<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 9, 2000
FIDELITY NATIONAL FINANCIAL, INC.
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 1-9396 86-0498599
- ---------------------------- ------------------------ -------------------
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
17911 Von Karman, Suite 300,
Irvine, California 92614
- ---------------------------------------- -------------------
(Address of Principal Executive Offices) (Zip Code)
(949) 622-5000
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
- --------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE> 2
Item 5. Other Events.
On February 9, 2000, Fidelity National Financial, Inc. ("Fidelity")
issued a press release announcing that its stockholders had approved the merger
of Chicago Title Corporation ("Chicago Title") with and into Fidelity. A copy of
such press release is attached hereto as Exhibit 99.1 and by this reference made
a part hereof.
On February 11, 2000, Fidelity issued a press release announcing that it
entered into a definitive Credit Agreement with Bank of America, N.A., as the
Administrative Agent, Chase Securities Inc., as the Syndication Agent, Morgan
Stanley Senior Funding, Inc., as the Documentation Agent, and various financial
institutions, as lenders. The Credit Agreement provides various credit
facilities to Fidelity, including a $450.0 million term loan facility, a $250.0
million revolving credit facility and a $100.0 million short-term revolving
credit facility. Borrowings under the Credit Agreement will be used initially to
finance the cash portion of the merger consideration to become payable upon
consummation of Fidelity's merger with Chicago Title, as well as to refinance
certain outstanding indebtedness of Fidelity and Chicago Title and to pay
expenses and costs incurred in connection with these transactions, and
thereafter for general corporate and working capital purposes.
Closing of the Credit Agreement and the initial borrowings thereunder
remains subject to satisfaction of a number of conditions, including completion
of the merger with Chicago Title.
A copy of the press release is attached hereto as Exhibit 99.2 and by
this reference made a part hereof. A copy of the Credit Agreement is attached
hereto as Exhibit 99.3 and by this reference made a part hereof.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
99.1 Press Release of Fidelity National Financial, Inc., dated
February 9, 2000.
99.2 Press Release of Fidelity National Financial, Inc., dated
February 11, 2000.
99.3 Credit Agreement, dated as of February 10, 2000, among Fidelity
National Financial, Inc., as Borrower, Bank of America, N.A.,
Chase Securities Inc., Morgan Stanley Senior Funding, Inc., and
various financial institutions, as lenders.
2
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FIDELITY NATIONAL FINANCIAL, INC.
Dated: February 15, 2000 By: /s/ M'LISS JONES KANE
------------------------------
Name: M'Liss Jones Kane
Title: Senior Vice President
3
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EXHIBIT INDEX
Exhibit
No. Description
99.1 Press Release of Fidelity National Financial, Inc., dated February 9,
2000.
99.2 Press Release of Fidelity National Financial, Inc., dated February 11,
2000.
99.3 Credit Agreement, dated as of February 10, 2000, among Fidelity
National Financial, Inc., as Borrower, Bank of America, N.A., Chase
Securities Inc., Morgan Stanley Senior Funding, Inc., and various
financial institutions, as lenders.
<PAGE> 1
EXHIBIT 99.1
PRESS RELEASE
FIDELITY NATIONAL FINANCIAL, INC. STOCKHOLDERS APPROVE MERGER OF FIDELITY WITH
CHICAGO TITLE CORPORATION
IRVINE, Calif., Feb. 9 /PRNewswire/ -- Fidelity National Financial, Inc. (NYSE:
FNF - news), headquartered in Irvine, California, today announced that its
stockholders overwhelmingly approved the merger of Chicago Title Corporation
into Fidelity. Chicago Title's stockholders meeting to approve the transaction
will take place on Friday, February 11, 2000 in Chicago, Illinois.
The transaction is subject to the completion of the regulatory approval process.
As previously announced, the Federal Trade Commission has approved the merger
and has published for public comment a proposed Consent Order. Fidelity has
obtained 17 of 20 required Form E pre merger consents from various State
Departments of Insurance and expects to receive the remaining three approvals
this week. Form E's are antitrust reviews conducted in states where Chicago
Title and Fidelity are licensed but not domiciled.
Form A approvals concerning the change of control of Chicago Title have been
received from the Missouri and Michigan Departments of Insurance. Form A's are
applications for prior approval of merger required in states where Chicago Title
and Fidelity are domiciled. The California and Oregon Departments of Insurance
are completing their review process. The merger is anticipated to close in the
first quarter of 2000.
William P. Foley, II Chairman and Chief Executive Officer of Fidelity, said, "We
are in the final stages of the merger and expect to close the transaction in the
first quarter. The management team and employees of both Fidelity and Chicago
are anticipating a smooth transition and our efforts will be dedicated to
building the five operating brands, Fidelity Title, Alamo Title, Chicago Title,
Ticor Title and Security Union through our approximately 1,000 office locations
across the country and our 7,000 agents nationwide."
Headquartered in Irvine, California, Fidelity National Financial, Inc. is one of
the largest national title insurance underwriters and also provides diversified
real estate services. The company does business in 49 states, the District of
Columbia, Puerto Rico and the U.S. Virgin Islands. Fidelity, through its
principal subsidiaries, issues title insurance policies and performs other
title-related services such as escrow, collection and trust activities, real
estate information and technology services, trustee's sale guarantees, credit
reporting, attorney services, flood certifications, real estate tax services,
reconveyances, recording, foreclosure publishing and posting services and
exchange intermediary services in connection with real estate transactions.
Chicago Title is a leading national real estate services company that provides a
full range of services for real estate transactions providing title insurance,
escrow, closing services, property valuation, credit reporting, flood
compliance, home warranty, default management and real estate information and
technology services. Chicago Title is the parent of Chicago Title and Trust
Company, Chicago Title Insurance Co., Ticor Title Insurance Co. and Security
Union Title Insurance Co. A comprehensive package of real estate services is
available through CastleLink(SM), which delivers title products as well as the
products of Chicago Title Flood Services, Inc., Chicago Title Credit Services
Inc., Chicago Title -- Market Intelligence, Chicago Title Field Services and
Consolidated Reconveyance.
