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Exhibit 10.1
8.14.00
CREDIT AGREEMENT, dated as of August 14, 2000, by and among ALLEGHANY
UNDERWRITING LTD, an English company, as an Account Party, ALLEGHANY
UNDERWRITING CAPITAL LTD, an English company, TALBOT UNDERWRITING LIMITED, an
English company, and ALLEGHANY UNDERWRITING CAPITAL (BERMUDA) LTD., a Bermuda
exempted limited liability company, as Borrowers and Account Parties; ALLEGHANY
CORPORATION, a Delaware corporation, as Guarantor; the Banks (as defined further
below) parties hereto from time to time; MELLON BANK, N.A., a national banking
association, as Issuing Bank, as Administrative Agent for the Banks and for the
Issuing Bank hereunder, and as Arranger; NATIONAL WESTMINSTER BANK plc, as
Syndication Agent and ING Bank, N.V., London Branch, as Managing Agent.
PRELIMINARY STATEMENT
WHEREAS, the Banks have agreed to extend credit to the Credit Parties
upon all of the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of their mutual agreements hereinafter
set forth and intending to be legally bound hereby, the Account Parties, the
Borrowers, the Guarantor, the Agent, the Issuing Bank, the Arranger and each
Bank agree as follows.
ARTICLE I
DEFINITIONS; CONSTRUCTION
1.01. Certain Definitions. In addition to other words and terms defined
elsewhere in this Agreement, as used herein the following words and terms shall
have the following meanings, respectively, unless the context hereof otherwise
clearly requires:
"AAM" means Alleghany Asset Management, Inc., a Delaware corporation.
"Account Parties" shall mean AUL, AUCL, Talbot and AUC(B)L, and any
Other Account Parties, together with their respective successors as permitted by
this Agreement, and "Account Party" shall mean one of them.
"Account Party Members" shall mean the Account Parties other than AUL.
"Account Party Accession Instrument" shall mean an Account Party
Accession Instrument in the form attached hereto as Exhibit G, as amended,
modified or supplemented from time to time.
"Additional Amount" shall have the meaning assigned to that term in
Section 2.13(a) hereof.
"Administrative Agent" shall mean Mellon, in its capacity as
Administrative Agent for the Banks and the Issuing Bank hereunder, together with
its successors and assigns in such capacity.
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"Affected Bank" shall have the meaning assigned to that term in Section
2.12 hereof.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. For the
purposes of this Agreement, a Person shall be deemed to control another Person
if the controlling Person owns 10% or more of any class of voting securities (or
other ownership interests) of the controlled Person or possesses, directly or
indirectly, the power to direct or cause the direction of the management or
policies of the controlled Person, whether through ownership of stock, by
contract or otherwise.
"Agents" shall mean, collectively, the Administrative Agent and any
other agent for the Bank Parties appointed hereunder and "Agent" shall mean one
of them. If there is no agent for the Bank Parties other than the Administrative
Agent, references herein to "Agents", "each Agent", "an Agent" and the like
shall be references to the Administrative Agent.
"Aggregate Letter of Credit Undrawn Availability" at any time shall
mean the aggregate amount of the Letter of Credit Undrawn Availability for all
Letters of Credit at such time.
"Aggregate Letter of Credit Unreimbursed Draws" at any time shall mean
the aggregate amount of Letter of Credit Unreimbursed Draws for all Letters of
Credit at such time.
"Agreement" shall mean this Agreement as amended, modified or
supplemented from time to time.
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect in the United States from time to time, applied in a
manner consistent with those used in preparing the financial statements referred
to in Section 4.05.
"Alleghany", "Guarantor" or "Pledgor" means Alleghany Corporation, a
Delaware corporation.
"Annual Statement" means the annual financial statement of each
syndicate managed by any AUHL Entity required to be filed with Lloyd's or, if
applicable, the insurance commissioner (or similar authority) of its
jurisdiction of incorporation, which statement shall be in the form required by
Lloyd's or such AUHL Entity's jurisdiction of incorporation or, if no specific
form is so required, in the form of financial statements permitted by Lloyd's or
such insurance commissioner (or such similar authority) to be used for filing
annual financial statements and shall contain the type of information permitted
by Lloyd's or such insurance commissioner (or such similar authority) to be
disclosed therein, together with all exhibits or schedules filed therewith.
"Applicable Margin" shall mean 0.75% for each Level One Day, 0.875% for
each Level Two Day, 1.00% for each Level Three Day and 1.125% for each Level
Four Day.
"Applicable Reimbursement Interest Rate" as used herein with respect to
Letters of Credit, (i) with respect to obligations denominated in Dollars, shall
mean the Prime Rate and (ii) with respect to obligations denominated in Pounds,
shall mean 0.5% per annum in excess of the seven-day rate appearing on the
Telerate Screen page 3750 or any equivalent successor to such page or other page
as appropriate on the Telerate Service or such other service as may, from time
to time, display the British Bankers' Association Interest Settlement Rate for
deposits in Pounds and (iii) with respect to obligations denominated in Euros,
shall mean 0.5% per annum in excess of the seven-day rate appearing on the
Telerate Screen page 3750 or any equivalent successor to such page or other page
as appropriate on the Telerate Service or such other service as may, from time
to time, display such Settlement Rate for deposits in Euros.
"Arranger" shall mean Mellon Bank, N. A., in its capacity as Arranger
hereunder.
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"AUC(B)L" means Alleghany Underwriting Capital (Bermuda) Ltd., a
Bermuda exempted limited liability company.
"AUCL" means Alleghany Underwriting Capital Ltd, an English company.
"AUHL Entities" means, collectively, AUL, AUCL, Talbot and AUC(B)L,
together with each permitted successor thereto which does not engage in any
business other than the businesses engaged in by the AUHL Entities on the date
of this Agreement.
"AUL" means Alleghany Underwriting Ltd, an English company which, on
the date hereof, is the managing agent for Lloyd's syndicates 376, 1183, 2376
and 1207.
"Bank Parties" shall mean the Banks, the Issuing Bank and the Agents.
"Banks" shall mean the parties listed on the signature pages hereof,
subject to the provisions of Section 10.13 hereof pertaining to Persons becoming
or ceasing to be Banks, and "Bank" shall mean any of them.
"Base Rate" shall have the meaning assigned to that term in Section
3.03(a)(i) hereof.
"Base Rate Loan" shall mean a Loan with respect to which a Borrower has
selected the Base Rate Option.
"Base Rate Option" shall have the meaning assigned to that term in
Section 3.03(a)(i) hereof.
"Base Rate Portion" of any Loan or Loans shall mean at any time the
portion, including the whole of such Loan or Loans bearing interest at any time
under the Base Rate Option. If no Loan or Loans is specified, "Base Rate
Portion" shall refer to the Base Rate Portion of all Loans outstanding at such
time.
"Business Day" shall mean any day other than a Saturday, Sunday, public
holiday under the laws of the Commonwealth of Pennsylvania or other day on which
banking institutions are authorized or obligated to close in Pittsburgh,
Pennsylvania or London, England and, in the case of the making or payment of
loans or reimbursement obligations denominated in Euros, other than a day which
is not a TARGET Day.
"Borrowers" shall mean AUCL, Talbot and AUC(B)L and any other entity
which becomes a borrower hereunder with the consent of all the Banks, together
with their respective successors as permitted by this Agreement and "Borrower"
shall mean one of them.
"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Cash Equivalents" means Investments maturing within one year from the
date of investment (excluding (x) Investments as to which the principal amount
to be repaid may be subject to fluctuation and (y) mortgage backed securities
consisting of principal only or interest only strips) in (a) certificates of
deposit, Eurodollar time deposits and other interest bearing deposits or
accounts with United States commercial banks having a combined capital and
surplus of at least $500,000,000 and rated C or better by Thomson BankWatch or
with any Bank, (b) certificates of deposit, other interest bearing accounts or
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deposits and demand deposits with other United States commercial banks, which
deposits and accounts are in amounts fully insured by the Federal Deposit
Insurance Corporation, (c) obligations issued or unconditionally guaranteed by
the United States government or issued by an agency thereof and backed by the
full faith and credit of the United States, (d) direct obligations issued by any
state of the United States or any political subdivision thereof which have the
highest rating obtainable from Standard & Poor's on the date of investment, (e)
commercial paper rated A-1 or better by Standard & Poor's and P-1 or better by
Moody's or (f) money market mutual funds identified by the valuation office of
the NAIC as requiring no investment reserve.
"Change in Control" shall mean (a) that any Credit Party (other than
Alleghany) or (unless and until a Substitution of Eligible Substitute Collateral
shall have occurred) AAM shall cease to be a Wholly-Owned Subsidiary of
Alleghany or (b) that a Person or Persons acting in concert (other than Allan P.
Kirby, Jr. and F. M. Kirby and their families) acquire beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange Commission
under the Securities Exchange Act of 1934) of 20% or more of the outstanding
voting stock of Alleghany.
"Closing Date" shall mean August 21, 2000 or such later date as may be
specified by Alleghany by one day's written notice to the Administrative Agent.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Collateral" shall have the meaning assigned to that term in the Pledge
Agreement.
"Committed Amount" shall have the meaning assigned to that term in
Section 2.01(a) hereof.
"Commitment Banks" shall have the meaning assigned to that term in
Section 2.15 hereof.
"Commitment Fee" shall have the meaning assigned to that term in
Section 2.02(a) hereof.
"Commitment Percentage" for each Bank shall mean a fraction, expressed
as a percentage, the numerator of which is such Bank's Committed Amount and the
denominator of which is the aggregate Committed Amounts of all the Banks.
"Consolidated" or "consolidated", when used in connection with any
calculation, means a calculation to be determined on a consolidated basis for a
Credit Party or Alleghany, as the case may be, and its Subsidiaries in
accordance with Agreement Accounting Principles.
"Consolidated Person" means, for the taxable year of reference of
Alleghany, each Person which has joined or which is required to join in the
filing of a consolidated federal income tax return with Alleghany.
"Consolidated Subsidiaries" of a Person shall mean those Subsidiaries
of such Person the accounts of which are consolidated with the accounts of such
Person in accordance with generally accepted accounting principles in effect in
the United States.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement or take-or-pay contract.
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"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with Alleghany or any of its Subsidiaries, are
treated as a single employer under Section 414 of the Code.
"Continuing Letter of Credit Agreement" shall mean, collectively, one
or more letter of credit agreements executed and delivered by the Account
Parties substantially in the form of Exhibit A hereto.
"Covered Subsidiary" shall mean AAM, each Subsidiary of AAM, Alleghany
Underwriting Holdings Ltd., each of the AUHL Entities and each Subsidiary of any
of the AUHL Entities or of Alleghany Underwriting Holdings Ltd.; provided,
however, that from and after the occurrence of a Substitution of Eligible
Substitute Collateral the term "Covered Subsidiary" shall mean Alleghany
Underwriting Holdings Ltd., each of the AUHL Entities and each Subsidiary of any
of the AUHL Entities or of Alleghany Underwriting Holdings Ltd.
"Conversion to Tranche System" shall have the meaning assigned to that
term in Section 2.15 hereof.
"Corresponding Source of Funds" shall mean in the case of any Funding
Segment of the Euro-Rate Portion, the proceeds of hypothetical receipts by a
Notional Euro-Rate Funding Office or by a Bank through a Notional Euro-Rate
Funding Office of one or more deposits in Pounds or Euros, as applicable, in the
London interbank market at the beginning of the Euro-Rate Funding Period
corresponding to such Funding Segment having maturities approximately equal to
such Euro-Rate Funding Period and in an aggregate amount approximately equal to
such Bank's pro rata share of such Funding Segment.
"Credit Extension" shall mean (a) the making of any Loan by any Bank or
(b) the issuance, or extension of the expiration date of, any Letter of Credit
by the Issuing Bank or (c) the Existing Letters of Credit becoming Letters of
Credit hereunder on the Closing Date.
"Credit Parties" means the Account Parties, the Borrowers and the
Guarantor, and "Credit Party" means any of them.
"Current Expiration Date" shall have the meaning assigned to that term
in Section 2.14 hereof.
"Deemed AAM Wholly-Owned Subsidiary" shall have the meaning assigned to
that term in Section 6.11(c) hereof.
"Default" and "Event of Default" shall have the same meaning and shall
mean an event or condition described in Article VII hereof.
"Designated Pledged Shares" shall have the meaning assigned to that
term in the Pledge Agreement.
"Dollar," "Dollars" and the symbol $ shall mean lawful money of the
United States of America.
"Dollar Equivalent" of an amount of a currency other than Dollars shall
mean the amount of Dollars which such amount of such currency could purchase at
11:00 o'clock A.M., Pittsburgh time on the date of determination, based upon the
quoted spot rates of the Issuing Bank at which its applicable branch or office
offers to exchange Dollars for such currency in the London foreign exchange
market and "Dollar Equivalent" of an amount denominated in Dollars shall mean
such amount of Dollars. Section 3.10 hereof contains certain provisions with
respect to calculation of Dollar Equivalent.
"Domestic Office" when used in connection with the Administrative
Agent, shall mean its office located at One Mellon Center, Pittsburgh,
Pennsylvania 15258, or such other address of the
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Administrative Agent or branch, subsidiary or affiliate thereof as may be
designated in writing from time to time by the Administrative Agent to the
Account Parties and the Borrowers.
"Eligible Substitute Collateral" shall mean either (a) one or more of
the following: (i) a letter of credit issued by a financial institution having a
senior unsecured long-term debt rating of not less than A by Standard & Poors
and not less than A2 by Moody's which letter of credit is in a form reasonably
satisfactory to the Required Banks and which in any event provides for drawings
thereunder solely upon certification by the Agent that an Event of Default has
occurred hereunder; (ii) cash (including credit balances treated as cash) and
interests in the Dreyfus Treasury Prime Cash Management Fund or similar money
market fund satisfactory to the Agent; and (iii) direct claims (including
securities, loans and leases) on, and the portions of claims that are directly
and unconditionally guaranteed by, the United States or any U.S. Government
Agency, as such terms are used in Appendix A, Section III(C), Category 1 to
Regulation H, as promulgated by the Board of Governors of the Federal Reserve
System, including, without limitation, the claims listed on Exhibit I hereto,
but only so long as such securities or obligations have a zero percent risk
capital weighting under such Regulation H, as amended from time to time or (b)
if the Required Banks approve in their sole discretion, common shares registered
with the Securities and Exchange Commission of a publicly traded financial
institution (other than any Bank which is a party to this Agreement), which
financial institution has a senior unsecured public debt rating of at least A
from Standard & Poors or at least A2 from Moody's, which shares constitute less
than 10% of all the publicly traded outstanding shares of such financial
institution.
"Environmental Laws" shall have the meaning ascribed to that term in
Section 4.13 hereof.
"Environmental Permits" shall have the meaning ascribed to that term in
Section 4.13 hereof.
"Euro", "Euros" and "EU" shall mean the lawful currency of the
participating member states of the European Union that adopt a single currency
in accordance with the Treaty establishing the European Communities, as amended
by the Treaty on European Union.
"Euro-Rate" shall have the meaning assigned to that term in Section
3.03(a) hereof.
"Euro-Rate Funding Period" shall have the meaning assigned to that term
in Section 3.03(c) hereof.
"Euro-Rate Loan" shall mean a Loan with respect to which a Borrower has
selected the Euro-Rate Option.
"Euro-Rate Option" shall have the meaning assigned to that term in
Section 3.03(a) hereof.
"Euro-Rate Portion" of any Loan or Loans shall mean at any time the
portion, including the whole, of such Loan or Loans bearing interest at any time
under the Euro-Rate Option. If no Loan or Loans is specified, "Euro-Rate
Portion" shall refer to the Euro-Rate Portion of all Loans outstanding at such
time.
"Euro-Rate Reserve Percentage" shall have the meaning set forth in
Section 3.03(a) hereof.
"Existing Letters of Credit" shall mean the letters of credit listed on
Exhibit E hereto.
"Expiration Date" shall mean November 1, 2001, as the same may be
extended in accordance with Section 2.14 hereof.
"Extension Request" shall have the meaning set forth in Section 2.14
hereof.
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"Federal Funds Effective Rate" for any day shall mean the rate per
annum (rounded upward to the nearest 1/100 of 1%) announced by the Federal
Reserve Bank of New York (or any successor) on such day as being the weighted
average of the rates on overnight Federal funds transactions arranged by Federal
funds brokers on the previous trading day, as computed and announced by such
Federal Reserve Bank (or any successor) in substantially the same manner as such
Federal Reserve Bank computes and announces the weighted average it refers to as
the "Federal Funds Effective Rate" as of the date of this Agreement; provided,
that if such Federal Reserve Bank (or its successor) does not announce such rate
on any day, the "Federal Funds Effective Rate" for such day shall be the Federal
Funds Effective Rate for the last day on which such rate was announced.
"Financial Statements" shall have the meaning set forth in Section 4.05
hereof.
"Fiscal Year" means the twelve-month accounting period ending December
31 of each year.
"Funding Segment" of the Euro-Rate Portion of the Loans at any time
shall mean the entire principal amount of such Portion to which at the time in
question there is applicable a particular Euro-Rate Funding Period beginning on
a particular day and ending on a particular day. (By definition, each such
Portion is at all times composed of an integral number of discrete Funding
Segments and the sum of the principal amounts of all Funding Segments of any
such Portion at any time equals the principal amount of such Portion at such
time.)
"Governmental Authority" shall mean any government (foreign or
domestic) or any state or other political subdivision thereof or any
governmental body, agency, authority, department or commission (including
without limitation any board of insurance, insurance department or insurance
commissioner or any taxing authority or political subdivision) or any
instrumentality or officer thereof (including without limitation any court or
tribunal) exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government and any corporation,
partnership or other entity directly or indirectly owned or controlled by or
subject to the control of any of the foregoing.
"Guaranteed Obligations" shall have the meaning assigned to that term
in Section 9.01 hereof.
"Guarantor" shall mean Alleghany, together with its successors as
permitted by this Agreement.
"Hazardous Materials" shall have the meaning ascribed thereto in
Section 4.13.
"Indebtedness" of a Person means such Person's (a) obligations for
borrowed money, (b) obligations representing the deferred purchase price of
Property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (c)
obligations, whether or not assumed, secured by Liens or payable out of the
proceeds or production from Property now or hereafter owned or acquired by such
Person, (d) obligations which are evidenced by notes, acceptances, or similar
instruments, (e) capitalized lease obligations, (f) Rate Hedging Obligations,
(g) Contingent Obligations, (h) obligations for which such Person is obligated
(contingently, including with respect to undrawn amounts of issued letters of
credit, or otherwise) pursuant to or in respect of a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable
and (i) repurchase obligations or liabilities of such Person with respect to
accounts or notes receivable sold by such Person.
"Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in the
trade), deposit account or contribution of capital by such Person to any other
Person or any investment in, or purchase or other acquisition, of the stock,
partnership interests, notes, debentures or other securities of any other Person
made by such Person.
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"Issuing Bank" shall mean Mellon, in its capacity as Issuing Bank
hereunder, together with its successors and assigns in such capacity.
"Law" shall mean any law (including common law), constitution, statute,
treaty, regulation, rule, ordinance, order, injunction, writ, decree or award of
any Official Body.
"L/C Termination Date" shall have the meaning assigned to that term in
Section 2.15 hereof.
"Letter of Credit" shall mean each Letter of Credit issued by the
Issuing Bank for the account of one or more of the Account Parties pursuant to
this Agreement and each of the Existing Letters of Credit, each as amended,
modified or supplemented from time to time.
"Letter of Credit Application" shall have the meaning given that term
in Section 2.03(a)(ii) hereof.
"Letter of Credit Exposure" at any time shall mean the sum at such time
of (a) the Aggregate Letter of Credit Unreimbursed Draws (determined as a Dollar
Equivalent), (b) the Aggregate Letter of Credit Undrawn Availability and (c) the
aggregate Stated Amount (determined as a Dollar Equivalent) of Letters of Credit
which have been requested by an Account Party to be issued hereunder but are not
yet so issued.
"Letter of Credit Fee" shall have the meaning given that term in
Section 2.01(d) hereof.
"Letter of Credit Participating Interest" shall have the meaning given
that term in Section 2.04(a) hereof.
"Letter of Credit Participating Interest Commitment" shall have the
meaning given that term in Section 2.04(a) hereof.
"Letter of Credit Participating Interest Commitment Percentage" of any
Bank shall mean the Commitment Percentage of such Bank.
"Letter of Credit Reimbursement Obligation" with respect to a Letter of
Credit means the obligation of the applicable Account Party to reimburse the
Issuing Bank for drawings on a Letter of Credit, together with interest thereon,
and "Letter of Credit Reimbursement Obligations" shall mean all such obligations
with respect to all Letters of Credit.
"Letter of Credit Undrawn Availability" with respect to a Letter of
Credit at any time shall mean the maximum amount (determined as a Dollar
Equivalent) available to be drawn under such Letter of Credit at such time or
thereafter, regardless of the existence or satisfaction of any conditions or
limitations on drawing.
"Letter of Credit Unreimbursed Draw" with respect to a Letter of Credit
at any time shall mean the amount at such time of a payment made by the Issuing
Bank under such Letter of Credit, to the extent not repaid.
"Level One Day" shall mean each day on which Alleghany has at least one
Tier I Rating and no rating below a Tier II Rating; "Level Two Day" shall mean
each day (which is not a Level One Day) on which Alleghany has at least one
rating which is a Tier II Rating or a Tier I Rating, and no rating below a Tier
III Rating; "Level Three Day" shall mean each day (which is not a Level Two Day
or a Level One Day) on which Alleghany has at least one Tier III Rating and no
rating below a Tier IV Rating; "Level Four Day" shall mean each day which is not
a Level Three Day, a Level Two Day or a Level One Day.
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"Leverage Ratio" means, with respect to Alleghany on a consolidated
basis with its Subsidiaries, at any time, the ratio of (a) Indebtedness to (b)
the sum of Indebtedness plus Net Worth. For the purpose of determining this
ratio, Contingent Obligations shall be excluded from Indebtedness to the extent
that they relate to underlying obligations which are included in Indebtedness
with respect to Alleghany on a consolidated basis with its Subsidiaries.
"License" means any license, certificate of authority, permit or other
authorization which is required to be obtained from any Governmental Authority
in connection with the operation, ownership or transaction of insurance
business.
"Lien" means any security interest, lien (statutory or other),
mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance or
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including, without limitation, the interest of a
vendor or lessor under any conditional sale, capitalized lease or other title
retention agreement).
"Lloyd's" means the Society of Lloyd's and, as the context requires,
the Council of Lloyd's.
"Loan" shall have the meaning assigned to that term in Section 3.01(a)
hereof.
"Loan Repayment Obligation" with respect to a Loan means the obligation
of a Borrower to repay the Banks for such Loan, and "Loan Repayment Obligations"
shall mean all such obligations with respect to all Loans.
"London Office" when used in connection with the Administrative Agent,
shall mean its office located at Princess House, One Suffolk Lane, London EC4R
OAN England, or such other address of the Administrative Agent or branch,
subsidiary or affiliate thereof as may be designated in writing from time to
time by the Administrative Agent to the Account Parties and the Borrowers.
"Managing Agent" shall mean ING Bank, N.V., London Branch.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the Collateral, (b) the business, Property, condition (financial or other),
performance or operations of, respectively, the AUHL Entities, taken as a whole,
Alleghany and its Subsidiaries, taken as a whole, or, until the occurrence of a
Substitution of Eligible Substitute Collateral, AAM and its Subsidiaries, taken
as a whole, (c) the ability of any Credit Party to perform its obligations under
the Transaction Documents, or (d) the validity or enforceability of any of the
Transaction Documents or the rights or remedies of the Agents, the Issuing Bank
or the Banks thereunder.
"Maturity Date" shall have the meaning set forth in Section 3.01(d).
"Mellon" shall mean Mellon Bank, N. A.
"Moody's" means Moody's Investors Service, Inc., a Delaware
corporation, together with any Person succeeding thereto by merger,
consolidation or acquisition of all or substantially all of its assets,
including substantially all of its business of rating securities.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement which is subject to Title IV of ERISA to which Alleghany or
any member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
"Multi-year Letter of Credit" means a Letter of Credit of which the
expiry date is more than one year after the date of issuance.
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"Net Worth" means at any date the stockholders' equity of Alleghany and
its Subsidiaries determined on a consolidated basis in accordance with Agreement
Accounting Principles.
"Nonextending Bank" shall have the meaning assigned to that term in
Section 2.14 hereof.
"Note" shall have the meaning assigned to that term in Section 3.01(c)
hereof.
"Notional Euro-Rate Funding Office" shall have the meaning given to
that term in Section 3.12(a) hereof.
"Obligations" shall mean, collectively, the Letter of Credit
Reimbursement Obligations, the Loan Repayment Obligations and the obligations of
each and every Account Party, Borrower, Guarantor and Pledgor to pay all fees,
indemnities and all other liabilities of such Account Party, Borrower, Guarantor
or Pledgor arising pursuant to the terms of this Agreement or the other
Transaction Documents, as the case may be (including without limitation under
Section 7.03 hereof).
"Official Body" shall have the same meaning as Governmental Authority.
"Option" shall mean the Base Rate Option or the Euro-Rate Option, as
the case may be.
"Other Account Parties" means each Wholly-Owned Subsidiary of Alleghany
which has become a party to this Agreement by the execution and delivery by such
Wholly-Owned Subsidiary and Alleghany, in its capacity as Pledgor, to the
Administrative Agent of an Account Party Accession Instrument and the other
documentation referred to in such Account Party Accession Instrument.
"Participant" has the meaning assigned to that term in Section 10.13(b)
hereof.
"PBGC" means the Pension Benefit Guaranty Corporation or any other
governmental instrumentality succeeding to the functions thereof.
"Person" shall mean an individual, corporation, partnership, trust,
unincorporated association, joint venture, joint-stock company, government
(including political subdivisions), official body or agency, or any other
entity.
"Plan" means an employee pension benefit plan as defined in Section
3(2) of ERISA, as to which Alleghany or any member of the Controlled Group may
have any liability.
"Pledge Agreement" shall mean the Pledge Agreement, dated as of even or
substantially even date herewith, between the Administrative Agent and
Alleghany.
"Portion" shall mean the Base Rate Portion or the Euro-Rate Portion, as
the case may be.
"Potential Default" shall mean any event or condition referenced in
Article VII hereof which with notice, passage of time or both would constitute
an Event of Default.
"Pound," "Pounds" and the symbol "pound sterling" shall mean the lawful
money of the United Kingdom.
"Prime Rate" shall mean the interest rate per annum announced from time
to time by the Administrative Agent as its prime rate, such rate to change
automatically effective as of the effectiveness of each announced change in such
prime rate (it being understood that such Prime Rate may be greater or less than
other interest rates charged by the Administrative Agent to other borrowers and
is not solely based or dependent upon the interest rate which the Administrative
Agent may charge any particular borrower or class of borrower).
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"Property" of a Person means any and all property, whether real,
personal, tangible, intangible or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Pro Rata" shall have the meaning assigned to that term in Section 2.15
hereof.
"Purchasing Bank" shall have the meaning assigned to that term in
Section 10.13(c) hereof.
"Rate Hedging Obligations" of a Person means any and all obligations of
such Person, whether absolute or contingent and however and whenever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (a) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, and (b) any and all
cancellations, buybacks, reversals, terminations or assignments of any of the
foregoing.
"Regular Payment Date" shall mean the last day of each March, June,
September and December after the date hereof, or, if such last day is not a
Business Day, the next succeeding Business Day.
"Regulation T" means Regulation T of the Board of Governors of the
Federal Reserve System as from time to time in effect and shall include any
successor or other regulation or official interpretation of such Board of
Governors relating to the extension of credit by securities brokers and dealers
for the purpose of purchasing or carrying margin stocks applicable to such
Persons.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to such Persons.
"Regulation X" means Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and shall include any
successor or other regulation or official interpretation of said Board of
Governors relating to the extension of credit by the specified Banks for the
purpose of purchasing or carrying margin stocks applicable to such Persons.
"Release" is defined in the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C. 39601 et seq.
"Replacement Bank" shall have the meaning assigned to that term in
Section 2.14 hereof.
"Reportable Event" means a reportable event as defined in Section
4043(a) of ERISA and the regulations issued under such section, with respect to
a Plan, excluding, however, such events as to which the PBGC has by regulation
unconditionally or conditionally waived the requirement of Section 4043(a) of
ERISA that it be notified within 30 days of the occurrence of such event;
provided, that a failure to meet the minimum funding standard of Section 412 of
the Code and of Section 302 of ERISA shall be a Reportable Event regardless of
the issuance of any such waiver of the notice requirement in accordance with
either Section 4043(a) of ERISA or Section 412(d) of the Code.
"Required Banks" shall mean at any time Banks which have at least 51%
of the aggregate Committed Amounts of the Banks outstanding at such time or, if
the commitments of the Banks hereunder shall have terminated, which have at
least 51% of the aggregate Total Credit Exposure of all of the Banks at such
time.
