cancellation of any instrument or agreement evidencing any of the Credit
Obligations. AFC shall, not later than five days after receipt of notice from
the Administrative Agent (which notice will be given upon the request of the
Required Majority Lenders), pay to the Administrative Agent an amount equal to
the amount of such repayment or return for which the Lenders have so become
liable. Payments hereunder by AFC may be required by the Administrative Agent on
any number of occasions.
2..3. WAIVERS WITH RESPECT TO CREDIT OBLIGATIONS. AFC hereby waives, to
the extent permitted by the provisions of applicable law that may not be waived,
all of the following (including all defenses, counterclaims and other rights of
any nature based upon any of the following):
(i) Presentment, demand for payment and protest of nonpayment of
any of the Credit Obligations, and notice of protest, dishonor or
nonperformance;
(ii) Notice of acceptance of or reliance upon this Agreement;
(iii) Except to the extent expressly required by the Credit
Agreement, this Agreement or any other Credit Document, notice of any
Default, or of any inability to enforce performance of the obligations
of the Obligor or any other Person thereunder;
(iv) Demand for performance or observance of, and any enforcement
of any provision of, the Credit Obligations, the Credit Agreement, this
Agreement or any other Credit Document (except to the extent required
by such agreements) or any pursuit or exhaustion of rights or remedies
with respect to any Credit Security or against the Obligor or any other
Person in respect of the Credit
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Obligations or any requirement of diligence or promptness on the part
of the Lenders in connection with any of the foregoing; (v) Any act or
omission on the part of the Lenders which may impair or prejudice any
rights of AFC, or which might vary the risk of AFC or otherwise operate
as a deemed release or discharge;
(vi) Failure or delay to perfect or continue the perfection of any
security interest in any Credit Security or any action which harms or
impairs the value of, or any failure to preserve or protect the value
of, or any release of, any Credit Security;
(vii) The provisions of any "one action" or "anti-deficiency" law
which would otherwise prevent the Lenders from bringing any action,
including any claim for a deficiency, against AFC before or after the
Lenders' commencement or completion of any foreclosure action, or any
other law which would otherwise require any election of remedies by the
Lenders;
(viii) All demands and notices of every kind with respect to the
foregoing; and
(ix) All defenses, offsets and counterclaims which the Company or
AFC may now or hereafter have to the payment of the Credit Obligations,
together with all suretyship defenses, which could otherwise be
asserted by AFC.
To the extent not prohibited by the provisions of applicable law that
may not be waived, AFC hereby absolutely and irrevocably waives and relinquishes
the benefit and advantage of, and covenants not to assert, any appraisement,
valuation, stay, extension, redemption or similar law, now or at any time
hereafter in force, or interpose any other defense or counterclaim, which might
delay, prevent or otherwise impede the performance or enforcement of the Credit
Agreement, this Agreement, any other Credit Document or the Credit Obligations.
3. SECURITY.
3..1. CREDIT SECURITY. As security for the payment and performance of
the Credit Obligations, AFC hereby mortgages, pledges, grants and assigns to the
Collateral Agent for the benefit of the Lenders and the holders from time to
time of any Credit Obligation, and creates a first priority security interest
in, all of AFC's right, title and interest in and to (but none of its
obligations or liabilities with respect to) the following:
3..1..1. 500 shares or such greater number of shares of the
Common Stock of the Company, constituting at all times at least 50% of
the issued and outstanding shares
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of capital stock of all classes of the Company and 50% of the issued
and outstanding shares of capital stock entitled to vote for the
election of directors of the Company.
3..1..2. All Distributions with respect to the stock described
in Section 3.1.1.
3..1..3. All proceeds of the foregoing.
The shares of capital stock from time to time pledged hereunder are
referred to as the "AFC Pledged Stock", and the AFC Pledged Stock, all
Distributions with respect thereto and the proceeds thereof are included in the
term "Credit Security". AFC has delivered to the Collateral Agent the
certificates representing the AFC Pledged Stock listed in Exhibit A, together
with undated stock transfer powers duly executed in blank, in accordance with
Section 3.2.1.
3..2. REPRESENTATIONS, WARRANTIES AND COVENANTS WITH RESPECT TO CREDIT
SECURITY. AFC represents, warrants and covenants that:
3..2..1. AFC PLEDGED STOCK. The AFC Pledged Stock is and shall
be at all times duly authorized, validly issued, fully paid and
nonassessable and is owned by AFC. The certificates delivered to the
Collateral Agent pursuant to this Section 3 evidence capital stock that
constitutes the percentages of the capital stock of the Company
specified in Section 3.1. Contemporaneously with the issuance of any
additional capital stock by the Company, AFC will hold in trust and
promptly deliver to the Collateral Agent certificates representing the
additional AFC Pledged Stock necessary to maintain the percentages
specified in Section 3.1, accompanied by undated stock transfer powers
duly executed in blank, or, if the Collateral Agent so requests,
registered in its name or the name of its nominee, as pledgee, and, if
the Collateral Agent shall so request, with the signature guaranteed,
all in form and manner satisfactory to the Collateral Agent. AFC will
promptly cause the Collateral Agent to be registered as pledgee with
respect to any uncertificated AFC Pledged Stock on the transfer books
of the issuer, any transfer agent or clearing house.
3..2..2. NO LIENS. All Credit Security is and shall be free
and clear of any Liens and restrictions on the transfer thereof except
for (i) restrictions on transfer of the AFC Pledged Stock imposed by
state, federal or other applicable securities or insurance laws or the
regulations of any Insurance Authority, and (ii) Liens created hereby.
AFC will not pledge or create or permit to exist any security interest
in any shares of capital stock of the Company, except as provided
herein.
3..2..3. PERFECTION OF CREDIT SECURITY. Upon the Collateral
Agent's written request from time to time, AFC will make, execute and
deliver all such instruments and documents, including appropriate
financing statements, transfer powers and notices, and take all such
action as the Collateral Agent may deem necessary or
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advisable to carry out the intent and purposes of this Agreement and
the other Credit Documents or for assuring and confirming to the
Lenders the Credit Security, including any further additional
collateral under Section 3.2.1.
3..2..4. INDEMNITY. AFC will indemnify each Managing Agent and
each Lender, and each of the Managing Agents' and the Lenders'
respective directors, officers and employees, and each Person, if any,
who controls any Managing Agent or Lender (each Managing Agent and each
Lender and each of their respective directors, officers, employees and
control Persons is referred to as an "Indemnitee") and hold each of
them harmless from and against any and all claims, damages, liabilities
and reasonable expenses (including reasonable fees and disbursements of
counsel with whom any Indemnitee may consult in connection therewith
and all expenses of litigation or preparation therefor) which any
Indemnitee may incur or which may be asserted against any Indemnitee in
connection with any litigation or investigation involving AFC or any of
its Affiliates, or any officer, director or employee thereof (including
the Managing Agents' or Lenders' compliance with or contest of any
subpoena or other process issued against it in any proceeding involving
AFC or any of its Affiliates), whether or not such Indemnities are
parties thereto, or any penalties or other matters involving the
transactions contemplated hereby or by any other Credit Document, or in
connection with the existence or exercise of any of the rights with
respect to the Credit Security in accordance with the provisions of
this Agreement or any other Credit Document, other than litigation
commenced by AFC against the Lenders or the Managing Agents which seeks
enforcement of any of the rights of AFC hereunder or under any other
Credit Document and is finally determined adversely to the Lenders or
the Managing Agents and except to the extent such claims, damages,
liabilities and expenses result from a Managing Agent's or Lender's
gross negligence or willful misconduct.
3..2..5. GOVERNMENTAL CONSENTS; VALIDITY OF PLEDGE. AFC has
obtained or has caused to be obtained all material approvals, consents,
orders, authorizations and licenses from, has given all notices
promptly to, has registered or filed all material agreements,
instruments or documents with, and has taken all other action with
respect to, any governmental or regulatory authority, agency or
official (including Insurance Authorities) necessary to ensure the
legality, validity, binding effect and enforceability of the grant of
the security interests in the Credit Security owned by it to the
Collateral Agent for the ratable benefit of the Lenders. The provisions
of this Section 3 are effective to create in favor of the Collateral
Agent for the ratable benefit of the Lenders, a legal, valid and
enforceable first priority Lien on and security interest in all right,
title and interest of the Company in the Credit Security owned by it.
3..3. ADMINISTRATION OF CREDIT SECURITY. The Credit Security shall be
administered as follows, and if an Event of Default shall have occurred, Section
3.4 shall also apply.
3..3..1. DISTRIBUTIONS.
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(i) Unless an Event of Default shall occur, AFC shall
be entitled to receive all ordinary cash dividends (or
ordinary dividends payable in marketable securities) paid on
the AFC Pledged Stock as distributions of earnings and
profits. All Distributions other than such ordinary dividends
made or paid on the AFC Pledged Stock will be retained by the
Collateral Agent (or if received by AFC shall be held by AFC
in trust and shall be forthwith paid by it to the Collateral
Agent in the original form received, endorsed in blank) as a
part of the Credit Security.
(ii) If an Event of Default shall occur, all Distributions
and other payments with respect to the AFC Pledged Stock shall
be retained by the Collateral Agent (or if received by AFC
shall be held by AFC in trust and shall be forthwith paid by
it to the Collateral Agent in the original form received,
endorsed in blank) as part of the Credit Security or applied
by the Collateral Agent to the payment of the Credit
Obligations in accordance with Section 3.4.4.
3..3..2. VOTING.
(i) Until an Event of Default shall occur, AFC shall
be entitled to vote or consent with respect to the AFC Pledged
Stock in any manner not inconsistent with the terms of any
Credit Document, and the Collateral Agent will, if so
requested, execute appropriate revocable proxies therefor.
(ii) If an Event of Default shall occur, and if and to the
extent that the Collateral Agent shall so notify AFC in
writing, only the Collateral Agent (with the written consent
of the Required Majority Lenders) shall be entitled to vote or
consent or take any other action with respect to the AFC
Pledged Stock (and AFC will, if so requested, execute or cause
to be executed appropriate proxies therefor).
3..3..3. CUSTODY OF CREDIT SECURITY. The Collateral Agent will
use reasonable care in the custody and physical preservation of any
Credit Security in its possession. Except as set forth in the
immediately preceding sentence, and except as provided by applicable
law that cannot be waived, the Managing Agents and the Lenders will
have no duty with respect to the custody and protection of the Credit
the collection of any part thereof or of any income thereon
or the preservation or exercise of any rights pertaining thereto,
including rights against prior parties. The Lenders will not be liable
or responsible for any loss or damage to any Credit Security, or for
any
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diminution in the value thereof, by reason of the act or omission of
any agent selected by the Collateral Agent.
3..3..4. GOVERNMENTAL CONSENTS AND APPROVALS. AFC will, and
will cause each of its Subsidiaries to, obtain or cause to be obtained
promptly all such material approvals, consents, orders, authorizations
and licenses from, give all such notices promptly to, register, enroll
or file all such material agreements, instruments or documents promptly
with, and promptly take all such other action with respect to, any
governmental or regulatory authority (including Insurance Authorities),
agency or official as may be required from time to time under any
provision of any applicable law:
(i) For the performance by AFC of any of its
agreements or obligations under any of the Credit Documents;
(ii) To ensure the continuing legality, validity or
binding effect or enforceability of the grant of a security
interest pursuant to this Agreement, or any other security
interests made or created in favor of the Lenders upon the
terms contained in any of the Credit Documents; and
(iii) To continue the conduct and operation of its business
in the ordinary course.
3..4. RIGHT TO REALIZE UPON CREDIT SECURITY. Except to the extent
prohibited by applicable law that cannot be waived, this Section 3.4 shall
govern the Lenders' right to realize upon the Credit Security if any Event of
Default shall have occurred until such time as such Event of Default shall have
been deemed not to exist or to have occurred pursuant to Section 9.3 of the
Credit Agreement. The provisions of this Section 3.4 are in addition to any
rights and remedies available at law or in equity and in addition to the
provisions of any other Credit Document. In the case of a conflict between this
Section 3.4 and any other Credit Document, this Section 3.4 shall govern.
3..4..1. MARSHALING. The Lenders shall not be required to make
any demand upon, accelerate, or pursue or exhaust any of their rights
or remedies against AFC, the Company, any Subsidiary of either of them
or any other Person with respect to the payment of the Credit
Obligations, or to pursue or exhaust any of their rights or remedies
with respect to any of the collateral therefor or any direct or
indirect guarantee thereof. The Lenders shall not be required to
marshal the Credit Security or any guarantee of the Credit Obligations
or to resort to the Credit Security or any such guarantee in any
particular order, and all of their rights hereunder shall be
cumulative. Without limiting the generality of the foregoing, AFC
agrees that it will not invoke or utilize any law which might delay or
impede the enforcement of the Lenders' rights
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under this Agreement or any other Credit Document and hereby waives the
same. In addition, AFC hereby waives any right to prior notice (except
to the extent expressly required by this Agreement) or judicial hearing
in connection with foreclosure on or disposition of any Credit
Security, including any such right which AFC would otherwise have under
the Constitution of the United States of America, any state or
territory thereof or any other jurisdiction.