Certain statements in this Press Release are forward-looking statements
concerning the benefits which Fidelity anticipates as a result of its proposed
acquisition of Chicago Title. Because such forward-looking statements involve
risks and uncertainties, there are important factors that could cause actual
results to differ materially from those expressed or implied by such
forward-looking statements, including, without limitation, changes in general
economic conditions, either nationally or in the regions in which Fidelity and
Chicago Title operate; competitive pressures in the title insurance and other
title and real estate related services industries and legislative or regulatory
changes that adversely affect our operations, along with other factors discussed
in our filings with the Securities and Exchange Commission.
<PAGE> 1
EXHIBIT 99.2
Contacts: Frank P. Willey
President
or
Al Stinson
Executive Vice President
Chief Financial Officer
(805) 563-1566
FOR IMMEDIATE RELEASE
FIDELITY NATIONAL FINANCIAL, INC. ANNOUNCES EXECUTION
OF AN $800 MILLION CREDIT FACILITY IN CONNECTION WITH
CHICAGO TITLE TRANSACTION
Irvine, Calif., February 11, 2000 -- Fidelity National Financial, Inc.
(NYSE:FNF), headquartered in Irvine, California, announced that is has executed
a fully syndicated Credit Agreement with Bank of America N.A., as the Lead
Arranger and Administrative Agent and Chase Securities Inc. as the co-Lead
Arranger and Syndication Agent to provide $800 million of Senior Credit
Facilities in connection with the merger of Chicago Title Corporation with and
into Fidelity. The Facilities are comprised of a $100 million 18-month revolving
credit facility, a $250 million 6-year revolving credit facility and a $450
million term loan facility amortizing over a 6-year period. Subject to the
consummation of the merger, proceeds from the Facilities will be used to finance
the cash portion of the merger consideration for Chicago Title Corporation
pursuant to the merger agreement, to refinance certain existing indebtedness, to
pay fees and expenses incurred in connection with the merger, and to fund other
general corporate purposes of the merged companies.
"We're pleased to have the cash portion of the financing in place for
the Chicago Title transaction," said William P. Foley, II, Fidelity's Chairman
and Chief Executive Officer. "The execution of the Credit Agreement completes
another significant step in the merger process."
Investors are urged to read our Joint Proxy Statement/Prospectus dated
December 29, 1999 and other relevant documents filed or to be filed with the
Securities and Exchange Commission because they contain important information.
These documents can be obtained
<PAGE> 2
-more-
FIDELITY NATIONAL FINANCIAL, INC. ANNOUNCES EXECUTION OF AN $800 MILLION CREDIT
FACILITY IN CONNECTION WITH CHICAGO TITLE TRANSACTION Page 2-2-2-2
from Fidelity National Financial, Inc. or at the commission's web site at
www.sec.gov.
Certain statements in this Press Release are forward-looking statements
concerning the benefits which Fidelity anticipates as a result of its proposed
acquisition of Chicago Title. Because such forward-looking statements involve
risks and uncertainties, there are important factors that could cause actual
results to differ materially from those expressed or implied by such
forward-looking statements, including, without limitation, changes in general
economic conditions, either nationally or in the regions in which Fidelity and
Chicago Title operate; competitive pressures in the title insurance and other
title and real estate related services industries and legislative or regulatory
changes that adversely affect our operations, along with other factors discussed
in our filings with the Securities and Exchange Commission.
Headquartered in Irvine, California, Fidelity National Financial, Inc.
is one of the largest national title insurance underwriters and also provides
diversified real estate services. The company does business in 49 states, the
District of Columbia, Puerto Rico and the U.S. Virgin Islands. Fidelity, through
its principal subsidiaries, issues title insurance policies and performs other
real estate related services such as escrow, collection and trust activities,
real estate information and technology services, trustee sale guarantees, credit
reporting, attorney services, flood certification, tax monitoring, home warranty
insurance, reconveyances, recordings, foreclosure publishing and posting
services and exchange intermediary services in connection with real estate
transactions.
# # #
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EXHIBIT 99.3
[EXECUTION COPY]
================================================================================
$800,000,000
CREDIT AGREEMENT
dated as of February 10, 2000
among
FIDELITY NATIONAL FINANCIAL, INC.,
as the Borrower,
BANK OF AMERICA, N.A.,
as the Administrative Agent,
CHASE SECURITIES INC.,
as the Syndication Agent,
MORGAN STANLEY SENIOR FUNDING, INC.,
as the Documentation Agent,
PARIBAS,
as the Co-Documentation Agent,
and
VARIOUS FINANCIAL INSTITUTIONS AND OTHER PERSONS
FROM TIME TO TIME PARTIES HERETO,
as the Lenders.
------------------------------
BANC OF AMERICA SECURITIES LLC,
AS LEAD ARRANGER AND SOLE BOOK MANAGER,
AND
CHASE SECURITIES INC.,
AS CO-LEAD ARRANGER.