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"Required Commitment Banks" shall have the meaning assigned to that
term in Section 2.15 hereof.
"Revolving Credit Commitment" shall have the meaning assigned to that
term in Section 3.01(a) hereof.
"Revolving Credit Exposure" of any Bank at any time shall mean the
outstanding principal amount at such time of such Bank's Loans.
"SAP" shall mean, with respect to any AUHL Entity (other than AUL) and
any syndicate managed by any AUHL Entity, the syndicate accounting practices
prescribed or permitted by the insurance commissioner (or other similar
authority, including Lloyd's) in the jurisdiction of such AUHL Entity or
syndicate, as the case may be, for the preparation of annual statements and
other financial reports by insurance companies or syndicates of the same type as
such AUHL Entity or syndicate in effect from time to time, applied in a manner
consistent with those used in preparing the respective financial statements
referred to in Section 4.05 and shall mean, with respect to AUL, the accounting
principles and practices prescribed or permitted by the Companies Act 1985, as
amended, in effect from time to time, applied in a manner consistent with those
used in preparing the respective financial statements referred to in Section
4.05.
"Single Employer Plan" means a Plan subject to Title IV of ERISA
maintained by any member of the Controlled Group for employees of any member of
the Controlled Group, other than a Multiemployer Plan.
"Solvent" means, when used with respect to a Person, that (a) the fair
saleable value of the assets of such Person is in excess of the total amount of
the present value of its liabilities (including for purposes of this definition
all liabilities (including loss reserves as determined by such Person), whether
or not reflected on a balance sheet prepared in accordance with Agreement
Accounting Principles and whether direct or indirect, fixed or contingent,
secured or unsecured, disputed or undisputed), (b) such Person is able to pay
its debts or obligations in the ordinary course as they mature and (c) such
Person does not have unreasonably small capital to carry on its business as
conducted and as proposed to be conducted. "Solvency" shall have a correlative
meaning.
"Special Expiration Date" has the meaning assigned to that term in
Section 2.15 hereof.
"Standard Notice" shall mean an irrevocable notice provided to the
Administrative Agent at no later than 10:00 o'clock a.m., Pittsburgh time, on a
Business Day which is
(a) not later than the same day in the case of selection of,
conversion to or renewal of the Base Rate Option and not later than one
day in advance with respect to prepayment of a Base Rate Loan; and
(b) at least three Business Days in advance in the case of
selection of, conversion to or renewal of the Euro-Rate Option or
prepayment of a Euro-Rate Loan.
Standard Notice shall be in writing (including telex, facsimile or cable
communication) or by telephone (to be subsequently confirmed in writing) in any
such case, effective upon receipt by the Administrative Agent.
"Stated Amount" shall mean, with respect to a Letter of Credit, the
maximum face or stated amount of such Letter of Credit, irrespective of whether
such maximum amount is available for drawing at the time in question.
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"Subsidiary" of a Person means (a) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or (b) any
partnership, association, joint venture or similar business organization more
than 50% of the ownership interests having ordinary voting power of which shall
at the time be so owned or controlled.
"Substantial Portion" means, with respect to Property of each of the
AUHL Entities, to Property of Alleghany and to Property of AAM or any of AAM's
Subsidiaries, as the case may be, Property which (a) represents more than 10% of
the consolidated assets of the AUHL Entities, taken as a whole, or of Alleghany
and its Subsidiaries, taken as a whole, or of AAM and its Subsidiaries, taken as
a whole, as the case may be, or (b) is responsible for more than 10% of the
consolidated net revenues or net income of the AUHL Entities, taken as a whole,
or of Alleghany and its Subsidiaries, taken as a whole, or of AAM and its
Subsidiaries, taken as a whole, as the case may be, in each case for the
12-month period ending as of the end of the fiscal quarter immediately preceding
the date of determination.
"Substitution of Eligible Substitute Collateral" shall mean the
substitution, as Collateral, for the Designated Pledged Shares of Eligible
Substitute Collateral pursuant to amendments to the Pledge Agreement and to this
Agreement reasonably satisfactory to the Required Banks (which amendments, in
the case of Eligible Substitute Collateral other than certificated securities,
shall be accompanied by a control agreement and a custody agreement reasonably
satisfactory to the Required Banks and which amendments in any event shall be
accompanied by customary opinions and ancillary documentation reasonably
satisfactory to the Required Banks), which amendments shall in any event provide
that, in the case of Eligible Substitute Collateral under clause (a) of the
definition thereof, the aggregate stated amount available to be drawn (with
respect to a letter of credit), the face amount (with respect to cash) and the
market value (with respect to securities) shall be, and shall be maintained at a
level, expressed as a Dollar Equivalent, equal to or greater than 111% of the
greater of the aggregate Committed Amounts and the Total Credit Exposure of the
Banks hereunder and that, in the case of Eligible Substitute Collateral under
clause (b) of the definition thereof the market value thereof (expressed as a
Dollar Equivalent) shall initially be at least 150% of the greater of the
aggregate Committed Amounts and the Total Credit Exposure of the Banks hereunder
and shall thereafter be maintained at a level equal to or greater than 130% of
the greater of the aggregate Committed Amounts and the Total Credit Exposure of
the Banks hereunder.
"Supplement to Tranche System" shall have the meaning assigned to that
term in Section 2.15 hereof.
"Syndication Agent" shall mean National Westminster Bank plc.
"Talbot" means Talbot Underwriting Limited, an English company.
"Tangible Net Worth" means, at any time, Net Worth at such time minus
the amount of Intangible Assets of Alleghany and its Subsidiaries at such time.
For purposes of this definition, "Intangible Assets" means the amount (to the
extent reflected in determining such Net Worth) of (i) all writeups (other than
writeups resulting from foreign currency translations) subsequent to June 30,
2000, in the book value of any asset (other than marketable securities) owned by
Alleghany or a Subsidiary, as applicable, and (ii) all unamortized debt discount
and expense, unamortized deferred charges, deferred acquisition costs, goodwill,
patents, trademarks, servicemarks, tradenames, anticipated future benefit of tax
loss carryforwards, copyrights, organization or developmental expenses and other
intangible assets; provided, however, that "Intangible Assets" shall not include
deferred acquisition costs of $74,305,000 existing as of June 30, 2000 but shall
include any and all deferred acquisition costs in excess of $74,305,000.
"TARGET" means the Trans-European Automated Real-Time Gross Settlement
Express Transfer payment system.
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"TARGET Day" shall mean any day on which TARGET is open for the
settlement of payment in Euros.
"Termination Event" means, with respect to a Plan which is subject to
Title IV of ERISA, (a) a Reportable Event, (b) the withdrawal of any member of
the Controlled Group from such Plan during a plan year in which such member of
the Controlled Group was a "substantial employer" as defined in Section
4001(a)(2) of ERISA or was deemed such under Section 4068(f) of ERISA, (c) the
termination of such Plan, the filing of a notice of intent to terminate such
Plan or the treatment of an amendment of such Plan as a termination under
Section 4041 of ERISA, (d) the institution by the PBGC of proceedings to
terminate such Plan or (e) any event or condition which could reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of or appointment of a trustee to administer, such Plan.
"Tier I Rating" with respect to Standard & Poor's shall mean a Rating
of at least A- and with respect to Moody's shall mean a Rating of at least A3;
"Tier II Rating" with respect to Standard & Poor's shall mean a Rating of BBB+
and with respect to Moody's shall mean a Rating of Baa1; "Tier III Rating" with
respect to Standard & Poor's shall mean a Rating of BBB and with respect to
Moody's shall mean a Rating of Baa2; "Tier IV Rating" with respect to Standard &
Poor's shall mean a Rating of BBB- and with respect to Moody's shall mean a
Rating of Baa3. "Rating" shall mean a senior unsecured issuer rating or, if
requested and received by Alleghany and if higher than such issuer rating, a
senior unsecured debt or bank loan rating.
"Total Credit Exposure" of any Bank at any time shall mean the sum at
such time of such Bank's Revolving Credit Exposure plus such Bank's Pro Rata
share of the Letter of Credit Exposure.
"Tranche 1 Bank", "Tranche 1 Letter of Credit", "Tranche 1 Letter of
Credit Participating Interest", "Tranche 2 Bank", "Tranche 2 Letter of Credit",
"Tranche 2 Letter of Credit Participating Interest", "Tranche 2 Letter of Credit
Participating Interest Commitment", "Tranche 2 Letter of Credit Participating
Interest Committed Amount", "Tranche 2 Letter of Credit Participating Interest
Commitment Percentage", "Tranche 3 Letter of Credit", "Tranche 4 Letter of
Credit" and "Tranche X" shall have the respective meanings assigned to those
terms in Section 2.15(a) or (b) hereof.
"Transaction Document" or "Transaction Documents" shall mean this
Agreement, the Pledge Agreement, the Continuing Letter of Credit Agreement, each
Letter of Credit Application, each Letter of Credit, each Note and any other
documents or instruments executed and delivered in connection herewith or
therewith.
"Unfunded Liabilities" means the amount (if any) by which the sum of
the Accumulated Benefit Obligations (as defined under SFAS No. 87) under all
Single Employer Plans exceeds the sum of the fair market value of all such Plan
assets allocable to such benefits, all determined as of the then most recent
measurement date for purposes of disclosure (as defined under SFAS No. 87) in
the annual audited consolidated financial statements of Alleghany.
"Unmatured Default" means an event or condition which but for the lapse
of time or the giving of notice, or both, would constitute a Default.
"Wholly-Owned Subsidiary" of a Person means (a) any Subsidiary all of
the outstanding voting securities of which shall at the time be owned or
controlled directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (b) any partnership, association, joint venture
or similar business organization 100% of the ownership interests having ordinary
voting power of which shall at the time be so owned or controlled.
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1.02. Construction. Unless the context of this Agreement otherwise
clearly requires, "or" has the inclusive meaning represented by the phrase
"and/or." References in this Agreement to "determination" by any Agent include
estimates by such Agent in good faith, without gross negligence and without
manifest error (in the case of quantitative determinations) and beliefs held by
such Agent in good faith and without gross negligence (in the case of
qualitative determinations). The words "hereof," "herein," "hereunder" and
similar terms in this Agreement refer to this Agreement as a whole and not to
any particular provision of this Agreement. The section and other headings
contained in this Agreement are for reference purposes only and shall not
control or affect the construction of this Agreement or the interpretation
hereof in any respect. Section, subsection and exhibit references are to this
Agreement unless otherwise specified.
1.03. Accounting Principles. Except as otherwise provided in this
Agreement, all computations and determinations as to accounting or financial
matters shall be made, and all financial statements to be delivered pursuant to
this Agreement shall be prepared, in accordance with Agreement Accounting
Principles or SAP, as the context requires (including principles of
consolidation where appropriate), and all accounting or financial terms shall
have the meanings ascribed to such terms by Agreement Accounting Principles or
SAP, as appropriate.
ARTICLE II
THE LETTER OF CREDIT FACILITY
2.01. Letters of Credit.
(a) Letter of Credit Commitments. Subject to the terms and conditions
and relying upon the representations and warranties herein set forth, the
Issuing Bank agrees to (i) allow the Existing Letters of Credit to become on the
Closing Date and thereafter be and be deemed to be Letters of Credit hereunder
and (ii) issue Letters of Credit for the account of an Account Party at any time
or from time to time on or after the date hereof and to but not including the
Expiration Date (it being understood that Letters of Credit may be outstanding
for the account of one or more of the Account Parties at any time). The Issuing
Bank shall have no obligation to issue any Letter of Credit if, after such
Letter of Credit were issued, the aggregate Total Credit Exposure of the Banks
upon such issuance would exceed the aggregate of the Banks' Committed Amounts
(which, on the Closing Date, is $325,000,000). Each Bank's "Committed Amount" at
any time shall be equal to the amount set forth as its "Initial Committed
Amount" below its name on the signature pages hereof, as such amount may have
been reduced under Section 2.02(b) hereof at such time, and subject to transfer
to another Bank as provided in Section 10.13 hereof. The Issuing Bank shall have
no obligation to issue any Multi-year Letter of Credit if the aggregate Stated
Amount of all Multi-year Letters of Credit upon such issuance would exceed
$275,000,000.
(b) Terms of Letters of Credit. The Account Parties shall not request
to be issued, and the Issuing Bank shall have no obligation to issue, any Letter
of Credit except within the following limitations: (i) each Letter of Credit
shall have an expiration date no later than five years after the date of
issuance thereof; provided, however, any Letter of Credit may have an
"evergreen" provision having substantially the effect set forth on Schedule
2.01(b) hereof, (ii) each Letter of Credit shall be denominated in Dollars,
Pounds or Euros and (iii) each Letter of Credit shall be payable only against
sight drafts (and not time drafts).
(c) Form of Letters of Credit. The Issuing Bank shall have no
obligation to issue any letter of credit which is unsatisfactory in form,
substance or beneficiary to the Issuing Bank in the exercise of its reasonable
judgment consistent with its customary practice (it being understood that the
standard form of letter of credit required by Lloyd's from time to time will be
found satisfactory by the Issuing Bank unless issuance of a letter of credit in
such form would violate Law). The Issuing Bank may not object to a letter of
credit on
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account of the fact that it may be presented for drawing at the Issuing Bank's
branch in London, England (or, if the Issuing Bank no longer maintains such a
branch at the time of issuance of a Letter of Credit, at such other location in
London, England as may be commercially reasonable).
(d) Letter of Credit Fee. Each Account Party shall pay or cause to be
paid to the Administrative Agent for the account of each Bank, in accordance
with its Commitment Percentage, a fee (the "Letter of Credit Fee") (based on a
year of 360 days and actual days elapsed), for each Letter of Credit issued for
the account of such Account Party for each day from and including the date of
issuance thereof to and including the date of expiration or termination thereof,
on the Letter of Credit Undrawn Availability on such day at a rate per annum
equal to 0.75% for each Level One Day, 0.875% for each Level Two Day, 1.00% for
each Level Three Day and 1.125% for each Level Four Day. Such Letter of Credit
Fee shall be due and payable for the preceding period for which such fee has not
been paid on each of the following dates: (i) each Regular Payment Date, (ii)
the date of each drawing on such Letter of Credit, and (iii) the date of
expiration or termination of such Letter of Credit. For each day on which a
Default shall have occurred and be continuing, the rate set forth in the first
sentence of this paragraph shall be increased by 2% per annum. The rate set
forth in the first sentence of this paragraph shall automatically increase by
0.125% per annum on the day after the Expiration Date (or, if the Conversion to
Tranche System occurs, on the date of the Conversion to Tranche System) and by
an additional 0.125% per annum on each anniversary of the Expiration Date (or,
if the Conversion to Tranche System shall have occurred, on each anniversary of
the Conversion to Tranche System).
(e) Purpose of Letters of Credit. Each Letter of Credit shall be used
by the Account Party for whom it is issued as a standby letter of credit, to
support the Account Party's Lloyd's underwriting activity or for other general
corporate purposes, all in the ordinary course of business of such Account
Party. The provisions of this Section 2.01(e) represent only an obligation of
the Account Parties to the Issuing Bank and the Banks; the Issuing Bank shall
have no obligation to the Banks to ascertain the purpose of any Letter of
Credit, and, without limiting the generality of the provisions of Section
2.04(b) hereof, the rights and obligations of the Banks and the Issuing Bank
among themselves shall not be impaired or affected by a breach of this Section
2.01(e).
(f) Administration Fees.
(i) Each Account Party shall pay or cause to be paid to the
Administrative Agent, for the sole account of the Issuing Bank, a
letter of credit facing fee (the "Facing Fee") for each Letter of
Credit issued for the account of such Account Party for each day
including the date of issuance thereof to and including the date of
expiration or termination thereof, on the aggregate Letter of Credit
Undrawn Availability of all of such Letters of Credit at a rate per
annum, based on a year of 360 days and actual days elapsed, agreed to
by the Issuing Bank and AUL prior to the Closing Date. Such Facing Fee
shall be due and payable on each Regular Payment Date and on the
Expiration Date for the preceding period for which such fee has not
been paid.
(ii) Each Account Party shall pay to the Administrative Agent,
for the sole account of the Issuing Bank, with respect to each Letter
of Credit issued for such Account Party's account, such other
administration, issuance, maintenance, amendment, drawing and
negotiation fees as are customarily charged by the Issuing Bank to its
customers generally at the time in question (a list of which customary
charges as of the date of this Agreement has been provided by the
Issuing Bank to AUL) or are otherwise agreed between the Issuing Bank
and AUL.
2.02. Commitment Fee; Reduction of the Committed Amounts.
(a) Commitment Fee. The Account Party Members shall pay or cause to be
paid to the Administrative Agent for the account of each Bank a commitment fee
(the "Commitment Fee") for each day during the period from the Closing Date to
but excluding the Expiration Date calculated (based on a year of 360 days and
actual days elapsed) at a per annum rate equal to 0.10% for each Level One Day,
0.125% for
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<PAGE> 17
each Level Two Day, 0.15% for each Level Three Day and 0.20% for each Level Four
Day, payable on the unused portion of such Bank's Committed Amount in effect on
such day. Such fee shall be payable on each Regular Payment Date and on the
Expiration Date for the preceding period for which such fee has not been paid.
(b) Reduction of the Committed Amounts. AUL may at any time or from
time to time reduce Pro Rata the Committed Amounts of the Banks to an aggregate
amount (which may be zero) not less than the aggregate of the Total Credit
Exposure of the Banks. Any reduction of the Committed Amounts shall be in an
aggregate minimum amount of $10,000,000 and in an amount which is an integral
multiple of $1,000,000. Reduction of the Committed Amounts shall be made by
providing not less than three Business Days' notice (which notice shall be
irrevocable) to such effect to the Administrative Agent. After the date
specified in such notice, the Commitment Fee shall be calculated upon the
Committed Amounts as so reduced.
2.03. Procedure for Issuance and Amendment of Letters of Credit.
(a) Request for Issuance. An Account Party may from time to time
request, upon at least three Business Days' notice, the Issuing Bank to issue a
Letter of Credit by:
(i) delivering to the Issuing Bank and the Administrative
Agent a written request to such effect, specifying the date on which
such Letter of Credit is to be issued, the expiration date thereof, and
the Stated Amount thereof, and
(ii) delivering to the Issuing Bank a completed application,
in the form annexed hereto as Exhibit F, or in such other form as may
from time to time be required by the Issuing Bank in accordance with
its customary practice with respect to its customers generally (the
"Letter of Credit Application"), together with such other certificates,
documents and other papers as are specified in such application.
Upon receiving any such notice, the Issuing Bank shall promptly notify the
Administrative Agent (by telephone or otherwise), and furnish the Administrative
Agent with the proposed form of Letter of Credit to be issued. The
Administrative Agent shall, promptly upon receiving such notice, notify the
Banks of such proposed Letter of Credit (which notice shall specify the Stated
Amount and term of such proposed Letter of Credit), and shall determine, as of
the close of business on the Business Day before such proposed issuance, whether
such proposed Letter of Credit complies with the limitations set forth in
Section 2.01 hereof. If such limitations set forth in Section 2.01 are not
satisfied or if the Required Banks have given notice to the Administrative Agent
to cease issuing Letters of Credit pursuant to Section 2.03(c)(ii) hereof, the
Administrative Agent shall notify the Issuing Bank (in writing or by telephone
promptly confirmed in writing) that the Issuing Bank is not authorized to issue
such Letter of Credit. If the Issuing Bank issues a Letter of Credit, it shall
deliver the original of such Letter of Credit to the beneficiary thereof or as
the Account Party shall otherwise direct, and shall promptly notify the
Administrative Agent thereof and furnish a copy thereof to the Administrative
Agent.
(b) Request for Extension or Increase. An Account Party may from time
to time request the Issuing Bank to extend the expiration date of an outstanding
Letter of Credit or increase (or, with the consent of the beneficiary, decrease)
the Stated Amount of or the amount available to be drawn on such Letter of
Credit. Such extension or increase shall for all purposes hereunder be treated
as though such Account Party had requested issuance of a replacement Letter of
Credit (except only that the Issuing Bank may, if it elects, issue a notice of
extension or increase in lieu of issuing a new Letter of Credit in substitution
for the outstanding Letter of Credit).
(c) Limitations on Issuance, Extension and Amendment.
(i) As between the Issuing Bank, on the one hand, and the
Agents and the Banks, on the other hand, the Issuing Bank shall be
justified and fully protected in issuing such Letter of Credit
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<PAGE> 18
after receiving authorization from the Administrative Agent as provided
in Section 2.03(a) hereof, notwithstanding any subsequent notices to
the Issuing Bank, any knowledge of an Event of Default (unless the
Issuing Bank shall have received a notice specifying that such Event of
Default is an "Event of Default" under this Agreement) or Potential
Default, any knowledge of failure of any condition specified in Section
5.02 hereof to be satisfied, any other knowledge of the Issuing Bank,
or any other event, condition or circumstance whatsoever. The Issuing
Bank may amend, modify or supplement Letters of Credit or Letter of
Credit Applications, or waive compliance with any condition of issuance
or payment, without the consent of, and without liability to, any Agent
or any Bank, provided that any such amendment, modification or
supplement that extends the expiration date or increases the Stated
Amount of or the amount available to be drawn on an outstanding Letter
of Credit shall be subject to Section 2.01.
(ii) As between the Administrative Agent, on the one hand, and
the Banks, on the other hand, the Administrative Agent shall not
authorize issuance of any Letter of Credit if the Administrative Agent
shall have received, at least one Business Day before authorizing such
issuance, from the Required Banks an unrevoked written notice that any
condition precedent set forth in Section 5.02 will not be satisfied as
of the time of such issuance and expressly requesting that the
Administrative Agent direct the Issuing Bank to cease to issue Letters
of Credit. Absent such notice, or unless the Administrative Agent
determines that the applicable limitations set forth in Section 2.01
hereof are not satisfied, the Administrative Agent shall be justified
and fully protected, as against the Banks, in authorizing the Issuing
Bank to issue such Letter of Credit, notwithstanding any subsequent
notices to the Administrative Agent, any knowledge of an Event of
Default or Potential Default, any knowledge of failure of any condition
specified in Section 5.02 hereof to be satisfied, any other knowledge
of the Administrative Agent, or any other event, condition or
circumstance whatsoever.
2.04. Letter of Credit Participating Interests.
(a) Generally. Concurrently with the issuance of each Letter of Credit
(which, in the case of the Existing Letters of Credit, shall be deemed to have
occurred on the Closing Date), the Issuing Bank automatically shall be deemed,
irrevocably and unconditionally, to have sold, assigned, transferred and
conveyed to each other Bank, and each other Bank automatically shall be deemed,
irrevocably and unconditionally, severally to have purchased, acquired, accepted
and assumed from the Issuing Bank, without recourse to, or representation or
warranty by, the Issuing Bank, an undivided interest, in a proportion equal to
such Bank's Pro Rata share, in all of the Issuing Bank's rights and obligations
in, to or under such Letter of Credit, the related Letter of Credit Application,
the Letter of Credit Reimbursement Obligations, and all collateral, guarantees
and other rights from time to time directly or indirectly securing the foregoing
(such interest of each Bank being referred to herein as a "Letter of Credit
Participating Interest", it being understood that the Letter of Credit
Participating Interest of the Issuing Bank is the interest not otherwise
attributable to the Letter of Credit Participating Interests of the other
Banks). Each Bank irrevocably and unconditionally agrees to the immediately
preceding sentence, such agreement being herein referred to as such Bank's
"Letter of Credit Participating Interest Commitment". Amounts other than Letter
of Credit Reimbursement Obligations and Letter of Credit Fees payable from time
to time under or in connection with a Letter of Credit or Letter of Credit
Application shall be for the sole account of the Issuing Bank. On the date that
any Purchasing Bank becomes a party to this Agreement in accordance with Section
10.13(c) hereof, Letter of Credit Participating Interests in all outstanding
Letters of Credit held by the Bank from which such Purchasing Bank acquired its
interest hereunder shall be proportionately reallocated between such Purchasing
Bank and such transferor Bank (and, to the extent such transferor Bank is the
Issuing Bank, the Purchasing Bank shall be deemed to have acquired a Letter of
Credit Participating Interest from the Issuing Bank to such extent).
(b) Maximum Amounts of Funding of Participations.
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(i) This Section 2.04(b)(i) is applicable if the Conversion to
Tranche System has not occurred. No Bank will be obligated to fund its
Commitment Percentage of a drawing on a Letter of Credit if such
funding would cause the sum of the aggregate amount of outstanding
unreimbursed fundings by such Bank of drawings on Letters of Credit and
the aggregate amount of outstanding principal with respect to Loans
made by such Bank to exceed such Bank's Committed Amount, unless such
excess results from the fact, with respect to a drawing on a Letter of
Credit denominated in Pounds or Euros, that the Dollar Equivalent of
one Pound or one Euro, as the case may be, is higher at the time of
such funding than it was at the time of issuance of such Letter of
Credit denominated in Pounds or Euros.
(ii) This Section 2.04(b)(ii) is applicable if the Conversion
to Tranche System has occurred. No Tranche 1 Bank, Tranche 2 Bank or
Tranche X Bank, as the case may be, will be obligated to fund its
Commitment Percentage of a drawing on a Tranche 1 Letter of Credit,
Tranche 2 Letter of Credit or Tranche X Letter of Credit, as the case
may be, if such funding would cause the sum of the aggregate amount of
outstanding unreimbursed fundings by such Bank of drawings on Letters
of Credit under such applicable Tranche and the aggregate amount of
outstanding principal with respect to Loans made by such Bank to exceed
such Bank's Committed Amount under such applicable Tranche, unless such
excess results from the fact, with respect to a drawing on a Letter of
Credit denominated in Pounds or Euros, that the Dollar Equivalent of
one Pound or one Euro, as the case may be, is higher at the time of
such funding than it was at the time of issuance of such Letter of
Credit denominated in Pounds or Euros.
(c) Obligations Absolute. Notwithstanding any other provision hereof,
each Bank hereby agrees that its obligation to participate in each Letter of
Credit issued in accordance herewith, its obligation to make the payments
specified in Section 2.05 hereof, and the right of the Issuing Bank to receive
such payments in the manner specified therein, are each absolute, irrevocable
and unconditional and shall not be affected by any event, condition or
circumstance whatever. The failure of any Bank to make any such payment shall
not relieve any other Bank of its funding obligation hereunder on the date due,
but no Bank shall be responsible for the failure of any other Bank to meet its
funding obligations hereunder.
2.05. Letter of Credit Drawings and Reimbursements.
(a) Account Party's Reimbursement Obligation. Each Account Party hereby
agrees to reimburse the Issuing Bank, by making payment to the Administrative
Agent for the account of the Issuing Bank in accordance with Section 2.11(a)
hereof on the date of each payment made by the Issuing Bank under any Letter of
Credit issued for such Account Party's account (but not earlier than the date
which is one Business Day after notice of such payment or of the drawing giving
rise to such payment is given to AUL), without protest or demand, all of which
are hereby waived, and an action therefor shall immediately accrue. Each Account
Party agrees that it will make such payment to the Administrative Agent for the
account of the Issuing Bank in the same currency as the currency of the payment
by the Issuing Bank under such Letter of Credit. To the extent such payment is
not timely made, such Account Party hereby agrees to pay to the Administrative
Agent, for the account of the Issuing Bank, on demand, interest on any Letter of
Credit Unreimbursed Draws for each day from and including the date of such
payment by the Issuing Bank until paid (before and after judgment) in accordance
with Section 2.11(a) hereof, at the rate per annum set forth in Section 2.11(b)
hereof.
(b) Payment by Banks on Account of Unreimbursed Draws. If the Issuing
Bank makes a payment under any Letter of Credit and is not reimbursed in full
therefor on such payment date in accordance with Section 2.05(a) hereof, the
Issuing Bank will promptly notify the Administrative Agent thereof (which notice
may be by telephone), and the Administrative Agent shall forthwith notify each
Bank (which notice may be by telephone promptly confirmed in writing) thereof.
No later than the Administrative Agent's close of business on the date such
notice is given (if notice is given by 11:30 o'clock A.M. Pittsburgh time) or
10:00 o'clock A.M. Pittsburgh time the following day (if notice is given after
11:30 o'clock A.M. Pittsburgh time), each such Bank will pay to the
Administrative Agent, for the account of the Issuing Bank, in immediately
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available funds, an amount equal to such Bank's Pro Rata share of the
unreimbursed portion of such payment by the Issuing Bank. Each Bank agrees that
such payment to the Administrative Agent for the account of the Issuing Bank
shall be in the same currency as the currency of the payment by the Issuing Bank
under the Letter of Credit. If and to the extent that any Bank fails to make
such payment to the Issuing Bank on such date, such Bank shall pay such amount
on demand, together with interest, for the Issuing Bank's own account, for each
day from and including the date of the Issuing Bank's payment to but not
including the date of repayment to the Issuing Bank (before and after judgment)
at a rate per annum for each day from and including the date of such payment by
the Issuing Bank equal to the Applicable Reimbursement Interest Rate.