3..4..2. SALES OF CREDIT SECURITY. Any Credit Security may be
sold for cash or other value, on credit or against future delivery
without assumption of any credit risk, in any number of lots at any
commercially reasonable public or private sale, without demand,
advertisement or notice; provided, however, that the Collateral Agent
shall give AFC 15 days' prior written notice of the time and place of
any public sale, or the time after which a private sale or a sale on a
recognized market may be made, which notice AFC and the Lenders hereby
agree to be reasonable. At any sale of Credit Security (except to the
extent prohibited by applicable law that cannot be waived) the Managing
Agents or any of the Lenders or any of its or their respective officers
acting on its behalf, or their assigns, may bid for and purchase all or
any part of the property and rights so sold and upon compliance with
the terms of such sale may hold and dispose of such property and rights
without further accountability to AFC, except for the proceeds of such
sale pursuant to Section 3.4.4. AFC acknowledges that any such sale
will be made by the Collateral Agent on an "as is" basis with
disclaimers of all warranties, whether express or implied, to the
extent permitted by applicable law. AFC will execute and deliver or
cause to be executed and delivered such instruments, documents,
assignments, waivers, certificates and affidavits, will supply or cause
to be supplied such further information and will take such further
action as the Collateral Agent shall require in connection with any
such sale.
3..4..3. SALE WITHOUT REGISTRATION. AFC agrees that if, at any
time when the Collateral Agent shall determine to exercise its rights
hereunder to sell all or part of the securities included in the Credit
Security, the securities in question shall not be effectively
registered under the Securities Act (or other applicable law), the
Collateral Agent may, in its sole discretion, sell such securities by
private or other sale not requiring such registration in such manner
and in such circumstances as the Collateral Agent may deem necessary or
advisable in order that such sale may be effected in a commercially
reasonable manner without such registration and without the related
delays, expense and uncertainty. Without limiting the generality of the
foregoing, in any event the Collateral Agent may, in its sole
discretion, (i) approach and negotiate with one or more possible
purchasers to effect such sale and accept the first offer to purchase
by any such purchaser, (ii) restrict such sale to one or more
purchasers each of whom will represent and agree that such purchaser is
purchasing for its own account, for investment and not with a view to
the distribution or sale of such securities and (iii) cause to be
placed on certificates representing the securities in question a legend
to the effect that such securities have not been registered under the
Securities
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Act (or other applicable law) and may not be disposed of in violation
of the provisions thereof. AFC agrees that such manner of disposition
is commercially reasonable, that it will upon the Collateral Agent's
request give any such purchaser access to such information regarding
the issuer of the securities in question as the Collateral Agent may
reasonably request and that neither the Collateral Agent nor any of the
Lenders shall incur any responsibility for selling all or part of the
securities included in the Credit Security at any private or other sale
not requiring such registration, notwithstanding the possibility that a
substantially higher price might be realized if the sale were deferred
until after registration under the Securities Act (or other applicable
law) or until made in compliance with rules or other exemptions from
the registration provisions under the Securities Act (or other
applicable law). In the event such securities are to be sold in a
registered offering, AFC shall cooperate in preparing such registration
statement and providing access to information in connection therewith.
AFC acknowledges that no adequate remedy at law exists for breach by it
of this Section 3.4.3 and that such breach would not be adequately
compensable in damages and therefore agrees that this Section 3.4.3 may
be specifically enforced.
3..4..4. APPLICATION OF PROCEEDS. The proceeds of all sales
and collections in respect of any Credit Security, all funds collected
from AFC and any cash contained in the Credit Security, the application
of which is not otherwise specifically provided for herein, shall be
applied as follows:
First, to the payment of the costs and expenses of
such sales and collections, the reasonable expenses of the
Collateral Agent and the Managing Agents and the reasonable
fees and expenses of their special counsel;
Second, any surplus then remaining to the payment of
the Credit Obligations in such order and manner as the
Required Majority Lenders may in their sole discretion
determine (subject to Section 11 of the Credit Agreement); and
Third, any surplus then remaining shall be paid to
AFC, subject, however, to the rights of the holder of any then
existing Lien of which the Collateral Agent has actual notice.
3..5. GOVERNMENTAL REGULATION. To the extent that the Credit Security
shall include investments in or stock of an entity regulated as an insurance
company by any Insurance Authority, then, notwithstanding anything else herein
contained to the contrary, no action shall be taken by the Collateral Agent with
respect to such AFC Pledged Stock unless all requirements of applicable state
and local law, and all applicable rules and regulations thereunder, requiring
the consent to or approval of such action by an Insurance Authority or of any
other governmental authority have been satisfied. Without limiting the
generality of the
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foregoing, the Collateral Agent will effect an acquisition of control of the
Company only with such approval or other action as may be required to be taken
by the Ohio Superintendent of Insurance pursuant to Chapter 3901.31 of Title 39
of the Ohio Revised Code (or any similar successor provision). AFC covenants
that, upon the Collateral Agent's request, it will file or cause to be filed
such applications and take such other action as the Collateral Agent may request
to obtain consent or approval of such Insurance Authority or of any governmental
authority applicable to AFC and its Subsidiaries to any action contemplated by
this Agreement and to give effect to the Lenders' security interests, including
the execution of an application for consent by such Insurance Authority to an
assignment or transfer involving a change in ownership or control. The
Collateral Agent is hereby irrevocably appointed the true and lawful attorney of
AFC, in its name and stead, to execute and file all necessary applications with
such Insurance Authority and with any other governmental authority, the exercise
of such appointment to commence only after the occurrence of any Default.
4. SUBORDINATION COVENANTS. The Obligor and each Holder of Subordinated
Indebtedness covenants that, until all of the Senior Indebtedness is paid in
full at a time when the Lenders' obligations to extend credit under the Credit
Agreement and all other Credit Documents shall have been irrevocably terminated
(other than indemnity and similar provisions of the Credit Documents that
expressly survive the termination of such documents), each will comply with such
of the following provisions as are applicable to it:
4..1. SUBORDINATION. To the extent and in the manner provided in this
Agreement, the payment of the Subordinated Indebtedness shall be expressly
subordinated and junior in right of payment to the prior payment in full of all
Senior Indebtedness, and the Subordinated Indebtedness is hereby subordinated as
a claim against the Obligor, any guarantor of the Subordinated Indebtedness or
any of their respective assets to the prior payment in full of the Senior
Indebtedness, in each case whether such claim be (i) in the ordinary course of
business or (ii) in the event of any Reorganization.
4..2. RESTRICTED PAYMENTS. The Obligor will not make, and no Holder of
Subordinated Indebtedness will receive, any payment of any Subordinated
Indebtedness, whether in cash, securities or other property or by way of
conversion, exchange or set-off or otherwise, and no such payment shall become
due; provided, however, that the Obligor may make any Distribution to any Holder
of Subordinated Indebtedness so long as immediately before and after giving
effect thereto, no Default shall exist.
4..3. REORGANIZATION. During the existence of any Reorganization, all
Senior Indebtedness shall first be paid in full before any payment is made on
account of any Subordinated Indebtedness, and in any proceedings seeking to
effect a Reorganization any payment or distribution of any kind or character,
whether in cash or property or securities, which may be payable or deliverable
in respect of any Subordinated Indebtedness shall be paid or delivered directly
to the Administrative Agent for application to payment of the Senior
Indebtedness, until all such Senior Indebtedness shall have been paid in full.
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4..4. SPECIFIC POWERS IN REORGANIZATION. In any proceedings with
respect to a Reorganization, until all Senior Indebtedness shall have been
indefeasibly paid in full, each Holder of Subordinated Indebtedness hereby
irrevocably authorizes the Administrative Agent:
(i) To prove and enforce any claims on the
Subordinated Indebtedness owed by the Obligor to any Holder of
Subordinated Indebtedness either in the Administrative Agent's
name or in the name of such Holder of Subordinated
Indebtedness as the attorney-in-fact of such Holder of
Subordinated Indebtedness if such Holder of Subordinated
Indebtedness does not so prove or enforce such claims at least
30 days prior to the expiration of the time, without giving
effect to discretionary extensions of time, for the filing of
such claims in a manner reasonably satisfactory to the
Administrative Agent;
(ii) To accept and receive for any payment or distribution
made with respect to any Subordinated Indebtedness and to
apply such payment or distribution to the payment of the
Senior Indebtedness;
(iii) To vote claims comprising any Subordinated
Indebtedness and to accept or reject on behalf of such Holder
of Subordinated Indebtedness any plan proposed in connection
with any Reorganization; and
(iv) To take any and all action and to execute any and all
instruments reasonably necessary to effectuate the foregoing
either in the Administrative Agent's name or in the name of
such Holder of Subordinated Indebtedness as the
attorney-in-fact of such Holder of Subordinated Indebtedness.
4..5. PAYMENTS HELD IN TRUST. If, notwithstanding the foregoing, any
payment or distribution of the assets of the Obligor of any kind or character in
respect of the Subordinated Indebtedness (other than payments permitted by
Section 4.2) shall be received, by set-off or otherwise, by any Holder of
Subordinated Indebtedness before all Senior Indebtedness then outstanding has
been paid and indefeasibly discharged in full and before the Lenders'
obligations to extend credit under all Credit Documents shall have been
irrevocably terminated (other than indemnity and similar provisions of the
Credit Documents that expressly survive the termination of such documents), such
payment or distribution and the amount of any such set-off shall be held in
trust by such Holder of Subordinated Indebtedness and promptly paid over
(together with any necessary endorsements) to the Administrative Agent (who
shall have the right to convert any such assets into cash in a commercially
reasonable manner) for application (including the applications of such cash and
cash proceeds) to the payment of all Senior Indebtedness remaining unpaid until
all such Senior Indebtedness shall have been paid and indefeasibly discharged in
full, after giving effect to any concurrent payment or distribution to the
holders of such Senior Indebtedness, and the Lenders' obligations to extend
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credit under all Credit Documents shall have been irrevocably terminated (other
than indemnity and similar provisions of the Credit Documents that expressly
survive the termination of such documents).
4..6. NO SECURITY. The Obligor shall not give, and no Holder of
Subordinated Indebtedness shall demand or receive, any security, direct or
indirect, for any Subordinated Indebtedness.
4..7. RESTRICTIONS ON REMEDIES. No Holder of Subordinated Indebtedness
shall, without the Managing Agents' prior written consent (at the direction of
the Required Majority Lenders), accelerate the maturity of, or institute
proceedings to enforce, any Subordinated Indebtedness notwithstanding any
provision to the contrary contained in any Subordinated Indebtedness or in any
agreement or instrument relating thereto. Without limiting the generality of the
foregoing sentence, no Holder of Subordinated Indebtedness shall, without the
Managing Agents' prior written consent (at the direction of the Required
Majority Lenders), commence or join with any other creditor or creditors of the
Obligor in commencing any proceeding against the Obligor seeking to effect a
Reorganization of the Obligor or any of its property.
4..8. RESTRICTIONS ON ACCELERATION. Notwithstanding any contrary
provision of any Subordinated Indebtedness or of any agreement or instrument
relating thereto, (i) no Subordinated Indebtedness shall become or be declared
to be due and payable prior to the date on which the Senior Indebtedness becomes
or is declared to be due and payable and (ii) if any Senior Indebtedness shall
have become or been declared to be due and payable prior to its stated maturity,
the Subordinated Indebtedness shall become immediately due and payable.
4..9. PAYMENT IN FULL. For the purposes of this Agreement, no Senior
Indebtedness shall be deemed to have been paid in full unless the holder thereof
shall have received and have been permitted to retain cash equal to the amount
thereof then outstanding and such Senior Indebtedness shall have been fully and
indefeasibly discharged.
4..10. EFFECT OF PROVISIONS. The provisions hereof as to subordination
are solely for the purpose of defining the relative rights of the holders of
Senior Indebtedness on the one hand and the Holders of Subordinated Indebtedness
on the other hand, and such provisions shall not impair as between the Obligor
and any Holder of Subordinated Indebtedness the obligation of the Obligor, which
is unconditional and absolute, to pay to such Holder of Subordinated
Indebtedness the principal of any Subordinated Indebtedness owed by the Obligor
to such Holder of Subordinated Indebtedness and interest thereon, and all other
amounts in respect thereof, nor shall any such provisions prevent any Holder of
Subordinated Indebtedness from exercising all remedies otherwise permitted by
applicable law or under the terms of such Subordinated Indebtedness upon a
default thereunder, except to the extent set forth in this Agreement.
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4..11. FURTHER ASSURANCES. The Obligor and each Holder of Subordinated
Indebtedness, for itself and its successors and assigns as Holders of
Subordinated Indebtedness, covenant to execute and deliver to the Administrative
Agent, the Collateral Agent or the Managing Agents such further instruments and
to take such further action as the Managing Agents may at any time or times
reasonably request in order to carry out the provisions and intent of this
Agreement.
4..12. LEGEND. The Obligor and each Holder of Subordinated
Indebtedness, for itself and its successors and assigns as Holders of
Subordinated Indebtedness, covenant to cause each instrument or certificate
representing or evidencing any of the Subordinated Indebtedness to have affixed
upon it a legend in substantially the following form:
"This instrument is subject to the Guarantee,
Security and Subordination Agreement dated as of December 7,
1993, as from time to time in effect, among the maker, the
payee, The First National Bank of Boston, as Administrative
Agent and as Managing Agent and Continental Bank N.A., as
Collateral Agent and as Managing Agent, which among other
things, subordinates the maker's obligations hereunder to the
prior indefeasible payment in full of certain obligations of
the maker to the holders of Senior Indebtedness as defined
therein."