================================================================================
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TABLE OF CONTENTS
<TABLE>
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ARTICLE I
DEFINITIONS
1.1. Certain Defined Terms..........................................................2
1.2. Other Interpretive Provisions.................................................30
1.3. Accounting Principles.........................................................31
ARTICLE II
THE CREDITS
2.1. Amounts and Terms of Commitments..............................................31
(a) The Term Credit.........................................................31
(b) The Revolving Credit....................................................31
(c) The Short Term Revolving Credit.........................................31
2.2. Loan Accounts.................................................................32
2.3. Procedure for Borrowing.......................................................32
2.4. Conversion and Continuation Elections.........................................33
2.5. The Swing Line Loans Subfacility..............................................35
(a) Swing Line Loans........................................................35
(b) Swing Line Loan Procedures..............................................35
(c) Refunding of, or Funding of Participations in, Swing Line Loans.........35
(d) Repayment of Participations.............................................36
(e) Participation Obligations Unconditional.................................36
ARTICLE III
PREPAYMENTS, REPAYMENTS, INTEREST AND FEES
3.1. Termination or Reduction of Short Term Revolving, Revolving or Swing
Line Commitments............................................................37
3.2. Optional Prepayments..........................................................37
3.3. Mandatory Prepayments of Loans................................................38
(a) Asset Dispositions......................................................38
(b) Applicable Debt Issuance................................................38
(c) Equity Issuance.........................................................38
(d) Application of Proceeds.................................................38
(e) General.................................................................38
(f) Interest Periods........................................................39
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3.4. Repayment.....................................................................39
(a) The Term Credit.........................................................39
(b) The Revolving Credit....................................................39
(c) The Short Term Revolving Credit.........................................40
3.5. Interest......................................................................40
(a) Rate....................................................................40
(b) Payment Dates...........................................................40
(c) Default Rate............................................................40
3.6. Fees..........................................................................40
(a) Arrangement, Agency Fees; etc...........................................40
(b) Commitment Fees.........................................................40
3.7. Computation of Fees and Interest..............................................41
3.8. Payments by the Borrower......................................................41
3.9. Payments by the Lenders to the Administrative Agent...........................42
3.10. Sharing of Payments, etc.....................................................42
ARTICLE IV
TAXES, YIELD PROTECTION AND ILLEGALITY
4.1. Taxes.........................................................................43
4.2. Illegality....................................................................45
4.3. Increased Costs and Reduction of Return.......................................46
4.4. Funding Losses................................................................46
4.5. Inability to Determine Rates..................................................47
4.6. Notice from Lenders...........................................................47
4.7. Change of Lending Office......................................................47
4.8. Notice of Certain Costs.......................................................48
4.9. Survival......................................................................48
4.10. Replacement of Certain Lenders...............................................48
ARTICLE V
CONDITIONS PRECEDENT
5.1. Conditions of Initial Credit Extensions.......................................49
(a) Credit Agreement........................................................49
(b) Organization Documents; Good Standing...................................49
(c) Legal Opinions..........................................................49
(d) Payment of Fees.........................................................49
(e) Subsidiary Guaranty.....................................................50
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(f) Solvency Certificate....................................................50
(g) Consummation of Transaction.............................................50
(h) Closing Balance Sheet...................................................50
(i) Other Indebtedness......................................................50
(j) Approvals...............................................................51
(k) Closing Date Certificate................................................51
(l) Unused Commitments......................................................51
(m) No Litigation...........................................................51
5.2. Conditions to All Credit Extensions...........................................51
(a) Notice of Borrowing.....................................................51
(b) Continuation of Representations and Warranties..........................52
(c) No Existing Default.....................................................52
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1. Corporate Existence and Power.................................................52
6.2. Corporate Authorization; No Contravention; Binding Effect.....................52
6.3. Governmental Authorization....................................................53
6.4. Litigation....................................................................53
6.5. ERISA Compliance..............................................................53
6.6. Margin Regulations; Investment Company Act; etc...............................54
6.7. Title to Properties...........................................................54
6.8. Taxes.........................................................................54
6.9. Financial Condition...........................................................55
6.10. Environmental Compliance.....................................................55
6.11. Copyrights, Patents, Trademarks and Licenses, etc............................56
6.12. Subsidiaries.................................................................56
6.13. Solvency.....................................................................56
6.14. Full Disclosure..............................................................56
6.15. Insurance Subsidiaries.......................................................57
6.16. Merger Agreement; Representations; Consummation of Transaction...............57
6.17. Compliance with Statutes, etc................................................57
6.18. Year 2000....................................................................57
ARTICLE VII
AFFIRMATIVE COVENANTS
7.1. Financial Statements..........................................................58
7.2. Certificates; Other Information...............................................60
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7.3. Notices.......................................................................62
7.4. Preservation of Corporate Existence, etc......................................63
7.5. Maintenance of Property.......................................................63
7.6. Insurance.....................................................................63
7.7. Payment of Taxes..............................................................63
7.8. Compliance with Laws..........................................................64
7.9. Compliance with ERISA.........................................................64
7.10. Inspection of Property and Books and Records.................................64
7.11. Interest Rate Protection Agreements..........................................64
7.12. Use of Proceeds..............................................................64
7.13. Future Subsidiaries..........................................................64
7.14. Merger Agreement.............................................................64
7.15. Maintenance of Corporate Separateness........................................65
7.16. UTCs.........................................................................65
7.17. Debt Rating Downgrade........................................................65
ARTICLE VIII
NEGATIVE COVENANTS
8.1. Limitation on Liens...........................................................66
8.2. Consolidations and Mergers; Sales of Assets...................................67
8.3. Loans, Acquisitions and Investments...........................................69
8.4. Limitation on Indebtedness....................................................70
8.5. Transactions with Affiliates..................................................72
8.6. Restricted Payments...........................................................72