(c) Distributions to Banks. If, at any time, after there occurs a
Letter of Credit Unreimbursed Draw and the Issuing Bank has received from any
Bank such Bank's Pro Rata share of such Letter of Credit Unreimbursed Draw, and
the Issuing Bank receives any payment or makes any application of funds on
account of the Letter of Credit Reimbursement Obligation arising from such
Letter of Credit Unreimbursed Draw, the Issuing Bank will pay to the
Administrative Agent, for the account of such Bank, such Bank's Pro Rata share
of such payment.
(d) Rescission. If any amount received by the Issuing Bank on account
of any Letter of Credit Reimbursement Obligation shall be avoided, rescinded or
otherwise returned or paid over by the Issuing Bank for any reason at any time,
whether before or after the termination of this Agreement (or the Issuing Bank
believes in good faith that such avoidance, rescission, return or payment is
required, whether or not such matter has been adjudicated), each Bank will,
promptly upon notice from the Administrative Agent or the Issuing Bank, pay over
to the Administrative Agent for the account of the Issuing Bank its Pro Rata
share of such amount, together with its Pro Rata share of any interest or
penalties payable with respect thereto.
2.06 Equalization. If any Bank receives any payment or makes any
application on account of its Letter of Credit Participating Interest, such Bank
shall forthwith pay over to the Issuing Bank, in Dollars and in like kind of
funds received or applied by it, the amount in excess of such Bank's Pro Rata
share of the amount so received or applied.
2.07. Obligations Absolute. The payment obligations of the Account
Parties and of the Banks under Section 2.05 shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including, without limitation, the following
circumstances:
(a) any lack of validity or enforceability of this Agreement, any
Letter of Credit or any Transaction Document against an Account Party;
(b) the existence of any claim, set-off, defense or other right which
any Account Party, any Borrower, the Pledgor, the Guarantor or any other Person
may have at any time against any beneficiary or transferee of any Letter of
Credit (or any Persons for whom any such beneficiary or transferee may be
acting), the Issuing Bank, any Bank, or any other Person, whether in connection
with this Agreement, the transactions contemplated hereby or any unrelated
transaction;
(c) any draft, certificate, statement or other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(d) payment by the Issuing Bank under any Letter of Credit against
presentation of a draft or certificate which does not comply with the terms of
such Letter of Credit, or payment by the Issuing Bank under the Letter of Credit
in any other circumstances in which conditions to payment are not met, except
any such wrongful payment to the extent resulting from the gross negligence or
willful misconduct of the Issuing Bank; or
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<PAGE> 21
(e) any other event, condition or circumstance whatever, whether or not
similar to any of the foregoing, except if the same results solely from the
gross negligence or willful misconduct of the Issuing Bank.
Each Account Party bears the risk of, and neither the Issuing Bank, any of its
directors, officers, employees or agents, nor any Bank, shall be liable or
responsible for any of, the foregoing matters, the use which may be made of any
Letter of Credit, or acts or omissions of the beneficiary or any transferee in
connection therewith, except for such person's gross negligence or willful
misconduct (it being understood that this sentence is without prejudice to any
rights which any Account Party may have to assert a claim against the Issuing
Bank for failure of the Issuing Bank to fulfill its obligations to such Account
Party with respect to payment under Letters of Credit).
2.08. Unacceptable Credit Rating. If the long-term debt credit rating
of any Bank shall decline below the Acceptable Credit Rating (as defined below),
the Issuing Bank shall have the right, but not the obligation, to cause such
Bank to be replaced as a party hereto by a Replacement Bank, subject to approval
of such Replacement Bank by AUL (which shall not be unreasonably withheld). In
the event that any Bank is to be replaced by a Replacement Bank, such Bank
shall, upon payment to it of all amounts owing to it on the date of its
replacement, assign all of its interests hereunder to such Replacement Bank in
accordance with the provisions of Section 10.13(c) hereof. A Bank shall have an
"Acceptable Credit Rating" if it has both (i) a long-term debt rating of at
least A by Standard & Poor's and (ii) a long-term debt rating of at least A2 by
Moody's. Each Credit Party agrees that it shall cooperate with the Issuing Bank
in connection with the identification of one or more Replacement Banks if the
Issuing Bank exercises its right set forth in the first sentence of this Section
2.08.
2.09. Letter of Credit Applications. The representations, warranties
and covenants by the Account Parties under, and the rights and remedies of the
Issuing Bank under, the Continuing Letter of Credit Agreement and any Letter of
Credit Application relating to any Letter of Credit are in addition to, and not
in limitation or derogation of, representations, warranties and covenants by the
Account Parties under, and rights and remedies of the Issuing Bank and the Banks
under, this Agreement, the Transaction Documents, and applicable Law. Each
Account Party acknowledges and agrees that all rights of the Issuing Bank under
any Letter of Credit Application shall inure to the benefit of each Bank to the
extent of its Commitment Percentage as fully as if such Bank was a party to such
Letter of Credit Application. In the event of any inconsistency between the
terms of this Agreement and any Letter of Credit Application, this Agreement
shall prevail.
2.10. Certain Provisions Relating to the Issuing Bank.
(a) General. The Issuing Bank shall have no duties or responsibilities
to the other Bank Parties except those expressly set forth in this Agreement and
the other Transaction Documents, and no implied duties or responsibilities on
the part of the Issuing Bank shall be read into this Agreement or any
Transaction Document or shall otherwise exist. The duties and responsibilities
of the Issuing Bank to the other Bank Parties under this Agreement and the other
Transaction Documents shall be mechanical and administrative in nature, and the
Issuing Bank shall not have a fiduciary relationship in respect of any Bank
Party or any other Person. The Issuing Bank shall not be liable to the other
Bank Parties for any action taken or omitted to be taken by it under or in
connection with this Agreement or any other Transaction Document, unless caused
by its own gross negligence or willful misconduct. The Issuing Bank shall not be
under any obligation to ascertain, inquire or give any notice to the other Bank
Parties relating to (i) the performance or observance of any of the terms or
conditions of this Agreement or any other Transaction Document on the part of
any Account Party, (ii) the business, operations, condition (financial or
otherwise) or prospects of the Account Parties or any other Person, or (iii) the
existence of any Event of Default or Potential Default. The Issuing Bank shall
not be under any obligation, either initially or on a continuing basis, to
provide any Agent or any Bank with any notices, reports or information of any
nature, whether in its possession presently or hereafter, except for such
notices, reports and other information expressly required by this Agreement to
be so furnished. The Issuing Bank shall not be responsible to the other Bank
Parties for the execution, delivery,
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<PAGE> 22
effectiveness, enforceability, genuineness, validity or adequacy of this
Agreement or any other Transaction Document.
(b) Administration. The Issuing Bank may rely in good faith upon any
notice or other communication of any nature (written or oral, including but not
limited to telephone conversations, whether or not such notice or other
communication is made in a manner permitted or required by this Agreement or any
Transaction Document) purportedly made by or on behalf of the proper party or
parties, and the Issuing Bank shall not have any duty to verify the identity or
authority of any Person giving such notice or other communication. The Issuing
Bank may consult with legal counsel (including, without limitation, in-house
counsel for the Issuing Bank or in-house or other counsel for the Account
Parties), independent public accountants and any other experts selected by it
from time to time, and the Issuing Bank shall not be liable for any action taken
or omitted to be taken in good faith in accordance with the advice of such
counsel, accountants or experts. Whenever the Issuing Bank shall deem it
necessary or desirable that a matter be proved or established with respect to
any Account Party or Bank Party, such matter may be established by a certificate
of such Account Party or Bank Party, as the case may be, and the Issuing Bank
may conclusively rely upon such certificate. The Issuing Bank shall not be
deemed to have any knowledge or notice of the occurrence of any Event of Default
or Potential Default unless the Issuing Bank has received notice from a Bank,
Alleghany or any Credit Party referring to this Agreement, describing such Event
of Default or Potential Default, and stating that such notice is a "notice of
default". If the Issuing Bank receives such a notice, the Issuing Bank shall
give prompt notice thereof to the Administrative Agent.
(c) Indemnification of Issuing Bank by Banks. Each Bank hereby agrees
to reimburse and indemnify the Issuing Bank and each of its directors, officers,
employees and agents (to the extent not reimbursed by the Account Parties and
without limitation of the obligations of the Account Parties to do so), Pro
Rata, from and against any and all amounts, losses, liabilities, claims,
damages, expenses, obligations, penalties, actions, judgments, suits, costs or
disbursements of any kind or nature (including, without limitation, the
reasonable fees and disbursements of counsel (other than in-house counsel) for
the Issuing Bank or such other Person in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not
the Issuing Bank or such other Person shall be designated a party thereto) that
may at any time be imposed on, incurred by or asserted against the Issuing Bank,
in its capacity as such, or such other Person, as a result of, or arising out
of, or in any way related to or by reason of, this Agreement, any other
Transaction Document, any transaction from time to time contemplated hereby or
thereby, or any transaction financed in whole or in part or directly or
indirectly with the proceeds of any Letter of Credit, provided, that no Bank
shall be liable for any portion of such amounts, losses, liabilities, claims,
damages, expenses, obligations, penalties, actions, judgments, suits, costs or
disbursements resulting from the gross negligence or willful misconduct of the
Issuing Bank or such other Person, as finally determined by a court of competent
jurisdiction.
(d) Issuing Bank in its Individual Capacity. With respect to its Letter
of Credit Participating Interest Commitment and the Obligations owing to it, the
Issuing Bank shall have the same rights and powers under this Agreement and each
other Transaction Document as any other Bank and may exercise the same as though
it were not the Issuing Bank, and the term "Banks" and like terms shall include
the Issuing Bank in its individual capacity as such. The Issuing Bank and its
affiliates may, without liability to account to any other Bank, make loans to,
accept deposits from, acquire debt or equity interests in, act as trustee under
indentures of, act as agent under other credit facilities for, and engage in any
other business with, Alleghany, any Credit Party and any stockholder, subsidiary
or affiliate of Alleghany or any Credit Party, as though the Issuing Bank were
not the Issuing Bank hereunder.
2.11. Payments Generally; Interest and Interest on Overdue Amounts.
(a) Payments Generally. All payments to be made by an Account Party in
respect of fees, indemnity, expenses or other amounts due from such Account
Party hereunder or under any Transaction Document shall be payable in Dollars
(except in the case of payment of reimbursement obligations with respect to
Letters of Credit denominated in Pounds, which shall be payable in Pounds, and
in the case of
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payment of reimbursement obligations with respect to Letters of Credit
denominated in Euros, which shall be payable in Euros) by not later than 2:00
o'clock p.m., Pittsburgh time (or, in the case of payments in Pounds or Euros,
London time), on the day when due without presentment, demand, protest or notice
of any kind, all of which are hereby expressly waived, and an action therefor
shall immediately accrue, without setoff, counterclaim, withholding or other
deduction of any kind or nature. Except for payments under Sections 2.12, 2.13
and 10.04 hereof, such payments shall be made to the Administrative Agent at its
Domestic Office in Dollars in funds immediately available at such office or, in
the case of payments in Pounds or Euros, at its London Office in funds
immediately available at such office. Payments under Sections 2.12, 2.13 and
10.04 hereof shall be made to the applicable Bank at such domestic account as it
shall specify to the Account Parties from time to time in funds immediately
available at such account. Any payment or prepayment received by the
Administrative Agent or such Bank after 2:00 p.m., Pittsburgh time or London
time, as applicable, on any day shall be deemed to have been received on the
next succeeding Business Day. The Administrative Agent shall distribute to the
Banks all such payments received by it from an Account Party as promptly as
practicable after receipt by the Administrative Agent.
(b) Interest and Interest on Overdue Amounts. Interest on Letter of
Credit Reimbursement Obligations shall accrue at a rate per annum (based on a
year of 360 days (or, in the case of such Obligations denominated in Dollars,
365 or 366 days, as the case may be) and actual days elapsed) which for each day
shall be equal to the then-current Applicable Reimbursement Interest Rate
beginning on the day that the related Letter of Credit payment is made and shall
be due and payable on the day that the Letter of Credit Reimbursement Obligation
is due and payable in accordance with Section 2.05(a) hereof. To the extent
permitted by law, after there shall have become due (by acceleration or
otherwise) fees, indemnity, expenses or any other amounts due from the Account
Parties hereunder or under any other Transaction Document, such amounts shall
bear interest for each day until paid (before and after judgment), payable on
demand, at a rate per annum (in each case based on a year of 360 days (or, in
the case of such Obligations denominated in Dollars, 365 or 366 days, as the
case may be) and actual days elapsed) which for each day shall be equal to 2%
above the then-current Applicable Reimbursement Interest Rate. To the extent
permitted by law, interest accrued on any amount which has become due hereunder
or under any Transaction Document shall compound on a day-by-day basis, and
hence shall be added daily to the overdue amount to which such interest relates.
2.12. Additional Compensation in Certain Circumstances. If the
introduction of or any change in, or any change in the interpretation or
application of, any Law, regulation or guideline by any Official Body charged
with the interpretation or administration thereof or compliance with any request
or directive of any applicable Official Body (whether or not having the force of
law):
(i) subjects any Bank to any tax or changes the basis of
taxation with respect to this Agreement, the Letters of Credit or
payments by the Account Parties of fees or other amounts due from the
Account Parties hereunder or under the other Transaction Documents
(except for taxes on the overall net income or overall gross receipts,
profits or gains of such Bank imposed by the jurisdictions (federal,
state and local) in which the Bank's principal office is located),
(ii) imposes, modifies or deems applicable any reserve,
special deposit or similar requirement against credits or commitments
to extend credit extended by, assets (funded or contingent) of,
deposits with or for the account of, or other acquisitions of funds by,
such Bank,
(iii) imposes, modifies or deems applicable any capital
adequacy or similar requirement (A) against assets (funded or
contingent) of, or credits or commitments to extend credit extended by,
any Bank or (B) otherwise applicable to the obligations of any Bank
under this Agreement, or
(iv) imposes upon any Bank any other condition or expense with
respect to this Agreement or the issuance of any Letter of Credit,
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and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense (including loss of margin) upon any
Bank or, in the case of clause (iii) hereof, any Person controlling a Bank, with
respect to this Agreement or the issuance of any Letter of Credit (or, in the
case of any capital adequacy or similar requirement, to have the effect of
reducing the rate of return on such Bank's or controlling Person's capital,
taking into consideration such Bank's or controlling Person's policies with
respect to capital adequacy so long as such policies are reasonable in light of
prevailing market practice at the time) by an amount which such Bank deems, in
the exercise of its reasonable discretion, to be material, such Bank may from
time to time notify in writing AUL of the amount determined in good faith (using
any averaging and attribution methods) by such Bank (which determination shall
be conclusive absent manifest error) to be necessary to compensate such Bank for
such increase, reduction or imposition. Such amount shall be due and payable by
any applicable Account Party to such Bank five Business Days after such notice
is given, together with an amount equal to interest on such amount from the date
two Business Days after the date demanded until such due date at a rate per
annum equal to the Prime Rate. Such notice shall set forth in reasonable detail
the calculations upon which such Bank determined such amount. A certificate by
such Bank as to the amount due and payable under this Section 2.12 from time to
time and the method of calculating such amount shall be conclusive absent
manifest error. Each Bank agrees that it will use good faith efforts promptly to
notify AUL in writing of the occurrence of any event that would give rise to a
payment under this Section 2.12; provided, however that, so long as such notice
is given within a reasonable period after the occurrence of such event, any
failure of such Bank to give any such notice shall have no effect on the Account
Parties' obligations under this Section 2.12. Upon the receipt by the Account
Parties or the Borrowers, as the case may be, from any Bank (an "Affected Bank")
of a claim for compensation under this Section 2.12 or under Section 3.11(a) or
of a claim for payment of an Additional Amount under Section 2.13, AUL may
designate another commercial lending institution satisfactory to the Issuing
Bank to acquire and assume all of such Affected Bank's Letter of Credit
Participating Interest Commitment, Letter of Credit Participating Interest,
Loans and Revolving Credit Commitment, and all other rights and obligations of
the Affected Bank hereunder, by giving notice of the name of such institution to
the Administrative Agent, the Issuing Bank and the Affected Bank. Such
acquisition and assumption shall be made in accordance with Section 10.13(c).
2.13. Taxes.
(a) Payments Net of Taxes. All payments made by the Account Parties and
Borrowers under this Agreement, any Note, or any other Transaction Document
shall be made free and clear of, and without reduction or withholding for or on
account of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Official Body, and all
liabilities with respect thereto, excluding
(i) in the case of each Agent and each Bank, income, profits,
gains or franchise taxes imposed on such Agent or such Bank by the
jurisdiction under the laws of which such Agent or such Bank is
organized or any political subdivision or taxing authority thereof or
therein or as a result of a connection between such Agent or such Bank
and any jurisdiction other than a connection resulting solely from this
Agreement and the transactions contemplated hereby, and
(ii) in the case of each Bank, income, profits, gains or
franchise taxes imposed by any jurisdiction in which such Bank's
lending offices which issue Letters of Credit or which makes Loans
hereunder are located or any political subdivision or taxing authority
thereof or therein
(all such non-excluded taxes, levies, imposts, deductions, charges or
withholdings being hereinafter called "Taxes"), unless an Account Party or
Borrower is required by Law to withhold or deduct Taxes. If any Taxes are
required to be withheld or deducted from any amounts payable to any Agent or any
Bank under this Agreement or any other Transaction Document, subject to Section
2.13(c) hereof, the applicable Account Party or Borrower shall pay the relevant
amount of such Taxes and the amounts so payable to such Agent or such Bank shall
be increased (the amount of such increase, an "Additional Amount") to the extent
necessary to yield to such Agent or such Bank (after payment of all Taxes)
interest or any such other
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<PAGE> 25
amounts payable hereunder at the rates or in the amounts specified in this
Agreement and the other Transaction Documents. Whenever any Taxes are paid by an
Account Party or a Borrower with respect to payments made in connection with
this Agreement or any other Transaction Document, as promptly as possible
thereafter, such Account Party or such Borrower shall send to such Agent for its
own account or to the Administrative Agent for the account of such Bank, as the
case may be, a certified copy of an original official receipt received by such
Account Party or such Borrower showing payment thereof. If an Agent or a Bank
determines in its sole discretion in good faith that it has received a refund in
respect of, or that it has been able to utilize to offset its liability for
Taxes a credit (a "utilized credit") in respect of, any Taxes as to which it has
been indemnified by an Account Party or a Borrower, or with respect to which an
Account Party or a Borrower has paid additional amounts pursuant to this Section
2.13, such Agent or such Bank shall promptly after the date of such receipt pay
over the amount of such refund or utilized credit to such Account Party or such
Borrower (but only to the extent of indemnity payments made, or additional
amounts paid, by an Account Party or a Borrower under this Section 2.13 with
respect to Taxes giving rise to such refund or utilized credit and only to the
extent that such Agent or such Bank has determined that the amount of any such
refund or utilized credit is directly attributable to payments made under this
Agreement), net of all reasonable expenses of such Agent or such Bank (including
additional Taxes attributable to such refund or utilized credit, as determined
by such Agent or such Bank) and without interest (other than interest, if any,
paid by the relevant Official Body with respect to such refund or utilized
credit). An Account Party or a Borrower receiving any such payment from an Agent
or a Bank shall, upon demand, pay to such Agent or such Bank any amount paid
over to such Account Party or such Borrower by such Agent or such Bank (plus
penalties, interest or other charges) in the event such Agent or such Bank is
required to repay any portion of such refund or utilized credit to such Official
Body. Nothing in this Section 2.13(a) shall entitle an Account Party or a
Borrower to have access to the records of any Agent or any Bank, including,
without limitation, tax returns.
(b) Indemnity. Each Account Party and each Borrower hereby indemnifies
each of the Agents and each of the Banks for the full amount of all Taxes
attributable to payments by or on behalf of such Account Party or such Borrower
hereunder or under any of the other Transaction Documents, any such Taxes paid
by such Agent or such Bank, as the case may be, any present or future claims,
liabilities or losses with respect to or resulting from any omission to pay or
delay in paying any such Taxes (including any incremental Taxes, interest or
penalties that may become payable by such Agent or such Bank as a result of any
failure to pay such Taxes, except by reason of unreasonable delay by such Agent
or Bank in notifying an Account Party or a Borrower or in making payment after
payment was received from an Account Party or a Borrower), whether or not such
Taxes were correctly or legally asserted, except to the extent that such Taxes
(x) are required to be paid solely because of failure of such Agent or such Bank
to deliver a form it is required to deliver pursuant to Section 2.13(c) hereof
or solely as a result of such form being incorrect in a material respect and (y)
would not have been required to be paid if such form had been delivered or had
not been incorrect. Such indemnification shall be made within 30 days from the
date such Bank or such Agent, as the case may be, makes written demand therefor.
(c) Withholding and Backup Withholding. Each Bank and each Agent that
is incorporated or organized under the laws of any jurisdiction other than the
United States or any State thereof agrees that, on or prior to the date the
first payment is due to be made to it hereunder or under any other Transaction
Document, it will furnish to the Account Parties, the Borrowers and the
Administrative Agent:
(i) two valid, duly completed copies of United States Internal
Revenue Service Form 4224 or United States Internal Revenue Form 1001
or successor applicable form (including proposed Form W-8BEN, W-8ECI or
W-8EXP), as the case may be, certifying in each case that such Bank is
entitled to receive payments under this Agreement and the other
Transaction Documents without deduction or withholding of any United
States federal income taxes and
(ii) a valid, duly completed Internal Revenue Service Form W-8
or W-9 or successor applicable form (including proposed Form W-8BEN,
W-8ECI or W-8EXP), as the case may be, to establish an exemption from
United States backup withholding tax.
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Each Bank and each Agent which so delivers to the Account Parties, the Borrowers
and the Administrative Agent a Form 1001 or 4224 and Form W-8 or W-9, or
successor applicable forms, agrees to deliver to the Account Parties, the
Borrowers and the Administrative Agent two further copies of the said Form 1001
or 4224 and Form W-8 or W-9, or successor applicable forms, or other manner of
certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or otherwise is required to be resubmitted as a
condition to obtaining an exemption from withholding tax, or after the
occurrence of any event requiring a change in the most recent form previously
delivered by it, and such extensions or renewals thereof as may reasonably be
requested by the Account Parties, the Borrowers and the Administrative Agent,
certifying in the case of a Form 1001 or Form 4224 that such Bank or Agent is
entitled to receive payments under this Agreement or any other Transaction
Document without deduction or withholding of any United States federal income
taxes, unless in any such cases an event (including any changes in Law) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Bank from duly completing and delivering any such letter or form with respect to
it and such Bank advises the Account Parties, the Borrowers and the
Administrative Agent that it is not capable of receiving payments without any
deduction or withholding of United States federal income tax, and in the case of
a Form W-8 or W-9, establishing an exemption from United States backup
withholding tax, in which case Section 2.13(a) and (b) shall apply to all
further payments. The Borrowers and the Account Parties shall not be required to
pay any Additional Amount on account of Taxes to a Bank or Agent (A) that has
failed to deliver any of the forms it is required by this Section 2.13 to
deliver, to the extent that deduction or withholding of the relevant Taxes would
not have been required if the form had been delivered, or (B) that has delivered
such a form that is incorrect in any material respect, to the extent that
deduction or withholding of the relevant Taxes would not have been required if
such form had been correct in all material respects.
2.14. Extensions of Expiration Date. AUL may, at its option, give the
Administrative Agent and the Issuing Bank written notice (an "Extension
Request") at any time not more than ninety days, nor less than forty-five days,
prior to the Expiration Date in effect at such time (the "Current Expiration
Date") of AUL's desire to extend the Expiration Date to a date which is not
later than 364 days after the Current Expiration Date. The Administrative Agent
shall promptly inform the Banks of such Extension Request. Each Bank which
agrees to such Extension Request shall deliver to the Administrative Agent its
express written consent thereto no later than thirty days prior to the Current
Expiration Date. No extension shall become effective unless the express written
consent thereto by the Required Commitment Banks and the Issuing Bank is
received by the Administrative Agent on or before the thirtieth day prior to the
Current Expiration Date. If the Issuing Bank and the Required Commitment Banks,
but not all Commitment Banks, have expressly consented in writing to such
Extension Request by such thirtieth day, then the Administrative Agent shall so
notify AUL and AUL may, effective as of the Current Expiration Date, take one or
both of the following actions: (i) replace any Commitment Bank which has not
agreed to such Extension Request (a "Nonextending Bank") with another commercial
lending institution satisfactory to the Issuing Bank (a "Replacement Bank") by
giving notice of the name of such Replacement Bank to the Administrative Agent
and the Issuing Bank not later than five Business Days prior to the Current
Expiration Date and (ii) elect to implement a Conversion to Tranche System as
contemplated by Section 2.15 hereof (or, if the Conversion to Tranche System has
previously been implemented, elect to implement a Supplement to Tranche System
as contemplated by Section 2.15 hereof). In the event that a Nonextending Bank
is to be replaced by a Replacement Bank, such Nonextending Bank shall, upon
payment to it of all amounts owing to it on the date of its replacement (it
being understood that such payment of the outstanding principal amount of and
accrued interest on Loans will be made by the Replacement Bank in accordance
with Section 10.13(c) hereof), assign all of its interests hereunder to such
Replacement Bank in accordance with the provisions of Section 10.13(c) hereof.
If a Nonextending Bank is not so replaced, such Nonextending Bank shall, in
accordance with Section 2.15 hereof, retain the obligation to fund draws on
Letters of Credit issued prior to the Current Expiration Date, unless such
Letter of Credit shall have been renewed (including, without limitation, renewal
by operation of an evergreen provision) since the Current Expiration Date. If
the Issuing Bank and the Required Commitment Banks shall have consented to such
Extension Request (and, if fewer than all the Banks shall have so consented, AUL
shall have elected to implement a Conversion to Tranche
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<PAGE> 27
System or Supplement to Tranche System, as the case may be), then, on the
Current Expiration Date, the Expiration Date shall be deemed to have been
extended to, and shall be, the date specified in such Extension Request. The
Administrative Agent shall promptly after any such extension advise the Banks of
any changes in the Committed Amounts and the Commitment Percentages, as well as
any changes effected by the election of the Conversion to Tranche System or a
Supplement to Tranche System.
2.15. Tranches.
(a) Certain Definitions. As used in this Agreement the following terms
have the meanings ascribed thereto:
"Commitment Banks" at any time means Banks which have
Letter of Credit Participating Interest Commitments at such
time and "Commitment Bank" means any one of them.
"Conversion to Tranche System" means the written
election by AUL, at a time when AUL has made an Extension
Request pursuant to Section 2.14 hereof and such Extension
Request has been consented to in writing by the Issuing Bank
and the Required Commitment Banks, but not by all of the
Commitment Banks, to classify Letters of Credit as Tranche 1
Letters of Credit and Tranche 2 Letters of Credit, all in
accordance with Section 2.15(b) hereof.
"L/C Termination Date" means, with respect to a
Letter of Credit, the date which is stated therein to be the
last day on which the beneficiary thereof may draw thereon.
"Pro Rata" means, with respect to Loans, ratably
among the Banks in accordance with the outstanding principal
amount thereof and, with respect to Letters of Credit: (i)
until the first Special Expiration Date, from and to the Banks
in accordance with their respective Letter of Credit
Participating Interest Percentages and (ii) thereafter, (x)
with respect to Tranche 1 Letters of Credit, from and to the
Tranche 1 Banks in accordance with their respective Tranche 1
Letter of Credit Participating Interest Percentages, (y) with
respect to Tranche 2 Letters of Credit and Tranche 2 Letter of
Credit Commitments, from and to the Tranche 2 Banks in
accordance with their respective Tranche 2 Letter of Credit
Participating Interest Percentages and (z) with respect to
each additional Tranche of Letters of Credit (i.e., Tranche 3
Letters of Credit, Tranche 4 Letters of Credit, and so on), if
any, from and to the Banks which have Letter of Credit
Participating Interest Commitments or Letter of Credit
Participating Interests, as applicable, with respect to such
Tranche in accordance with their respective related Letter of
Credit Participating Interest Percentages.
"Required Commitment Banks" at any time means
Commitment Banks which have, in the aggregate, Committed
Amounts equal to at least 51% of the total Committed Amounts
in effect at such time.
"Special Expiration Date" means the Expiration Date
which is in effect at a time when each of the following has
occurred: (i) AUL has made an Extension Request pursuant to
Section 2.14 hereof, (ii) such Extension Request has been
consented to in writing by the Issuing Bank and the Required
Commitment Banks, but not by all of the Commitment Banks, and
(iii) AUL has elected to implement a Conversion to Tranche
System or a Supplement to Tranche System.