4..13. FINANCIAL STATEMENTS. Each Holder of Subordinated Indebtedness
and each Obligor shall cause any financial statement describing or listing or
otherwise reflecting the existence of any Indebtedness included in the
Subordinated Indebtedness to indicate the existence of such Subordinated
Indebtedness consistent with GAAP.
5. REPRESENTATIONS AND WARRANTIES. In order to induce the Lenders to extend
credit under the Credit Agreement, AFC hereby represents and warrants on and as
of the date hereof, and on and as of any Closing Date under the Credit
Agreement, that:
5..1. ORGANIZATION AND BUSINESS. AFC is a duly organized and validly
existing corporation, in good standing under the laws of the State of Ohio, with
all power and authority, corporate or otherwise, necessary to (i) enter into and
perform this Agreement and each other Credit Document to which it is party and
guarantee the Credit Obligations hereby, (ii) grant the Collateral Agent for the
ratable benefit of the Lenders the security interests in the Credit Security
owned by it to secure the Credit Obligations and (iii) own its properties and
carry on the business now conducted or proposed to be conducted by it. AFC has
taken all corporate action required to execute, deliver and perform this
Agreement and each other Credit Document to which it is party, to guarantee the
Credit Obligations hereby, and to grant to the Lenders a first priority security
interest in the Credit Security owned by it. Certified copies of the Charter and
By-laws of AFC have been previously delivered to the Administrative Agent and
are correct and complete.
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5..2. FINANCIAL STATEMENTS AND OTHER INFORMATION; CERTAIN AGREEMENTS.
AFC has previously furnished to the Lenders copies of the following:
(i) The audited Consolidated financial statements of
AFC and its Subsidiaries as at December 31 in each of 1991 and
1992, accompanied by reports of AFC's independent auditors;
(ii) The Annual Report of AFC on Form 10-K for the fiscal
year ended December 31, 1992 ("AFC's 1992 Form 10K"); and
(iii) The Quarterly Report of AFC on Form 10-Q for the
fiscal quarter ended June 30, 1993.
The financial statements (including the notes thereto)
referred to in clauses (i), (ii) and (iii) above have been prepared in
accordance with GAAP (subject to year-end audit adjustments and the
absence of footnotes for interim statements) and fairly present the
financial condition of the Persons covered thereby at the dates thereof
and the results of their operations for the periods covered thereby.
Neither AFC nor any of its Subsidiaries has any known material
contingent liabilities which are not referred to in said financial
statements or in the notes thereto.
AFC's 1992 Form 10-K (including all of the financial
statements and schedules included therein) contains all information
which is required to be stated therein in accordance with the Exchange
Act, and conforms in all material respects to the requirements thereof;
and AFC's 1992 Form 10-K did not when filed include any untrue
statement of a material fact or omit to state a material fact which was
required to be stated therein or was necessary to make the statements
therein not misleading in the light of the circumstances in which they
were made.
5..3. CHANGES IN CONDITION. No Material Adverse Change has occurred,
and since December 31, 1992, except as previously disclosed to the Lenders, AFC
has not entered into any material transaction outside the ordinary course of
business.
5..4. LITIGATION. Other than as disclosed in AFC's 1992 Form 10-K, no
litigation, at law or in equity, or any proceeding before any federal, state,
provincial or municipal court, board or other governmental or administrative
agency or any arbitrator is pending or to the knowledge of AFC threatened which
may involve any material risk of any final judgment or liability not adequately
covered by insurance or which may otherwise result in any Material Adverse
Change, or which questions the validity or enforceability of any Credit
Document, and no judgment, decree, or order of any federal, state, provincial or
municipal court, board or other governmental or administrative agency or
arbitrator has been issued against AFC which has resulted, or poses a material
risk of resulting in, any Material Adverse Change.
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5..5. ENFORCEABILITY; NO LEGAL OBSTACLE TO AGREEMENTS. Each of this
Agreement and each other Credit Document to which AFC or any of its Subsidiaries
is party constitutes the legal, valid and binding obligation of such Person,
enforceable against such Person in accordance with its terms. Neither the
execution and delivery of this Agreement or any other Credit Document, nor the
guaranteeing of the Credit Obligations hereby, nor the securing of the Credit
Obligations with the Credit Security hereunder, nor the consummation of any
transaction referred to in or contemplated by this Agreement, the Credit
Agreement or any other Credit Document, nor the fulfillment of the terms hereof
or thereof or of any other agreement, instrument, deed or lease referred to in
this Agreement or any other Credit Document, has constituted or resulted, or
will constitute or result in:
(i) Any breach or termination of the provisions of
any agreement, instrument, deed or lease to which AFC is a
party or by which it is bound, or of the Charter or By-laws of
AFC;
(ii) The violation of any law, statute, judgment, decree
or governmental or court order, rule or regulation applicable
to AFC or any of its Subsidiaries;
(iii) The creation under any agreement, instrument, deed or
lease of any Lien (other than Liens on the Credit Security
which secure the Credit Obligations) upon any of the assets of
AFC or any of its Subsidiaries; or
(iv) Any redemption, retirement or other repurchase
obligation of AFC or any of its Subsidiaries under any
Charter, By-law, agreement, instrument, deed or lease.
No approval, authorization or other action by, or declaration to or filing with,
any governmental or administrative authority or any other Person (including
Insurance Authorities) is required to be obtained or made by AFC or any of its
Subsidiaries in connection with the execution, delivery and performance of this
Agreement or any other Credit Document, the transactions contemplated hereby or
thereby, the granting of any security interest by AFC or any of its Subsidiaries
hereunder or thereunder, or the validity or enforceability of any Credit
Document.
5..6. TAX RETURNS. AFC and its Designated Subsidiaries have filed all
tax returns which are required to be filed and have paid, or made adequate
provision for the payment of, all taxes which have or may become due pursuant to
said returns or to assessments received. The federal tax returns of AFC for
which the applicable period of limitations have not expired have not been
audited by the Internal Revenue Service. AFC knows of no material additional
assessments or basis therefor. AFC has made adequate provision for all current
taxes, and in the opinion of AFC there will not be any material additional
assessments for all fiscal periods
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prior to and including the fiscal year ended December 31, 1992 in excess of the
amounts reserved therefor in the balance sheet as at such date.
6. GENERAL COVENANTS. AFC covenants that, until all of the Credit Obligations
shall have been indefeasibly paid in full and discharged and the Lenders'
Commitments to extend credit under the Credit Agreement and any other Credit
Document shall have been irrevocably terminated, it and its respective
Subsidiaries will comply with the following provisions:
6..1. PRESERVATION OF CORPORATE EXISTENCE, ETC. AFC will at all times
preserve and keep in full force and effect its corporate existence, rights and
franchises. AFC will at all times preserve and keep in full force and effect the
corporate existence, rights and franchises of any of its Subsidiaries the
securities of which are included in the Credit Security.
6..2. TAXES AND OTHER CHARGES; ACCOUNTS PAYABLE.
6..2..1. TAXES AND OTHER CHARGES. AFC will duly pay and
discharge, or cause to be paid and discharged, before the same shall
become in arrears, all taxes, assessments and other governmental
charges imposed upon AFC and its properties, sales or activities, or
upon the income or profits therefrom, as well as all claims for labor,
materials or supplies which if unpaid might by law become a Lien upon
any of its property; provided, however, that any such tax, assessment,
charge, or claim need not be paid if the validity or amount thereof
shall at the time be contested in good faith by appropriate proceedings
and if AFC shall, in accordance with GAAP, have set aside on its books
adequate reserves with respect thereto; and provided, further, that AFC
will pay or bond all such taxes, assessments, charges or other
governmental claims immediately upon the commencement of proceedings to
foreclose any Lien which may have attached as security therefor (except
to the extent such proceedings have been dismissed or stayed).
6..2..2. ACCOUNTS PAYABLE. AFC will promptly pay when due, or
in conformity with customary trade terms, all other Indebtedness
incident to the operations of AFC; PROVIDED, HOWEVER, that any such
Indebtedness need not be paid if the validity or amount thereof shall
at the time be contested in good faith by appropriate proceedings and
if AFC shall, in accordance with GAAP, have set aside on its books
adequate reserves with respect thereto.
6..3. FINANCIAL STATEMENTS AND REPORTS. AFC and its Material
Subsidiaries will maintain a system of accounting in which full and correct
entries will be made of all transactions in relation to their business and
affairs in accordance with GAAP. The fiscal year of AFC will end on December 31
in each year.
6..3..1. ANNUAL REPORTS. AFC will furnish to the Lenders as
soon as available, and in any event within 120 days after the end of
each fiscal year, the Annual Report of
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AFC on Form 10-K for the fiscal year then ended, in the form filed with
the Securities and Exchange Commission.
6..3..2. QUARTERLY REPORTS. AFC will furnish to the Lenders as
soon as available and, in any event, within 60 days after the end of
each of the first three fiscal quarters of AFC in each fiscal year, the
Quarterly Report of AFC on Form 10-Q for the fiscal quarter then ended,
in the form filed with the Securities and Exchange Commission.
6..3..3. OTHER INFORMATION. From time to time upon request of
any authorized officer of any Lender, AFC will furnish to such Lender
such other information regarding the business, affairs and condition,
financial or otherwise, of AFC and of any of its Material Subsidiaries
as such officer may reasonably request. The authorized officers and
representatives of the Managing Agents shall have the right during
normal business hours to examine the books and records of AFC and its
Material Subsidiaries and to make copies, notes and abstracts
therefrom, for the purpose of verifying the accuracy of the reports
delivered by AFC pursuant to this Section 6.3 or otherwise and
ascertaining compliance with this Agreement.
6..3..4. OTHER REPORTS. AFC will furnish to the Lenders as
soon as available copies of all registration statements, proxy
statements, financial statements and reports, including reports on Form
8-K, as may be filed with the Securities and Exchange Commission or any
stock exchange.
6..3..5. NOTICE OF MATERIAL LITIGATION; NOTICE OF DEFAULTS;
ETC. AFC will promptly furnish to the Lenders notice of the occurrence
of any litigation or any administrative or arbitration proceeding to
which AFC or any of its Material Subsidiaries may hereafter become a
party which may involve any material risk of any material final
judgment or liability not adequately covered by insurance or which may
otherwise result in a Material Adverse Change or which questions the
validity or enforceability of any Credit Document, and notices by any
lenders, trustees or investors of any defaults, acceleration of time
for payment or special prepayments with respect to any other
Indebtedness of AFC and its Designated Subsidiaries.
6..3..6. ERISA REPORTS. AFC will:
(i) Furnish the Lenders with a copy of any request
for a waiver of the funding standards or an extension of the
amortization period required by sections 303 and 304 of ERISA
or section 412 of the Code, promptly after any ERISA Group
Member submits such request to the Department of Labor or the
Internal Revenue Service.
(ii) Notify the Lenders of any reportable event (as
defined in section 4043 of ERISA), unless the notice
requirement with respect thereto
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has been waived by regulation, promptly after any ERISA Group
Member learns of such reportable event; and furnish the
Lenders with a copy of the notice of such reportable event
required to be filed with the PBGC, promptly after such notice
is required to be given.
(iii) Furnish the Lenders with a copy of any notice
received by any ERISA Group Member that the PBGC has
instituted or intends to institute proceedings under section
4042 of ERISA to terminate any Plan, or that any Multiemployer
Plan is insolvent or in reorganization status under Title IV
of ERISA, promptly after receipt of such notice.
(iv) Notify the Lenders of the possibility of the
termination of any Plan by its administrator pursuant to
section 4041 of ERISA, as soon as any ERISA Group Member
learns of such possibility and in any event prior to such
termination; and furnish the Lenders with a copy of any notice
to the PBGC that a Plan is to be terminated, promptly after
any ERISA Group Member files a copy of such notice.
(v) Notify the Lenders of the intention of any ERISA
Group Member to withdraw, in whole or in part, from any
Multiemployer Plan which may result in the incurrence by any
ERISA Group Member of withdrawal liability in excess of
$10,000,000 under Subtitle E of Title IV of ERISA, or of the
termination, insolvency or reorganization status of any
Multiemployer Plan under such Subtitle E which may result in
liability to any ERISA Group Member in excess of $10,000,000,
and, upon any Lender's request from time to time, of the
extent of the liability, if any, of such Person as a result of
such withdrawal, to the best of such Person's knowledge at
such time.
6..4. MERGER, CONSOLIDATION AND SALE OF ASSETS. AFC will not become
party to any merger or consolidation or sell, sell and lease back, lease,
sublease or otherwise dispose of any assets, except that, so long as immediately
before and after giving effect thereto no Default shall exist:
6..4..1. AFC may become party to any merger or consolidation
of which AFC is the surviving or resulting Person if, after giving
effect thereto, the Company shall continue to be a Wholly Owned
Subsidiary of AFC.
6..4..2. AFC may dispose of assets in the ordinary course of
business that are no longer used or useful in such business.
6..4..3. AFC may sell or dispose of inventory in the ordinary
course of business.
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6..4..4. AFC may sell or dispose of any shares of capital
stock of the Company pursuant to Liens created under this Agreement.