8.7. Change in Business............................................................73
8.8. Accounting Changes............................................................73
8.9. Financial Covenants...........................................................73
8.10. Negative Pledges, Restrictive Agreements, etc................................74
8.11. ERISA........................................................................74
8.12. Modification of Certain Agreements...........................................74
8.13. Capital Expenditures.........................................................75
ARTICLE IX
EVENTS OF DEFAULT
9.1. Event of Default..............................................................75
(a) Non-Payment.............................................................75
(b) Representation or Warranty..............................................75
(c) Specific Defaults.......................................................75
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(d) Other Defaults..........................................................75
(e) Cross-Default...........................................................76
(f) Insolvency; Voluntary Proceedings.......................................76
(g) Involuntary Proceedings.................................................76
(h) ERISA...................................................................76
(i) Judgments...............................................................77
(j) Change of Control.......................................................77
(k) Loss of Material License................................................77
(l) Environmental Damages....................................................77
(m) Governmental Action.....................................................77
(n) Governmental Action.....................................................78
9.2. Remedies......................................................................78
9.3. Rights Not Exclusive..........................................................78
ARTICLE X
THE ADMINISTRATIVE AGENT
10.1. Appointment and Authorization; "Administrative Agent"........................78
10.2. Delegation of Duties.........................................................79
10.3. Limitation on Liability of Agent and Agent-Related Persons...................79
10.4. Reliance by Agent............................................................80
10.5. Notice of Default............................................................80
10.6. Credit Decision..............................................................80
10.7. Indemnification of Agent and Agent-Related Persons...........................81
10.8. Administrative Agent in Individual Capacity..................................81
10.9. Successor Administrative Agent...............................................82
10.10. Documentation Agent and Co-Documentation Agent..............................82
ARTICLE XI
MISCELLANEOUS
11.1. Amendments and Waivers.......................................................83
11.2. Notices......................................................................84
11.3. No Waiver; Cumulative Remedies...............................................85
11.4. Costs and Expenses...........................................................85
11.5. Borrower Indemnification.....................................................86
11.6. Marshalling; Payments Set Aside..............................................86
11.7. Successors and Assigns.......................................................87
11.8. Assignments, Participations, etc.............................................87
11.9. Confidentiality..............................................................89
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11.10. Set-off.....................................................................90
11.11. Notification of Addresses, Lending Offices, etc.............................90
11.12. Counterparts, Effectiveness.................................................90
11.13. Severability................................................................90
11.14. No Third Parties Benefited..................................................90
11.15. Governing Law and Jurisdiction..............................................91
11.16. Waiver of Jury Trial........................................................91
11.17. Entire Agreement............................................................91
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SCHEDULES
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<CAPTION>
<S> <C>
Schedule 2.1 Commitments
Schedule 6.3 Governmental Authorizations
Schedule 6.4 Litigation
Schedule 6.5 ERISA
Schedule 6.9 Disclosure of Liabilities
Schedule 6.12 Subsidiaries
Insurance Subsidiaries
Material Subsidiaries
Subsidiary Guarantors
Schedule 8.1 Existing Liens
Schedule 8.2 Merger Related Dispositions
Schedule 8.3 Existing Investments
Schedule 8.4 Permitted Indebtedness
Schedule 8.5 Transactions with Affiliates
Schedule 11.2 Lending Offices; Addresses for Notices
EXHIBITS
Exhibit A Form of Note
Exhibit B Form of Notice of Borrowing
Exhibit C Form of Notice of Conversion/Continuation
Exhibit D Form of Assignment and Acceptance
Exhibit E Form of Compliance Certificate
Exhibit F Form of Subsidiary Guaranty
Exhibit G Form of Solvency Certificate
Exhibit H Form of Closing Date Certificate
</TABLE>
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<PAGE> 9
CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of February 10, 2000, among FIDELITY NATIONAL
FINANCIAL, INC., a Delaware corporation (the "Borrower"), VARIOUS FINANCIAL
INSTITUTIONS AND OTHER PERSONS FROM TIME TO TIME PARTIES HERETO (collectively,
the "Lenders"; individually, a "Lender"), BANK OF AMERICA, N.A., as
administrative agent (in such capacity, the "Administrative Agent") for the
Lenders, CHASE SECURITIES INC., as syndication agent (in such capacity, the
"Syndication Agent") for the Lenders, and MORGAN STANLEY SENIOR FUNDING, INC.,
as documentation agent (in such capacity, the "Documentation Agent") for the
Lenders, and PARIBAS, as co-documentation agent (in such capacity, the
"Co-Documentation Agent") for the Lenders.
W I T N E S S E T H:
WHEREAS, pursuant to the Agreement and Plan of Merger, dated as of August
1, 1999, as amended by the amendment thereto dated October 13, 1999 (the "Merger
Agreement"), by and between the Borrower and Chicago Title Corporation, a
Delaware corporation (the "Company"), the Company will merge (the "Merger") with
and into the Borrower, with the Borrower as the surviving corporation;
WHEREAS, as a result of the Merger, each share of common stock of the
Company which is issued and outstanding immediately prior to the effective time
of the Merger will (except as provided in the Merger Agreement) be converted
into the right to receive a combination of shares of the Borrower's common stock
and cash with an aggregate value of $52.00, subject to reduction in certain
circumstances described in the Merger Agreement, and, in connection therewith,
the Borrower will issue new shares with an aggregate value of not less than
$500,000,000 or not less than 40% of the aggregate value of the cash and stock
portions of the merger consideration (as determined pursuant to Section 3.1(c)
of the Merger Agreement);
WHEREAS, in order to (a) finance the cash portion of the merger
consideration payable by the Borrower to consummate the Merger, (b) refinance
certain existing Indebtedness of the Company and the Borrower (the
"Refinancing", and together with the Merger and the issuance of new equity
referred to above, the "Transaction"), (c) pay costs and expenses related to the
Transaction and the transactions contemplated hereby and (d) provide financing
for the working capital and other general corporate purposes of the Borrower and
its Subsidiaries following the consummation of the Merger, the Borrower has
requested that the Lenders make available:
(a) a Term Commitment (such capitalized term and other capitalized
terms used in these recitals without definition to have the meanings set
forth in Section 1.1 below) pursuant to which Term Loans in an aggregate
principal amount up to $450,000,000 may be borrowed in a single borrowing
on the Closing Date;
<PAGE> 10
(b) a Short Term Revolving Commitment pursuant to which Short Term
Revolving Loans in an aggregate principal amount not to exceed the Short
Term Revolving Commitment Amount at any time outstanding may be borrowed
from time to time from the Closing Date until the Short Term Revolving
Commitment Termination Date; and
(c) a Revolving Commitment pursuant to which (i) Revolving Loans
in an aggregate principal amount not to exceed the Revolving Commitment
Amount at any time outstanding may be borrowed from time to time from the
Closing Date until the Revolving Commitment Termination Date and (ii) as a
subfacility of the Revolving Commitment, a Swing Line Commitment would be
provided pursuant to which Swing Line Loans in an aggregate principal
amount not to exceed the Swing Line Commitment Amount at any time
outstanding may be borrowed from time to time from the Closing Date until
the Revolving Commitment Termination Date; provided that in no event shall
the aggregate principal amount of all Revolving Loans and Swing Line Loans
exceed the Revolving Commitment Amount at any one time; and
WHEREAS, the Lenders are willing to provide such Facilities, but only on
and subject to the terms and conditions set forth below;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1. Certain Defined Terms. The following terms have the following
meanings:
"AAM Distribution" means the distribution of Alleghany Asset Management to
Alleghany Corporation by Chicago Title & Trust Company, a wholly owned
subsidiary of the Company, in June 1998.