"Supplement to Tranche System" means the election by
AUL at a time when the Conversion to Tranche System has been
previously made and when AUL has made an Extension Request
pursuant to Section 2.14 hereof and such Extension Request has
been
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<PAGE> 28
consented to in writing by the Issuing Bank and the Required
Commitment Banks, but not by all of the Commitment Banks, to
classify additional Letters of Credit as Tranche X Letters of
Credit.
"Tranche 1 Bank" shall mean each Bank which is a Bank
immediately prior to the first Special Expiration Date.
"Tranche 1 Letter of Credit" means each Letter of
Credit which is issued prior to the first Special Expiration
Date, but shall not include any such Letter of Credit as to
which the L/C Termination Date has been extended to a date
after the L/C Termination Date which was in effect on such
first Special Expiration Date.
"Tranche 1 Letter of Credit Participating Interest
Percentage" for each Tranche 1 Bank means such Bank's Letter
of Credit Participating Interest Percentage immediately prior
to the first Special Expiration Date.
"Tranche 2 Bank" shall mean each Bank which has a
Tranche 2 Letter of Credit Participating Interest Commitment.
"Tranche 2 Letter of Credit" means each Letter of
Credit which is issued prior to the second Special Expiration
Date, but shall not include any such Letter of Credit as to
which the L/C Termination Date has been extended to a date
after the L/C Termination Date which was in effect on such
second Special Expiration Date and shall not include any
Tranche 1 Letter of Credit (it being understood that a Letter
of Credit may change from a Tranche 1 Letter of Credit to a
Tranche 2 Letter of Credit as a result of the extension, after
the first Special Expiration Date, of its L/C Termination
Date).
"Tranche 3 Letter of Credit" and "Tranche 4 Letter of
Credit" have the meanings set forth in the definition of the
term "Tranche X".
"Tranche X" shall mean Tranche 3 if there are
existing Tranche 2 Letters of Credit but not Tranche 3 Letters
of Credit, Tranche 4 if there are existing Tranche 3 Letters
of Credit but not Tranche 4 Letters of Credit, and so on in
consecutive integral succession. The terms "Tranche X Bank",
"Tranche X Letter of Credit Participating Interest
Commitment", "Tranche X Letter of Credit Participating
Interest Committed Amount" and "Tranche X Letter of Credit
Participating Interest Percentage" shall have comparable
meanings. The term "Tranche X Letter of Credit" shall have a
comparable meaning, but such meaning shall be consistent with
the following: (i) the term "Tranche 3 Letter of Credit" means
each Letter of Credit which is issued prior to the third
Special Expiration Date, but shall not include any such Letter
of Credit as to which the L/C Termination Date has been
extended to a date after the L/C Termination Date which was in
effect on such third Special Expiration Date and shall not
include any Tranche 1 Letter of Credit or any Tranche 2 Letter
of Credit; (ii) the term "Tranche 4 Letter of Credit" means
each Letter of Credit which is issued prior to the fourth
Special Expiration Date, but shall not include any such Letter
of Credit as to which the L/C Termination Date has been
extended to a date after the L/C Termination Date which was in
effect on such fourth Special Expiration Date and shall not
include any Tranche 1 Letter of Credit, any Tranche 2 Letter
of Credit or any Tranche 3 Letter of Credit; (iii) the terms
"Tranche 5 Letter of Credit", "Tranche 6 Letter of Credit",
and so on shall have comparable meanings (it being understood
that a Letter of Credit can change from one Tranche to another
as a result of an extension of its L/C Termination Date).
(b) Conversion to Tranche System. If AUL elects the Conversion to
Tranche System with respect to an Extension Request, the following shall occur:
(i) the Letter of Credit Participating Interest
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<PAGE> 29
Commitments of Banks which, with respect to such Extension Request, are
Nonextending Banks shall terminate as of the Special Expiration Date related to
such Extension Request, but such Nonextending Banks (other than Nonextending
Banks which have been replaced as contemplated by Section 2.14 hereof) shall
remain parties to this Agreement and shall retain all of their respective
obligations with respect to Tranche 1 Letters of Credit and shall retain their
respective Letter of Credit Participating Interests in and with respect to
Tranche 1 Letters of Credit; (ii) from and after the Special Expiration Date
related to such Extension Request, the Letter of Credit Participating Interest
Commitment of each Bank which has consented in writing to such Extension Request
shall be a "Tranche 2 Letter of Credit Participating Interest Commitment" and
the Committed Amount of such Bank shall be its "Tranche 2 Committed Amount";
(iii) the "Tranche 2 Letter of Credit Participating Interest Commitment
Percentage" for each Tranche 2 Bank shall mean a fraction, expressed as a
percentage, the numerator of which is such Tranche 2 Bank's Tranche 2 Committed
Amount and the denominator of which is the aggregate Tranche 2 Committed Amounts
of all of the Tranche 2 Banks; and (iv) the Issuing Bank shall have no
obligation to issue any Tranche 2 Letter of Credit (or to permit any Letter of
Credit to become a Tranche 2 Letter of Credit by extension of its L/C
Termination Date) if the Letter of Credit Exposure upon such issuance (or
extension) would exceed the aggregate of the Banks' Tranche 2 Committed Amounts.
(c) Supplement to Tranche System. If AUL elects a Supplement to Tranche
System with respect to an Extension Request, the following shall occur: (i) the
Letter of Credit Participating Interest Commitments of Banks which, with respect
to such Extension Request, are Nonextending Banks shall terminate, but such
Nonextending Banks shall remain parties to this Agreement and shall retain all
of their respective obligations with respect to Letters of Credit under existing
Tranches and shall retain their respective Letter of Credit Participating
Interests in and with respect to existing Letters of Credit; (ii) from and after
the Special Expiration Date related to such Extension Request, the Letter of
Credit Participating Interest Commitment of each Bank which has consented in
writing to such Extension Request shall be a "Tranche X Letter of Credit
Participating Interest Commitment" and the Committed Amount of such Bank shall
be its "Tranche X Committed Amount"; (iii) the "Tranche X Letter of Credit
Participating Interest Commitment Percentage" for each Tranche X Bank shall mean
a fraction, expressed as percentage, the numerator of which is such Tranche X
Bank's Tranche X Committed Amount, and the denominator of which is the aggregate
Tranche X Committed Amounts of all of the Tranche X Banks, all as contemplated
by the definition of the term "Tranche X" contained in paragraph (a) of this
Section 2.15; and (iv) the Issuing Bank shall have no obligation to issue any
Tranche X Letter of Credit (or to permit any Letter of Credit to become a
Tranche X Letter of Credit by extension of its L/C Termination Date) if the
Letter of Credit Exposure upon such issuance (or extension) would exceed the
aggregate of the Banks' Tranche X Committed Amounts.
ARTICLE III
REVOLVING CREDIT LOANS
3.01. Revolving Credit Loans.
(a) Revolving Credit Commitments. Subject to the terms and conditions
and relying upon the representations and warranties herein set forth, each Bank,
severally and not jointly, agrees (such agreement being herein called such
Bank's "Revolving Credit Commitment") to make loans (the "Loans") in Dollars,
Pounds or Euros to a Borrower at any time or from time to time on or after the
Closing Date and to but not including the Expiration Date. A Bank shall have no
obligation to make any Loan to the extent that the Dollar Equivalent of such
Bank's Total Credit Exposure at any time outstanding would exceed such Bank's
Committed Amount at such time. The sum of all of the Banks' Revolving Credit
Exposures shall not exceed $50,000,000 (or such lesser amount as may be
irrevocably specified from time to time by written notice from AUL to the Agent)
at any time.
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<PAGE> 30
(b) Purpose and Nature of Credit. Within the limits of time and amount
set forth in this Section 3.01, and subject to the provisions of this Agreement,
a Borrower may borrow, repay and reborrow Loans hereunder. The failure of any
Bank to make a Loan shall not relieve any other Bank of its obligation to lend
hereunder, but neither the Administrative Agent nor any Bank shall be
responsible for the failure of any other Bank to make a Loan. Each Loan shall be
made to a single Borrower and shall be made in Dollars, Pounds or Euros. Loans
shall be used by the Borrowers for general corporate purposes, including without
limitation for temporary liquidity needs.
(c) Revolving Credit Notes. The obligation of each Borrower to repay
the unpaid principal amount of the Loans made to it by each Bank and to pay
interest thereon shall be evidenced in part by promissory notes of such
Borrower, one to each Bank, dated the Closing Date (collectively for all
Borrowers and all Banks, the "Notes") in substantially the form attached hereto
as Exhibit H-1, H-2 or H-3, as the case may be, with the blanks appropriately
filled, payable to the order of such Bank.
(d) Maturity. The Loans shall mature, and be due and payable, on the
Maturity Date. The term "Maturity Date" shall mean: (i) if no Extension Request
shall theretofore have been made, November 1, 2001; (ii) if all of the Banks
have consented to an Extension Request, the date specified in such Extension
Request; and (iii) if fewer than all of the Banks have consented to an Extension
Request, the Current Expiration Date which was in effect at the time such
Extension Request was made.
3.02 Making of Loans. Whenever any Borrower desires that the Banks make
Loans, such Borrower shall provide Standard Notice to the Administrative Agent
setting forth the following information:
(a) The name of the Borrower to whom such proposed Loans are to be
made;
(b) The date, which shall be a Business Day, on which such proposed
Loans are to be made;
(c) The currency, which shall be Dollars, Pounds or Euros, in which
such Loans are to be made;
(d) The aggregate principal amount of such proposed Loans, which shall
be the sum of the principal amounts selected pursuant to clause (e) of this
Section 3.02;
(e) The interest rate Option or Options selected in accordance with
Section 3.03(a) hereof and the principal amount selected in accordance with
Section 3.03(d) hereof of the Base Rate Portion and each Funding Segment of the
Euro-Rate Portion of such proposed Loans; and
(f) with respect to each such Funding Segment of such proposed Loans,
the Euro-Rate Funding Period to apply to such Funding Segment selected in
accordance with Section 3.03(c) hereof.
The Administrative Agent shall promptly give notice to each Bank of the
information contained in such notice and of the amount of such Bank's Loan.
Unless any applicable condition specified in Article V hereof has not been
satisfied on the proposed borrowing date specified in such Standard Notice, each
Bank shall make the proceeds of its Loan available to the Administrative Agent
(a) with respect to Dollars, at the Administrative Agent's Domestic Office, no
later than 12:00 o'clock Noon, Pittsburgh time, and (b) with respect to Pounds
or Euros, at the Administrative Agent's London Office, no later than 12:00
o'clock Noon, London time, on the date specified in such notice, in funds
immediately available at such office. The Administrative Agent will make the
funds so received available to such Borrower in funds immediately available at
the Administrative Agent's Domestic Office or at the Administrative Agent's
London Office, as the case may be.
3.03 Interest Rates.
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<PAGE> 31
(a) Optional Bases of Borrowing. The unpaid principal amount of the
Loans shall bear interest for each day until due on one or more bases selected
by a Borrower from among the interest rate Options set forth below. Subject to
the provisions of this Agreement, a Borrower may select different Options to
apply simultaneously to different Portions of the Loans and may select different
Funding Segments to apply simultaneously to different parts of the Euro-Rate
Portion of the Loans, it being understood that the Base Rate Option may not be
selected for Loans denominated in Pounds or Euros.
(i) Base Rate Option: A rate per annum (computed on the basis
of a year of 365 or 366 days, as the case may be, and actual days
elapsed) for each day equal to the Base Rate for such day. The "Base
Rate" for any day shall mean the greater of (A) the Prime Rate for such
day or (B) the Federal Funds Effective Rate for such day plus .50%,
such interest rate to change automatically from time to time effective
as of the effective date of each change in the Prime Rate or the
Federal Funds Effective Rate.
(ii) Euro-Rate Option: A rate per annum (based on a year of
360 days and actual days elapsed) for each day equal to the Euro-Rate
for such day plus the Applicable Margin for such day. "Euro-Rate" for
any day, as used herein, shall mean for each Funding Segment of the
Euro-Rate Portion corresponding to a proposed or existing Euro-Rate
Funding Period the rate per annum determined by the Administrative
Agent by dividing (the resulting quotient to be rounded upward to the
nearest 1/100 of 1%) (A) the rate of interest (which shall be the same
for each day in such Euro-Rate Funding Period) determined in good faith
by the Administrative Agent in accordance with its usual procedures for
determination of London interbank market-based interest rates for
borrowers in general by reference to the applicable Telerate Screen
page or other similar source (which determination shall be conclusive
absent manifest error) to be the average of the rates per annum for
deposits in Dollars, Pounds or Euros, as applicable, offered to major
money center banks in the London interbank market (or, to the extent
consistent with the Administrative Agent's usual procedures, the
interbank market for the Euro zone) at approximately 11:00 a.m., London
time (or, in the case of Euros, to the extent consistent with the
Administrative Agent's usual procedures, Brussels time), two Business
Days prior to the first day of such Euro-Rate Funding Period for
delivery on the first day of such Euro-Rate Funding Period in amounts
comparable to such Funding Segment and having maturities comparable to
such Funding Period by (B) a number equal to 1.00 minus the Euro-Rate
Reserve Percentage.
The "Euro-Rate" may also be expressed by the following formula:
[average of the rates offered to major money ]
[center banks in the London (or Euro zone) interbank market]
Euro-Rate = [determined by the Administrative Agent per subsection (A) ]
------------------------------------------------------------
[1.00 - Euro-Rate Reserve Percentage]
"Euro-Rate Reserve Percentage" for any day shall mean the percentage
(expressed as a decimal, rounded upward to the nearest 1/100 of 1%), as
determined in good faith by the Administrative Agent (which determination shall
be conclusive absent manifest error), which is in effect on such day as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) representing the maximum reserve requirement (including, without
limitation, supplemental, marginal and emergency reserve requirements) with
respect to eurocurrency funding (currently referred to as "Eurocurrency
liabilities") of a member bank in such System. The Euro-Rate shall be adjusted
automatically as of the effective date of each change in the Euro-Rate Reserve
Percentage. The Euro-Rate Option shall be calculated in accordance with the
foregoing whether or not any Bank is actually required to hold reserves in
connection with its eurocurrency funding or, if required to hold such reserves,
is required to hold reserves at the "Euro-Rate Reserve Percentage" as herein
defined.
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<PAGE> 32
(b) Notice of Euro-Rate. The Administrative Agent shall give prompt
notice to AUL and to the Banks of the Euro-Rate determined or adjusted in
accordance with the definition of the Euro-Rate, which determination or
adjustment shall be conclusive, absent manifest error, if made in good faith.
(c) Funding Periods. At any time when a Borrower shall select, convert
to or renew the Euro-Rate Option to apply to any part of its Loans, the Borrower
shall specify one or more periods (the "Euro-Rate Funding Periods") during which
such Option shall apply, such Euro-Rate Funding Periods being one, two, three or
six months; provided, that (i) each Euro-Rate Funding Period shall begin on a
Business Day, and the term "month", when used in connection with a Euro-Rate
Funding Period, shall be construed in accordance with prevailing practices in
the London interbank market at the commencement of such Euro-Rate Funding
Period, as determined in good faith by the Administrative Agent (which
determination shall be conclusive absent manifest error) and (ii) such Borrower
may not select a Euro-Rate Funding Period that would end after the Maturity
Date.
(d) Transactional Amounts. Every selection of, conversion from,
conversion to or renewal of an interest rate Option and every payment or
prepayment of any Loans shall be in a principal amount such that after giving
effect thereto the aggregate principal amount of the Base Rate Portion of such
Loans or the aggregate principal amount of each Funding Segment of the Euro-Rate
Portion of such Loans shall be as set forth below:
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<PAGE> 33
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
PORTION OR FUNDING SEGMENT ALLOWABLE AGGREGATE PRINCIPAL AMOUNTS
--------------------------------------------------------------------------------
Base Rate Portion Any
--------------------------------------------------------------------------------
<S> <C>
Each Funding Segment of Integral multiples of $1,000,000, pound
the Euro-Rate Portion sterling1,000,000 or EU1,000,000 not less
than $5,000,000, pound sterling5,000,000 or
EU5,000,000, as the case may be.
--------------------------------------------------------------------------------
</TABLE>
(e) Euro-Rate Unascertainable. If
(i) on any date on which a Euro-Rate would otherwise be set
the Administrative Agent shall have determined in good faith (which
determination shall be conclusive absent manifest error) that:
(A) adequate and reasonable means do not exist for
ascertaining such Euro-Rate,
(B) a contingency has occurred which materially and
adversely affects the London interbank market (or, if
applicable, the interbank market for the Euro zone) for
deposits in the relevant currency, or
(C) the effective cost to Banks having more than half
of the Committed Amounts of funding a proposed Funding Segment
of the Euro-Rate Portion from a Corresponding Source of Funds
shall exceed the Euro-Rate plus the Applicable Margin
applicable to such Funding Segment, or
(ii) at any time any Bank shall have determined in good faith
(which determination shall be conclusive absent manifest error) that
the making, maintenance or funding of any part of the Euro-Rate Portion
has been made unlawful by compliance by such Bank or a Notional
Euro-Rate Funding Office in good faith with any Law or guideline or
interpretation or administration thereof by any Official Body charged
with the interpretation or administration thereof or with any request
or directive of any such Official Body;
then, and in any such event, the Administrative Agent or such Bank, as
the case may be, may notify AUL of such determination (and any Bank giving such
notice shall notify the Administrative Agent). Upon such date as shall be
specified in such notice (which shall not be earlier than the date such notice
is given), the obligation of each of the Banks (or, in the case of clause (ii),
of the Bank giving such notice) to allow the Borrowers to select, convert to or
renew the Euro-Rate Option shall be suspended until the Administrative Agent or
such Bank, as the case may be, shall have later notified AUL (and any Bank
giving such notice shall notify the Administrative Agent) of the Administrative
Agent's or such Bank's determination in good faith (which determination shall be
conclusive absent manifest error) that the circumstance giving rise to such
previous determination no longer exists.
If any Bank notifies AUL of a determination under subsection (ii) of
this Section 3.03(e), the Euro-Rate Portion of the Dollar-denominated Loans of
such Bank shall automatically be converted to the Base Rate Option as of the
date specified in such notice.
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<PAGE> 34
If at the time the Administrative Agent or a Bank makes a determination
under subsection (i) or (ii) of this Section 3.03(e) the applicable Borrower
previously has notified the Administrative Agent that it wishes to select,
convert to or renew the Euro-Rate Option with respect to any proposed Loans but
such Loans have not yet been made, such notification shall be deemed to provide
for selection of, conversion to or renewal of the Base Rate Option instead of
the Euro-Rate Option with respect to such Loans or, in the case of a
determination by a Bank, such Loans of such Bank.
3.04 Conversion or Renewal of Interest Rate Options.
(a) Conversion or Renewal. Subject to the provisions of Section 3.11(b)
hereof, a Borrower may convert any part of its Loans from any interest rate
Option or Options to one or more different interest rate Options and may renew
the Euro-Rate Option as to any Funding Segment of the Euro-Rate Portion: (i) at
any time with respect to conversion from the Base Rate Option; or (ii) at the
expiration of any Funding Period with respect to conversions from or renewals of
the Euro-Rate Option as to the Funding Segment corresponding to such expiring
Funding Period. Whenever a Borrower desires to convert or renew any interest
rate Option or Options, such Borrower shall provide to the Administrative Agent
Standard Notice setting forth the following information: (1) the Loans to which
such conversion or renewal is to apply; (2) the date, which shall be a Business
Day, on which the proposed conversion or renewal is to be made; (3) the
principal amounts selected in accordance with Section 3.03(d) hereof of the Base
Rate Portion and each Funding Segment of the Euro-Rate Portion to be converted
from or renewed; (4) the interest rate Option or Options selected in accordance
with Section 3.03(a) hereof and the principal amounts selected in accordance
with Section 3.03(d) hereof of the Base Rate Portion and each Funding Segment of
the Euro-Rate Portion to be converted to; and (5) with respect to each Funding
Segment to be converted to or renewed, the Funding Period selected in accordance
with Section 3.03(c) hereof to apply to such Funding Segment. Standard Notice
having been so provided, after the date specified in such Standard Notice,
interest shall be calculated upon the principal amount of the Loans as so
converted or renewed.
(b) Failure to Convert or Renew. Absent due notice from a Borrower of
conversion or renewal in the circumstances described in clause (ii) of the first
sentence of Section 3.04(a) hereof, any part of the Euro-Rate Portion for which
such notice is not received shall be (i) converted automatically to the Base
Rate Option on the last day of the expiring Funding Period if such Euro-Rate
Portion is in Dollars or (ii) renewed automatically for one month on the last
day of the expiring Funding Period if such Euro-Rate Portion is in Pounds or
Euros.
3.05. Prepayments Generally. Whenever a Borrower desires or is required
to prepay any part of its Loans, it shall provide Standard Notice to the
Administrative Agent setting forth the following information: (a) the date,
which shall be a Business Day, on which the proposed prepayment is to be made;
(b) subject to Section 3.09, the currency, which shall be either Dollars, Pounds
or Euros, in which such proposed prepayment is to be made, (c) the total
principal amount of such prepayment, which shall be the sum of the principal
amounts selected pursuant to clause (d) of this Section 3.05 and (d) the
principal amounts selected in accordance with Section 3.03(d) hereof of the Base
Rate Portion and each part of each Funding Segment of Euro-Rate Portion to be
prepaid. Standard Notice having been so provided, on the date specified in such
Standard Notice, the principal amounts of the Base Rate Portion and each part of
the Euro-Rate Portion specified in such notice, together with interest on each
such principal amount to such date, shall be due and payable.
3.06. Optional Prepayments. A Borrower shall have the right at its
option from time to time voluntarily to prepay its Loans in whole or part
without premium or penalty (subject, however, to Section 3.11(b) hereof) at any
time. Any such prepayment shall be made in accordance with Section 3.05 hereof.
3.07. Mandatory Prepayments. If the Dollar Equivalent of the aggregate
Total Credit Exposure of the Banks exceeds the aggregate of the Banks' Committed
Amounts at any time, then the Borrowers shall, upon receipt of notice of such
excess from the Administrative Agent (and, if the amount of such
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excess is equal to or less than $3,000,000 upon the expiration of a period of
ten days at the end of which period any excess remains outstanding), immediately
prepay a principal amount of Loans (subject to Section 3.11(b)) so as to reduce
the Dollar Equivalent of the aggregate Total Credit Exposures of the Banks by
such excess.
3.08. Interest Payment Dates. Interest on the Base Rate Portion shall
be due and payable on each Regular Payment Date. Interest on each Funding
Segment of the Euro-Rate Portion shall be due and payable on the last day of the
corresponding Euro-Rate Funding Period and also, if such Funding Period is
longer than three months, every three months during such Funding Period. After
maturity of any part of the Loans (by acceleration or otherwise), interest on
such part of the Loans shall be due and payable on demand.
3.09. Pro Rata Treatment and Payments.
(a) Each borrowing from the Banks and each payment or prepayment to the
Banks under this Article III (except as specifically provided in Sections 3.11
and 3.12) and all fees payable by the Borrowers hereunder shall be made Pro Rata
in accordance with each Bank's Commitment Percentage and from and to each Bank
on the same date.
(b) The parties agree that (i) all payments of principal, interest and
other amounts in connection with Loans denominated in Dollars and all fees shall
be made in Dollars and (ii) all payments of principal, interest and other
amounts (other than fees) in connection with Loans denominated in Pounds or
Euros shall be made in such currency.
(c) All payments and prepayments to be made in respect of principal,
interest, fees or other amounts due from the Borrowers in Dollars shall be
payable by 2:00 p.m., Pittsburgh time, on the day when due without presentment,
demand, protest or notice of any kind, all of which are hereby expressly waived,
and an action therefor shall immediately accrue. Such payments shall be made to
the Administrative Agent at its Domestic Office in Dollars in funds immediately
available at such office without setoff, counterclaim or other deduction of any
nature. The Administrative Agent shall make the funds so received available to
each Bank in funds immediately available at the Administrative Agent's Domestic
Office.
(d) All payments and prepayments to be made in respect of principal,
interest, fees or other amounts due from a Borrower in any Pounds or Euros shall
be payable by 2:00 p.m., London time, on the day when due without presentment,
demand, protest or notice of any kind, all of which are hereby expressly waived,
and an action therefor shall immediately accrue. Such payments shall be made to
the Administrative Agent at its London Office in such currency in funds
immediately available at such office without setoff, counterclaim or other
deduction of any nature. The Administrative Agent shall promptly make the funds
so received available to each Bank in funds immediately available at each Bank's
office designated in writing to the Administrative Agent.
(e) To the extent permitted by law, after there shall have become due
(by acceleration or otherwise) interest, funding fees or any other amounts due
from a Borrower hereunder or under its Notes (excluding overdue principal, which
shall bear interest as described in the immediately-following sentence), such
amounts shall bear interest for each day until paid (before and after judgment),
payable on demand, at a rate per annum (based on a year of 365 or 366 days, as
the case may be, with respect to Loans bearing interest at the Base Rate Option
and based on a year of 360 days with respect to Loans bearing interest at the
Euro-Rate Option) equal to the following: (i) in the case of any part of the
Euro-Rate Portion of the Loans, (A) until the end of the applicable then-current
Euro-Rate Funding Period, at a rate per annum 2 % above the rate otherwise
applicable to such part, and (B) thereafter, in accordance with the following
clause (ii); and (ii) otherwise, 2% above the then-current Base Rate Option,
such interest rate to change automatically from time to time effective as of the
effective date of each change in the Base Rate. After the principal amount of
any Loan has become due (by acceleration or otherwise),
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such Loan shall bear interest for each day until paid (before and after
judgment) at a rate per annum (based on a year of 365 or 366 days, as the case
may be, with respect to Loans bearing interest at the Base Rate Option and based
on a year of 360 days with respect to Loans bearing interest at the Euro-Rate
Option) which shall be equal to the following: (i) in the case of any part of
the Euro-Rate Portion of the Loans, (A) until the end of the applicable
then-current Euro-Rate Funding Period, at a rate per annum 2 % above the rate
otherwise applicable to such part, and (B) thereafter, in accordance with the
following clause (ii); and (ii) in the case of any other principal amount due, 2
% above the then-current Base Rate Option, such interest rate to change
automatically from time to time effective as of the effective date of each
change in the Base Rate.
(f) The provisions of this Section 3.09 are cumulative and not
exclusive of the other provisions of this Agreement; without limitation, the
increased interest rates provided for herein are cumulative with the adjustments
in interest rates provided for elsewhere in this Agreement. The Banks and the
Borrowers acknowledge that, in no event shall the interest charged on any Loan
exceed the maximum rate permitted under applicable law. Interest in excess of
the maximum allowed by applicable law will not be collected and, if
inadvertently collected, will be credited as a reduction of principal, effective
as of the date inadvertently collected. Any payment of principal in excess of
the then outstanding principal balance resulting from the inadvertent collection
of interest in excess of the maximum rate allowed by law shall be refunded to
the relevant Borrower, effective as of the date inadvertently collected.
3.10 Calculation of Dollar Equivalent.
(a) Calculation of Dollar Equivalent. Upon each making and
upon each payment of a Loan or a Letter of Credit denominated in Pounds
or Euros, the Administrative Agent shall calculate the Dollar
Equivalent of such Loan or Letter of Credit, as the case may be, and
shall provide written confirmation to the Banks and to AUL.
(b) Recalculation of Dollar Equivalent. In determining the
Dollar Equivalent of the aggregate Total Credit Exposure of the Banks,
the Administrative Agent may use the respective Dollar Equivalent for
the Loans and the Letters of Credit calculated in accordance with
Section 3.10(a) hereof, unless such Dollar Equivalent so calculated
exceeds 90% of the aggregate of the Banks' Committed Amounts, in which
case the Administrative Agent shall recalculate the Dollar Equivalent
of the Loans and the Letters of Credit outstanding no less frequently
than once each week. The Administrative Agent may recalculate the
Dollar Equivalent of each of the Loans and the Letters of Credit as
frequently as it determines to do so in its discretion, provided, that
such recalculation shall be made for all of the Loans and the Letters
of Credit no less frequently than once each week during any period when
the aggregate Dollar Equivalent of the aggregate Total Credit Exposure
of the Banks exceeds 90% of the aggregate Committed Amounts of the
Banks.