6..4..5. AFC may from time to time sell or dispose of assets
(other than stock of the Company) on arm's length terms; PROVIDED,
HOWEVER, that the assets sold pursuant to this Section 6.4.5 on a
cumulative basis (a) shall not represent net book value, determined in
accordance with GAAP, exceeding 50% of the net book value of all assets
of AFC as of December 31, 1992 (other than assets constituting American
Business Insurance, Inc. or any of its Subsidiaries) and (b) shall not
have contributed revenue, determined in accordance with GAAP, over the
period of four fiscal quarters prior to the respective sales exceeding
50% of revenue of AFC for the four fiscal quarters ended December 31,
1992 (other than revenue attributable to American Business Insurance,
Inc. or any of its Subsidiaries).
6..5. COMPLIANCE WITH ERISA. AFC will cause all ERISA Group Members to
meet all minimum funding requirements applicable to them with respect to any
Plan pursuant to section 302 of ERISA or section 412 of the Code, without giving
effect to any waivers of such requirements or extensions of the related
amortization periods which may be granted. Each Plan maintained from time to
time will be a qualified plan under section 401(a) of the Code and will comply
in all material respects with the provisions of ERISA and the Code applicable to
each Plan. At no time shall the Accumulated Benefit Obligations under any Plan
that is not a Multiemployer Plan exceed the fair market value of the assets of
such Plan allocable to such benefits by more than $10,000,000.
6..6. TRANSACTIONS WITH AFFILIATES. AFC shall not effect any
transaction with any Affiliate (other than the Company or any Designated
Subsidiary of the Company) on a basis less favorable to AFC than would be the
case if such transaction had been effected with a non-Affiliate, other than
transactions not involving more than $10,000,000 per year in the aggregate.
7. CONFIDENTIALITY. Each Managing Agent agrees that it will make no disclosure
of any information furnished to it by AFC or any of its Subsidiaries pursuant to
Section 6.3 unless such information shall have become public, except:
(i) In connection with operations under or the
enforcement of the Credit Agreement, this Agreement or any
other Credit Document;
(ii) To any proposed Assignee or Credit Participant under
the Credit Agreement who agrees (subject to the exceptions
provided in this Agreement) to preserve the confidentiality of
any confidential information relating to AFC or any of its
Subsidiaries received from such Managing Agent;
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(iii) To the applicable bank regulatory or other
governmental agencies relating to such Managing Agent or
pursuant to any statutory or regulatory requirement or any
mandatory court order, subpoena or other legal process;
(iv) To any parent or corporate Affiliate of such Managing
Agent; PROVIDED, HOWEVER, that any such Person shall also
agree to comply with the restrictions set forth in this
Section 7 with respect to such information;
(v) To its independent counsel, auditors and other
professional advisors with an instruction to such Person to
keep such information confidential;
(vi) In connection with any litigation or arbitration
proceedings to which such Managing Agent is a party; and
(vii) With the prior written consent of AFC, to any other
Person.
Notwithstanding the foregoing, this Section shall not apply to information which
is obtained or was previously obtained by any Managing Agent from a third person
who, insofar as is known to such Managing Agent, is not subject to a duty of
confidentiality.
8. INFORMATION REGARDING THE COMPANY. AFC and any Holder of Subordinated
Indebtedness expressly acknowledges and agrees that such Holder of Subordinated
Indebtedness has made such investigation as it deems desirable of the risks
undertaken by such Holder of Subordinated Indebtedness in entering into this
Agreement and is fully satisfied that it understands all such risks. AFC and any
Holder of Subordinated Indebtedness waives any obligation which may now or
hereafter exist on the part of the Managing Agents or any holder of any Senior
Indebtedness to inform any Holder of Subordinated Indebtedness of the risks
being undertaken by entering into this Agreement or of any changes in such risks
and, from and after the initial Closing Date, AFC and any Holder of Subordinated
Indebtedness undertakes to keep itself informed of such risks and any changes
therein. AFC and each Holder of Subordinated Indebtedness expressly waives
(except to the extent prohibited by applicable law which cannot be waived) any
duty which may now or hereafter exist on the part of the Managing Agents or any
holder of any Senior Indebtedness to disclose to such Holder of Subordinated
Indebtedness any matter related to the business, operations, character,
collateral, credit or condition (financial or otherwise) or prospects of the
Company, its Subsidiaries or its or their Affiliates, properties or management,
whether now or hereafter known by any Lender. AFC and any Holder of Subordinated
Indebtedness represents, warrants and agrees that it assumes sole responsibility
for obtaining from the Company and its Subsidiaries and its and their Affiliates
all information concerning the Credit Agreement and all other Credit Documents
and all other information as to the Company and its Subsidiaries
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and its and their properties, management or Affiliates or anything relating to
any of the above as it deems necessary or desirable.
9. CONTINUING AGREEMENT, ETC. This Agreement shall be a continuing agreement,
shall be irrevocable and shall remain in full force and effect until the
indefeasible payment in full of the Senior Indebtedness then outstanding in
accordance with the terms thereof at a time when the Lenders' obligations to
extend credit under all Credit Documents shall have been irrevocably terminated
(other than indemnity and similar provisions of the Credit Documents that
expressly survive the termination of such documents). No action which the
holders of the Senior Indebtedness or the Obligor may take or refrain from
taking with respect to the Senior Indebtedness, including any amendments
thereto, shall affect the provisions of this Agreement or the obligations of the
Obligor or any Holder of Subordinated Indebtedness hereunder. No right of the
Lenders or any present or future holder of any of the Senior Indebtedness shall
at any time be prejudiced or impaired by any act or failure to act on the part
of the Obligor or by any act or failure to act, in good faith, by any Lender or
any such holder, or by any noncompliance by the Obligor with the terms of this
Agreement, regardless of any knowledge thereof which any Lender or any such
holder may have or otherwise be charged with.
10. WAIVERS; POWERS, ETC.
10..1. SPECIFIC PERFORMANCE. The Managing Agents are authorized to
demand specific performance of this Agreement at any time when the Obligor or
any Holder of Subordinated Indebtedness shall have failed to comply with any
provision hereof applicable to it, and each of them irrevocably waives any
defense based on the adequacy of a remedy at law which might be asserted as a
bar to the remedy of specific performance hereof in any action brought therefor
by the Lenders.
10..2. CONSENT TO CREDIT AGREEMENT. AFC and each Holder of Subordinated
Indebtedness acknowledges receipt from the Company of a correct and complete
copy of the Credit Agreement as in effect as of the date hereof, and consents to
all of the provisions of the Credit Agreement as in effect as of such date and
agrees that its consent is not required for any amendments, modifications or
waivers of the provisions thereof.
10..3. POWER TO MODIFY, ETC. AFC and each Holder of Subordinated
Indebtedness grants, to the extent permitted by applicable law that cannot be
waived, the Managing Agents and the Lenders full power, in their sole
discretion, without notice to or consent by any Holder of Subordinated
Indebtedness and without in any way affecting the subordination of the
Subordinated Indebtedness provided in this Agreement:
10..3..1. To waive any Default, or compliance with, and to
consent to any amendment, change or modification of any terms of, the
Credit Agreement, any other Credit Documents, the Credit Security, the
Credit Obligations or any guarantee thereof (each as from time to time
in effect);
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10..3..2. To grant one or more extensions or renewals of the
Credit Obligations (for any period, no matter how long), and any other
indulgence with respect thereto and to effect any total or partial
release (by operation of law or otherwise), discharge, compromise or
settlement with respect to the obligations of the Obligor in respect of
the Credit Obligations, whether or not rights against the Obligor under
this Agreement are reserved in connection therewith;
10..3..3. To take security in any form for the Credit
Obligations and to consent to the addition to or the substitution,
exchange, release, failure to perfect or any other disposition of, and
to deal in any other manner with, to the extent permitted by applicable
law that cannot be waived, all or part of any property which may from
time to time secure the Credit Obligations whether or not the property,
if any, received upon the exercise of such power shall be of a
character or value the same as or different from the character or value
of any property disposed of, and to obtain, modify or release any
present or future guarantees of the Credit Obligations and to proceed
against any of the Credit Security or such guarantees in any order;
10..3..4. To extend credit under the Credit Agreement or any
other Credit Document, or otherwise, in such amount as the Lenders may
determine, whether for a greater or lesser amount than is presently in
effect, even though the financial condition of the Company and its
Subsidiaries may have deteriorated since the date hereof; and
10..3..5. To collect or liquidate any of the Credit
Obligations or the Credit Security in any manner or to refrain from
collecting or liquidating any of the Credit Obligations or the Credit
Security.
10..4. NO SUBROGATION. AFC hereby agrees with the Lenders that it
waives all rights of reimbursement, subrogation, contribution, offset and other
claims against the Obligor arising by contract or operation of law in connection
with any payment made or required to be made by AFC under this Agreement.
11. TRANSFERS; SUCCESSORS AND ASSIGNS.
11..1. TRANSFERS. Neither AFC nor any Holder of Subordinated
Indebtedness will sell, assign, transfer or otherwise dispose of any
Subordinated Indebtedness except to another Person which shall have entered into
an agreement with the Managing Agents, in a form satisfactory to the Managing
Agents, providing for subordination of such Subordinated Indebtedness to the
prior payment of the Credit Obligations on the terms provided in this Agreement.
11..2. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
inure to the benefit of the Lenders and their successors and assigns and shall
be binding upon the Obligor,
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AFC and the Holders of Subordinated Indebtedness and their respective successors
and assigns.
12. NOTICES. Except as otherwise specified in this Agreement, any notice
required to be given pursuant to this Agreement shall be given in writing. Any
notice, demand or other communication in connection with this Agreement shall be
deemed to be given if given in writing (including telex, telecopy (confirmed by
telephone or writing) or similar teletransmission) addressed as provided below
(or to the addressee at such other address as the addressee shall have specified
by notice actually received by the addressor), and if either (i) actually
delivered in fully legible form to such address (evidenced in the case of a
telex by receipt of the correct answerback) or (ii) in the case of a letter,
five days shall have elapsed after the same shall have been deposited in the
United States mails, with first-class postage prepaid and registered or
certified.
If to AFC or the Company, to it at the following address:
One East Fourth Street
Cincinnati, Ohio 45202
ATTENTION: Fred J. Runk
With a copy to:
Keating, Muething & Klekamp
1800 Provident Tower
One East Fourth Street
Cincinnati, Ohio 45202
ATTENTION: Paul V. Muething
If to the Managing Agents or any Lender, to it at its address set forth
on the signature page of the Credit Agreement, to the attention of the account
officer specified on such signature page, with a copy to the Managing Agents.
13. DEFEASANCE. When all Credit Obligations have been paid, performed and
reasonably determined by the Lenders to have been indefeasibly discharged in
full, and if at the time no Lender continues to be committed to extend any
credit to the Company under the Credit Agreement or under any other Credit
Document, this Agreement shall terminate and, at the written request of AFC or
the Company accompanied by such certificates and opinions as the Managing Agents
shall reasonably deem necessary, the Credit Security shall revert to AFC or the
Company, as the case may be, and all right, title and interest of the Lenders
therein shall terminate; PROVIDED, HOWEVER, that Sections 2.2, 3.2.4, 4.3, 14
and 15 shall survive the termination of this Agreement. Thereupon, on AFC's
demand and at its cost and expense, each Managing Agent shall execute proper
instruments, acknowledging satisfaction of and
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discharging this Agreement, and shall redeliver to AFC or the Company, as the
case may be, any Credit Security then in its possession.
14. VENUE; SERVICE OF PROCESS. AFC, the Obligor and each Holder of Subordinated
Indebtedness, by its execution hereof:
(i) Irrevocably submits to the nonexclusive
jurisdiction of the state courts of The Commonwealth of
Massachusetts and to the nonexclusive jurisdiction of the
United States District Court for the District of Massachusetts
for the purpose of any suit, action or other proceeding
arising out of or based upon this Agreement, the Credit
Agreement, or any other Credit Document or the subject matter
hereof or thereof brought by the Managing Agents, any holder
of Senior Indebtedness or their successors or assigns; and
(ii) Waives to the extent not prohibited by applicable
law, and agrees not to assert, by way of motion, as a defense
or otherwise, in any such proceeding, any claim that it is not
subject personally to the jurisdiction of the above-named
courts, that its property is exempt or immune from attachment
or execution, that such proceeding is brought in an
inconvenient forum, that the venue of such proceeding is
improper, or that this Agreement, the Credit Agreement or any
other Credit Document, or the subject matter hereof or
thereof, may not be enforced in or by such court.
Each Obligor and the Holder of Subordinated Indebtedness hereby consents to
service of process in any such proceeding in any manner permitted by Chapter
223A of the General Laws of The Commonwealth of Massachusetts and agrees that
service of process by registered or certified mail, return receipt requested, at
its address specified in or pursuant to Section 12 is reasonably calculated to
give actual notice.
15. WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT
CANNOT BE WAIVED, AFC, THE OBLIGOR AND EACH HOLDER OF SUBORDINATED INDEBTEDNESS
AND THE MANAGING AGENTS HEREBY WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT
(WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN
ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND OR ACTION ARISING OUT OF THIS
AGREEMENT, THE CREDIT AGREEMENT OR ANY OTHER CREDIT DOCUMENT OR THE SUBJECT
MATTER HEREOF OR THEREOF OR ANY CREDIT OBLIGATION OR IN ANY WAY CONNECTED WITH
THE DEALINGS OF THE LENDERS, AFC, SUCH OBLIGOR OR ANY HOLDER OF SUBORDINATED
INDEBTEDNESS IN CONNECTION WITH ANY OF THE ABOVE, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING AND WHETHER IN
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CONTRACT OR TORT OR OTHERWISE. AFC, the Obligor and each Holder of Subordinated
Indebtedness acknowledges that it has been informed by the Managing Agents that
the provisions of this Section 15 constitute a material inducement upon which
each of the Managing Agents and the Lenders has relied, is relying and will rely
in entering into this Agreement, and that it has reviewed the provisions of this
Section 15 with its counsel. The Managing Agents, AFC, the Obligor or any Holder
of Subordinated Indebtedness may file an original counterpart or a copy of this
Section 15 with any court as written evidence of the consent of the Managing
Agents, AFC, the Obligor or any Holder of Subordinated Indebtedness to the
waiver of their rights to trial by jury.