"Acquired Cash Flow" means, for any period, (a) Available Dividends of any
Person or assets acquired by a Restricted Subsidiary which is an Insurance
Subsidiary in a Permitted Acquisition during such period, plus (b) EBITDA of any
Person or assets acquired by a Restricted Subsidiary which is a non-Insurance
Subsidiary in a Permitted Acquisition during such period and available to be
paid as dividends to the Borrower under applicable law, in either case as
determined on a pro forma basis for such period as if consummation of such
Permitted Acquisition occurred on the first day of such period.
"Acquisition" means any transaction or series of related transactions for
the purpose of or resulting, directly or indirectly, in (a) the acquisition of
all or substantially all of the assets of a
2
<PAGE> 11
Person, or of any business or division of a Person, (b) the acquisition of in
excess of 50% of the Equity Interests of any Person, or otherwise causing any
Person to become a Subsidiary or (c) a merger or consolidation or any other
combination with another Person (other than with a Person that is a Subsidiary);
provided that the Borrower or one of its Subsidiaries is the surviving entity.
"Administrative Agent" means BofA in its capacity as Administrative Agent
for the Lenders hereunder and under the other Loan Documents, together with any
successor agent appointed in accordance with Section 10.9.
"Administrative Agent's Payment Office" means the address for payments set
forth on Schedule 11.2 or such other address as the Administrative Agent may
from time to time specify in writing.
"Affiliate" means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by or is under common control with,
such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power (a) to vote 10%
or more of the Voting Stock of such other Person or (b) to direct or cause the
direction of the management and policies of the other Person, whether through
the ownership of Equity Interests, by contract or otherwise.
"Agent-Related Persons" means BofA (and any successor agent appointed in
accordance with Section 10.9), the Syndication Agent, the Documentation Agent,
the Co-Documentation Agent, the Lead Arranger and the Co-Lead Arranger, together
with each of their respective Affiliates, and the officers, directors, employees
and agents of such Persons and Affiliates.
"Agreement" means this Credit Agreement, as amended, supplemented, amended
and restated or otherwise modified from time to time.
"Annual Statement" means the annual financial statement of any insurance
company as required to be filed with the Department, together with all exhibits
or schedules filed therewith, prepared in conformity with SAP. References to
amounts on particular exhibits, schedules, lines, pages and columns of such
Annual Statements are based on the formats promulgated by the NAIC for 1998
Annual Statements for the applicable type of insurance company. If such format
is changed in future years so that different information is contained in such
items or they no longer exist, it is understood that the reference is to
information consistent with that recorded in the referenced item in the 1998
Annual Statement of the insurance company.
"Applicable Debt" means obligations described in clauses (a), (d) or (f)
of the definition of Indebtedness contained herein (other than obligations
permitted by Section 8.4(f) and (g)).
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<PAGE> 12
"Applicable Margin" means, with respect to the Loans or the Commitment
Fee, as of any date, the rate per annum determined pursuant to the following
pricing grid:
PRICING GRID
<TABLE>
<CAPTION>
Senior Unsecured Offshore Rate Base Rate
Debt Rating Commitment Fee: Margin: Margin:
---------------- --------------- ------------- ---------
<S> <C> <C> <C>
BBB+/Baa1 and above 0.150% 0.75% 0.00%
BBB/Baa2 0.200% 1.00% 0.00%
BBB-/Baa3 0.250% 1.125% 0.00%
BBB-/Ba1 or Baa3/BB+ 0.275% 1.25% 0.00%
BB+/Ba1 0.325% 1.50% 0.25%
BB/Ba2 0.375% 1.75% 0.50%
BB-/Ba3 and below 0.500% 2.00% 0.75%
</TABLE>
provided that at any time from and including the Closing Date until the date
which is six months after the Closing Date, the Applicable Margin for (a) all
Loans shall be 0.25% as to Base Rate Loans and 1.50% as to Offshore Rate Loans
and (b) the Commitment Fee shall be 0.375%. At all times that the Applicable
Margin is determined by reference to the pricing grid above, (a) in the event
the Borrower's Senior Unsecured Debt Ratings are split, except where otherwise
expressly set forth in the pricing grid above, the higher rating shall apply;
(b) if the Senior Unsecured Debt Ratings differ by two or more levels, the
rating shall be one level above the lesser rating, and (c) changes in the
Applicable Margin will take effect simultaneously with each change in the Senior
Unsecured Debt Rating.
"Approved Securities" means fixed maturity securities or preferred stock
which are rated as Investment Grade by at least one of the Rating Agencies.
"Assignment and Acceptance" is defined in Section 11.8(a).
"Available Dividends" means, for any Test Period, amounts available as of
the end of the full Fiscal Year ending prior to the end of such Test Period to
be paid by the Insurance Subsidiaries to the Borrower in accordance with the
rules and regulations of the applicable Departments as dividends under
applicable Law.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C. Section 101, et seq.).