3.11. Additional Compensation in Certain Circumstances, etc.
(a) Increased Costs or Reduced Return Resulting From Taxes, Reserves,
Capital Adequacy Requirements, Expenses, Etc. If the introduction of or any
change in, or any change in the interpretation or application of, any Law,
regulation or guideline by any Official Body charged with the interpretation or
administration thereof or compliance with any request or directive of any
applicable Official Body (whether or not having the force of law):
(i) subjects any Bank or any Notional Euro-Rate Funding Office
to any tax or changes the basis of taxation with respect to this
Agreement, the Notes, the Loans or payments by a Borrower of principal,
interest, commitment fee or other amounts due from such Borrower
hereunder or under the Notes (except for taxes on the overall net
income or overall gross receipts of such Bank or such Notional
Euro-Rate Funding Office imposed by the jurisdictions (federal,
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state and local) in which the Bank's principal office or Notional
Euro-Rate Funding Office is located),
(ii) imposes, modifies or deems applicable any reserve,
special deposit or similar requirement against credits or commitments
to extend credit extended by, assets (funded or contingent) of,
deposits with or for the account of, or other acquisitions of funds by,
such Bank or any Notional Euro-Rate Funding Office (other than
requirements expressly included herein in the determination of the
Euro-Rate hereunder),
(iii) imposes, modifies or deems applicable any capital
adequacy or similar requirement (A) against assets (funded or
contingent) of, or credits or commitments to extend credit extended by,
any Bank or any Notional Euro-Rate Funding Office, or (B) otherwise
applicable to the obligations of any Bank or any Notional Euro-Rate
Funding Office under this Agreement, or
(iv) imposes upon any Bank or any Notional Euro-Rate Funding
Office any other condition or expense with respect to this Agreement,
the Notes or its making, maintenance or funding of any Loans or any
security therefor,
and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense (including loss of margin) upon any
Bank, any Notional Euro-Rate Funding Office or, in the case of clause (iii)
hereof, any person controlling a Bank, with respect to this Agreement, the Notes
or the making, maintenance or funding of any Loan (or, in the case of any
capital adequacy or similar requirement, to have the effect of reducing the rate
of return on such Bank's or controlling person s capital, taking into
consideration such Bank's or controlling person's policies with respect to
capital adequacy) by an amount which such Bank, in its reasonable discretion,
deems to be material (such Bank being deemed for this purpose to have made,
maintained or funded each Funding Segment of the Euro-Rate Portion from a
Corresponding Source of Funds), such Bank may from time to time notify AUL in
writing of the amount determined in good faith (using any averaging and
attribution methods) by such Bank (which determination shall be conclusive
absent manifest error) to be necessary to compensate such Bank or such Notional
Euro-Rate Funding Office for such increase, reduction or imposition. Such amount
shall be due and payable by the applicable Borrower to such Bank five Business
Days after such notice is given, together with an amount equal to interest on
such amount from the date two Business Days after the date demanded until such
due date at the Base Rate Option applicable to Loans. A certificate by such Bank
as to the amount due and payable under this Section 3.11(a) from time to time
and the method of calculating such amount shall be conclusive absent manifest
error. Each Bank agrees that it will use good faith efforts to notify AUL in
writing of the occurrence of any event that would give rise to a payment by such
Borrower under this Section 3.11(a); provided, however, that, so long as such
notice is given within a reasonable period of time after the occurrence of such
event, any failure of such Bank to give any such notice shall have no effect on
such Borrower's obligations under this Section 3.11(a).
(b) Funding Breakage. If (i) any Borrower fails to borrow, convert or
renew any Loan hereunder which would, after such borrowing, conversion or
renewal, have a Euro-Rate Portion, after notice requesting such borrowing,
conversion or renewal has been given by such Borrower (whether such failure
results from failure to satisfy applicable conditions to such borrowing,
conversion, or renewal or otherwise), or (ii) any part of any Funding Segment of
any Euro-Rate Portion of the Loans becomes due (by acceleration or otherwise),
or is paid, prepaid or converted to another interest rate Option (whether or not
such payment, prepayment or conversion is mandatory or automatic and whether or
not such payment or prepayment is then due), on a day other than the last day of
the corresponding Funding Period, such Borrower shall indemnify the Banks on
demand against any loss, liability, cost or expense of any kind or nature which
the Banks may sustain or incur in connection with or as a result of such event.
Such indemnification in any event shall include an amount equal to the excess,
if any, of (i) the aggregate amount of interest which would have accrued on the
amount of the Euro-Rate Portion not so borrowed, converted or renewed, or which
so becomes due, or which is so paid, prepaid or converted,
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<PAGE> 38
from and including the date on which such borrowing, conversion or renewal would
have been made pursuant to such notice, or on which such part of such Funding
Segment so becomes due, or on which such part of such Funding Segment is so
paid, prepaid or converted, to the last day of the Funding Period applicable to
such amount (or, in the case of a failure to borrow, convert or renew, the
Funding Period that would have been applicable to such amount but for such
failure) in each case at the applicable rate of interest for such Euro-Rate
Portion provided for herein (excluding, however, the Applicable Margin included
therein, if any), over (ii) the aggregate amount of interest (as determined in
good faith by the Administrative Agent with reference to the applicable Telerate
Screen page or other source and after consultation with the Banks) which would
have accrued to the Banks on such amount for such period by placing such amount
on deposit for such period with leading banks in the London interbank market. A
certificate by the Banks as to any amount that the Banks are entitled to receive
pursuant to this Section 3.11(b) shall be conclusive absent manifest error if
made in good faith.
3.12. Funding by Branch, Subsidiary or Affiliate.
(a) Notional Funding. Each Bank shall have the right from time to time,
prospectively or retrospectively, without notice to a Borrower, to deem any
branch, subsidiary or affiliate of such Bank to have made, maintained or funded
any part of the Euro-Rate Portion at any time. Any branch, subsidiary or
affiliate so deemed shall be known as a "Notional Euro-Rate Funding Office."
Such Bank shall deem any part of the Euro-Rate Portion of the Loans or the
funding therefor to have been transferred to a different Notional Euro-Rate
Funding Office if such transfer would avoid or cure an event or condition
described in Section 3.03(e)(ii) hereof or would lessen compensation payable by
the Borrowers under Section 3.11(a) hereof, and if such Bank determines in its
sole discretion that such transfer would be practicable and would not have a
material adverse effect on such part of the Loans, such Bank or any Notional
Euro-Rate Funding Office (it being assumed for purposes of such determination
that each part of the Euro-Rate Portion is actually made or maintained by or
funded through the corresponding Notional Euro-Rate Funding Office). Notional
Euro-Rate Funding Offices may be selected by such Bank without regard to such
Bank's actual methods of making, maintaining or funding Loans or any sources of
funding actually used by or available to such Bank.
(b) Actual Funding. Each Bank shall have the right from time to time to
make or maintain any part of the Euro-Rate Portion by arranging for a branch,
subsidiary or affiliate of such Bank to make or maintain such part of the
Euro-Rate Portion. Such Bank shall have the right to (i) hold any applicable
Note payable to its order for the benefit and account of such branch, subsidiary
or affiliate or (ii) request each Borrower to (A) execute and deliver to the
Administrative Agent (for delivery to such branch, subsidiary or affiliate) a
new Note in the principal amount of such Euro-Rate Portion, in substantially the
form of a Note, with the blanks appropriately filled, payable to such branch,
subsidiary or affiliate and with appropriate changes reflecting that the holder
thereof is not obligated to make any additional Loans to a Borrower, and (B)
execute and deliver to the Administrative Agent (for delivery to such Bank) a
replacement Note in the principal amount of such Bank's Committed Amount minus
the amount of the new Note under subsection (b)(ii)(A) (such Note to be in
exchange for (and to be delivered against delivery, marked "exchanged" to such
Borrower of), but not in payment of, the Note then held by such Bank). Each such
Note shall be dated as of and be in substantially the form of the predecessor
Note. The Administrative Agent shall mark the predecessor Note "exchanged" and
deliver it to the respective Borrower. Each Borrower agrees to comply promptly
with any request under subsection (b)(ii) of this Section 3.12. If any Bank
causes a branch, subsidiary or affiliate to make or maintain any part of the
Euro-Rate Portion hereunder, all terms and conditions of this Agreement, the
Notes, and any other Transaction Document shall, except where the context
clearly requires otherwise, be applicable to such part of the Euro-Rate Portion
and to any note payable to the order of such branch, subsidiary or affiliate to
the same extent as if such part of the Euro-Rate Portion were made or maintained
and such note were a Note payable to such Bank's order.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES.
Each Credit Party represents and warrants to the Issuing Bank,
the Banks and the Agents that:
4.01. Corporate Existence and Standing. Such Credit Party and each of
its Covered Subsidiaries is a corporation duly incorporated, validly existing
and in good standing under the laws of its respective jurisdiction of
incorporation, has the power and authority to own its properties and assets, and
to carry on its business as presently conducted, and is duly qualified to
conduct business as a foreign corporation in each jurisdiction in which such
qualification is required, except where the failure to be so qualified could not
reasonably be expected to have a Material Adverse Effect.
4.02. Authorization and Validity. Such Credit Party has all requisite
corporate power and authority and legal right to execute and deliver (or file,
as the case may be) this Agreement and any other Transaction Document to which
it is a party, to request the issuance of Letters of Credit (in the case of
Account Parties) or the making of Loans (in the case of Borrowers) and to
perform its obligations hereunder and thereunder. The execution and delivery (or
filing, as the case may be) by such Credit Party of this Agreement and each such
Transaction Document and the performance of its obligations hereunder and
thereunder have been duly authorized by proper corporate proceedings and this
Agreement and each such Transaction Document constitute legal, valid and binding
obligations of such Credit Party enforceable against such Credit Party in
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
similar laws affecting the enforcement of creditors' rights generally or by
general principles of equity.
4.03. Compliance with Laws and Contracts. Such Credit Party and its
Covered Subsidiaries have complied in all material respects with all applicable
statutes, rules, regulations, orders and restrictions of any domestic or foreign
government or any instrumentality or agency thereof having jurisdiction over the
conduct of their respective businesses or the ownership of their respective
properties, except where the failure to so comply could not reasonably be
expected to have a Material Adverse Effect. Neither the execution and delivery
by such Credit Party of the Transaction Documents to which such Credit Party is
a party, the issuance or use of the Letters of Credit (in the case of Account
Parties), the making of Loans or the use of the proceeds of Loans (in the case
of Borrowers), the consummation of the transactions contemplated by the
Transaction Documents nor compliance with the provisions of the Transaction
Documents will, or at the relevant time did, (a) violate any law, rule,
regulation, order, writ, judgment, injunction, decree or award binding on such
Credit Party or any Covered Subsidiary or such Credit Party's or any Covered
Subsidiary's charter, articles or certificate of incorporation or by-laws, (b)
violate the provisions of or require the approval or consent of any party to any
indenture, instrument or agreement to which such Credit Party or any Covered
Subsidiary is a party or is subject, or by which it, or its property, is bound,
or conflict with or constitute a default thereunder, or result in the creation
or imposition of any Lien in, of or on the property of such Credit Party or any
Subsidiary pursuant to the terms of any such indenture, instrument or agreement
or (c) require any consent of the stockholders of any Person except for
approvals or consents which will be obtained before the initial Letter of Credit
issuance (including by deeming Existing Letters of Credit to be Letters of
Credit) or making of a Loan and are disclosed on Schedule 4.03, except for any
violation of, failure to obtain an approval or consent required under, conflict
with, default under or creation or imposition of a Lien pursuant to, any such
law, rule, regulation, order, writ, judgment, injunction, decree, award,
indenture, instrument or agreement that could not reasonably be expected to have
a Material Adverse Effect.
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4.04. Governmental Consents. Except as set forth on Schedule 4.04
hereto, no order, consent, approval, qualification, license, authorization, or
validation of, or filing, recording or registration with, or exemption by, or
other action in respect of, a Governmental Authority, or any subdivision
thereof, any securities exchange or any other Person is or at the relevant time
was required with respect to a Credit Party to authorize, or is or at the
relevant time was required with respect to a Credit Party or AAM in connection
with, the execution, delivery, consummation or performance of, or the legality,
validity, binding effect or enforceability of any of the Transaction Documents,
the issuance or use of the Letters of Credit, the making of Loans or the use of
the proceeds of Loans, or the consummation of any transaction contemplated in
the Transaction Documents.
4.05. Financial Statements. The Credit Parties have heretofore
furnished to the Administrative Agent, with sufficient copies for each Bank, the
financial statements listed on Schedule 4.05 hereto (collectively, the
"Financial Statements"). Each of the Financial Statements was prepared in
accordance with Agreement Accounting Principles or SAP, as applicable, and,
together with the related notes, fairly presents the consolidated financial
condition and operations of Alleghany and its Subsidiaries, of the relevant
Credit Party and its Subsidiaries, or of the relevant AUHL Entity or syndicate
managed by any AUHL Entity, as applicable, at such dates and the consolidated
results of their operations for the respective periods then ended (except, in
the case of such unaudited statements, for normal year-end audit adjustments).
4.06. Material Adverse Change. Except as set forth on Schedule 4.06
hereto, no material adverse change in the business, Property, condition
(financial or otherwise), performance or operations of Alleghany and its
Subsidiaries, taken as a whole, or of the AUHL Entities, taken as a whole, has
occurred since December 31, 1999.
4.07. Taxes. Except as set forth in Schedule 4.07 hereto, such Credit
Party and each of its Covered Subsidiaries have filed or caused to be filed on a
timely basis and in correct form all material tax returns which are required to
be filed by it, and each of the Credit Parties and each such Subsidiary has paid
all taxes due pursuant to said returns or pursuant to any assessment received by
such person, except, in each case, such taxes, if any, as are being contested in
good faith and as to which adequate reserves have been provided in accordance
with Agreement Accounting Principles or SAP, as applicable, and as to which no
Lien exists. No tax liens have been filed and no claims are being asserted with
respect to any taxes for which any Credit Party or any Subsidiary of any Credit
Party may be liable which could reasonably be expected to have a Material
Adverse Effect. The charges, accruals and reserves on the books of each Credit
Party and its Subsidiaries in respect of any taxes or other governmental charges
owing with respect to any tax year are in accordance with Agreement Accounting
Principles or SAP, as applicable.
4.08. Litigation. There is no litigation, arbitration proceeding,
inquiry or governmental investigation pending or, to the knowledge of any of its
officers, threatened against or affecting such Credit Party or any of its
Subsidiaries or any of their respective properties which could reasonably be
expected to have a Material Adverse Effect if adversely determined.
4.09. Licenses. No License, the loss of which could reasonably be
expected to have a Material Adverse Effect, is the subject of a proceeding for
suspension or revocation. To such Credit Party's knowledge, there is no
sustainable basis for such suspension or revocation, and no such suspension or
revocation has been threatened by any Governmental Authority.
4.10. Use of Proceeds. Such Credit Party is not engaged in the business
of extending credit to others for the purposes of buying or carrying any "margin
stock."
4.11. Permits, Licenses and Rights. Such Credit Party and each Covered
Subsidiary of such Credit Party own or possess all the patents, trademarks,
service marks, trade names, copyrights, licenses, franchises, permits and rights
with respect to the foregoing necessary to own and operate their respective
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properties and to carry on their respective businesses as presently conducted
and presently planned to be conducted without, to the best knowledge of such
Credit Party, conflict with the rights of others, except where failure to do so
could not reasonably be expected to have a Material Adverse Effect.
4.12. Disclosure. None of the (a) information, exhibits or reports
furnished by or on behalf of any Credit Party to any Agent or to any Bank in
connection with this Agreement or the Transaction Documents and the transactions
contemplated hereby and thereby or (b) representations or warranties of any
Credit Party contained in this Agreement, the other Transaction Documents or any
other document, certificate or written statement furnished to the Agents or the
Banks by or on behalf of any Credit Party for use in connection with the
transactions contemplated by this Agreement or the Transaction Documents
contained, contains or will contain any untrue statement of a material fact or
omitted, omits or will omit to state a material fact necessary in order to make
the statements contained herein or therein not misleading in light of the
circumstances in which the same were made and on the date as of which the same
were made; provided, that this Section 4.12 shall not apply to any plan,
forecast, projection or pro forma financial information contained in such
materials that is based upon good faith estimates and assumptions believed to be
reasonable at the time made and shall not apply to the Merrill Lynch valuation
report with respect to AAM distributed to the Banks prior to the execution and
delivery of this Agreement. The pro forma financial information contained in
such materials is based upon good faith estimates and assumptions believed by
the Credit Parties to be reasonable at the time made. There is no fact known to
any Credit Party (other than matters of a general economic or political nature
and other than matters applicable to the insurance industry generally) that has
had since December 31, 1999 or could reasonably be expected to have a Material
Adverse Effect and that has not been disclosed herein or in such other
documents, certificates and statements furnished to the Agents or Banks for use
in connection with the transactions contemplated by this Agreement and the other
Transaction Documents.
4.13. Environmental Laws. Except as set forth on Schedule 4.13 hereto,
there are no claims, investigations, litigation, administrative proceedings,
notices, requests for information (each a "Proceeding"), whether pending or, to
such Credit Party's knowledge, threatened, or judgments or orders asserting
violations of applicable federal, state and local environmental, health and
safety statutes, regulations, ordinances, codes, rules, orders, decrees,
directives and standards ("Environmental Laws") or relating to any toxic or
hazardous waste, substance or chemical or any pollutant, contaminant, chemical
or other substance defined or regulated pursuant to any Environmental Law,
including, without limitation, asbestos, petroleum, crude oil or any fraction
thereof ("Hazardous Materials") asserted against such Credit Party or any of its
Subsidiaries which, in any case, could reasonably be expected to have a Material
Adverse Effect. Such Credit Party and each of its Covered Subsidiaries have
obtained and are in compliance in all material respects with all permits,
certificates, licenses, approvals and other authorizations ("Environmental
Permits") required for the operation of their business and have filed all
required notifications or reports relating, in each case, to chemical
substances, air emissions, effluent discharges and the storage, treatment,
transport and disposal of Hazardous Materials. As of the date hereof, such
Credit Party and its Covered Subsidiaries do not have liabilities exceeding
$100,000 in the aggregate for all of them with respect to compliance with
applicable Environmental Laws and Environmental Permits or related to the
generation, treatment, storage, disposal, release, investigation or cleanup of
Hazardous Materials, and, to the knowledge of such Credit Party, no facts or
circumstances exist which could give rise to such liabilities with respect to
compliance with applicable Environmental Laws and Environmental Permits and the
generation, treatment, storage, disposal, release, investigation or cleanup of
Hazardous Materials.
4.14. Material Agreements. Neither such Credit Party nor any Covered
Subsidiary of such Credit Party is a party to any agreement or instrument or
subject to any charter, bylaw or other restriction set forth in a similar
governing document which could reasonably be expected to have a Material Adverse
Effect. Neither such Credit Party nor any Covered Subsidiary of such Credit
Party is in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement to which it is a
party, which default could reasonably be expected to have a Material Adverse
Effect.
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4.15 Insurance. Such Credit Party and each Covered Subsidiary of such
Credit Party maintains insurance on its Property with such companies, in such
amounts and covering such risks as is, in each case, consistent with sound
business practice.
4.16. Capitalization. Schedule 4.16 hereto contains (a) an accurate
description of Alleghany's capitalization as of June 30, 2000, and (b) an
accurate list of all of such Credit Party's existing Subsidiaries as of the date
of this Agreement, setting forth their respective jurisdictions of incorporation
and the percentage of their capital stock owned by such Credit Party or other
Subsidiaries. All of the issued and outstanding shares of capital stock of such
Credit Party and of each Covered Subsidiary have been duly authorized and
validly issued, are fully paid and non-assessable, and are free and clear of all
Liens. Except as set forth on Schedule 4.16, no authorized but unissued or
treasury shares of capital stock of such Credit Party or any Subsidiary are
subject to any option, warrant, right to call or commitment of any kind or
character. Except as set forth on Schedule 4.16, neither the Credit Party nor
any Covered Subsidiary has any outstanding stock or securities convertible into
or exchangeable for any shares of its capital stock, or any right issued to any
Person (either preemptive or other) to subscribe for or to purchase, or any
options for the purchase of or any agreements providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to any of its capital stock or any stock or securities
convertible into or exchangeable for any of its capital stock other than as
expressly set forth in the certificate or articles of incorporation of such
Credit Party or such Subsidiary. Neither the Credit Party nor any Covered
Subsidiary is subject to any obligation (contingent or otherwise) to repurchase
or otherwise acquire or retire any shares of its capital stock or any
convertible securities, rights or options of the type described in the preceding
sentence except as otherwise set forth on Schedule 4.16. Except as set forth on
Schedule 4.16 as of the date hereof such Credit Party does not own or hold,
directly or indirectly, any capital stock or equity security of, or any equity
or partnership interest in any Person other than such Subsidiaries.
4.17. ERISA; Labor. The Unfunded Liabilities of all Single Employer
Plans maintained by such Credit Party or any of its Subsidiaries do not in the
aggregate exceed $5,000,000 and the Unfunded Liabilities of all Single Employer
Plans maintained by the other members of the Controlled Group do not in the
aggregate exceed an amount which could reasonably be expected to have a Material
Adverse Effect. Except as set forth on Schedule 4.17 neither such Credit Party
nor any other member of the Controlled Group maintains, or is obligated to
contribute to, any Multiemployer Plan. Each Plan complies in all material
respects with all applicable requirements of law and regulations, no Reportable
Event has occurred with respect to any Plan maintained by such Credit Party or
any of its Subsidiaries, no Reportable Event has occurred with respect to any
Plan maintained by any other member of the Controlled Group that could
reasonably be expected to have a Material Adverse Effect, neither such Credit
Party nor any Subsidiary has withdrawn from any Multiemployer Plan or initiated
steps to do so, no other member of the Controlled Group has withdrawn from any
Multiemployer Plan resulting in any withdrawal liability that could reasonably
be expected to have a Material Adverse Effect or initiated steps to do so, and
no steps have been taken to reorganize or terminate any Plan by any member of
the Controlled Group or, to such Credit Party's knowledge, by any other Person.
On the date of this Agreement, neither Alleghany nor any of its Covered
Subsidiaries is a party to a collective bargaining agreement.
4.18. Defaults. No Default or Unmatured Default has occurred and is
continuing.
4.19. Federal Reserve Regulations. Neither such Credit Party nor any
its Subsidiaries is engaged, directly or indirectly, principally, or as one of
its important activities, in the business of extending, or arranging for the
extension of credit for the purpose of purchasing or carrying Margin Stock. No
part of the proceeds of any Letter of Credit or Loan will be used in a manner
which would violate, or result in a violation of Regulation T, Regulation U or
Regulation X. Neither the issuance of any Letter of Credit or the making of any
Loan hereunder nor the use of the proceeds thereof will violate or conflict with
the provisions of, Regulation T, Regulation U or Regulation X. Following the
issuance of any Letter of Credit or the making of any Loan, less than 25% of the
value (as determined by any
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reasonable method) of the assets of such Credit Party and its Subsidiaries which
are subject to any limitation on sale, pledge, or other restriction hereunder
taken as a whole has been, and will continue to be, represented by Margin Stock.
4.20. Investment Company; Public Utility Holding Company Act. Neither
such Credit Party nor any Covered Subsidiary is, or after giving effect to the
issuance of any Letter of Credit or the making of any Loan will be, an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended. Neither such
Credit Party nor any Covered Subsidiary is a "holding company" or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
4.21. Certain Fees. No broker's or finder's fee or commission was, is
or will be payable by such Credit Party or any Subsidiary with respect to any of
the transactions contemplated by this Agreement. Such Credit Party hereby agrees
to indemnify the Agents and the Banks against and agrees that it will hold each
of them harmless from any claim, demand or liability for broker's or finder's
fees or commissions alleged to have been incurred by such Credit Party in
connection with any of the transactions contemplated by this Agreement and any
expenses (including, without limitation, attorneys' fees and time charges of
attorneys for any Agent or any Bank which attorneys may be employees of any
Agent or any Bank) arising in connection with any such claim, demand or
liability. No other similar fee or commissions will be payable by such Credit
Party or any Subsidiary for any other services rendered to such Credit Party or
any Subsidiary ancillary to any of the transactions contemplated by this
Agreement.
4.22. Solvency. As of the date hereof, before and after giving effect
to the consummation of the transactions contemplated by the Transaction
Documents and the payment of all fees, costs and expenses payable by the Credit
Party or its Subsidiaries with respect to the transactions contemplated by the
Transaction Documents, each Credit Party (individually and on a consolidated
basis) is Solvent.
4.23. Ownership of Properties. Except as set forth on Schedule 4.23
hereto, such Credit Party and its Covered Subsidiaries own, free of all liens,
other than those permitted by Section 6.16 or by any of the other Transaction
Documents, all of the properties and assets reflected in the Financial
Statements as being owned by them, except for assets sold, transferred or
otherwise disposed of in the ordinary course of business since the date thereof.
To the knowledge of such Credit Party, there are no actual, threatened or
alleged defaults with respect to any leases of real property under which such
Credit Party or any Covered Subsidiary is lessee or lessor which could
reasonably be expected to have a Material Adverse Effect. Such Credit Party and
its Covered Subsidiaries own or possess rights to use all licenses, patents,
patent applications, copyrights, service marks, trademarks and trade names
necessary to continue to conduct their business as heretofore conducted, and no
such license, patent or trademark has been declared invalid or been limited by
order of any court or by agreement or is the subject of any infringement,
interference or similar proceeding or challenge, except for proceedings and
challenges which could not reasonably be expected to have a Material Adverse
Effect.
4.24. Indebtedness. Attached hereto as Schedule 4.24 is a complete and
correct list of all Indebtedness of such Credit Party and its Covered
Subsidiaries outstanding on the date of this Agreement (other than Indebtedness
in a principal amount not exceeding $1,000,000 (or its equivalent in any other
currency) for a single item of Indebtedness and $5,000,000 (or its equivalent in
any other currency) in the aggregate for all such Indebtedness and other than
Contingent Obligations permitted by clauses (b) through (f) of Section 6.15),
showing the aggregate principal amount which was outstanding on such date. Such
Credit Party has delivered or caused to be delivered to the Administrative
Agent, with sufficient copies for each of the Banks, a true and complete copy of
each instrument evidencing Indebtedness in a principal amount of $5,000,000 or
more (or its equivalent in any other currency) and of each document pursuant to
which any of such Indebtedness was issued.
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ARTICLE V
CONDITIONS
5.01. Effectiveness. The effectiveness of this Agreement shall be
subject to the following conditions:
(a) Proceedings and Incumbency. There shall have been delivered to the
Administrative Agent with sufficient copies for each Bank a certificate with
respect to each Credit Party in form and substance satisfactory to the
Administrative Agent dated the Closing Date and signed on behalf of each Credit
Party by the Secretary or an Assistant Secretary of such Credit Party certifying
as to: (a) true copies of all corporate action taken by such Credit Party
relative to this Agreement and the other Transaction Documents applicable to it,
including but not limited to that described in Section 4.02 hereof and (b) the
names, true signatures and incumbency of the officer or officers of such Credit
Party authorized to execute and deliver this Agreement and the other Transaction
Documents applicable to it. Each Bank, the Issuing Bank and each Agent may
conclusively rely on such certificates unless and until a later certificate
revising the prior certificate has been furnished to such Person.
(b) Organizational Documents. There shall have been delivered to the
Administrative Agent with sufficient copies for each Bank (i) certified copies
of the articles of incorporation or memorandum of association and by-laws or
other equivalent organizational documents for each Credit Party and for AAM and
(ii) a certificate of good standing for each Credit Party and for AAM certified
by the appropriate Official Body of its place of organization.
(c) Opinions of Counsel. There shall have been delivered to the
Administrative Agent with sufficient copies for each Bank written opinions
addressed to the Banks, dated the Closing Date, of Messrs. Dewey Ballantine LLP,
counsel for Alleghany, United States counsel for the Credit Parties and special
English counsel for AUL, AUCL and Talbot, and of Messrs. Conyers, Dill &
Pearman, special Bermuda counsel for AUC(B)L, in form and substance satisfactory
to each Bank, which together are substantially to the effects set forth in
Exhibit C.
(d) Details, Proceedings and Documents. All legal details and
proceedings in connection with the transactions contemplated by this Agreement
shall be reasonably satisfactory to each Bank, and each Bank shall have received
all such counterpart originals or certified or other copies of this Agreement
and the other the Transaction Documents and such other documents and proceedings
in connection with such transactions, in form and substance satisfactory to it,
as such Bank has reasonably requested.
(e) Fees and Expenses. Each Credit Party shall have paid all fees
(including the arrangement fee payable pursuant to the engagement letter between
the Arranger and Alleghany) and other compensation to be paid by it hereunder,
or with respect to the transactions contemplated hereby, on or prior to the
Closing Date.
(f) Representation and Warranties. The representations and warranties
contained in Article IV hereof shall be true on and as of the Closing Date with
the same effect as though made on and as of the Closing Date.
(g) Documentation. The Pledge Agreement shall have been delivered to
the Administrative Agent, duly executed by Alleghany, together with all other
documents and certificates required to be delivered thereunder (including
without limitation certificates representing the stock pledged as Collateral
with undated stock powers endorsed in blank). The Continuing Letter of Credit
Agreement shall have been delivered to the Administrative Agent and the Issuing
Bank, duly executed by the respective Account Parties, and the Notes shall have
been delivered to the Administrative Agent, duly executed by the Borrowers.