16. GENERAL. The headings in this Agreement are for convenience of reference
only and shall not limit, alter or otherwise affect the meaning hereof. The
invalidity or unenforceability of any term or provision hereof shall not affect
the validity or enforceability of any other term or provision hereof. This
Agreement and the other Credit Documents referred to herein or in the Credit
Agreement constitute the entire understanding of the parties with respect to the
subject matter hereof and thereof and supersede all prior and current
understandings and agreements, whether written or oral. This Agreement is a
Credit Document and may be executed in any number of counterparts, which
together shall constitute one instrument. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS (OTHER THAN THE CONFLICT OF LAWS
RULES) OF THE COMMONWEALTH OF MASSACHUSETTS.
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Each of the undersigned has caused this Agreement to be executed and
delivered by its duly authorized officer as an agreement under seal as of the
date first above written.
AMERICAN FINANCIAL CORPORATION
By
---------------------------------------
Vice President & Treasurer
GREAT AMERICAN HOLDING CORPORATION
By
---------------------------------------
Vice President & Treasurer
THE FIRST NATIONAL BANK OF BOSTON,
as Administrative Agent and as
Managing Agent for the Lenders
By
---------------------------------------
Director
CONTINENTAL BANK N.A., as Collateral
Agent and as Managing Agent for the
Lenders
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<PAGE> 139
By
---------------------------------------
Managing Director
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<PAGE> 140
EXHIBIT A
AFC PLEDGED STOCK
Certificate Number of
Issuer Number Shares
- ------ ------ ------
Great American
Holding Corporation 5 250
Great American
Holding Corporation 8 250
<PAGE> 141
EXECUTION COPY
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PENNSYLVANIA COMPANY SUBORDINATION AGREEMENT
Dated as of August 30, 1996
THE FIRST NATIONAL BANK OF BOSTON and
BANK OF AMERICA ILLINOIS, as Managing Agents
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 142
TABLE OF CONTENTS
PAGE
1. Definitions, etc.........................................................1
1.1. Reference to Credit Agreement; Definitions.....................1
1.1.1. "Holder of Subordinated Indebtedness"...............1
1.1.2. "Obligor"...........................................1
1.1.3. "Reorganization"....................................1
1.1.4. "Senior Indebtedness"...............................2
1.1.5. "Subordinated Indebtedness".........................2
2. Subordination Covenants..................................................2
2.1. Subordination..................................................2
2.2. Restricted Payments............................................3
2.3. Reorganization.................................................3
2.4. Specific Powers in Reorganization..............................3
2.5. Payments Held in Trust.........................................4
2.6. No Security....................................................4
2.7. Restrictions on Remedies.......................................4
2.8. Restrictions on Acceleration...................................4
2.9. Payment in Full................................................5
2.10. Effect of Provisions..........................................5
2.11. Further Assurances............................................5
2.12. Legend........................................................5
2.13. Financial Statements..........................................5
3. Information Regarding the Company........................................6
4. Continuing Agreement, etc................................................6
5. Waivers; Powers, etc.....................................................7
5.1. Specific Performance...........................................7
5.2. Consent to Credit Agreement....................................7
5.3. Power to Modify, etc...........................................7
5.4. No Subrogation.................................................8
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6. Transfers; Successors and Assigns........................................8
6.1. Transfers......................................................8
6.2. Successors and Assigns.........................................8
7. Notices..................................................................8
8. Venue; Service of Process................................................9
9. WAIVER OF JURY TRIAL....................................................10
10. General.................................................................10
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PENNSYLVANIA COMPANY SUBORDINATION AGREEMENT
This Agreement, dated as of August 30, 1996, is among Pennsylvania
Company, a Delaware corporation ("Pennsylvania Company"), Great American Holding
Corporation, an Ohio corporation (the "Company"), American Financial
Corporation, an Ohio corporation ("AFC"), The First National Bank of Boston, as
administrative agent (the "Administrative Agent") and as managing agent (a
"Managing Agent"), and Bank of America Illinois (formerly, Continental Bank,
N.A.), as collateral agent (the "Collateral Agent") and as managing agent (a
"Managing Agent", and together with The First National Bank of Boston as
Managing Agent, collectively, the "Managing Agents"), for the ratable benefit of
the Lenders under the Credit Agreement (as defined below). The parties agree as
follows:
1. DEFINITIONS, ETC.
1.1. REFERENCE TO CREDIT AGREEMENT; DEFINITIONS. Reference is made to
the Credit Agreement dated as of December 7, 1993, as amended from time to time
and as in effect (the "Credit Agreement"), among the Company, the Administrative
Agent and Managing Agent, the Collateral Agent and Managing Agent, and certain
Lenders party thereto. Except as the context otherwise explicitly requires, (i)
the capitalized term "Section" refers to sections of this Agreement, (ii)
references to a particular Section shall include all subsections thereof and
(iii) the word "including" shall be construed as "including without limitation".
Capitalized terms defined in the Credit Agreement are used herein with the
meanings so defined. Certain other capitalized terms used in this Agreement
shall have the meanings specified below:
1.1.1. "HOLDER OF SUBORDINATED INDEBTEDNESS" means (i)
Pennsylvania Company and (ii) each Person becoming a party to this
Agreement pursuant to Section 6.1.
1.1.2. "OBLIGOR" means each of (i) the Company and (ii) AFC,
and their respective successors and assigns.
1.1.3. "REORGANIZATION" means any voluntary or involuntary
dissolution, winding-up, total or partial liquidation or reorganization
or restructuring, whether by judicial proceedings or otherwise, or
bankruptcy, insolvency, receivership or other statutory or common law
proceedings or arrangements, including any proceeding under the
Bankruptcy Code or any similar law of any other jurisdiction, involving
any Obligor or any guarantor of the Subordinated Indebtedness or any of
their present or future Subsidiaries or the readjustment of the
respective liabilities of any Obligor or any such other Person or any
assignment for the benefit of creditors or any marshaling of the assets
or liabilities of any Obligor or any such other Person; provided,
however, that a Reorganization resulting solely from the filing of a
petition against any Obligor commencing an involuntary case under the
Bankruptcy Code shall cease to constitute a
<PAGE> 145
Reorganization for purposes of this Agreement if such case has been
dismissed within 60 days after such petition is filed.
1.1.4. "SENIOR INDEBTEDNESS" means: (i) the principal of and
premium, if any, on any Indebtedness of any Obligor to any Lender under
the Credit Agreement or any other Credit Document and all other Credit
Obligations, including without limitation the Indebtedness evidenced by
the Notes; (ii) all renewals, extensions, restructurings, refinancings
and refundings of Senior Indebtedness as defined in clause (i) above;
(iii) all fees, costs, expenses and other obligations payable under the
Credit Agreement or any other Credit Document or otherwise with respect
to Senior Indebtedness as defined in clauses (i) and (ii) above,
accrued to the date of payment, whether before or after the institution
by or against any Obligor of proceedings under the Bankruptcy Code; and
(iv) all interest arising on or with respect to Senior Indebtedness as
defined in clauses (i), (ii) and (iii) above accrued to the date of
payment, whether before or after the institution by or against any
Obligor of a Reorganization.
1.1.5. "SUBORDINATED INDEBTEDNESS" means (i) the principal of
and premium, if any, and interest, fees and other obligations arising
on or with respect to (a) all Indebtedness of the Company under the
Reducing Revolving Credit Agreement dated as of March 29, 1996 between
the Company and Pennsylvania Company, and (b) all Indebtedness of AFC
under the Credit Agreement dated as of April 3, 1995 between AFC and
Pennsylvania Company, including all renewals, extensions, refinancings,
or other amendments to or modifications of the Indebtedness referred to
in clauses (a) and (b) above; and (ii) any and all claims, damages and
liabilities of any nature whatsoever arising hereunder or with respect
to any Subordinated Indebtedness as defined in clause (i) above which
the Holder of Subordinated Indebtedness may now or hereafter have
against any Obligor.
2. SUBORDINATION COVENANTS. Each Obligor and each Holder of Subordinated
Indebtedness covenants that, until all of the Senior Indebtedness is paid in
full at a time when the Lenders' obligations to extend credit under the Credit
Agreement and all other Credit Documents shall have been irrevocably terminated
(other than indemnity and similar provisions of the Credit Documents that
expressly survive the termination of such documents), each will comply with such
of the following provisions as are applicable to it:
2.1. SUBORDINATION. To the extent and in the manner provided in this
Agreement, the payment of the Subordinated Indebtedness shall be expressly
subordinated and junior in right of payment to the prior payment in full of all
Senior Indebtedness, and the Subordinated Indebtedness is hereby subordinated as
a claim against each Obligor, any guarantor of the Subordinated Indebtedness or
any of their respective assets to the prior payment in full of the Senior
Indebtedness, in each case whether such claim be (i) in the ordinary course of
business or (ii) in the event of any Reorganization.
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<PAGE> 146
2.2. RESTRICTED PAYMENTS. No Obligor will make, and no Holder of
Subordinated Indebtedness will receive, any payment of any Subordinated
Indebtedness, whether in cash, securities or other property or by way of
conversion, exchange or set-off or otherwise, and no such payment shall become
due; provided, however, that each Obligor may make any Distribution to any
Holder of Subordinated Indebtedness so long as immediately before and after
giving effect thereto, no Default or Event of Default shall exist.
2.3. REORGANIZATION. During the existence of any Reorganization, all
Senior Indebtedness shall first be paid in full before any payment is made on
account of any Subordinated Indebtedness, and in any proceedings seeking to
effect a Reorganization any payment or distribution of any kind or character,
whether in cash or property or securities, which may be payable or deliverable
in respect of any Subordinated Indebtedness shall be paid or delivered directly
to the Administrative Agent for application to payment of the Senior
Indebtedness, until all such Senior Indebtedness shall have been indefeasibly
paid in full.
2.4. SPECIFIC POWERS IN REORGANIZATION. In any proceedings with respect
to a Reorganization, until all Senior Indebtedness shall have been indefeasibly
paid in full, each Holder of Subordinated Indebtedness hereby irrevocably
authorizes the Administrative Agent:
(i) To prove and enforce any claims on the
Subordinated Indebtedness owed by any Obligor to any Holder of
Subordinated Indebtedness either in the Administrative Agent's
name or in the name of such Holder of Subordinated
Indebtedness as the attorney-in-fact of such Holder of
Subordinated Indebtedness if such Holder of Subordinated
Indebtedness does not so prove or enforce such claims at least
30 days prior to the expiration of the time, without giving
effect to discretionary extensions of time, for the filing of
such claims in a manner reasonably satisfactory to the
Administrative Agent;
(ii) To accept and receive for any payment or
distribution made with respect to any Subordinated
Indebtedness and to apply such payment or distribution to the
payment of the Senior Indebtedness;
(iii) To vote claims comprising any Subordinated
Indebtedness and to accept or reject on behalf of such Holder
of Subordinated Indebtedness any plan proposed in connection
with any Reorganization; and
(iv) To take any and all action and to execute any
and all instruments reasonably necessary to effectuate the
foregoing either in the Administrative Agent's name or in the
name of such Holder of Subordinated Indebtedness as the
attorney-in-fact of such Holder of Subordinated Indebtedness.
2.5. PAYMENTS HELD IN TRUST. If, notwithstanding the foregoing, any
payment or distribution of the assets of any Obligor of any kind or character in
respect of the Subordinated
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Indebtedness (other than payments permitted by Section 2.2) shall be received,
by set-off or otherwise, by any Holder of Subordinated Indebtedness before all
Senior Indebtedness then outstanding has been paid and indefeasibly discharged
in full and before the Lenders' obligations to extend credit under all Credit
Documents shall have been irrevocably terminated (other than indemnity and
similar provisions of the Credit Documents that expressly survive the
termination of such documents), such payment or distribution and the amount of
any such set-off shall be held in trust by such Holder of Subordinated
Indebtedness and promptly paid over (together with any necessary endorsements)
to the Administrative Agent (who shall have the right to convert any such assets
into cash in a commercially reasonable manner) for application (including the
applications of such cash and cash proceeds) to the payment of all Senior
Indebtedness remaining unpaid until all such Senior Indebtedness shall have been
paid and indefeasibly discharged in full, after giving effect to any concurrent
payment or distribution to the holders of such Senior Indebtedness, and the
Lenders' obligations to extend credit under all Credit Documents shall have been
irrevocably terminated (other than indemnity and similar provisions of the
Credit Documents that expressly survive the termination of such documents).
2.6. NO SECURITY. No Obligor shall give, and no Holder of Subordinated
Indebtedness shall demand or receive, any security, direct or indirect, for any
Subordinated Indebtedness.