"Base Rate" means a fluctuating rate per annum equal to the higher of (a)
the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for
such day as publicly announced from time to time by BofA as its "prime rate."
Such rate is a rate set by BofA based upon various factors including BofA's
costs and desired return, general economic conditions and other factors, and is
used as a reference point for pricing some loans, which may be priced at,
4
<PAGE> 13
above, or below such announced rate. Any change in such rate announced by BofA
shall take effect at the opening of business on the day specified in the public
announcement of such change.
"Base Rate Loan" means a Loan that bears interest based on the Base Rate.
"BofA" means Bank of America, N.A.
"Borrower" is defined in the preamble.
"Borrowing" means a borrowing hereunder consisting of Loans of the same
Type made to the Borrower on the same day by the Lenders under Article II, and,
in the case of Offshore Rate Loans, having the same Interest Period.
"Borrowing Date" means any date on which a Borrowing occurs under Section
2.3.
"Business Day" means (a) any day other than a Saturday, Sunday or other
day on which commercial lenders are authorized or required by Law to close, or
in fact are closed, in the State where the Administrative Agent's office, as
designated on Schedule 11.2 hereto or as otherwise designated to the Borrower
and the Lenders from time to time in writing, is located and (b) if the
applicable Business Day relates to any Offshore Rate Loan, a Business Day
described in the preceding clause (a) on which dealings are also carried on in
the applicable offshore Dollar interbank market.
"Capital Adequacy Regulation" means any guideline, request or directive of
any central bank or other Governmental Authority, or any other Law regarding
capital adequacy of any Lender or of any corporation controlling a Lender.
"Capital Expenditures" means, for any period, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities and including in
all events all amounts expended or capitalized under Capital Leases, but
excluding any amount representing capitalized interest) by the Borrower and its
Subsidiaries (other than FNFC, Micro General and their respective Subsidiaries)
during such period that, in conformity with GAAP, are or are required to be
included as additions during such period to property, plant or equipment
reflected in the consolidated statement of cash flows of the Borrower and its
Restricted Subsidiaries.
"Capitalized Lease Liabilities" means all monetary obligations of the
Borrower or any of its Restricted Subsidiaries under any leasing or similar
arrangement constituting a Capital Lease and, for purposes of each Loan
Document, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.
"Capital Lease", as applied to any Person, means any lease of any property
(whether real, personal or mixed) by that Person as lessee that, in conformity
with GAAP, is, or is required to be, accounted for as a capital lease on the
balance sheet of that Person.
5
<PAGE> 14
"Cash Collateralize" means to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the Administrative Agent and the
Lenders, as collateral for the Obligations, cash or deposit account balances
pursuant to documentation in form and substance reasonably satisfactory to the
Administrative Agent. Derivatives of such term shall have corresponding
meanings.
"Cash Equivalents" means:
(a) securities issued or unconditionally guaranteed by the United
States government or any agency or instrumentality thereof, in each case
having maturities of not more than 12 months from the date of acquisition
thereof;
(b) securities issued by any state of the United States or any
political subdivision of any such state or any public instrumentality
thereof having maturities of not more than 12 months from the date of
acquisition thereof and, at the time of acquisition, having a rating of at
least A-2 or P-2 (or long-term ratings of at least A3 or A-) from either
Rating Agency, or, with respect to municipal bonds, a rating of at least
MIG 2 or VMIG 2 from Moody's;
(c) commercial paper issued by any Lender or any bank holding
company owning any Lender;
(d) commercial paper maturing not more than 12 months after the
date of creation thereof and, at the time of acquisition, having a rating
of at least A-1 or P-1 from either Rating Agency and commercial paper
maturing not more than 90 days after the date of creation thereof and, at
the time of acquisition, having a rating of at least A-2 or P-2 from
either Rating Agency;
(e) domestic and eurodollar certificates of deposit or bankers'
acceptances maturing no more than one year after the date of acquisition
thereof which are either issued by any Lender or any other banks having
combined capital and surplus of not less than $100,000,000 (or in the case
of foreign banks, the dollar equivalent thereof) or are insured by the
FDIC for the full amount thereof;
(f) repurchase agreements with a term of not more than 30 days
for, and secured by, underlying securities of the type without regard to
maturity described in clauses (a), (b) and (e) above entered into with any
bank meeting the qualifications specified in clause (e) above or
securities dealers of recognized national standing; and
(g) shares of investment companies that are registered under the
Investment Company Act of 1940 and invest solely in one or more of the
types without regard to maturity of securities described in clauses (a)
through (f) above.
6
<PAGE> 15
"Cash Flow" means, for any period, (a) Available Dividends from the
Insurance Subsidiaries, plus (b) EBITDA of Restricted Subsidiaries which are
non-Insurance Subsidiaries available to be paid as dividends under applicable
law, plus (c) the total interest expense for such period multiplied by the
actual marginal combined federal and state income tax rate then applicable to
the Borrower, plus (d) (i) to the extent not otherwise included in the
foregoing, with respect to Investments of the Borrower, income of the Borrower
(on a stand-alone basis) attributable to such Investments, less any federal or
state income tax attributable to such income, but only to the extent cash is
received by the Borrower with respect to such income, less losses attributable
to such Investments, plus any federal or state income tax benefit attributable
to such losses, but only to the extent cash is paid by the Borrower with respect
to such losses, minus (ii) cash operating expenses (determined in accordance
with GAAP, including Capital Expenditures and excluding depreciation,
amortization and interest expense) paid by the Borrower (on a stand-alone
basis), plus (e) to the extent deducted in determining Available Dividends,
non-capitalized Merger-related expenses and costs actually incurred by the
Borrower and its Restricted Subsidiaries, in each case for such period, plus (f)
Acquired Cash Flow.