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(h) Other Certificates, Opinions or Documents. There shall have been
delivered to the Administrative Agent with sufficient copies for each Bank such
other certificates, opinions or documents as may be reasonably requested by the
Administrative Agent.
(i) Licenses; Regulatory Approvals. Each Credit Party shall have
obtained all licenses and regulatory approvals, if any, which are necessary to
complete the transactions contemplated by this Agreement and the other
Transaction Documents.
5.02. Extension of Credit. The obligation of the Issuing Bank and the
Banks to make any Credit Extension hereunder is subject to the accuracy as of
the date hereof of the representations and warranties herein contained, to the
performance by each Credit Party of its obligations to be performed hereunder on
or before the date of such Credit Extension and to the satisfaction of the
following further conditions:
(a) Representations and Warranties; Events of Default and Unmatured
Defaults. The representations and warranties contained in Article IV hereof
shall be true on and as of the date of each Credit Extension made hereunder with
the same effect as though made on and as of each such date, and on the date of
each Credit Extension made hereunder no Default and no Unmatured Default shall
have occurred and be continuing or exist or shall occur or exist after giving
effect to the Credit Extension to be made on such date. Failure of the
Administrative Agent to receive notice from the applicable Credit Party to the
contrary before any Credit Extension is made hereunder shall constitute a
representation and warranty that: (i) the representations and warranties
contained in Article IV hereof are true and correct on and as of the date of
such Credit Extension with the same effect as though made on and as of such date
and (ii) on the date of such Credit Extension no Default or Unmatured Default
has occurred and is continuing or exists or will occur or exist after giving
effect to such Credit Extension.
(b) Commitment. The fact that, immediately after the making of such
Credit Extension, the aggregate outstanding Total Credit Exposure hereunder will
not exceed the aggregate of the Banks' Committed Amounts.
ARTICLE VI
COVENANTS
So long as any Letter of Credit or Loan is outstanding, any
Obligation is outstanding, the Issuing Bank has any obligation to issue, or the
Banks have any obligation to participate in, Letters of Credit, or the Banks
have any obligation to make any Loan:
6.01. Financial Reporting. Each Credit Party will maintain,
for itself and each Subsidiary, a system of accounting established and
administered in accordance with Agreement Accounting Principles or SAP, as the
case may be, consistently applied, and will furnish to the Banks:
(a) As soon as practicable and in any event within 120 days
after the close of each of its Fiscal Years, an unqualified (except for
qualifications relating to changes in accounting principles or practices
reflecting changes in generally accepted accounting principles and required or
approved by the independent certified public accountants of such Credit Party)
audit report certified by independent certified public accountants, acceptable
to the Banks, prepared in accordance with Agreement Accounting Principles or
SAP, as the case may be, on a consolidated and (except with respect to AUHL and
its Subsidiaries as such) consolidating basis (consolidating statements need not
be certified by such accountants) for Alleghany and its Subsidiaries, for AUHL
and its Subsidiaries and, unless a Substitution of Eligible Substitute
Collateral has occurred, for AAM and its Subsidiaries, including balance sheets
as of the end of such period (or, in the case of AUHL and its Subsidiaries, as
of the immediately preceding September 30) and related statements of income,
retained earnings and cash flows accompanied by
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(i) any control letter prepared by said accountants addressed to the audit
committee of the board of directors of Alleghany, any AUHL Entity or, unless a
Substitution of Eligible Substitute Collateral has occurred, AAM, as the case
may be, (ii) a certificate of said accountants that, in the course of the
examination necessary for their certification of the foregoing, they have
obtained no knowledge of any Default or Unmatured Default, or if in the opinion
of such accountants, any Default or Unmatured Default shall exist, stating the
nature and status thereof and (iii) a letter from said accountants addressed to
the Banks acknowledging that the Banks are relying on such certificate as part
of their credit consideration of the transactions hereby contemplated and
authorizing such reliance and (iv) a copy of each Annual Statement of each
syndicate managed by any AUHL Entity prepared in accordance with SAP.
(b) As soon as practicable and in any event within 45 days
after the close of the first three Fiscal Quarters of each of its Fiscal Years,
commencing June 30, 2000, for Alleghany and its Subsidiaries, consolidated and
consolidating unaudited balance sheets as at the close of each such period and
consolidated and consolidating statements of income, retained earnings and cash
flows for the period from the beginning of such Fiscal Year to the end of such
quarter, all certified by its chief financial officer.
(c) Promptly and in any event within ten days after (i)
learning thereof, notification of any changes after the date hereof in the
rating given by Standard & Poor's or Moody's in respect of the senior
Indebtedness, or as an issuer rating, of any Credit Party or, unless a
Substitution of Eligible Substitute Collateral has occurred, AAM and (ii)
receipt thereof, copies of any ratings analysis by Standard & Poor's or Moody's
in respect of the senior Indebtedness of any Credit Party or, unless a
Substitution of Eligible Substitute Collateral has occurred, AAM.
(d) Copies of any actuarial certificates prepared with respect
to any AUHL Entity or, unless a Substitution of Eligible Substitute Collateral
has occurred, AAM by an employee of or an actuary engaged by AAM or such AUHL
Entity, as the case may be, promptly after the receipt thereof.
(e) As soon as available but in any event not later than the
last Business Day in February of each Fiscal Year, a copy of the plan and
forecast (including a projected consolidated balance sheet and income
statement), if any, of AUHL and its Subsidiaries for such Fiscal Year, together
with a copy of the narrative business plan, as filed with Lloyd's, for the
Syndicates managed by any AUHL Entity for such Fiscal Year.
(f) Together with the financial statements required by clauses
(a) and (b) above, a compliance certificate in substantially the form of Exhibit
D hereto signed by the chief financial officer of AUL showing the calculations
necessary to determine compliance with this Agreement and stating that no
Default or Unmatured Default exists, or if any Default or Unmatured Default
exists, stating the nature and status thereof.
(g) Within 270 days after the close of each Fiscal Year, a
statement of the Unfunded Liabilities of each Single Employer Plan, if any,
certified as correct by an actuary enrolled under ERISA.
(h) As soon as possible and in any event within ten days after
any Credit Party knows that any Termination Event has occurred with respect to
any Plan, a statement, signed by the chief financial officer of Alleghany
describing said Termination Event and the action which such Credit Party
proposes to take with respect thereto and as soon as possible and in any event
within ten days after learning thereof notification of any lien imposed by the
PBGC or the Internal Revenue Service on the assets of any member of the
Controlled Group in respect of any Plan maintained by any such member (or any
other employee pension benefit plan as to which any such member may be liable)
which relates to liabilities in excess of ten percent of the net worth
(determined according to generally accepted accounting principles and without
reduction for any reserve for such liabilities) of Alleghany and its
Subsidiaries, taken as a whole.
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(i) As soon as possible and in any event within ten days after
receipt by any Credit Party or one of its Covered Subsidiaries, a copy of (i)
any notice, claim, complaint or order to the effect that a Credit Party or any
of its or their Covered Subsidiaries is or may be liable to any Person as a
result of the release by such Credit Party or any of its Covered Subsidiaries,
or any other Person of any Hazardous Materials into the environment or requiring
that action be taken to respond to or clean up a Release of Hazardous Materials
into the environment. and (ii) any notice, complaint or citation alleging any
violation of any Environmental Law or Environmental Permit by such Credit Party
or any of its or their Covered Subsidiaries. Within ten days of any Credit Party
or any Covered Subsidiary having knowledge of the proposal, enactment or
promulgation of any Environmental Law which could reasonably be expected to have
a Material Adverse Effect, AUL shall provide the Administrative Agent with
written notice thereof.
(j) Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly or other regular reports
which any Credit Party or any of its Covered Subsidiaries files with any
insurance commission or department or analogous Governmental Authority
(including without limitation, any filing made by any Credit Party or any
Covered Subsidiary pursuant to any insurance holding company act or related
rules or regulations), but excluding routine or non-material filings with any
insurance commissioner or department or analogous Governmental Authority.
(k) Promptly and in any event within ten days after learning
thereof, notification of (i) any tax assessments demand, notice of proposed
deficiency or notice of deficiency received by Alleghany or any other
Consolidated Person or (ii) the filing of any tax Lien or commencement of any
judicial proceeding by or against any such Consolidated Person, of any such
assessment, demand, notice, Lien or judicial proceeding relates to tax
liabilities in excess of ten percent (10%) of the net worth (determined
according to Agreement Accounting Principles and without reduction for any
reserve for such liabilities) of Alleghany and its Subsidiaries taken as a
whole.
(l) Such other information (including, without limitation, the
annual report prepared with respect to each AUHL Entity, if any, rated by A.M.
Best & Co.) as any Agent or any Bank may from time to time reasonably request.
6.02. Use of Proceeds. Each Account Party and each Borrower
will, and will cause each Subsidiary to, use the Credit Extensions made
hereunder for its general corporate purposes (which may include, without
limitation, deposits to the Credit for Reinsurance Trust Fund); provided, that
each Account Party will use Multi-year Letters of Credit only in connection with
its business relating to Lloyd's. No Account Party or Borrower will permit a
Credit Extension in connection with the purchase or carrying of any Margin Stock
or in connection with the acquisition of, or the acquisition of a majority
interest in, any Person, which acquisition has not been approved and recommended
by the board of directors (or functional equivalent thereof) of such Person.
6.03. Notice of Default. The Credit Parties will give prompt
notice in writing to the Banks of (a) the occurrence of any Default or Unmatured
Default, (b) the occurrence of any other development, financial or other,
relating specifically to any Credit Party or any of its Subsidiaries (and not of
a general economic or political nature) which could reasonably be expected to
have a Material Adverse Effect, (c) the receipt of any notice from any
Governmental Authority of the expiration without renewal, revocation or
suspension of or the institution of any proceedings to revoke or suspend any
License now or hereafter held by any AUHL Entity which is required to conduct
insurance business in compliance with all applicable laws and regulations and
the expiration, revocation or suspension of which could reasonably be expected
to have a Material Adverse Effect, (d) the receipt of any notice from any
Governmental Authority of the institution of any disciplinary proceedings
against or in respect of any AUHL Entity, or the issuance of any order, the
taking of any action or any request for an extraordinary audit for cause by any
Governmental Authority which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect, (e) any judicial or administrative
order limiting or controlling the insurance business of any AUHL Entity (and not
the insurance industry
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generally) which has been issued or adopted and which has had, or could
reasonably be expected to have, a Material Adverse Effect, or (f) the
commencement of any litigation which could reasonably be expected to create a
Material Adverse Effect.
6.04. Conduct of Business. Each Credit Party will, and will
cause each Covered Subsidiary to, (a) carry on and conduct its business only in
substantially the same manner as it is presently conducted, (b)(i) with respect
to each AUHL Entity, only engage in the insurance business in which it is
engaged or licensed as of the date hereof, or as of the date of its acquisition
if hereafter acquired, or only engage in the insurance business for which it is
formed, if hereafter formed, and (ii) with respect to each other Credit Party
and each of its Covered Subsidiaries, only engage in the business in which it is
engaged as of the date of its acquisition if hereafter acquired, or only engage
in the business for which it is formed, if hereafter formed, (c) do all things
necessary to remain duly incorporated, validly existing and in good standing in
its jurisdiction of incorporation and its jurisdiction of domicile and maintain
all requisite qualification to conduct business in each other jurisdiction in
which such qualification is required, except where the failure to maintain such
qualification could not reasonably be expected to have a Material Adverse
Effect, and (d) do all things necessary to renew, extend and continue in effect
all Licenses which may at any time and from time to time be necessary for it to
operate its insurance business in compliance with all applicable laws and
regulations; provided, that any AUHL Entity may withdraw from one or more
jurisdictions (other than its jurisdiction of domicile) as an admitted insurer
if such withdrawal is determined by the board of directors or management of such
AUHL Entity to be in the best interest of such AUHL Entity and could not
reasonably be expected to have a Material Adverse Effect. No AUHL Entity shall
change its jurisdiction of domicile or incorporation without the prior written
consent of the Required Banks. Each Credit Party and AAM shall be and continue
to be a Wholly-Owned Subsidiary of Alleghany, unless, with respect to AAM only,
a Substitution of Eligible Substitute Collateral shall have occurred. Each AUHL
Entity other than AUHL shall be and continue to be a Subsidiary of AUHL.
6.05. Taxes. Each Credit Party will, and will cause each
Covered Subsidiary to, timely file United States federal and applicable foreign,
state and local tax returns required to be filed by it that are true and correct
in all material respects, and each Credit Party will, and will cause their
respective Covered Subsidiaries and each other Consolidated Person to, pay when
due all material taxes, assessments and governmental charges and levies upon it
or its income, profits or Property, except, in each case those which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves have been set aside in accordance with Agreement Accounting
Principles or SAP, as applicable.
6.06. Insurance. Each Credit Party will, and will cause each
Covered Subsidiary to, maintain insurance on all their Property with such
companies, in such amounts and covering such risks as is, in each case,
consistent with sound business practice, and the Credit Parties will furnish to
any Agent and any Bank upon request all information as to the insurance carried.
6.07. Compliance with Laws. Each Credit Party will, and will
cause each Covered Subsidiary to, comply with all laws, rules, regulations,
orders, writs, judgments, injunctions, decrees or awards to which it may be
subject, the failure to comply with which could reasonably be expected to have a
Material Adverse Effect.
6.08. Maintenance of Properties. Each Credit Party will, and
will cause each Covered Subsidiary to, do all things necessary to maintain,
preserve, protect and keep its Property in good repair, working order and
condition except for ordinary wear and tear, and make all necessary and proper
repairs, renewals and replacements so that its business carried on in connection
therewith may be properly conducted at all times; provided, that any Credit
Party or any Covered Subsidiary may dispose of any Property that such Person
deems unnecessary for the conduct of its business.
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6.09. Inspection. Each Credit Party will, and will cause each
of its Covered Subsidiaries to, permit the Agents and the Banks, by their
respective representatives and agents, to inspect any of the Property, corporate
books and financial records of such Credit Party and each such Subsidiary, to
examine and make copies of the books of accounts and other financial records of
such Credit Party and to discuss the affairs, finances and accounts of such
Credit Party and each such Subsidiary with, and to be advised as to the same by,
their respective officers at such reasonable times and intervals as the Banks
may designate. Each Credit Party will keep or cause to be kept, and will cause
each Subsidiary to cause or be kept, appropriate records and books of account in
which complete entries are to be made reflecting its and their business and
financial transactions, such entries to be made in accordance with Agreement
Accounting Principles or SAP, as applicable, consistently applied.
6.10. Capital Stock and Dividends. No Credit Party will, nor
will it permit any Subsidiary to, (a) issue any capital stock or equity
securities of any kind if as a result thereof a Change in Control would occur,
or (b) declare or pay any dividends or make any distributions on its capital
stock (other than dividends payable in its own capital stock) or redeem,
repurchase or otherwise acquire or retire any of its capital stock or any
options or other rights in respect thereof at any time outstanding if a Default
or Unmatured Default has occurred and is continuing or would occur after giving
effect thereto (determined with respect to the covenants set forth in Section
6.22 on a pro forma basis as of the last day of the immediately preceding Fiscal
Quarter), except that any Subsidiary of Alleghany may declare and pay dividends
or make distributions to Alleghany or any Wholly-Owned Subsidiary of Alleghany.
6.11. Certain Covenants Related to AAM. Unless and until a
Substitution of Eligible Substitute Collateral has occurred:
(a) Alleghany will not suffer or permit AAM or any of AAM's
Subsidiaries to, create, incur or suffer to exist any Indebtedness or
any obligations with respect to the transfer of rights relating to
future revenues of AAM or such Subsidiaries other than (i) Indebtedness
not in excess of $15,000,000 in the aggregate at any time outstanding
and (ii) advances from Alleghany to AAM or any of AAM's Subsidiaries
not exceeding $50,000,000 in the aggregate at any time outstanding
pursuant to an agreement of Alleghany in form reasonably satisfactory
to the Agent providing that, if the Banks shall have commenced remedial
action with respect to the Collateral, or shall (other than solely as a
result of the institution of an insolvency proceeding) be entitled to
commence such remedial action, such advances shall automatically be
converted into and be deemed to be common stock of AAM.
(b) Alleghany will not suffer or permit AAM or any of AAM's
Subsidiaries to create, incur, or suffer to exist any Lien in, of or on
any of their respective Property, except Liens in favor of the Bank
Parties to secure obligations hereunder and except:
(i) Liens for taxes, assessments or governmental charges
or levies on its Property if the same shall not at the time be
delinquent or thereafter can be paid without penalty, or are
being contested in good faith and by appropriate proceedings
and for which adequate reserves in accordance with Agreement
Accounting Principles or SAP, as applicable, shall have been
set aside on its books;
(ii) Liens imposed by law, such as carriers',
warehousemen's and mechanics' liens and other similar liens
arising in the ordinary course of business which secure the
payment of obligations not more than 60 days past due or which
are being contested in good faith by appropriate proceedings
and for which adequate reserves shall have been set aside on
its books;
(iii) Liens arising out of pledges or deposits under
worker's compensation laws, unemployment insurance, old age
pensions, or other social security or retirement benefits, or
similar legislation;
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(iv) Utility easements, building restrictions and such
other encumbrances or charges against real property as are of
a nature generally existing with respect to properties of a
similar character and which do not in any material way affect
the marketability of the same or interfere with the use
thereof in the business of such Credit Party or its
Subsidiaries;
(v) Liens existing on the date hereof and described in
Part A of Schedule 6.11 hereto and statutory Liens incurred in
the ordinary course of business of the type described in Part
B of Schedule 6.11 hereto; and
(vi) Other Liens securing Indebtedness or obligations with
an aggregate principal amount not in excess of $5,000,000 (or
its equivalent in any other currency) at any time outstanding.
(c) Alleghany shall cause AAM and AAM's Subsidiaries to
maintain at all times (and shall not suffer AAM and AAM's Subsidiaries
to fail to maintain at any time) Net Assets Under Management having a
value at least equal to the equivalent of $35 billion, determined in
accordance with Agreement Accounting Principles. Alleghany shall cause
AAM and AAM's Wholly-Owned Subsidiaries and Deemed AAM Wholly-Owned
Subsidiaries to maintain at all times (and shall not suffer AAM and
such Wholly-Owned Subsidiaries and Deemed AAM Wholly-Owned Subsidiaries
to fail to maintain at any time) assets under management having a value
at least equal to the equivalent of $24 billion, determined in
accordance with Agreement Accounting Principles. For purposes of this
paragraph, "Net Assets Under Management" means assets under management
of AAM and AAM's Subsidiaries minus a portion of the assets under
management of each of AAM's Subsidiaries which is not a Wholly-Owned
Subsidiary of AAM, which portion bears the same proportion to the total
value of assets under management of such Subsidiary as the amount of
equity interests in such Subsidiary held by Persons other than AAM and
its Wholly-Owned Subsidiaries bears to the total amount of equity
interests in such Subsidiary. For purposes of this paragraph, a "Deemed
AAM Wholly-Owned Subsidiary" shall mean a Subsidiary of AAM which, but
for ownership by management of such Subsidiary of equity interests
which are nontransferable and which, in the aggregate, constitute not
more than 20% of the outstanding equity interests of such Subsidiary,
would be a Wholly-Owned Subsidiary of AAM.
(d) Alleghany shall cause AAM and AAM's Subsidiaries to
continue at all times and for all periods of one month or longer to
derive at least 90% of their revenues and earnings from the asset
management business (which, for purposes of this paragraph, shall
include the businesses in which AAM and AAM's Subsidiaries are engaged
as of the date of this Agreement).
6.12. Merger. Alleghany shall not merge or consolidate with or
into any other Person unless Alleghany is the surviving corporation and such
merger or consolidation does not result in a Change in Control.
6.13. Sale of Assets. Unless and until a Substitution of
Eligible Substitute Collateral has occurred, Alleghany will not sell or dispose
of or permit the sale or other disposition of any of the stock of AAM, The
Chicago Trust Company or Montag & Caldwell, Inc. or any substantial part of the
Properties of AAM, The Chicago Trust Company, Montag & Caldwell, Inc. or any of
their respective Subsidiaries.
6.14. Investments and Purchases. Alleghany will not, and will
not permit any Subsidiary or other Credit Party to, make or suffer to exist any
Investments (including, without limitation, loans and advances to, and other
Investments in, Subsidiaries), or commitments therefor, or to create any
Subsidiary or to become or remain a partner in any partnership or joint venture,
or to make any Purchases, if the same would result in an Event of Default or an
Unmatured Default.
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6.15. Contingent Obligations. No Credit Party will, nor will it permit
any Subsidiary to, make or suffer to exist any Contingent Obligation (including,
without limitation, any Contingent Obligation with respect to the obligations of
a Subsidiary), except (a) Contingent Obligations described on Schedule 4.24, (b)
Contingent Obligations incurred under insurance contracts or policies or under
reinsurance contracts or policies issued, or under requirements of Lloyd's with
respect to the Credit for Reinsurance Trust Fund or the Situs Trust Fund
incurred, in the ordinary course of business, (c) Contingent Obligations in
respect of the extension of guaranties in the ordinary course of business to
insureds of the obligations of insurers under insurance policies or contracts or
under reinsurance policies or contracts, (d) Contingent Obligations in respect
of the endorsement of instruments for deposit or collection in the ordinary
course of business, (e) the Obligations and (f) Contingent Obligations
undertaken (x) in the ordinary course of the business of the AUHL Entities
substantially in accordance with practice prior to the date of this Agreement
and (y) in accordance with the standard form of Managing Agent's Agreement as in
effect from time to time between AUL and each of AUCL, Talbot and AUC(B)L.
6.16. Indebtedness, Liens. No Credit Party will, nor will it
permit any Subsidiary to, (a) create, incur, or suffer to exist any
Indebtedness, or (b) create, incur or suffer to exist any Lien, if, in either
case, the same would result in an Event of Default or an Unmatured Default.
6.17. Affiliates. Except for dividends to Alleghany or any
Wholly-Owned Subsidiary of Alleghany, no Credit Party shall, nor shall it permit
any Covered Subsidiary to, enter into any transaction (including, without
limitation, the purchase or sale of any Property or service) with, or make any
payment or transfer to, any Affiliate of such Credit Party except in the
ordinary course of business and pursuant to the reasonable requirements of such
Credit Party's or such Subsidiary's business and upon fair and reasonable terms
no less favorable to such Credit Party or such Subsidiary than the Credit Party
or such Subsidiary would obtain in a comparable arm's-length transaction.
6.18. Other Indebtedness. Except as required pursuant to
Section 6.11(a) hereof, no Credit Party will, nor will it permit any Covered
Subsidiary to, directly or indirectly voluntarily prepay, defease or in
substance defease, purchase, redeem, retire or otherwise acquire, any
Indebtedness prior to the date when due (other than the Obligations) while a
Default or Unmatured Default has occurred and is continuing.
6.19. Environmental Matters. Each Credit Party shall and shall
cause each of its Covered Subsidiaries to (a) at all times comply in all
material respects with all applicable Environmental Laws and (b) promptly take
any and all commercially reasonable actions in response to the presence,
storage, use, disposal, transportation or Release of any Hazardous Materials on,
under or about any real property owned, leased or operated by such Credit Party
or any of its Covered Subsidiaries.
6.20. Change in Corporate Structure; Fiscal Year. No Credit
Party shall, nor shall it permit any Subsidiary to, permit any amendment or
modification to be made to its certificate or articles of incorporation or
by-laws which is materially adverse to the interests of the Banks (provided that
such Credit Party shall notify the Administrative Agent of any other amendment
or modification thereto as soon as practicable thereafter). Alleghany shall not
change its fiscal year.
6.21. Inconsistent Agreements. No Credit Party shall, nor
shall it permit any Covered Subsidiary to, enter into any indenture, agreement,
instrument or other arrangement (other than the Transaction Documents) which,
(a) directly or indirectly prohibits or restrains, or has the effect of
prohibiting or restraining, or imposes materially adverse conditions upon, the
incurrence of the Obligations, the amendment of the Transaction Documents or the
ability of any Covered Subsidiary to (i) pay dividends or make other
distributions on its capital stock, (ii) make loans or advances to a Credit
Party of which it is a Subsidiary or (iii) repay loans or advances from a Credit
Party or (b) contains any provision which would be violated or breached by the
issuance of Letters of Credit or by the performance by any Credit Party of any
of its obligations under any Transaction Document.
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6.22. Financial Covenants. Alleghany shall:
(a) Leverage Ratio. At all times after the date hereof
maintain a Leverage Ratio of not more than 0.45 to 1.0.
(b) Tangible Net Worth. At all times after the date hereof
maintain Tangible Net Worth equal to at least $873,032,000.
(c) Ratings. At all times after the date hereof maintain a
senior unsecured debt rating or an Issuer rating of at least BBB- by Standard &
Poors and at least Baa3 by Moody's.
6.23. Tax Consolidation. No Credit Party will, nor will it
permit any of its Subsidiaries to, file or consent to the filing of any
consolidated, combined or unitary income tax return with any Person (other than
any of its Subsidiaries, Alleghany or any other Consolidated Person), except as
required by law. No Credit Party will, nor will it permit any of its
Subsidiaries to, enter into any tax sharing agreement with any Person (other
than its parent companies, Alleghany, another Credit Party or any of its
Subsidiaries) without the written consent of the Required Banks. Each Credit
Party will cause each Covered Subsidiary (including any newly acquired or newly
created Covered Subsidiary) to enter into a tax sharing agreement or arrangement
with such Subsidiary's immediate parent corporation whenever such Subsidiary
files any consolidated, combined or unitary income tax return with such
immediate parent corporation, which tax sharing agreement shall obligate such
Subsidiary to pay, or pursuant to which arrangement such Subsidiary shall have
paid, to such Subsidiary's immediate parent corporation an amount of tax
substantially equal to the amount of tax such parent corporation is required to
pay to Alleghany (or to a Subsidiary of Alleghany) by reason of the taxable
income of such Subsidiary.