2.7. RESTRICTIONS ON REMEDIES. No Holder of Subordinated Indebtedness
shall, without the Managing Agents' prior written consent (at the direction of
the Required Majority Lenders), accelerate the maturity of, or institute
proceedings to enforce, any Subordinated Indebtedness notwithstanding any
provision to the contrary contained in any Subordinated Indebtedness or in any
agreement or instrument relating thereto. Without limiting the generality of the
foregoing sentence, no Holder of Subordinated Indebtedness shall, without the
Managing Agents' prior written consent (at the direction of the Required
Majority Lenders), commence or join with any other creditor or creditors of any
Obligor in commencing any proceeding against such Obligor seeking to effect a
Reorganization of such Obligor or any of its property.
2.8. RESTRICTIONS ON ACCELERATION. Notwithstanding any contrary
provision of any Subordinated Indebtedness or of any agreement or instrument
relating thereto, (i) no Subordinated Indebtedness shall become or be declared
to be due and payable prior to the date on which the Senior Indebtedness becomes
or is declared to be due and payable and (ii) if any Senior Indebtedness shall
have become or been declared to be due and payable prior to its stated maturity,
the Subordinated Indebtedness shall become immediately due and payable.
2.9. PAYMENT IN FULL. For the purposes of this Agreement, no Senior
Indebtedness shall be deemed to have been paid in full unless the holder thereof
shall have received and have been permitted to retain payment equal to the
amount thereof then outstanding and such Senior Indebtedness shall have been
fully and indefeasibly discharged.
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<PAGE> 148
2.10. EFFECT OF PROVISIONS. The provisions hereof as to subordination
are solely for the purpose of defining the relative rights of the holders of
Senior Indebtedness on the one hand and the Holders of Subordinated Indebtedness
on the other hand, and such provisions shall not impair as between any Obligor
and any Holder of Subordinated Indebtedness the obligation of such Obligor,
which is unconditional and absolute, to pay to such Holder of Subordinated
Indebtedness the principal of any Subordinated Indebtedness owed by such Obligor
to such Holder of Subordinated Indebtedness and interest thereon, and all other
amounts in respect thereof, nor shall any such provisions prevent any Holder of
Subordinated Indebtedness from exercising all remedies otherwise permitted by
applicable law or under the terms of such Subordinated Indebtedness upon a
default thereunder, except to the extent set forth in this Agreement.
2.11. FURTHER ASSURANCES. Each Obligor and each Holder of Subordinated
Indebtedness, for itself and its successors and assigns as Holders of
Subordinated Indebtedness, covenant to execute and deliver to the Administrative
Agent, the Collateral Agent or the Managing Agents such further instruments and
to take such further action as the Managing Agents may at any time or times
reasonably request in order to carry out the provisions and intent of this
Agreement.
2.12. LEGEND. Each Obligor and each Holder of Subordinated
Indebtedness, for itself and its successors and assigns as Holders of
Subordinated Indebtedness, covenant to cause each instrument or certificate
representing or evidencing any of the Subordinated Indebtedness to have affixed
upon it a legend in substantially the following form:
"This instrument is subject to the Subordination Agreement
dated as of August 30, 1996, as from time to time in effect, among
Pennsylvania Company, each Obligor or party thereto, The First National
Bank of Boston, as Administrative Agent and as Managing Agent and Bank
of America Illinois, as Collateral Agent and as Managing Agent, which
among other things, subordinates the Obligor's obligations hereunder to
the prior indefeasible payment in full of certain obligations of the
Obligor to the holders of Senior Indebtedness as defined therein."
2.13. FINANCIAL STATEMENTS. Each Holder of Subordinated Indebtedness
and each Obligor shall cause any financial statement describing or listing or
otherwise reflecting the existence of any Indebtedness included in the
Subordinated Indebtedness to indicate the existence of such Subordinated
Indebtedness consistent with GAAP.
3. INFORMATION REGARDING THE COMPANY. Pennsylvania Company and each Holder of
Subordinated Indebtedness expressly acknowledges and agrees that such Holder of
Subordinated Indebtedness has made such investigation as it deems desirable of
the risks undertaken by such Holder of Subordinated Indebtedness in entering
into this Agreement and is fully satisfied that it understands all such risks.
Pennsylvania Company and each Holder of Subordinated Indebtedness waives any
obligation which may now or hereafter exist on the part
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<PAGE> 149
of the Managing Agents or any holder of any Senior Indebtedness to inform any
Holder of Subordinated Indebtedness of the risks being undertaken by entering
into this Agreement or of any changes in such risks and, from and after the date
of this Agreement, Pennsylvania Company and each Holder of Subordinated
Indebtedness undertakes to keep itself informed of such risks and any changes
therein. Pennsylvania Company and each Holder of Subordinated Indebtedness
expressly waives (except to the extent prohibited by applicable law which cannot
be waived) any duty which may now or hereafter exist on the part of the Managing
Agents or any holder of any Senior Indebtedness to disclose to such Holder of
Subordinated Indebtedness any matter related to the business, operations,
character, collateral, credit or condition (financial or otherwise) or prospects
of AFC, the Company, its Subsidiaries or its or their Affiliates, properties or
management, whether now or hereafter known by any Lender. Pennsylvania Company
and each Holder of Subordinated Indebtedness represents, warrants and agrees
that it assumes sole responsibility for obtaining from AFC, the Company and its
Subsidiaries and its and their Affiliates all information concerning the Credit
Agreement and all other Credit Documents and all other information as to the
Company and its Subsidiaries and its and their properties, management or
Affiliates or anything relating to any of the above as it deems necessary or
desirable.
4. CONTINUING AGREEMENT, ETC. This Agreement shall be a continuing agreement,
shall be irrevocable and shall remain in full force and effect until the
indefeasible payment in full of the Senior Indebtedness then outstanding in
accordance with the terms thereof at a time when the Lenders' obligations to
extend credit under all Credit Documents shall have been irrevocably terminated
(other than indemnity and similar provisions of the Credit Documents that
expressly survive the termination of such documents). No action which the
holders of the Senior Indebtedness or any Obligor may take or refrain from
taking with respect to the Senior Indebtedness, including any amendments
thereto, shall affect the provisions of this Agreement or the obligations of
such Obligor or any Holder of Subordinated Indebtedness hereunder. No right of
the Lenders or any present or future holder of any of the Senior Indebtedness
shall at any time be prejudiced or impaired by any act or failure to act on the
part of any Obligor or by any act or failure to act, in good faith, by any
Lender or any such holder, or by any noncompliance by any Obligor with the terms
of this Agreement, regardless of any knowledge thereof which any Lender or any
such holder may have or otherwise be charged with.
5. WAIVERS; POWERS, ETC.
5.1. SPECIFIC PERFORMANCE. The Managing Agents are authorized to demand
specific performance of this Agreement at any time when any Obligor or any
Holder of Subordinated Indebtedness shall have failed to comply with any
provision hereof applicable to it, and each of them irrevocably waives any
defense based on the adequacy of a remedy at law which might be asserted as a
bar to the remedy of specific performance hereof in any action brought therefor
by the Lenders.
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5.2. CONSENT TO CREDIT AGREEMENT. Pennsylvania Company and each Holder
of Subordinated Indebtedness acknowledges receipt from the Company of a correct
and complete copy of the Credit Agreement and the AFC Agreement as in effect as
of the date hereof, and consents to all of the provisions of the Credit
Agreement and the AFC Agreement as in effect as of such date and agrees that its
consent is not required for any amendments, modifications or waivers of the
provisions thereof.
5.3. POWER TO MODIFY, ETC. Pennsylvania Company and each Holder of
Subordinated Indebtedness grants, to the extent permitted by applicable law that
cannot be waived, the Managing Agents and the Lenders full power, in their sole
discretion, without notice to or consent by any Holder of Subordinated
Indebtedness and without in any way affecting the subordination of the
Subordinated Indebtedness provided in this Agreement:
5.3.1. To waive any Default or Event of Default, or compliance
with, and to consent to any amendment, change or modification of any
terms of, the Credit Agreement, any other Credit Documents, the Credit
Security, the Credit Obligations or any guarantee thereof (each as from
time to time in effect);
5.3.2. To grant one or more extensions or renewals of the
Credit Obligations (for any period, no matter how long), and any other
indulgence with respect thereto and to effect any total or partial
release (by operation of law or otherwise), discharge, compromise or
settlement with respect to the obligations of any Obligor in respect of
the Credit Obligations, whether or not rights against such Obligor
under this Agreement are reserved in connection therewith;
5.3.3. To take security in any form for the Credit Obligations
and to consent to the addition to or the substitution, exchange,
release, failure to perfect or any other disposition of, and to deal in
any other manner with, to the extent permitted by applicable law that
cannot be waived, all or part of any property which may from time to
time secure the Credit Obligations whether or not the property, if any,
received upon the exercise of such power shall be of a character or
value the same as or different from the character or value of any
property disposed of, and to obtain, modify or release any present or
future guarantees of the Credit Obligations and to proceed against any
of the Credit Security or such guarantees in any order;
5.3.4. To extend credit under the Credit Agreement or any
other Credit Document, or otherwise, in such amount as the Lenders may
determine, whether for a greater or lesser amount than is presently in
effect, even though the financial condition of the Company and its
Subsidiaries may have deteriorated since the date hereof; and
5.3.5. To collect or liquidate any of the Credit Obligations
or the Credit Security in any manner or to refrain from collecting or
liquidating any of the Credit Obligations or the Credit Security.
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5.4. NO SUBROGATION. Pennsylvania Company hereby agrees with the
Lenders that it waives all rights of reimbursement, subrogation, contribution,
offset and other claims against any Obligor arising by contract or operation of
law in connection with any payment made or required to be made by Pennsylvania
Company under this Agreement.
6. TRANSFERS; SUCCESSORS AND ASSIGNS.
6.1. TRANSFERS. Neither Pennsylvania Company nor any Holder of
Subordinated Indebtedness will sell, assign, transfer or otherwise dispose of
any Subordinated Indebtedness except to another Person which shall have entered
into an agreement with the Managing Agents, in form and substance satisfactory
to the Managing Agents, providing for subordination of such Subordinated
Indebtedness to the prior payment of the Credit Obligations on the terms
provided in this Agreement.
6.2. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
inure to the benefit of the Lenders and their successors and assigns and shall
be binding upon each Obligor, Pennsylvania Company and the Holders of
Subordinated Indebtedness and their respective successors and assigns.
7. NOTICES. Except as otherwise specified in this Agreement, any notice required
to be given pursuant to this Agreement shall be given in writing. Any notice,
demand or other communication in connection with this Agreement shall be deemed
to be given if given in writing (including telex, telecopy (confirmed by
telephone or writing) or similar teletransmission) addressed as provided below
(or to the addressee at such other address as the addressee shall have specified
by notice actually received by the addressor), and if either (i) actually
delivered in fully legible form to such address (evidenced in the case of a
telex by receipt of the correct answerback) or (ii) in the case of a letter,
five days shall have elapsed after the same shall have been deposited in the
United States mails, with first-class postage prepaid and registered or
certified.
If to AFC, Pennsylvania Company or the Company, to it at the following
address:
One East Fourth Street
Cincinnati, Ohio 45202
ATTENTION: Fred J. Runk
With a copy to:
Keating, Muething & Klekamp
1800 Provident Tower
One East Fourth Street
Cincinnati, Ohio 45202
-8-
<PAGE> 152
ATTENTION: Paul V. Muething
If to the Managing Agents or any Lender, to it at its address set forth
on the signature page of the Credit Agreement, to the attention of the account
officer specified on such signature page, with a copy to the Managing Agents.
8. VENUE; SERVICE OF PROCESS. Each Obligor and each Holder of Subordinated
Indebtedness, by its execution hereof:
(i) Irrevocably submits to the nonexclusive
jurisdiction of the state courts of The Commonwealth of
Massachusetts and to the nonexclusive jurisdiction of the
United States District Court for the District of Massachusetts
for the purpose of any suit, action or other proceeding
arising out of or based upon this Agreement, the Credit
Agreement, or any other Credit Document or the subject matter
hereof or thereof brought by the Managing Agents, any holder
of Senior Indebtedness or their successors or assigns; and
(ii) Waives to the extent not prohibited by
applicable law, and agrees not to assert, by way of motion, as
a defense or otherwise, in any such proceeding, any claim that
it is not subject personally to the jurisdiction of the
above-named courts, that its property is exempt or immune from
attachment or execution, that such proceeding is brought in an
inconvenient forum, that the venue of such proceeding is
improper, or that this Agreement, the Credit Agreement or any
other Credit Document, or the subject matter hereof or
thereof, may not be enforced in or by such court.
Each Obligor and each Holder of Subordinated Indebtedness hereby consents to
service of process in any such proceeding in any manner permitted by Chapter
223A of the General Laws of The Commonwealth of Massachusetts and agrees that
service of process by registered or certified mail, return receipt requested, at
its address specified in or pursuant to Section 7 is reasonably calculated to
give actual notice.
9. WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY
APPLICABLE LAW THAT CANNOT BE WAIVED, EACH OBLIGOR AND EACH HOLDER OF
SUBORDINATED INDEBTEDNESS AND EACH MANAGING AGENT HEREBY WAIVES, AND COVENANTS
THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY
RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND OR
ACTION ARISING OUT OF THIS AGREEMENT, THE CREDIT AGREEMENT OR ANY OTHER CREDIT
DOCUMENT OR THE SUBJECT MATTER HEREOF OR THEREOF OR ANY CREDIT OBLIGATION OR IN
ANY WAY CONNECTED WITH THE DEALINGS OF THE LENDERS, AFC, SUCH OBLIGOR OR ANY
HOLDER OF SUBORDINATED INDEBTEDNESS IN CONNECTION WITH ANY OF THE ABOVE, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER IN
-9-
<PAGE> 153
CONTRACT OR TORT OR OTHERWISE. Each Obligor and each Holder of Subordinated
Indebtedness acknowledges that it has been informed by the Managing Agents that
the provisions of this Section 9 constitute a material inducement upon which
each of the Managing Agents and the Lenders has relied, is relying and will rely
in entering into this Agreement, and that it has reviewed the provisions of this
Section 9 with its counsel. The Managing Agents, each Obligor or any Holder of
Subordinated Indebtedness may file an original counterpart or a copy of this
Section 9 with any court as written evidence of the consent of the Managing
Agents, each Obligor or any Holder of Subordinated Indebtedness to the waiver of
their rights to trial by jury.
10. GENERAL. The headings in this Agreement are for convenience of reference
only and shall not limit, alter or otherwise affect the meaning hereof. The
invalidity or unenforceability of any term or provision hereof shall not affect
the validity or enforceability of any other term or provision hereof. This
Agreement and the other Credit Documents referred to herein or in the Credit
Agreement constitute the entire understanding of the parties with respect to the
subject matter hereof and thereof and supersede all prior and current
understandings and agreements, whether written or oral. This Agreement is a
Credit Document and may be executed in any number of counterparts, which
together shall constitute one instrument. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS (OTHER THAN THE CONFLICT OF LAWS
RULES) OF THE COMMONWEALTH OF MASSACHUSETTS.
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<PAGE> 154
Each of the undersigned has caused this Agreement to be executed and
delivered by its duly authorized officer as an agreement under seal as of the
date first above written.
PENNSYLVANIA COMPANY
By
------------------------------------
Title:
AMERICAN FINANCIAL CORPORATION
By
------------------------------------
Vice President & Treasurer
GREAT AMERICAN HOLDING CORPORATION
By
------------------------------------
Vice President & Treasurer
THE FIRST NATIONAL BANK OF BOSTON,
as Administrative Agent and as Managing
Agent for the Lenders
By
------------------------------------
Managing Director
BANK OF AMERICA ILLINOIS, as Collateral
Agent and as Managing Agent for the Lenders
By
------------------------------------
Managing Director
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<PAGE> 155
Execution Copy
--------------
AMERICAN FINANCIAL CORPORATION
GREAT AMERICAN HOLDING CORPORATION
Amendment No. 1 to Credit Agreement
-----------------------------------
This Agreement dated as of August 30, 1996, is among Great American
Holding Corporation, an Ohio corporation (the "Company"), The First National
Bank of Boston ("FNBB"), for itself and as Administrative Agent and as Managing
Agent, Bank of America Illinois (formerly, Continental Bank N.A.), for itself
and as Collateral Agent and as Managing Agent, (together with FNBB as Managing
Agent, collectively, the "Managing Agents"), and the other lenders party to the
Credit Agreement referred to below. The parties hereto agree as follows:
1. REFERENCE TO CREDIT AGREEMENT; DEFINITIONS. Reference is made to the Credit
Agreement, dated as of December 7, 1993, as in effect on the date hereof prior
to giving effect to this Agreement (the "Credit Agreement"), among the Company,
the Managing Agents and the lenders party thereto. The Credit Agreement as
amended hereby is referred to herein as the "Amended Credit Agreement". Terms
defined in the Amended Credit Agreement and not otherwise defined herein are
used herein with the meanings so defined.
2. ASSIGNMENT OF INTEREST. The Chase Manhattan Bank (the "Assignor") hereby
assigns to each of (i) The First National Bank of Boston, (ii) Bank of America
Illinois and (iii) The Bank of New York (each an "Assignee") and each Assignee
hereby purchases and assumes from Assignor, a portion of Assignor=s Commitment
and a Percentage Interest in the Loan as set forth below opposite such
Assignee's respective name:
<TABLE>
<CAPTION>
Commitment Percentage Interest
Assignee Amount In The Loan
-------- ---------- -------------------
<S> <C> <C>
The First National Bank
of Boston $10,000,000 3.3333%
Bank of America Illinois $10,000,000 3.3333%
The Bank of New York $ 5,000,000 1.6667%
----------- -------
Total $25,000,000 8.3333%
=========== =======
</TABLE>
<PAGE> 156
2.1 REPRESENTATIONS OF THE ASSIGNOR. The Assignor:
(a) represents that as of the date hereof, its Commitment
(without giving effect to assignments thereof which have not yet become
effective) is $55,000,000, and that there is no outstanding principal
balance of its Percentage Interest in the Loan.
(b) makes this assignment without recourse and makes no
representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in
connection with the Credit Agreement or the other Credit Documents or
any other instrument furnished pursuant thereto, or the execution,
legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement or the other Credit Documents or any other
instrument or document furnished pursuant thereto, other than that it
is the legal and beneficial owner of the interest being assigned by it
hereunder and that such interest is free and clear of any adverse
claim; and
(c) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of AFC, the
Company or any of their respective Subsidiaries or the performance of
any of their obligations under the Credit Agreement, any of the other
Credit Documents or any other instrument or document furnished pursuant
thereto.
2.2 EFFECT OF ASSIGNMENT. Assignor hereby instructs the Administrative
Agent to make all payments after the Amendment Effective Date (as specified
below) in respect of the interests assigned hereby directly to the Assignees.
The Assignor and the Assignees agree that all interest on, and fees with respect
to, the Loan, accrued to, but not including, the Amendment Effective Date, are
the property of the Assignor, and not the Assignees. Each of the Assignees
agrees that, upon receipt of any such interest or fees, such Assignee will
promptly remit the same to the Assignor. On the Amendment Effective Date, after
giving effect to this assignment, the Lenders' Percentage Interests will be as
set forth in Section 11.1 of the Amended Credit Agreement.
3. AMENDMENTS TO THE CREDIT AGREEMENT. The parties hereto agree that on the date
on which the conditions set forth in Section 5 hereof are satisfied (the
"Amendment Effective Date"), the Credit Agreement is amended effective as of the
Amendment Effective Date as follows:
3.1 DELETION OF SECTION 3.4. Section 3.4 of the Credit Agreement is
deleted in its entirety.
3.2 AMENDMENT TO SECTION 4.2.2. Section 4.2.2 of the Credit Agreement
is amended to read in its entirety as follows:
-2-
<PAGE> 157
"4.2.2. TERM LOAN. On each Payment Date after the Conversion
Date, including the Final Maturity Date, the Company will, as a
mandatory prepayment on account of the Term Loan, pay to the
Administrative Agent for the account of the Lenders, in accordance with
their respective Percentage Interests, an amount equal to the lesser of
(a) an amount equal to the percentage of the original amount of the
Term Loan set opposite such Payment Date:
<TABLE>
<CAPTION>
Payment Date Percentage
------------ ----------
<S> <C>
March 1998 through 5%
December 2000
March 2001 through 10%
December 2001
</TABLE>
or (b) the amount of the Term Loan then outstanding."
3.3 AMENDMENT TO SECTION 7.7.1. Section 7.7.1 of the Credit Agreement
is amended to read in its entirety as follows:
"7.7.1. COMPANY INDEBTEDNESS. Indebtedness of the Company (on
a holding company only basis) shall at no time exceed 40% of its Net
Worth; PROVIDED, HOWEVER, that for purposes of this Section 7.7.1, the
term "Indebtedness" shall not include any Indebtedness owed by GAHC to
AFC or its Affiliates which is subordinated to the prior payment in
full of the Credit Obligations pursuant to the AFC Agreement and the
Pennsylvania Company Subordination Agreement."
3.4 AMENDMENT TO SECTION 7.10.6 Section 7.10.6 of the Credit Agreement
is amended to read in its entirety as follows:
"7.10.6 The Company and its Designated Subsidiaries may from
time to time sell or dispose of assets (other than stock of GAIC) on
arm's length terms; PROVIDED, HOWEVER, that the assets sold pursuant to
this Section 7.10.6 on a cumulative basis (a) shall not represent net
book value, determined in accordance with GAAP, exceeding 25% of the
net book value of all assets of the Company and its Designated
Subsidiaries as of December 31, 1995 and (b) shall not have contributed
revenue, determined in accordance with GAAP, over the period of four
fiscal quarters prior to the respective sales exceeding 25% of the
revenue of the Company and its Designated Subsidiaries for the four
fiscal quarters ended December 31, 1995."
-3-
<PAGE> 158
3.5 ADDITION OF SECTION 7.14 Section 7 of the Credit Agreement is
amended by adding thereto immediately following Section 7.13 thereof, a new
Section 7.14, which shall read in its entirety as follows:
"7.14 INTERCOMPANY ACCOUNTS. Neither AFC nor GAHC nor any of
their Wholly-Owned Subsidiaries shall make any Investment in or create,
incur, suffer or permit to exist any Indebtedness to AFG, APU or
Pennsylvania Company or any of their Wholly-Owned Subsidiaries, unless
(a) immediately before and after giving effect thereto no Default shall
exist, and (b) any such Indebtedness shall be incurred pursuant to the
Subordinated Affiliate Revolvers; PROVIDED, HOWEVER, that any such
Person may make inter-company transfers or payments and incur trade
payables in the ordinary course of business."
3.6 AMENDMENT TO SECTION 9.1 Section 9.1 of the Credit Agreement is
amended to read in its entirety as follows:
"9.1. EVENTS OF DEFAULT. The following events are herein
referred to as "Events of Default":
9.1.1. The Company shall fail to make any payment in
respect of: (a) interest on any of the Credit Obligations as
the same shall become due and payable and such failure shall
continue for a period of five consecutive days, (b) any fee or
any expense or indemnity in respect of any of the Credit
Obligations as the same shall become due and payable and such
failure shall continue for a period of five consecutive days
after notice thereof by the Managing Agents to the Company
(which notice shall be given upon the request of the Required
Majority Lenders), or (c) principal of any of the Credit
Obligations as the same shall become due, whether at maturity
or by acceleration or otherwise.
9.1.2. The Company or any of its Subsidiaries shall
fail to perform or observe any of the provisions of Sections
7.6 through 7.14 to be performed or observed by it or AFC
shall fail to perform or observe any of the provisions of
Section 6.4 or 6.5 of the AFC Agreement.
9.1.3. The Company or any of its Subsidiaries, AFC or
Pennsylvania Company shall fail to perform or observe any
other covenant, agreement or provision to be performed or
observed by it under this Agreement or any other Credit
Document, and such failure shall not be rectified or cured to
the written satisfaction of the Required Majority Lenders
within 20 days after notice thereof by the Managing Agents to
the Company (which notice shall be given upon the request of
the Required Majority Lenders).
-4-
<PAGE> 159
9.1.4. Any representation or warranty of or with
respect to the Company or any of its Subsidiaries or AFC in
connection with this Agreement or any other Credit Document
shall be materially false or materially misleading on the date
as of which it was made.
9.1.5. (a) AFG or any of its Wholly-Owned
Subsidiaries shall fail to make any payment when due (after
giving effect to any applicable grace periods) in respect of
any Financing Debt (other than the Credit Obligations)
outstanding in an aggregate amount of principal and accrued
and unpaid interest exceeding $2,500,000;
(b) AFG or any of its Wholly-Owned Subsidiaries shall
fail to perform or observe the terms of any agreement or
guarantee relating to such Financing Debt, and such failure or
condition shall continue, without having been duly cured,
waived or consented to, beyond the period of grace, if any,
specified in such agreement, and such failure or condition
shall permit the acceleration of such Financing Debt;
(c) Any such Financing Debt of AFG or any of its
Wholly-Owned Subsidiaries shall be accelerated or become due
or payable prior to its stated maturity for any reason
whatsoever (other than voluntary prepayments thereof);
(d) Any Lien on any property of AFG or any of its
Wholly-Owned Subsidiaries securing any such Financing Debt
shall be enforced by foreclosure or similar action; or
(e) Any holder of any such Financing Debt shall
exercise any right of rescission with respect to the issuance
thereof.
9.1.6. AFG shall cease to own beneficially directly
or indirectly a majority of the voting securities of AFC, the
Company or GAIC.
9.1.7. (i) Lindner Family Members or direct or
indirect Subsidiaries of Lindner Family Members shall cease to
own, in the aggregate, beneficially (A) at least 30% of the
outstanding Common Stock of AFG entitled to vote generally and
(B) a sufficient number of shares of such voting Common Stock
of AFG so that such Lindner Family Members or direct or
indirect Subsidiaries thereof, in the aggregate, shall own
more shares of such Common Stock than any other Person or
group of Persons by a margin of at least 10% of the total
number of shares of such voting Common Stock of AFG then
outstanding, or (ii) a majority of the members of the Board of
Directors of AFG shall not actually consist of Lindner Family
Members or their nominees or representatives.
-5-
<PAGE> 160
9.1.8. Any Credit Document shall cease, for any
reason, to be in full force and effect, or the Company or any
of its Subsidiaries or AFC or Pennsylvania Company shall so
assert, or the security interests created by this Agreement
and the other Credit Documents shall cease to be enforceable
and of the same effect and priority purported to be created
hereby.