"Change of Control" means, and shall be deemed to have occurred if: (a) at
any time Continuing Directors shall not constitute a majority of the Board of
Directors of the Borrower; or (b) any Person or "group" (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), other than Mr. William P. Foley II,
Mr. Allan P. Kirby, Jr., Grace Kirby Culbertson, the Estate of Ann Kirby or Mr.
F.M. Kirby or Persons controlled by any of them, shall at any time have acquired
direct or indirect beneficial ownership of a percentage equal to or more than
20% of the outstanding Voting Stock of the Borrower.
"Closing Date" means the date on which all conditions precedent set forth
in Article V are satisfied (or, in accordance with the terms of this Agreement,
waived) and Credit Extensions are first made hereunder, but in no event later
than the Scheduled Merger Termination Date.
"Closing Date Certificate" means a certificate substantially in the Form
of Exhibit H.
"Code" means the Internal Revenue Code of 1986, and regulations
promulgated thereunder.
"Co-Documentation Agent" is defined in the preamble.
"Co-Lead Arranger" means Chase Securities Inc., in its capacity as Co-Lead
Arranger hereunder.
"Commitment" means, as to each Lender that has such Commitment, the
Revolving Commitment (including the obligation of such Lender to participate in
Swing Line Loans), the Short Term Revolving Commitment, the Term Commitment and
the Swing Line Commitment; collectively as to all Lenders and the Swing Line
Lender, the "Commitments".
"Commitment Fee" means the fee set forth in Section 3.6(b).
7
<PAGE> 16
"Commitment Letter" means the Amended and Restated Commitment Letter,
dated as of September 16, 1999, among the Borrower, BofA, the Lead Arranger, The
Chase Manhattan Bank and the Co-Lead Arranger, as the same may be amended or
otherwise modified from time to time in accordance with the terms thereof.
"Company" is defined in the first recital.
"Compliance Certificate" means a certificate substantially in the form of
Exhibit E.
"Confidential Information" is defined in Section 11.9.
"Confidential Memorandum" means the Confidential Offering Memorandum,
dated October, 1999, prepared by the Lead Arranger based upon information
supplied by the Borrower, describing the Facilities.
"Contingent Obligation" means, as to any Person, any direct or indirect
liability of that Person, with or without recourse, guaranteeing or intended to
guarantee any Indebtedness, lease, dividend or other monetary obligation (the
"primary obligations") of another Person (the "primary obligor") in any manner,
including any obligation of that Person (a) to purchase, repurchase or otherwise
acquire such primary obligations or any security therefor, (b) to advance or
provide funds for the payment or discharge of any such primary obligation or to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency or any balance sheet item, level of income
or financial condition of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (d) otherwise to assure or hold harmless the holder
of any such primary obligation against loss in respect thereof. The amount of
any Contingent Obligation shall be deemed equal to the stated or determinable
amount of the primary obligation in respect of which such Contingent Obligation
is made or, if not stated or if indeterminable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder), as determined by such Person in good faith. Notwithstanding
the foregoing, the term "Contingent Obligation" shall not include (a)
endorsements of instruments for deposit or collection in the ordinary course of
business, and (b) obligations of any Insurance Subsidiary under Insurance
Contracts, Reinsurance Agreements and Retrocession Agreements (but not including
any of the foregoing that constitutes financial reinsurance).
"Continuing Director" means, at any date, an individual (a) who is a
member of the Board of Directors of the Borrower on the Effective Date, (b) who,
as at such date, has been a member of such Board of Directors for at least the
12 preceding months (or, for the period comprising the first 12 months after the
Effective Date, has been a member of the Board of Directors at least since the
Effective Date), or (c) who has been nominated to be a member of such Board of
Directors by a majority of the other Continuing Directors then in office.
8
<PAGE> 17
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument, document or agreement to
which such Person is a party or by which it or any of its property is bound.
"Conversion/Continuation Date" means any date on which, under Section
2.4, the Borrower (a) converts Loans of one Type to another Type or (b)
continues as Loans of the same Type, but with a new Interest Period, Loans
having Interest Periods expiring on such date.
"Credit Extension" means and includes the making (but not conversion or
continuation) of any Loans hereunder.
"Debt Service" means, for any period for the Borrower and its Restricted
Subsidiaries, the aggregate amount of interest expense and current maturities of
long-term Applicable Debt (other than any principal payments in respect of
Revolving Loans and Short Term Revolving Loans), in each case during such
period.
"Debt Service Coverage Ratio" means, for any period, the ratio of Cash
Flow to Debt Service for such period. Cash Flow shall be determined on a
trailing four Fiscal Quarter basis as at the end of each Fiscal Quarter for each
Test Period. Debt Service shall be determined by calculating for the next four
Fiscal Quarters on the then outstanding principal balances all interest deemed
to accrue at the then 3-month Offshore Rate plus the Applicable Margin as of the
time of such test and assuming only scheduled principal payments but no
prepayments.
"Default" means any event or circumstance which, with the giving of
notice, the lapse of time or both, would (if not cured or otherwise remedied
during such time) constitute an Event of Default.
"Department" means the applicable Governmental Authority of the state of
domicile of an insurance company responsible for the regulation of said
insurance company.
"Disposition" means: (a) the sale, lease, conveyance, issuance or other
disposition of property by the Borrower or any Restricted Subsidiary, other than
sales, conveyances or other dispositions expressly permitted under Section
8.2(a), 8.2(b), 8.2(c) or, with respect to the first $25,000,000 received by the
Borrower and/or its Restricted Subsidiaries in respect thereof, 8.2(d); and (b)
the sale or transfer by the Borrower or any Restricted Subsidiary of the
Borrower of any equity securities issued by any Restricted Subsidiary of the
Borrower.
"Documentation Agent" is defined in the preamble.
"Dollars", "dollars" and "$" each means lawful money of the United
States.