6.24. ERISA Compliance.
With respect to any Plan none of any Credit Party and their
respective Covered Subsidiaries shall:
(a) engage in any "prohibited transaction" (as such term is
defined in Section 406 of ERISA or Section 4975 of the Code) for which a civil
penalty pursuant to Section 502(i) of ERISA or a tax pursuant to Section 4975 of
the Code in excess of $1,000,000 could be imposed;
(b) permit to be incurred any "accumulated funding deficiency"
(as such term is defined in Section 302 of ERISA) in excess of $1,000,000,
whether or not waived;
(c) permit the occurrence of any Termination Event which could
result in a liability to any member of the Controlled Group in excess of
$1,000,000;
(d) be an "employer" (as such term is defined in Section 3(5) of
ERISA) required to contribute to any Multiemployer Plan or a "substantial
employer" (as such term in defined in Section 4001(a)(2) of ERISA) required to
contribute to any Multiemployer Plan; or
(e) permit the establishment, or amendment of any Plan or fail
to comply with the applicable provisions of ERISA and the Code with respect to
any Plan which could reasonably be expected to result in liability to any member
of the Controlled Group which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
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ARTICLE VII
EVENTS OF DEFAULT
7.01. Events of Default. The occurrence or existence of one or more of
the following events or conditions (for any reason, whether voluntary,
involuntary or effected or required by Law) shall be a Default:
(a) The principal amount of any Loan or any reimbursement obligation
with respect to any Letter of Credit shall not be paid when due hereunder;
(b) Any interest, fee or other amount payable hereunder shall not be
paid when due and shall remain unpaid for a period of five days from the due
date thereof;
(c) Alleghany shall default in the observance, performance or
fulfillment of any covenant contained in Section 4.2 or 4.3 of the Pledge
Agreement or any Credit Party shall default in the observance, performance or
fulfillment of any covenant contained in Section 6.03(a), 6.10, 6.11, 6.12,
6.13, 6.14, 6.15, 6.16, 6.17, 6.18 or 6.22 hereof;
(d) Any Credit Party shall default in the observance, performance or
fulfillment of any other covenant, condition or provision hereof or of the
Pledge Agreement and such default shall not be remedied for a period of thirty
days after written notice thereof to such Credit Party from any Agent or any
Bank;
(e) The default by any Credit Party or any Covered Subsidiary in the
performance of any term, provision or condition contained in any agreement or
agreements under which any Indebtedness aggregating in excess of $5,000,000 (or
its equivalent in any other currency) was created or is governed, or the
occurrence of any other event or existence of any other condition, the effect of
any of which is to cause, or to permit the holder or holders of such
Indebtedness to cause, such Indebtedness to become due prior to its stated
maturity, or any such Indebtedness of a Credit Party or any Covered Subsidiary
shall be declared to be due and payable or required to be prepaid (other than by
a regularly scheduled payment) prior to the stated maturity thereof;
(f) Any Credit Party or any Covered Subsidiary shall (i) have an order
for relief entered with respect to it under the Federal bankruptcy laws as now
or hereafter in effect, (ii) make an assignment for the benefit of creditors,
(iii) apply for, seek, consent to, or acquiesce in, the appointment of a
receiver, custodian, trustee, examiner, liquidator or similar official for it or
any Substantial Portion of its Property, (iv) institute any proceeding seeking
an order for relief under the Federal bankruptcy laws as now or hereafter in
effect or seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement, adjustment or
composition of it or its debts under any law(including any law of a jurisdiction
other than the United States) relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, (v)
take any corporate action to authorize or effect any of the foregoing actions
set forth in this Section 7.01(f), (vi) fail to contest in good faith any
appointment or proceeding described in Section 7.01(g) or (vii) become unable to
pay, not pay, or admit in writing its inability to pay, its debts generally as
they become due;
(g) Without the application, approval or consent of a Credit Party or
any Covered Subsidiary, as the case may be, a receiver, trustee, examiner,
liquidator or similar official shall be appointed for such Credit Party or such
Covered Subsidiary or any Substantial Portion of its Property, or a proceeding
described in Section 7.01(f)(iv) shall be instituted against any Credit Party or
any Covered Subsidiary
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and such appointment continues undischarged or such proceeding continues
undismissed or unstayed for a period of forty-five consecutive days;
(h) Any court, government or governmental agency shall condemn, seize
or otherwise appropriate, or take custody or control of (each a "Condemnation"),
(i) all or any portion of the Property of any AUHL Entity, of Alleghany or,
unless a Substitution of Eligible Substitute Collateral shall have occurred, of
AAM or any of AAM's Subsidiaries which, when taken together with all other
Property of the AUHL Entities, of Alleghany or of AAM and AAM's Subsidiaries, as
the case may be, so condemned, seized, appropriated, or taken custody or control
of, during the twelve-month period ending with the month in which any such
Condemnation occurs, constitutes a Substantial Portion or (ii) all or any
portion of the Collateral;
(i) Any Credit Party or any Covered Subsidiary shall fail within thirty
days to pay, bond or otherwise discharge any judgment or order for the payment
of money in excess of $500,000 (or multiple judgments or orders for the payment
of an aggregate amount in excess of $1,000,000) (or, in each case, its
equivalent in any other currency), which is not stayed on appeal or otherwise
being appropriately contested in good faith and as to which no enforcement
actions have been commenced;
(j) Any representation or warranty made or deemed made by or on behalf
of any Credit Party or AAM to the Banks, the Issuing Bank or the Agents under or
in connection with this Agreement, the Pledge Agreement or any other Transaction
Document, or any certificate or material information delivered in connection
with this Agreement or any other Transaction Document, shall prove to have been
false in any material respect on the date as of which made or deemed made;
(k) A Change in Control shall occur;
(l) The Pledge Agreement or the guarantee contained in Article IX
hereof shall terminate or cease, in whole or material part, to be a legally
valid and binding obligation of Alleghany, or Alleghany or any other Credit
Party or AAM or any Person acting for or on behalf of any of such parties
contests such validity or binding nature of the Pledge Agreement or the
validity, perfection or priority of the security interest thereunder, or any
such Person shall assert any of the foregoing;
(m) (i) the Unfunded Liabilities of all Single Employer Plans
maintained by any Credit Party or any Subsidiary of a Credit Party shall exceed
in the aggregate $5,000,000 or a Reportable Event shall occur in connection with
any Plan maintained by any Credit Party or any Subsidiary or a Credit Party,
(ii) the Unfunded Liabilities of all Single Employer Plans maintained by members
of the Controlled Group shall exceed an amount which could reasonably be
expected to have a Material Adverse Effect or any Reportable Event shall occur
in connection with any Plan maintained by members of the Controlled Group which
could reasonably be expected to have a Material Adverse Effect or (iii) any Lien
shall be imposed by the PBGC or the IRS against any assets of any Credit Party
or any Subsidiary of a Credit Party with respect to a Plan maintained by any
other member of the Controlled Group (or any other employee pension benefit plan
as to which any such member may be liable).
(n) Any License of any AUHL Entity (a) shall be revoked by the
Governmental Authority which issued such License, or any action (administrative
or judicial) to revoke such License shall have been commenced against such AUHL
Entity and shall not have been dismissed within 60 days after the commencement
thereof, (b) shall be suspended by such Governmental Authority for a period in
excess of 60 days or (c) shall not be reissued or renewed by such Governmental
Authority upon the expiration thereof following application for such reissuance
or renewal of such AUHL Entity and, in any such case, the Required Banks shall
have determined in good faith that, individually or in the aggregate, such event
or events could have a Material Adverse Effect;
(o) Any AUHL Entity shall be the subject of a final non-appealable
order imposing a fine in an amount in excess of $250,000 (or its equivalent in
any other currency) in any single instance or other
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such orders imposing fines in excess of $1,000,000 (or its equivalent in any
other currency) in the aggregate after the date of this Agreement by or at the
request of any state insurance regulatory agency as a result of the violation by
such AUHL Entity of such state's applicable insurance laws or the regulations
promulgated in connection therewith and, in any such case, the Required Banks
shall have determined in good faith that, individually or in the aggregate, such
event or events could have a Material Adverse Effect;
(p) Any AUHL Entity shall become subject to (i) any conservation or
liquidation order, directive or mandate issued by any Governmental Authority or
(ii) any other directive or mandate issued by any Governmental Authority which
could reasonably be expected to have a Material Adverse Effect which in either
case is not stayed within thirty days; and
(q) Any Credit Party or any Covered Subsidiary or any other
Consolidated Person shall receive any tax assessment, demand or notice of
deficiency or have any tax liens filed or any judicial proceeding relating to
any tax matter commenced against it which, in any such case, could reasonably be
expected to have a Material Adverse Effect or any tax lien shall be filed
against any property of any Credit Party or any Covered Subsidiary relating to
the tax liabilities of any Person if the same shall not at the time be
delinquent or thereafter can be paid without penalty, or are being contested in
good faith and by appropriate proceedings and for which adequate reserves in
accordance with generally accepted principles of accounting or SAP, as
applicable, shall have been set aside on its books.
7.02. Consequences of an Event of Default.
(a) If an Event of Default specified in subsections (a) through (e) or
(h) through (q) of Section 7.01 hereof shall occur or exist, then, in addition
to all other rights and remedies which the Administrative Agent, any Bank or the
Issuing Bank may have hereunder, at law, in equity or otherwise, the Banks shall
be under no obligation to make Loans and the Issuing Bank shall be under no
obligation to issue Letters of Credit, and the Administrative Agent may, and
upon the written request of the Required Banks shall, by notice to AUL, from
time to time do any or all of the following:
(i) Declare the Revolving Credit Commitments and the
commitment of the Issuing Bank to issue Letters of Credit terminated,
whereupon the Revolving Credit Commitments and such commitment to issue
Letters of Credit will terminate and any accrued Commitment Fees
hereunder shall be immediately due and payable without presentment,
demand, protest or further notice of any kind, all of which are hereby
waived, and an action therefor shall immediately accrue,
(ii) Declare the unpaid principal amount of the Notes,
interest accrued thereon and all other obligations of any of the Credit
Parties hereunder to be immediately due and payable without
presentment, demand, protest or further notice of any kind, all of
which are hereby waived, and an action therefor shall immediately
accrue, and
(iii) Exercise any or all remedies available to it under the
Pledge Agreement or otherwise.
(b) If an Event of Default specified in subsection (f) or (g) of
Section 7.01 hereof shall occur or exist, then, in addition to all other rights
and remedies which the Administrative Agent, any Bank or the Issuing Bank may
have hereunder, at law, in equity or otherwise, the Banks shall be under no
further obligation to make Loans and the Issuing Bank shall be under no further
obligation to issue Letters of Credit, and the following provisions shall
automatically apply:
(i) The Revolving Credit Commitments and the commitment to
issue Letters of Credit shall terminate, and any accrued Commitment
Fees hereunder shall be immediately due and
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payable without presentment, demand, protest or further notice of any
kind, all of which are hereby waived, and an action therefor shall
immediately accrue;
(ii) The unpaid principal amount of the Notes, interest
accrued thereon and all other obligations of any of the Credit Parties
hereunder shall be immediately due and payable without presentment,
demand, protest or further notice of any kind, all of which are hereby
waived, and an action therefor shall immediately accrue; and
(iii) The Administrative Agent may, and upon the request of
the Required Banks shall, exercise any or all remedies available to it
under the Pledge Agreement or otherwise.
7.03 Certain Actions in Respect of Letters of Credit upon Default. If
any Default shall have occurred and be continuing or shall exist, the
Administrative Agent may, and at the direction of the Required Banks shall,
irrespective of whether it is taking any other action with respect to such
Default or otherwise and without limiting the generality of Section 7.02, make
demand upon the applicable Account Party to, and forthwith upon such demand each
applicable Account Party will, pay to the Administrative Agent on behalf of the
Issuing Bank and the Banks in same day funds at the Administrative Agent's
Domestic Office, for deposit to the Cash Collateral Account, an amount equal to
the aggregate Letter of Credit Undrawn Availability of all Letters of Credit
issued for the account of such Account Party then outstanding. If at any time
the Administrative Agent determines that any funds held in the Cash Collateral
Account are subject to any right or claim of any Person other than the
Administrative Agent, the Issuing Bank and the Banks, or that the total amount
of such funds is less than the aggregate Letter of Credit Undrawn Availability
of all Letters of Credit then outstanding, the Account Party Members will,
forthwith upon demand by the Administrative Agent, pay to the Administrative
Agent, as additional funds to be deposited and held in the Cash Collateral
Account, an amount equal to the excess of such aggregate Letter of Credit
Undrawn Availability over the total amount of funds, if any, then held in the
Cash Collateral Account that the Administrative Agent determines to be free and
clear of any such right and claim. As used herein, the term "Cash Collateral
Account" shall mean a cash collateral account opened by the Administrative Agent
in the name of the applicable Account Parties but under the sole dominion and
control of the Administrative Agent and subject to the terms of this Agreement.
Each Account Party hereby grants to the Administrative Agent, for the benefit of
the Issuing Bank and the Banks, to secure payment of the Obligations, a security
interest in the Cash Collateral Account, all funds held therein and all
certificates and instruments, if any, from time to time representing or
evidencing the Cash Collateral Account. Amounts on deposit in the Cash
Collateral Account shall bear interest at the lowest customary rate payable at
the time in question by the Administrative Agent for overnight deposits of a
comparable amount and such interest shall be retained in and added to the Cash
Collateral Account.
ARTICLE VIII
THE AGENTS
8.01. Appointment. Each Bank hereby irrevocably appoints Mellon Bank,
N.A. to act as Administrative Agent for such Bank under this Agreement and the
other Transaction Documents, subject to Section 8.09 hereof. Each Bank hereby
irrevocably authorizes each of the Agents to take such action on behalf of such
Bank under the provisions of this Agreement and the other Transaction Documents,
and to exercise such powers and to perform such duties, as are expressly
delegated to or required of each such Agent by the terms hereof or thereof,
together with such powers as are reasonably incidental thereto. Mellon Bank,
N.A. hereby agrees to act as Administrative Agent on behalf of the Banks on the
terms and conditions set forth in this Agreement and the other Transaction
Documents, subject to the right of each Agent to resign as provided in Section
8.09 hereof. Each Bank hereby irrevocably authorizes the Administrative Agent to
execute and deliver each of the Transaction Documents and to accept delivery of
such of the other
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Transaction Documents as may not require execution by the Administrative Agent.
Each Bank agrees that the rights and remedies granted to each of the Agents
under the Transaction Documents shall be exercised exclusively by the Agents,
and that no Bank shall have any right individually to exercise any such right or
remedy, except to the extent expressly provided herein or therein.
8.02. General Nature of Agents' Duties. Notwithstanding anything to the
contrary elsewhere in this Agreement or in any other Transaction Document:
(a) No Agent shall have any duties or responsibilities except those
expressly set forth in this Agreement and the other Transaction Documents, and
no implied duties or responsibilities on the part of any Agent shall be read
into this Agreement or any Transaction Document or shall otherwise exist.
(b) The duties and responsibilities of each of the Agents under this
Agreement and the other Transaction Documents shall be mechanical and
administrative in nature, and no Agent shall have a fiduciary relationship in
respect of any Bank.
(c) Each Agent is and shall be solely the agent of the Banks. No Agent
assumes, and shall not at any time be deemed to have, any relationship of agency
or trust with or for, or any other duty or responsibility to, any other Person
(except only for its relationship as agent for, and its express duties and
responsibilities to, the Banks as provided in this Agreement and the other
Transaction Documents).
(d) No Agent shall be under any obligation to take any action hereunder
or under any other Transaction Document if such Agent believes in good faith
that taking such action may conflict with any Law or any provision of this
Agreement or any other Transaction Document, or may require such Agent to
qualify to do business in any jurisdiction where it is not then so qualified.
8.03. Exercise of Powers. Each of the Agents shall take any action of
the type specified in this Agreement or any other Transaction Document as being
within such Agent's rights, powers or discretion in accordance with directions
from the Required Banks (or, to the extent this Agreement or such Transaction
Document expressly requires the direction or consent of some other Person or set
of Persons, then instead in accordance with the directions of such other Person
or set of Persons). In the absence of such directions, such Agent shall have the
authority (but under no circumstances shall be obligated), in its sole
discretion, to take any such action, except to the extent this Agreement or such
Transaction Document expressly requires the direction or consent of the Required
Banks (or some other Person or set of Persons), in which case such Agent shall
not take such action absent such direction or consent. Any action or inaction
pursuant to such direction, discretion or consent shall be binding on all the
Banks. No Agent shall have any liability to any Bank or affiliate of any Bank as
a result of (x) such Agent acting or refraining from acting in accordance with
the directions of the Required Banks (or other applicable Person or set of
Persons), (y) such Agent refraining from acting in the absence of instructions
to act from the Required Banks (or other applicable Person or set of Persons),
whether or not such Agent has discretionary power to take such action, or (z)
such Agent taking discretionary action it is authorized to take under this
Section (subject, in the case of this clause (z), to the provisions of Section
8.04(a) hereof).
8.04. General Exculpatory Provisions. Notwithstanding anything to the
contrary elsewhere in this Agreement or any other Transaction Document:
(a) No Agent shall be liable for any action taken or omitted to be
taken by it under or in connection with this Agreement or any other Transaction
Document, unless caused by its own gross negligence or willful misconduct.
(b) No Agent shall be responsible for (i) the execution, delivery,
effectiveness, enforceability, genuineness, validity or adequacy of this
Agreement or any other Transaction Document, (ii) any recital, representation,
warranty, document, certificate, report or statement in, provided for in, or
received under or in connection with, this Agreement or any other Transaction
Document, (iii) any failure of any Credit Party
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or Bank to perform any of their respective obligations under this Agreement or
any other Transaction Document, or (iv) the existence, validity, enforceability,
perfection, recordation, priority, adequacy or value, now or hereafter, of any
Lien or other direct or indirect security afforded or purported to be afforded
by any of the Transaction Documents or otherwise from time to time.
(c) No Agent shall be under any obligation to ascertain, inquire or
give any notice relating to (i) the performance or observance of any of the
terms or conditions of this Agreement or any other Transaction Document on the
part of any Credit Party, (ii) the business, operations, condition (financial or
otherwise) or prospects of any Credit Party, AAM or any other Person, or (iii)
except to the extent set forth in Section 8.05(f) hereof, the existence of any
Event of Default or Potential Default.
(d) No Agent shall be under any obligation, either initially or on a
continuing basis, to provide any Bank with any notices, reports or information
of any nature, whether in its possession presently or hereafter, except for such
notices, reports and other information expressly required by this Agreement or
any other Transaction Document to be furnished by such Agent to such Bank.
8.05. Administration by the Agents.
(a) Each of the Agents may rely upon any notice or other communication
of any nature (written or oral, including but not limited to telephone
conversations, whether or not such notice or other communication is made in a
manner permitted or required by this Agreement or any Transaction Document)
purportedly made by or on behalf of the proper party or parties, and such Agent
shall not have any duty to verify the identity or authority of any Person giving
such notice or other communication.
(b) Each of the Agents may consult with legal counsel (including,
without limitation, in-house counsel for such Agent or in-house or other counsel
for any Credit Party), independent public accountants and any other experts
selected by it from time to time, and such Agent shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts.
(c) Each of the Agents may conclusively rely upon the truth of the
statements and the correctness of the opinions expressed in any certificates or
opinions furnished to such Agent in accordance with the requirements of this
Agreement or any other Transaction Document. Whenever such Agent shall deem it
necessary or desirable that a matter be proved or established with respect to
any Credit Party or Bank, such matter may be established by a certificate of
such Credit Party or Bank, as the case may be, and such Agent may conclusively
rely upon such certificate (unless other evidence with respect to such matter is
specifically prescribed in this Agreement or another Transaction Document).
(d) Each of the Agents may fail or refuse to take any action unless it
shall be indemnified to its satisfaction from time to time against any and all
amounts, liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature which
may be imposed on, incurred by or asserted against such Agent by reason of
taking or continuing to take any such action.
(e) Each of the Agents may perform any of its duties under this
Agreement or any other Transaction Document by or through agents or
attorneys-in-fact. No Agent shall be responsible for the negligence or
misconduct of any agents or attorneys-in fact selected by it with reasonable
care.
(f) No Agent shall be deemed to have any knowledge or notice of the
occurrence of any Event of Default or Potential Default unless such Agent has
received notice from a Bank, Alleghany or any Credit Party referring to this
Agreement, describing such Event of Default or Potential Default, and stating
that such notice is a "notice of default". If any Agent receives such a notice,
such Agent shall give prompt notice thereof to each Bank.
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8.06. Bank Not Relying on Agent or Other Banks. Each Bank acknowledges
as follows: (a) neither any Agent nor any other Bank has made any
representations or warranties to it, and no act taken hereafter by any Agent or
any other Bank shall be deemed to constitute any representation or warranty by
such Agent or such other Bank to it; (b) it has, independently and without
reliance upon any Agent or any other Bank, and based upon such documents and
information as it has deemed appropriate, made its own credit and legal analysis
and decision to enter into this Agreement and the other Transaction Documents;
and (c) it will, independently and without reliance upon any Agent or any other
Bank, and based upon such documents and information as it shall deem appropriate
at the time, make its own decisions to take or not take action under or in
connection with this Agreement and the other Transaction Documents.
8.07. Indemnification. Each Bank agrees to reimburse and indemnify each
Agent and its directors, officers, employees and agents (to the extent not
reimbursed by a Credit Party and without limitation of the obligations of the
Credit Parties to do so), ratably in accordance with their respective Total
Credit Exposures, from and against any and all amounts, losses, liabilities,
claims, damages, expenses, obligations, penalties, actions, judgments, suits,
costs or disbursements of any kind or nature (including, without limitation, the
reasonable fees and disbursements of counsel for such Agent or such other Person
in connection with any investigative, administrative or judicial proceeding
commenced or threatened, whether or not such Agent or such other Person shall be
designated a party thereto) that may at any time be imposed on, incurred by or
asserted against such Agent or such other Person as a result of, or arising out
of, or in any way related to or by reason of, this Agreement, any other
Transaction Document, any transaction from time to time contemplated hereby or
thereby, or any transaction to which a Letter of Credit directly or indirectly
relates, provided that no Bank shall be liable for any portion of such amounts,
losses, liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements to the extent resulting from the gross
negligence or willful misconduct of such Agent or such other Person, as finally
determined by a court of competent jurisdiction. Payments under this Section
shall be due and payable on demand, and to the extent that any Bank fails to pay
any such amount on demand, such amount shall bear interest for each day from the
date of demand until paid (before and after judgment) at a rate per annum
(calculated on the basis of a year of 360 days and actual days elapsed) which
for each day shall be equal to 2% over the interest rate per annum announced by
the Federal Reserve Bank of New York or otherwise determined by such Agent to be
applicable for such day to overnight federal funds transactions arranged by
federal funds brokers on the previous trading day. If an Agent receives from a
Bank interest for any day on a payment due under this Section, as contemplated
by the immediately preceding sentence, and subsequently receives interest from a
Credit Party for such day with respect to the cost, expense or other item giving
rise to such payment, the amount of such interest received by such Agent from a
Credit Party shall be forthwith paid to such Bank.
8.08. Agents in their Individual Capacities. With respect to its
Commitments and the Obligations owing to each Agent, such Agent shall have the
same rights and powers under this Agreement and each other Transaction Document
as any other Bank and may exercise the same as though it were not an Agent, and
the terms "Banks" and like terms shall include such Agent in its individual
capacity as such. Each Agent and its affiliates may, without liability to
account, make loans to, accept deposits from, acquire debt or equity interests
in, act as trustee under indentures of, act as agent under other credit
facilities for, and engage in any other business with, any Credit Party and any
stockholder, subsidiary or affiliate of any Credit Party, as though such Agent
were not an Agent hereunder.
8.09. Successor Agents. Any Agent may resign at any time by giving 10
days' prior written notice thereof to the Banks, AUL and Alleghany. Any Agent
may be removed by the Required Banks at any time by giving 10 days' prior
written notice thereof to such Agent, the other Banks, AUL and Alleghany. Upon
any such resignation or removal, the Required Banks shall have the right to
appoint a successor Agent. If no successor Agent shall have been so appointed
and consented to, and shall have accepted such appointment, within 30 days after
such notice of resignation or removal, then such retiring Agent may, on behalf
of the Banks, appoint a successor Agent. Each successor Agent shall be a
commercial bank or trust company organized or licensed under the laws of the
United States of America or any State thereof and having a combined capital and
surplus of at least $1,000,000,000. Upon the acceptance by a successor Agent of
its appointment as an Agent hereunder and under the Pledge Agreement, such
successor Agent shall thereupon
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succeed to and become vested with all the properties, rights, powers, privileges
and duties of the former Agent, without further act, deed or conveyance. Upon
the effective date of resignation or removal of a retiring Agent (but not
earlier than the acceptance by a successor Administrative Agent of appointment
as secured party under the Pledge Agreement), such Agent shall be discharged
from its duties under this Agreement and the other Transaction Documents, but
the provisions of this Agreement shall inure to its benefit as to any actions
taken or omitted by it while it was an Agent under this Agreement. If and so
long as no successor Agent shall have been appointed, then any notice or other
communication required or permitted to be given by such Agent shall be
sufficiently given if given by the Required Banks, all notices or other
communications required or permitted to be given to such Agent shall be given to
each Bank, and all payments to be made to such Agent shall be made directly to
the Account Parties, Borrowers or Bank for whose account such payment is made.
8.10. Additional Administrative Agents. If the Administrative Agent
shall from time to time deem it necessary or advisable, for its own protection
in the performance of its duties hereunder or in the interest of the Banks, the
Administrative Agent, the Borrowers and the Account Parties shall execute and
deliver a supplemental agreement and all other instruments and agreements
necessary or advisable, in the opinion of the Administrative Agent, to
constitute another commercial bank or trust company, or one or more other
Persons approved by the Administrative Agent, to act as co-Administrative Agent
or agent with such powers of the Administrative Agent as may be provided in such
supplemental agreement and to vest in such bank, trust company or Person as such
co-Administrative Agent or separate agent, as the case may be, any properties,
rights, powers, privileges and duties of the Administrative Agent under this
Agreement or any other Transaction Document.
8.11. Calculations. No Agent shall be liable for any calculation,
apportionment or distribution of payments made by it in good faith. If such
calculation, apportionment or distribution is subsequently determined to have
been made in error, the sole recourse of any Bank to whom payment was due but
not made shall be to recover from the other Banks any payment in excess of the
amount to which they are determined to be entitled or, if the amount due was not
paid by the appropriate Account Party or Borrower, to recover such amount from
the appropriate Account Party or Borrower.
8.12. Agents' Fees. Each Account Party and each Borrower agrees to pay
to each Agent, for its individual account, a nonrefundable Administrative
Agent's fee in an amount and at such time or times as such Agent and Alleghany
have heretofore agreed.
ARTICLE IX
GUARANTEE
9.01. The Guarantee. The Guarantor hereby irrevocably, unconditionally
and absolutely guarantees to the Agents, the Issuing Bank and the Banks, and
becomes surety for, the prompt payment of the Obligations of the Account Parties
and the Borrowers (the "Guaranteed Obligations") in full when due (whether at
stated maturity, by acceleration, or otherwise) strictly in accordance with the
terms thereof. The Guarantor hereby further agrees, as a primary obligor, that
if any of the Guaranteed Obligations are not paid in full when due (whether at
stated maturity, by acceleration, or otherwise and whether or not such payments
would not be permitted under any applicable bankruptcy or similar law), the
Guarantor will promptly pay the same, without any demand or notice whatsoever
(except as expressly provided herein), and that in the case of any extension of
time of payment or renewal of any of the Guaranteed Obligations, the same will
be promptly paid in full when due (whether at extended maturity, by acceleration
or otherwise) in accordance with the terms of such extension or renewal. Without
limiting the generality of the foregoing, the Guaranteed Obligations shall
include the obligations of the Account Parties under Section 7.03 hereof.
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Notwithstanding any provision to the contrary contained herein or in any other
of the Transaction Documents, to the extent the obligations of the Guarantor
shall be adjudicated to be invalid or unenforceable for any reason (including,
without limitation, because of any applicable law, including the insolvency
laws, relating to fraudulent conveyances or transfers) then the obligations of
the Guarantor hereunder automatically shall be limited to the maximum amount
that is permissible under applicable law.
9.02. Obligations Unconditional. The obligations of the Guarantor under
this Article are irrevocable, absolute and unconditional (to the fullest extent
permitted by applicable law), irrespective of the value, genuineness, validity,
regularity or enforceability of any of the Transaction Documents, or any other
agreement or instrument referred to therein, or any substitution, release or
exchange of any other guarantee of or security for any of the Guaranteed
Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being the intent of this Article that the obligations of the Guarantor
hereunder shall be absolute and unconditional under any and all circumstances.
The Guarantor agrees that it shall have no right of subrogation, indemnity,
reimbursement or contribution against any Account Party or any Borrower, for
amounts paid under this Article IX until such time as the Banks have been paid
in full, no Guaranteed Obligation is outstanding, the Letter of Credit
Participating Interest Commitments under this Agreement have been terminated and
no Person or Official Body shall have any right to request any return or
reimbursement of funds from any Bank in connection with monies received under
the Transaction Documents. Without limiting the generality of the foregoing, it
is agreed that, to the fullest extent permitted by applicable law, the
occurrence of any one or more of the following shall not alter or impair the
liability of the Guarantor hereunder which shall remain irrevocable, absolute
and unconditional as described above:
(i) at any time or from time to time, without notice to the
Guarantor, the time for any performance of or compliance with any of
the Guaranteed Obligations shall be extended, or such performance or
compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of any
of the Transaction Documents, or any other agreement or instrument
referred to in the Transaction Documents shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall
be accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under any of the
Transaction Documents, or any other agreement or instrument referred to
in the Transaction Documents shall be waived or any other guarantee of
any of the Guaranteed Obligations or any security therefor shall be
released or exchanged in whole or in part or otherwise dealt with;
(iv) any Lien granted to, or in favor of, any Agent or any
Bank as security for any of the Guaranteed Obligations shall be void or
voidable, or shall fail to attach or be perfected or any Agent or any
Bank shall fail to realize on any collateral security; or
(v) any of the Guaranteed Obligations shall be determined to
be void or voidable (including, without limitation, for the benefit of
any creditor of the Guarantor) or shall be subordinated to the claims
of any Person (including, without limitation, any creditor of the
Guarantor).
With respect to its obligations hereunder, the Guarantor hereby expressly waives
diligence, presentment, demand of payment, protest and all notices whatsoever
(except notices expressly required hereunder), and any requirement that the
Banks exhaust any right, power or remedy or proceed against any Person under any
of the Transaction Documents, or any other agreement or instrument referred to
in the
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Transaction Documents, or against any other Person under any other guarantee of,
or security for, any of the Guaranteed Obligations. This is a guarantee of
payment and not merely of collection.
9.03. Reinstatement. The obligations of the Guarantor under this
Article shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of any Person in respect of the Guaranteed
Obligations is rescinded or must be otherwise restored by any holder of any of
the Guaranteed Obligations, whether as a result of any proceedings in
bankruptcy, receivership, or reorganization or otherwise, and the Guarantor
agrees that it will indemnify the Agents and the Banks on demand for all
reasonable out-of-pocket costs and expenses (including, without limitation,
reasonable fees and expenses of counsel) incurred by any Agent or any Bank in
connection with such rescission or restoration, including any such reasonable
costs and expenses incurred in defending against any claim alleging that such
payment constituted a preference, fraudulent transfer or similar payment under
any bankruptcy, insolvency, receivership, reorganization or similar law.