9.1.9. A final judgment (a) which, with other
outstanding final judgments against AFG or any of its
Wholly-Owned Subsidiaries, exceeds an aggregate of $5,000,000
shall be rendered against AFG or any of its Wholly-Owned
Subsidiaries, or (b) which grants injunctive relief that
results, or poses a material risk of resulting, in a Material
Adverse Change, and (c) which, within 60 days after entry
thereof, has not been discharged or execution thereof stayed
pending appeal, or if, within 60 days after the expiration of
any such stay, such judgment shall not have been discharged.
9.1.10. The Company or any ERISA Group Member shall
fail to pay when due amounts aggregating in excess of
$10,000,000 which it shall have become liable to pay to the
PBGC or to a Plan under Title IV of ERISA; or notice of intent
to terminate a Plan shall be filed for a termination of a Plan
pursuant to section 4041(c) of ERISA by the Company or any
ERISA Group Member or any administrator; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate or
to cause a trustee to be appointed to administer any Plan or a
proceeding shall be instituted by a fiduciary of any Plan
against the Company or any ERISA Group Member to enforce
section 515 or 4219(c)(5) of ERISA and such proceeding shall
not have been dismissed within 30 days thereafter; or a Lien
shall be imposed under section 302(f) of ERISA; or a condition
shall exist by reason of which the PBGC would be entitled to
obtain a decree adjudicating that any Plan must be terminated.
9.1.11. GAIC or any of its Designated Insurance
Subsidiaries shall, at any time after the date hereof, be
prohibited by law from engaging in the business of effecting
and carrying out contracts of insurance, and such prohibition
would result in a Material Adverse Change.
9.1.12. Any court or any Insurance Authority or any
other governmental or regulatory authority, agency or official
of competent jurisdiction shall issue an order or decree which
shall require GAIC or any of its Designated Insurance
Subsidiaries to reduce or to terminate all or any substantial
part of its insurance business, and such reduction or
termination would result in a Material Adverse Change.
-6-
<PAGE> 161
9.1.13. (a) AFG or any of its Wholly-Owned
Subsidiaries or any Material Subsidiary shall:
(i) Commence a voluntary case under the
Bankruptcy Code or authorize, by appropriate
proceedings of its board of directors or other
governing body, the commencement of such a voluntary
case;
(ii) Have filed against it a petition
commencing an involuntary case under the Bankruptcy
Code which shall not have been dismissed within 60
days after the date on which such petition is filed;
or file an answer or other pleading within such
60-day period admitting or failing to deny the
material allegations of such a petition or seeking,
consenting to or acquiescing in the relief therein
provided;
(iii) Have entered against it an order for
relief in any involuntary case commenced under the
Bankruptcy Code;
(iv) Seek relief as a debtor under any
applicable law, other than the Bankruptcy Code, of
any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or
alteration of the rights of creditors, or consent to
or acquiesce in such relief;
(v) Have entered against it an order by a
court of competent jurisdiction (A) finding it to be
bankrupt or insolvent, (B) ordering or approving its
liquidation or reorganization or any modification or
alteration of the rights of its creditors or (C)
assuming custody of, or appointing a receiver or
other custodian for, all or a substantial portion of
its property;
(vi) Make an assignment for the benefit of,
or enter into a composition with, its creditors, or
appoint, or consent to the appointment of, or suffer
to exist a receiver or other custodian for, all or a
substantial portion of its property; or
(vii) Become insolvent or generally fail to
pay, or admit in writing its inability or
unwillingness to pay, debts as they become due; or
(b) Any applicable insurance regulatory authority
shall take action to intervene into the management or business
affairs of GAIC.
3.7 AMENDMENT TO SECTION 11.1. Section 11.1 of the Credit Agreement is
amended to read in its entirety as follows:
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<PAGE> 162
"11.1. INTERESTS IN CREDITS. The percentage interest of each
Lender in the Loan shall be computed based on the Commitment for each
Lender as follows:
Commitment Percentage
Lender Amount Interest
------ ---------- ----------
Bank of America $47,500,000 15.8333%
Illinois, N.A.
The First National $47,500,000 15.8333%
Bank of Boston
The Chase Manhattan $30,000,000 10.0000%
Bank
The Bank of New York $30,000,000 10.0000%
NationsBank of $25,000,000 8.3333%
Georgia, N.A.
Credit Lyonnais $25,000,000 8.3333%
Cayman Island Branch
Key Bank National
Association $25,000,000 8.3333%
Riggs National Bank $20,000,000 6.6667%
Star Bank, N.A. $20,000,000 6.6667%
Bank of Tokyo-Mitsubishi $15,000,000 5.0000%
Bank One, Columbus, $15,000,000 5.0000%
----------- -------
N.A.
Total $300,000,000 100%
The foregoing percentage interests, as adjusted pursuant to the terms
of this Agreement and otherwise as the Lenders may from time to time agree among
themselves, are referred to as the "Percentage Interests" with respect to all or
any portion of the Loan. References in any Credit Document to the Lenders'
respective Percentage Interests are to such interests as from time to time in
effect."
-8-
<PAGE> 163
3.8 AMENDMENT TO EXHIBIT 1. Exhibit 1 to the Credit Agreement is
amended as follows:
3.8.1 AMENDMENTS TO DEFINITIONS. The following definitions are
amended to read in their entirety as follows:
"16. "BANKRUPTCY DEFAULT' means an Event of Default
referred to in Section 9.1.13."
"44. 'CONVERSION DATE' means December 31, 1997 or
such later date as determined in accordance with Section 2.5."
"69. 'FINAL MATURITY DATE' means December 31, 2001 or
such later date as determined in accordance with Section 2.5."
"118. 'REVOLVING RATE' means the sum of:
(a) (i) With respect to any such portion of
the Loan which is at the time subject to an
effective Eurodollar Pricing Option, the sum
of 7/8% PLUS the Eurodollar Rate;
(ii) With respect to any such portion of
the Loan which is at the time subject to an
effective CD Pricing Option, the sum of 1%
PLUS the CD Rate; and
(iii) With respect to any other such
portion of the Loan, the Base Rate; PLUS
(b) the GAIC Net Loss Margin, if any."
"124. 'TERM RATE' means the Revolving Rate."
3.8.2 ADDITIONS TO DEFINITIONS. The following definitions are
added to Exhibit 1 in the proper alphabetical order:
"'AFG' means American Financial Group, Inc., an Ohio
corporation."
"'APU' means American Premier Underwriters, Inc., a
Pennsylvania corporation."
"'INVESTMENT' means, in relation to any Person, (a) any loan,
advance or other extension of credit (including any guarantee of any
Indebtedness) made by such Person to any other Person, (b) any capital
contribution by such Person to, or purchase of
-9-
<PAGE> 164
capital stock or other securities or partnership interests by such
Person in, any other Person, or any other investment evidencing an
ownership or similar interest of such Person in any other Person, or
(c) any sale of property by such Person to any other Person other than
upon full payment, in cash, of not less than the agreed sale price or
the fair value of such property, whichever is higher."
"'PENNSYLVANIA COMPANY' means Pennsylvania Company, a Delaware
corporation."
"'PENNSYLVANIA COMPANY SUBORDINATION AGREEMENT' means the
Subordination Agreement dated as of August 30, 1996 between the
Company, AFC and Pennsylvania Company and the Managing Agents pursuant
to which Pennsylvania Company shall subordinate all obligations owed to
it by the Company and AFC under the Subordinated Affiliate Revolvers to
the prior payment in full of the Credit Obligations."
"'SUBORDINATED AFFILIATE REVOLVERS' means, collectively, (a)
the Reducing Revolving Credit Agreement dated as of March 29, 1996
between Pennsylvania Company and the Company, and (b) the Credit
Agreement dated as of April 3, 1995 between Pennsylvania Company and
AFC, in each case including all renewals, extensions, refinancings or
other amendments thereto to or modifications thereof."
4. REPRESENTATIONS AND WARRANTIES OF COMPANY. In order to induce the Lenders to
enter into this Agreement, the Company represents and warrants to the Agent as
follows:
4.1 NO DEFAULT. After giving effect to the amendments set forth in
Section 3 hereof, no Default or Event of Default will exist.
4.2 INCORPORATION OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Company set forth in Sections 6.3 and 8 of
the Amended Credit Agreement are true and correct on and as of the Amendment
Effective Date as if made as of the Amendment Effective Date; and no Material
Adverse Change has occurred.
5. CONDITIONS TO EFFECTIVENESS. The effectiveness of this Agreement shall be
subject to the compliance by the Company with the following conditions:
5.1 PENNSYLVANIA COMPANY SUBORDINATION AGREEMENT. Each of the Company
and AFC shall have duly authorized, executed and delivered to the Managing
Agents an agreement (the "Pennsylvania Company Subordination Agreement") in the
form of Exhibit 5.1 hereto, pursuant to which Pennsylvania Company shall
subordinate all obligations owed to it by the Company and AFC under the
Subordinated Affiliate Revolvers to the prior payment in full of the Credit
Obligations.
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<PAGE> 165
5.2 LEGAL OPINION. The Lenders shall have received from Keating,
Muething & Klekamp, counsel to AFC and the Company, its opinion with respect to
the transactions contemplated by this Amendment and the Pennsylvania
Subordination Agreement, which opinion shall be in form and substance
satisfactory to the Lenders.
5.3 PROPER PROCEEDINGS. This Agreement, the Credit Agreement, the
Pennsylvania Company Subordination Agreement and each other Credit Document and
the transactions contemplated hereby and thereby shall have been authorized by
all necessary proceedings of the Company and AFC. All necessary consents,
approvals and authorizations of any governmental or administrative agency or any
other Person of any of the transactions contemplated hereby, by the Credit
Agreement or by any other Credit Document shall have been obtained and shall be
in full force and effect.
6. GENERAL. The Amended Credit Agreement and all of the Credit Obligations are
confirmed as being in full force and effect. This Agreement, the Amended Credit
Agreement and the other Credit Documents referred to herein or therein
constitute the entire understanding of the parties with respect to the subject
matter hereof and thereof and supersede all prior and current understandings and
agreements, whether written or oral. The invalidity or unenforceability of any
provision hereof shall not affect the validity or enforceability of any other
term or provision hereof. The headings in this Agreement are for convenience of
reference only and shall not alter, limit or otherwise affect the meaning
hereof. This Agreement is a Credit Document and may be executed in any number of
counterparts, which together shall constitute one instrument, and shall bind and
inure to the benefit of the parties hereto and their respective successors and
assigns, including as such successors and assigns all holders of any Credit
Obligations. This Agreement shall be governed by and construed in accordance
with the laws (other than the conflict of laws rules) of The Commonwealth of
Massachusetts.
[This space intentionally left blank.]
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<PAGE> 166
Each of the undersigned has caused this Agreement to be executed and
delivered by its duly authorized officer as an agreement under seal as of the
date first above written.
GREAT AMERICAN HOLDING CORPORATION
By:
---------------------------------------------
Vice President & Treasurer
BANK OF AMERICA ILLINOIS, in its
individual capacity and as
Collateral Agent and as Managing
Agent
By:
---------------------------------------------
Managing Director
231 LaSalle Street
9Q
Chicago, Illinois 60697
Telecopy: (312) 987-0303
THE FIRST NATIONAL BANK OF BOSTON,
in its indivi capacity and
as Administrative Agent and as
Managing Agent
By:
---------------------------------------------
Managing Director
Media and Communications Division
Mail Stop 01-08-08
100 Federal Street
Boston, Massachusetts 02110
Telecopy: (617) 434-3401
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<PAGE> 167
RIGGS NATIONAL BANK
By:
---------------------------------------------
Title:
Corporate Banking Group
808 17th Street, N.W.
10th Floor
Washington, D.C. 20006
Telecopy: (202) 835-5977
THE BANK OF NEW YORK
By:
---------------------------------------------
Title:
One Wall Street
New York, New York 10286
Telecopy: (212) 809-9520
NATIONSBANK, N.A.
By:
---------------------------------------------
Title:
600 Peachtree Street
Atlanta, Georgia 30308
Telecopy: (404) 607-6318
CREDIT LYONNAIS CAYMAN ISLAND BRANCH
By:
---------------------------------------------
Title:
c/o Credit Lyonnais
New York Branch
-13-
<PAGE> 168
Credit Lyonnais Building
1301 Avenue of the Americas
New York, New York 10019
Telecopy: (212) 459-3176
THE CHASE MANHATTAN BANK
By:
---------------------------------------------
Title:
Insurance Corporate
Finance Division
One Chase Manhattan Plaza
New York, New York 10081
Telecopy: (212) 552-1999
STAR BANK, N.A.
By:
---------------------------------------------
Title:
425 Walnut Street
Cincinnati, Ohio 45201-1038
Telecopy: (513) 632-2068
BANK OF TOKYO-MITSUBISHI TRUST COMPANY
By:
---------------------------------------------
Title: Assistant Vice President
1251 Avenue of the Americas
New York, New York 10020-1106
Telecopy: (212) 782-4935
KEYBANK NATIONAL ASSOCIATION
-14-
<PAGE> 169
By:
---------------------------------------------
Title:
525 Vine Street
Cincinnati, Ohio 45202
Telecopy: (513) 762-8222
BANK ONE, COLUMBUS, NA
By:
---------------------------------------------
Title:
Bank One Towers
8044 Montgomery Road
Cincinnati, Ohio 45326-5800
Telecopy: (513) 985-5030
-15-