9.04. Remedies. The Guarantor agrees that, to the fullest extent
permitted by applicable law, as between the Guarantor, on the one hand, and the
Agents and the Banks, on the other hand, the Guaranteed Obligations may be
declared to be forthwith due and payable as provided in Section 7.02 hereof (and
shall be deemed to have become automatically due and payable in the
circumstances provided in said Section 7.02) for purposes of Section 9.01 hereof
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or preventing the Guaranteed Obligations from becoming
automatically due and payable) as to any other Person and that, in the event of
such declaration (or Guaranteed Obligations being deemed to have become
automatically due and payable), the Guaranteed Obligations (whether or not due
and payable by any other Person) shall forthwith become due and payable by the
Guarantor for purposes of said Section 9.01.
9.05. Continuing Guarantee. The guarantee in this Article is a
continuing guarantee, and shall apply to all of the Guaranteed Obligations
whenever arising.
9.06. No Restrictions. Except for restrictions under the Transaction
Documents, the Guarantor shall not be or become subject to any restriction of
any nature (whether arising by operation of Law, by agreement, by its articles
of incorporation, by-laws or other constituent documents, or otherwise) on the
right of the Guarantor from time to time to (x) pay any indebtedness,
obligations or liabilities from time to time owed to any Account Party or any
Borrower, (y) make loans or advances to any Account Party or any Borrower, or
(z) transfer any of its properties or assets to any Account Party or any
Borrower.
ARTICLE X
MISCELLANEOUS
10.01. No Implied Waiver etc. No delay or failure of any Agent or any
Bank in exercising any right, power or privilege hereunder shall affect such
right, power or privilege; nor shall any single or partial exercise thereof or
any abandonment or discontinuance of steps to enforce such a right, power or
privilege preclude any further exercise thereof or of any other right, power or
privilege. The rights and remedies hereunder of the Agents and the Banks are
cumulative and not exclusive of any rights or remedies which it or they would
otherwise have. Any amendment, waiver, permit, consent or approval of any kind
or character on the part of an Agent or a Bank of any breach or default under
this Agreement or any such waiver of any provision or condition of this
Agreement must be in writing and shall be effective only to the extent in such
writing specifically set forth.
10.02. Set-Off. In case any one or more of the Events of Default
described in Article VII hereof shall occur, each Bank shall have the right, in
addition to all other rights and remedies available to it, to
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set-off against the unpaid balance of its interests in any Letter of Credit
Reimbursement Obligations or Loan Repayment Obligations any debt owing by such
Bank to the applicable Credit Party, including without limitation any funds in
any deposit account maintained by such Credit Party with such Bank. Nothing in
this Agreement shall be deemed any waiver or prohibition of any right of
banker's lien or set-off under applicable Law.
10.03. Survival of Provisions. Each of the representations, warranties,
covenants and agreements of the Credit Parties contained herein or made in
writing in connection herewith shall survive the execution and delivery of this
Agreement, and the making of any Credit Extension hereunder.
10.04. Expenses and Fees; Indemnity.
(a) Each of the Account Party Members and each Borrower agrees to pay
or cause to be paid and to save each of the Agents, the Arranger and (in the
case of clause (iv) below) each of the Banks harmless against liability for the
payment of all reasonable out-of-pocket costs and expenses (including but not
limited to reasonable fees and expenses of counsel, including local counsel,
auditors, and all other professional, accounting, evaluation and consulting
costs) incurred by such Agent or such Bank from time to time arising from or
relating to (i) the negotiation, preparation, execution, delivery,
administration and performance of this Agreement and the other Transaction
Documents, (ii) any syndication of the transactions contemplated by this
Agreement and the Transaction Documents, (iii) any amendments, modifications,
supplements, waivers or consents requested by any Credit Party (whether or not
ultimately entered into or granted) to this Agreement or any Transaction
Document, and (iv) the enforcement or preservation of rights under this
Agreement or any Transaction Document (including but not limited to the
reasonable fees and expenses of special counsel to the Arranger and Banks and
any such costs or expenses arising from or relating to (A) collection or
enforcement of any other amount owing hereunder or thereunder by any Agent or
any Bank and (B) any litigation, proceeding, dispute, work-out, restructuring or
rescheduling related in any way to this Agreement or the Transaction Documents).
Notwithstanding the foregoing, no Credit Party shall be required to pay costs
and expenses of a Bank (in its capacity as such) which were incurred by such
Bank in connection with any litigation, proceeding or other dispute relating
solely to a claim made against such Bank by one or more of the other Banks. Each
Credit Party (other than AUL) hereby agrees to pay all stamp, document,
transfer, recording, filing, registration, search, sales and excise fees and
taxes and all similar impositions now or hereafter determined by any Agent or
any Bank to be payable in connection with this Agreement or any other
Transaction Documents or any other documents, instruments or transactions
pursuant to or in connection herewith or therewith, and each Credit Party (other
than AUL) agrees to save each Agent and each Bank harmless from and against any
and all present or future claims, liabilities or losses with respect to or
resulting from any omission to pay or delay in paying any such fees.
(b) Each of the Account Party Members and each Borrower hereby agrees
to reimburse and indemnify each Agent, the Arranger and each Bank and their
respective directors, officers, employees and agents (the "Indemnified Parties")
from and against any and all losses, liabilities, claims, damages, expenses,
obligations, penalties, actions, judgments, suits, costs or disbursements of any
kind or nature whatsoever (including, without limitation, the reasonable fees
and disbursements of counsel for the Indemnified Parties in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not such Indemnified Party shall be designated a party thereto) that
may at any time be imposed on, asserted against or incurred by such Indemnified
Party as a result of, or arising out of, or in any way related to or by reason
of, this Agreement or any other Transaction Document, any transaction from time
to time contemplated hereby or thereby, or any transaction to which any Letter
of Credit directly or indirectly relates (and without in any way limiting the
generality of the foregoing, including any violation or breach of any Law by any
Credit Party or any exercise by any Agent or any Bank of any of its rights or
remedies under this Agreement or any other Transaction Document; any breach of
any representation or warranty, covenant or agreement of any Credit Party); but
excluding any such losses, liabilities, claims, damages, expenses, obligations,
penalties, actions, judgments, suits, costs or disbursements to the extent
resulting from the gross negligence or willful
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misconduct of such Indemnified Party, as finally determined by a court of
competent jurisdiction. If and to the extent that the foregoing obligations of
the Account Party Members and Borrowers under this Section 10.04, or any other
indemnification obligation of the Account Party Members or Borrowers hereunder
or under any other Transaction Document, are unenforceable for any reason, the
Account Party Members and the Borrowers hereby agree to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under applicable Law. Notwithstanding the foregoing, no Account
Party Member or Borrower shall be required to pay costs and expenses of a Bank
or a Participant (in its capacity as such) which were incurred by such Bank or
Participant in connection with any litigation, proceeding or other dispute
relating solely to a claim made against such Bank or Participant by one or more
of the other Banks or Participants.
10.05. Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Transaction Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby. The parties shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
10.06. Holidays. Unless otherwise specified herein, whenever any
payment or action to be made or taken hereunder shall be stated to be due on a
Saturday, Sunday or public holiday under the laws of the Commonwealth of
Pennsylvania, such payment or action shall be made or taken on the next
succeeding Business Day and such extension of time shall in such case be
included in computing interest, if any, in connection with such payment or
action.
10.07. Notices, etc. Any notice or other communication in connection
with this Agreement shall be deemed to have been given or made when received by
the party to whom directed. All such notices and other communications shall be
in writing unless otherwise provided herein and shall be directed, if to a Bank,
at such Bank's address on the signature pages hereof, if to the Administrative
Agent at Three Mellon Center, Pittsburgh, Pennsylvania 15259, Attention: Loan
Administration, with a copy to Institutional Banking, Room 4401, One Mellon
Center, Pittsburgh, PA 15258; if to the Issuing Bank at Three Mellon Center,
Pittsburgh, Pennsylvania 15259, Attention: Letter of Credit Department with a
copy to Institutional Banking, Room 4401, One Mellon Center, Pittsburgh,
Pennsylvania 15258 and if to any Credit Party, to AUL at Gracechurch House, 55
Gracechurch Street, London EC3V 0JP, England, Attention: Mr. Nigel Wachman, with
a copy to the Chief Financial Officer of Alleghany at 375 Park Avenue, New York,
New York 10152, or in accordance with the latest unrevoked written direction
from any party to the other parties hereto. For the purposes of both receiving
information from any Agent or any Bank or providing information to any Agent or
any Bank, AUL shall act as the agent for each other Credit Party.
10.08. FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR
ANY OTHER TRANSACTION DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, OR
ANY OTHER MATTER RELATED THERETO MAY BE BROUGHT AND MAINTAINED IN THE COURTS OF
COMMONWEALTH OF PENNSYLVANIA OR IN THE COURTS OF THE STATE OF NEW YORK OR IN THE
UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA OR IN THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. EACH CREDIT
PARTY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS
OF COMMONWEALTH OF PENNSYLVANIA, THE COURTS OF THE STATE OF NEW YORK, THE UNITED
STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA AND THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF
ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY
JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION, SUBJECT TO ANY
GENERAL RIGHT OF APPEAL. EACH CREDIT PARTY
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FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL,
POSTAGE PREPAID, TO THE ADDRESS PROVIDED IN THIS AGREEMENT.
10.09. WAIVER OF JURY TRIAL. TO THE EXTENT LITIGATION HEREUNDER IS
BROUGHT BEFORE A COURT IN THE UNITED STATES, THE PARTIES HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY.
EACH PARTY ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISIONS OF EACH OTHER
DOCUMENT HERETO TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR EACH AGENT AND EACH BANK ENTERING INTO THIS AGREEMENT AND RELATED
AGREEMENTS.
10.10. Governing Law. This Agreement and any other documents delivered
in connection herewith and the rights and obligations of the parties hereto and
thereto shall for all purposes be governed by and construed and enforced in
accordance with the substantive law of the State of New York without giving
effect to conflict of laws principles.
10.11 Validity and Enforceability. If any stamp tax, levy, duty or fee
is imposed or payable in respect to this Agreement or the transaction
contemplated hereby or is necessary or advisable to ensure the legality,
validity or enforceability of the documents in this transaction, the Account
Parties and Borrowers shall promptly pay such stamp tax, levy, duty or fee. No
government approval or consent is necessary for the execution, delivery and
performance of the transactions contemplated under this Agreement.
10.12. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which, when so executed and delivered, shall be an original, but all such
counterparts shall together constitute one (1) and the same instrument.
10.13. Successors and Assigns; Participations; Assignments.
(a) Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the Account Parties, the Borrowers, the
Banks, all future holders of the Notes, the Agents, and their respective
successors and assigns, except that no Credit Party may assign or otherwise
transfer any of its rights or duties under this Agreement without the prior
written consent of each of the Agents and each of the Banks, and any purported
assignment without such consent shall be void. Nothing in this Agreement shall
preclude any Bank from assigning its interests in any of the Obligations or the
Notes to a Federal Reserve Bank.
(b) Participations. Any Bank may, in the ordinary course of its
commercial banking business and in accordance with applicable Law, at any time
sell participations to one or more commercial banks or other Persons (each a
"Participant") in a portion of its rights and obligations under this Agreement
and the other Transaction Documents (including, without limitation, all or a
portion of its Letter of Credit Participating Interest Commitments and Letter of
Credit Participating Interest and the Loans owing to it and any Note held by
it); provided, that
(i) any such participation sold to a Participant which is not
a Bank, an affiliate of a Bank or a Federal Reserve Bank shall be made
only with the consent (which in each case shall not be unreasonably
withheld) of the Issuing Bank,
(ii) any such Bank's obligations under this Agreement and the
other Transaction Documents shall remain unchanged,
(iii) such Bank shall remain solely responsible to the other
parties hereto for the performance of such obligations,
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(iv) the parties hereto shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and
obligations under this Agreement and each of the other Transaction
Documents,
(v) such Participant shall be bound by the provisions of
Section 10.13 hereof, and the Bank selling such participation shall
obtain from such Participant a written confirmation of its agreement to
be so bound,
(vi) no Participant (unless such Participant is an affiliate
of such Bank, or is itself a Bank) shall be entitled to require such
Bank to take or refrain from taking action under this Agreement or
under any other Transaction Document, except that such Bank may agree
with such Participant that such Bank will not, without such
Participant's consent, take action of the type described in subsections
(a), (b), (c), (d) or (e) of Section 10.14 hereof, and
(vii) a Participant shall have the right to vote regarding
amendments to this Agreement only in connection with amendments which
effect changes in the amount of Letter of Credit Participating Interest
Commitments, Letter of Credit Participating Interests, Revolving Credit
Commitments, Loans, fees payable hereunder and the Expiration Date.
Each Account Party and each Borrower agrees that any such Participant shall be
entitled to the benefits of Sections 2.12, 3.11 and 10.04(b) with respect to its
participation in the Letter of Credit Commitments, the Letters of Credit, the
Revolving Credit Commitments and the Loans outstanding from time to time;
provided, that no such Participant shall be entitled to receive any greater
amount pursuant to such Sections than the transferor Bank would have been
entitled to receive in respect of the amount of the participation transferred to
such Participant had no such transfer occurred.
(c) Assignments. Any Bank may, in the ordinary course of its commercial
banking business and in accordance with applicable Law, at any time assign all
or a portion of its rights and obligations under this Agreement and the other
Transaction Documents (including, without limitation, all or any portion of its
Letter of Credit Participating Interest Commitments and Letter of Credit
Participating Interests, and all or any portion of its Revolving Credit
Commitments, Loans owing to it and any Note held by it) to any Bank, any
affiliate of a Bank or to one or more additional commercial banks or other
Persons (each a "Purchasing Bank"); provided, that
(i) any such assignment shall be made only with the consent
(which in each case shall not be unreasonably withheld) of the Credit
Parties and the Issuing Bank, unless an Event of Default has occurred
and is continuing or exists, in which case the consent of the Credit
Parties shall not be required,
(ii) if a Bank makes such an assignment of less than all of
its then remaining rights and obligations under this Agreement and the
other Transaction Documents, such assignment shall be in a minimum
aggregate principal amount of $10,000,000 of the Letter of Credit
Participating Interest Commitments, Letter of Credit Participating
Interests, Revolving Credit Commitments and Loans then outstanding,
(iii) each such assignment shall be of a constant, and not a
varying, percentage of each Letter of Credit Commitment and Revolving
Credit Commitment of the transferor Bank and of all of the transferor
Bank's rights and obligations under this Agreement and the other
Transaction Documents, and
(iv) each such assignment shall be made pursuant to a Transfer
Supplement in substantially the form of Exhibit B to this Agreement,
duly completed (a "Transfer Supplement").
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In order to effect any such assignment, the transferor Bank and the
Purchasing Bank shall execute and deliver to the Administrative Agent a duly
completed Transfer Supplement (including the consents required by clause (i)
of the preceding sentence) with respect to such assignment, together with
any Note subject to such assignment, and a processing and recording fee of
$2,500; and, upon receipt thereof, the Administrative Agent shall accept
such Transfer Supplement; provided, however, that no such processing and
recording fee shall be due if such assignment is to an affiliate of a Bank
or a Federal Reserve Bank. Upon receipt of the Purchase Price Receipt Notice
pursuant to such Transfer Supplement, the Administrative Agent shall record
such acceptance in the Register. Upon such execution, delivery, acceptance
and recording, from and after the close of business at the Administrative
Agent's Domestic Office on the Transfer Effective Date specified in such
Transfer Supplement:
(x) the Purchasing Bank shall be a party hereto and, to the
extent provided in such Transfer Supplement, shall have the rights and
obligations of a Bank hereunder, and
(y) the transferor Bank thereunder shall be released from its
obligations under this Agreement to the extent so transferred (and, in
the case of an Transfer Supplement covering all or the remaining
portion of a transferor Bank's rights and obligations under this
Agreement, such transferor Bank shall cease to be a party to this
Agreement) from and after the Transfer Effective Date.
On or prior to the Transfer Effective Date specified in a Transfer Supplement
pursuant to which any Revolving Credit Commitment or Loan is assigned, the
Borrowers shall execute and deliver to the Administrative Agent (for delivery to
the Purchasing Bank) new Notes evidencing such Purchasing Bank's assigned
Revolving Credit Commitments or Loans and (for delivery to the transferor Bank)
replacement Notes in the principal amount of the Loans or Revolving Credit
Commitments retained by the transferor Bank (such Notes to be in exchange for
(and deliverable against delivery, marked "exchanged" of), but not in payment
of, those Notes then held by such transferor Bank). Each such Note shall be
dated the date and be substantially in the form of the predecessor Note. The
Administrative Agent shall mark the predecessor Notes "exchanged" and deliver
them to the Borrowers. Accrued interest and accrued fees shall be paid to the
Purchasing Bank at the same time or times provided in the predecessor Notes and
this Agreement.
(d) Register. The Administrative Agent shall maintain at its office a
copy of each Transfer Supplement delivered to it and a register (the "Register")
for the recordation of the names and addresses of the Banks and the Letter of
Credit Participating Interest Commitment of, the amount of the Letter of Credit
Participating Interests of, the Revolving Credit Commitment of and the amount of
the Loans of, each Bank from time to time. The entries in the Register shall be
conclusive absent manifest error and the Account Parties, the Borrowers,
Alleghany, the Agents and the Banks may treat each person whose name is recorded
in the Register as a Bank hereunder for all purposes of the Agreement. The
Register shall be available for inspection by any Account Party, Borrower or
Bank, or by Alleghany, at any reasonable time and from time to time upon
reasonable prior notice.
(e) Financial and Other Information. Each Credit Party authorizes each
Agent and each Bank to disclose to any Participant or Purchasing Bank (each, a
"Transferee") and any prospective transferee any and all financial and other
information in such Person's possession concerning the Credit Parties and their
Affiliates which has been or may be delivered to such Person by or on behalf of
the Credit Parties in connection with this Agreement or any other Transaction
Document or such Person's credit evaluation of the Credit Parties and their
Affiliates, subject to the agreement of the Transferee or prospective Transferee
to be bound by Section 10.17 hereof with respect to confidentiality. At the
request of any Bank, a Credit Party, at a Credit Party's expense, shall provide
to each prospective transferee the conformed copies of documents referred to in
Section 4 of the form of Transfer Supplement.
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10.14. Amendments and Waivers. Neither this Agreement nor any
Transaction Document may be amended, modified or supplemented except in
accordance with the provisions of this Section. The Agents and the Credit
Parties may from time to time amend, modify or supplement the provisions of this
Agreement or any other Transaction Document for the purpose of amending, adding
to, or waiving any provisions or changing in any manner the rights and duties of
any Credit Party, any Agent or any Bank. Any such amendment, modification or
supplement made by the Credit Parties and the Agents in accordance with the
provisions of this Section shall be binding upon the Credit Parties, each Bank
and each Agent. The Agents shall enter into such amendments, modifications or
supplements from time to time as directed by the Required Banks, and only as so
directed, provided, that no such amendment, modification or supplement may be
made which will:
(a) Increase the Committed Amount of any Bank over the amount thereof
then in effect, or extend the Expiration Date or Maturity Date, without the
written consent of each Bank affected thereby;
(b) Reduce the principal amount of or extend the scheduled final
maturity or time for any scheduled payment of principal of any Loan, or reduce
the rate of interest or extend the time for payment of interest borne by any
Loan (other than as a result of waiving the applicability of any increase in
interest rates applicable to overdue amounts), without the written consent of
each Bank affected thereby;
(c) Reduce the amount of or postpone the date for payment of any
Commitment Fee or Letter of Credit Fee or reduce or postpone the date for
payment of any other fees, expenses, indemnities or amounts payable under any
Transaction Document, without the written consent of each Bank affected thereby;
(d) Change the definition of "Required Banks" or amend this Section
10.14, without the written consent of all the Banks;
(e) Amend or waive any of the provisions of Article IX hereof, or
impose additional duties upon any Agent or otherwise adversely affect the
rights, interests or obligations of any Agent, without the written consent of
such Agent;
(f) Amend or waive any of the provisions of the Pledge Agreement or
release the Pledgor from its obligations under the Pledge Agreement without the
written consent of all the Banks, except that the Pledge Agreement may be
amended with the written consent (which shall not be unreasonably withheld) of
the Required Banks in connection with a Substitution of Eligible Substitute
Collateral as contemplated by clause (a) of the definition of such term.
(g) Amend or waive any of the provisions of Article IX or release the
Guarantor from its obligations hereunder without the written consent of all of
the Banks;
and provided further, that Transfer Supplements may be entered into in the
manner provided in Section 10.13 hereof. Any such amendment, modification or
supplement must be in writing and shall be effective only to the extent set
forth in such writing. Any Event of Default or Potential Default waived or
consented to in any such amendment, modification or supplement shall be deemed
to be cured and not continuing to the extent and for the period set forth in
such waiver or consent, but no such waiver or consent shall extend to any other
or subsequent Event of Default or Potential Default or impair any right
consequent thereto.
10.15. Judgment Currency. In the event of a judgment or order being
rendered by any court or tribunal for the payment of any amounts owing to the
Banks or any of them under this Agreement or any other Transaction Document or
for the payment of damages in respect of any breach of this Agreement or any
other Transaction Document or under or in respect of a judgment or order of
another court or tribunal for the payment of such amounts or damages, such
judgment or order being expressed in a currency (the "Judgment Currency") other
than Dollars the party against whom the judgment or order is made shall
indemnify and hold the Banks harmless against any deficiency in terms of Dollars
in the amounts received by the Banks arising or resulting from any variations as
between (i) the exchange rate at which Dollars are
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converted into the Judgment Currency for the purposes of such judgment or order
and (ii) the exchange rate at which each Bank is able to purchase Dollars with
the amount of the Judgment Currency actually received by the Banks on the date
of such receipt. The indemnity in this section shall constitute a separate and
independent obligation from the other obligations of the Account Parties and
Borrowers hereunder and shall apply irrespective of any indulgence granted by
the Banks.
10.16. Records. The amount of outstanding Letters of Credit, each
Bank's Letter of Credit Participating Interest, Committed Amount and the accrued
and unpaid Commitment Fees shall at all times be ascertained from the records of
the Administrative Agent, which shall be conclusive absent manifest error.
10.17 Confidentiality. Each of the Agents and the Banks agree, for the
benefit of the Credit Parties and AAM, to keep confidential (and not to use for
any purpose other than in connection with this Agreement) the Transaction
Documents and the extension of credit to the Credit Parties and their
affiliates, any information relating to the Credit Parties and AAM received by
it pursuant to or in connection with this Agreement which is (a) information
which such Agent and such Bank reasonably expects that the applicable Credit
Party would want to keep confidential or (b) information which is clearly marked
"CONFIDENTIAL"; provided, however, that this Section 10.17 shall not be
construed to prevent any Agent or any Bank from disclosing such information (i)
to any affiliate that shall agree in writing for the benefit of the Credit
Parties and AAM to be bound by this obligation of confidentiality, (ii) upon the
order of any court or administrative agency of competent jurisdiction, (iii)
upon the request or demand of any regulatory agency or authority having
jurisdiction over such Agent or such Bank which request or demand has the force
of Law or is made by a bank regulatory agency (in which case the Agent and the
Banks will use reasonable efforts to promptly so advise AUL), (iv) that has been
publicly disclosed, other than from a breach of this provision by any Agent or
any Bank, (v) that has been obtained from any person that is neither a party to
this Agreement nor an affiliate of any such party, but only to the extent that
such Bank does not know or have reason to know that such disclosure violates a
confidentiality agreement between such person and the applicable Credit Party,
(vi) in connection with the exercise of any right or remedy hereunder or under
any other Transaction Document, (vii) as expressly contemplated by this
Agreement or any other Transaction Document or (viii) to any prospective
purchaser of all or any part of the interest of any Bank which shall agree in
writing for the benefit of the Credit Parties and AAM to be bound by the
obligation of confidentiality in this Agreement or the other Transaction
Documents if such prospective purchaser is a financial institution or has been
consented to by the Credit Parties, which consent will not be withheld if such
purchaser is not a competitor of any Credit Party or AAM, or an affiliate of a
competitor of any Credit Party or AAM.
10.18. Sharing of Collections. The Banks hereby agree among themselves
that if any Bank shall receive (by voluntary payment, realization upon security,
set-off or from any other source) any amount on account of any Obligation
contemplated by this Agreement or the other Transaction Documents to be made by
an Account Party or Borrower pro rata to all Banks in greater proportion than
any such amount received by any other Bank, then the Bank receiving such
proportionately greater payment shall notify each other Bank and the
Administrative Agent of such receipt, and equitable adjustment will be made in
the manner stated in this Section 10.18 so that, in effect, all such excess
amounts will be shared ratably among all of the Banks. The Bank receiving such
excess amount shall purchase (which it shall be deemed to have done
simultaneously upon the receipt of such excess amount) for cash from the other
Banks a participation in the applicable Obligations owed to such other Banks in
such amount as shall result in a ratable sharing by all Banks of such excess
amount (and to such extent the receiving Bank shall be a Participant). If all or
any portion of such excess amount is thereafter recovered from the Bank making
such purchase, such purchase shall be rescinded and the purchase price restored
to the extent of such recovery, together with interest or other amounts, if any,
required by Law to be paid by the Bank making such purchase. The Account Parties
and Borrowers hereby consent to and confirm the foregoing arrangements. Each
Participant shall be bound by this Section 10.18 as fully as if it were a Bank
hereunder.
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10.19. Arranger, Other Agents. The Arranger shall have no obligations
or duties in its capacity as such under this Agreement. Neither the Syndication
Agent nor the Managing Agent shall have any obligations or duties in its
capacity as such under this Agreement.
10.20. Power of Attorney. Each Credit Party hereby appoints and
constitutes the Agent, its successors and assigns, as such Credit Party's agent
and attorney-in-fact for the purpose of the exercise of the Agent's rights and
remedies under the Pledge Agreement upon the occurrence of an Event of Default
hereunder (including without limitation under the second sentence of Section 5.6
of the Pledge Agreement) and taking any action or executing any document or
instrument that the Agent deems necessary or convenient for such purpose,
including the power to deliver to Lloyd's or any other Person cash in the name
of such Credit Party, to endorse and deliver to Lloyd's or any other Person
checks, notes and other instruments for the payment of money in the name of and
on behalf of such Credit Party and to endorse and deliver to Lloyd's or any
other Person in the name of and on behalf of such Credit Party securities or
other certificates. This appointment is coupled with an interest and is
irrevocable and will not be affected by the bankruptcy or insolvency of any
Credit Party or any circumstances whatsoever. Each Credit Party agrees that the
Council of Lloyd's shall be entitled to accept the provisions hereof as
conclusive evidence of the Agent's rights to effect any transfer pursuant to
this Agreement or the Pledge Agreement and the authority granted to the Agent
hereunder, notwithstanding any other notice as direction to the contrary
heretofore or hereafter given by any Credit Party or any other Person.
[Remainder of page intentionally left blank]
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<PAGE> 71
IN WITNESS WHEREOF, the parties hereto, by their respective officers
thereunto duly authorized, have executed this Agreement as of the day and year
first above written.
ALLEGHANY UNDERWRITING LTD
By /s/ D. M. Slade
-------------------------------------------
Title: Director
ALLEGHANY UNDERWRITING CAPITAL LTD
By /s/ D. M. Slade
-------------------------------------------
Title: Director
TALBOT UNDERWRITING LIMITED
By /s/ D. M. Slade
-------------------------------------------
Title: Director
ALLEGHANY UNDERWRITING CAPITAL (BERMUDA) LTD.
By /s/ D. M. Slade
-------------------------------------------
Title: Director
ALLEGHANY CORPORATION
By /s/ Peter R. Sismondo
-------------------------------------------
Title: Vice President, Controller,
Treasurer and Assistant Secretary
MELLON BANK, N.A., as a Bank, as Issuing Bank and as
Administrative Agent
By /s/ Karla Maloof
-------------------------------------------
Title: Vice President
Initial Committed Amount: $75,000,000
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NATIONAL WESTMINSTER BANK, plc, as a Bank and as
Syndication Agent
By /s/ John Mallett
-------------------------------------------
Title: Senior Manager
Initial Committed Amount: $70,000,000
ING BANK, N.V., London Branch., as a Bank and as
Managing Agent
By /s/ M. Sharman
-------------------------------------------
Title: Director
By /s/ T. Bates
-------------------------------------------
Title: Director
Initial Committed Amount: $60,000,000
CREDIT LYONNAIS NEW YORK BRANCH, as a Bank
By /s/ Peter Rasmussen
-------------------------------------------
Title: First Vice President
Initial Committed Amount: $35,000,000
FLEET NATIONAL BANK, as a Bank
By /s/ Robert Mclelland
-------------------------------------------
Title: Director
Initial Committed Amount: $35,000,000
ABN AMRO BANK, N.V., as a Bank
By /s/ Raymond Catt
-------------------------------------------
Title: Head of Insurance Banking
By /s/ Martyn Taplin
-------------------------------------------
Title: Authorised Signatory
Initial Committed Amount: $35,000,000
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<PAGE> 73
PNC BANK, National Association., as a Bank
By /s/ Donald V. Davis
-------------------------------------------
Title: Vice President
Initial Committed Amount: $15,000,000
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