"Domestic Subsidiaries" means all Subsidiaries of the Borrower which are
organized and existing under the laws of any state located in the United States.
9
<PAGE> 18
"EBITDA" means, for any period, for the Borrower's Restricted
Subsidiaries which are non-Insurance Subsidiaries, an amount equal to the sum of
(a) Net Income, (b) the amount of interest charges deducted in determining such
Net Income, (c) the amount of taxes, based on or measured by income, used or
included in the determination of such Net Income, (d) the amount of depreciation
and amortization expense deducted in determining such Net Income, in each case
for all such non-Insurance Subsidiaries for such period, (e) Merger-related
expenses deducted in determining Net Income, and (f) cash received by the
Borrower as dividends from Excluded Subsidiaries.
"Effective Date" means the date this Agreement becomes effective
pursuant to Section 11.12.
"Eligible Assignee" means (a) a financial institution organized under
the laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $100,000,000; (b) a commercial bank organized
under the laws of any other country which is a member of the Organization for
Economic Cooperation and Development, or a political subdivision of any such
country, and having a combined capital and surplus of at least $100,000,000,
provided that such bank is acting through a branch or agency located in the
United States; (c) a Person that is primarily engaged in the business of
commercial banking and that is (i) a Subsidiary of a Lender, (ii) a Subsidiary
of a Person of which a Lender is a Subsidiary, or (iii) a Person of which a
Lender is a Subsidiary; (d) another Lender; (e) any other entity which is an
"accredited investor" (as defined in Regulation D under the Securities Act of
1933, as amended) which extends credit or buys loans as one of its businesses,
including but not limited to, insurance companies, mutual funds and lease
financing companies, and acceptable to the Administrative Agent; (f) a Person
that is engaged in the making, purchasing or investing in commercial loans in
the ordinary course of business, and acceptable to the Administrative Agent; or
(g) other lenders or institutional investors consented to in writing in advance
by the Administrative Agent and, so long as no Default or Event of Default has
occurred and is continuing, the Borrower (such consents not to be unreasonably
withheld or delayed). No Obligor or any Affiliate of an Obligor shall be an
Eligible Assignee.
"Environmental Laws" means all Laws relating to environmental, health,
safety and land use matters applicable to any property.
"Equity Interests" means, with respect to any Person, all shares,
interests (including membership and partnership interests), participations or
other equivalent (however designated, whether voting or non-voting) of such
Person's capital, whether now outstanding or issued after the Effective Date.
"ERISA" means the Employee Retirement Income Security Act of 1974 and
any regulations issued pursuant thereto, as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
Sections 414(b) or (c) of the Code
10
<PAGE> 19
(and Sections 414(m) and (o) of the Code for purposes of provisions relating to
Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which might reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Pension Plan or
Multiemployer Plan; or (f) the imposition of any liability under Title IV of
ERISA, other than PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon the Borrower or any ERISA Affiliate. Notwithstanding the foregoing,
ERISA Event shall not include any actions taken by the Borrower or the
occurrence of events which would otherwise constitute an ERISA Event if such
actions are taken or events occur in connection with the rationalization of the
Pension Plans and Multiemployer Plans of the Borrower and the Company following
and by reason of the occurrence of the Merger as described on Schedule 6.5.
"Eurodollar Reserve Percentage" means, for any day during any Interest
Period, the reserve percentage (expressed as a decimal, rounded upward to the
next 1/100th of 1%) in effect on such day, whether or not applicable to any
Lender, under regulations issued from time to time by the Board of Governors of
the Federal Reserve System for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve requirement)
with respect to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities"). The determination of the Eurodollar Reserve Percentage by the
Administrative Agent shall be conclusive in the absence of manifest error.
"Event of Default" means any of the events or circumstances specified in
Section 9.1.
"Exchange Act" means the Securities Exchange Act of 1934, and
regulations promulgated thereunder.
"Excluded Subsidiaries" means FNFC, FAMI, Micro General and their
respective Subsidiaries.
"Existing Credit Agreement" means the Credit Agreement dated as of
August 1, 1998 (as amended to the date hereof) among the Borrower, the lenders
party thereto and Sanwa Bank California, as agent for such lenders.
11
<PAGE> 20
"Facilities" means the credit facilities hereunder (i.e., the facility
to provide Revolving Loans (including the subfacility for Swing Line Loans), the
facility to provide Short Term Revolving Loans and the facility to provide Term
Loans).
"FAMI" means Fidelity Asset Management, Inc., a California corporation.
"FDIC" means the Federal Deposit Insurance Corporation, and any
Governmental Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards to the nearest 1/100 of 1%) equal to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as published by the
Federal Reserve Bank on the Business Day next succeeding such day; provided that
(a) if such day is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate charged to BofA on such day on such transactions
as determined by the Administrative Agent.
"Fee Letter" is defined in Section 3.6(a).
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means any period of 12 consecutive calendar months ending
on December 31.
"FNFC" means FNF Capital, Inc., a Delaware corporation, formerly known
as Granite Financial Inc.
"FRB" means the Board of Governors of the Federal Reserve System, and
any Governmental Authority succeeding to any of its principal functions.
"GAAP" means generally accepted accounting principles in the United
States as in effect and set forth from time to time in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of comparable
stature and authority within the United States accounting profession); provided
that if there occurs after the date hereof any change in GAAP that affects in
any respect the calculation of any covenant contained in Section 8.9, the
Lenders and the Borrower shall negotiate in good faith amendments to the
provisions of this Agreement that relate to the calculation of such covenant
with the intent of having the respective positions of the Lenders and the
Borrower after such change in GAAP conform as nearly as possible to their
respective positions as of the date of this Agreement and, until any such
amendments have been agreed
12
<PAGE> 21
upon, the covenants in Section 8.9 shall be calculated as if no such change in
GAAP has occurred.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government
and any corporation or other entity owned or controlled, through Equity
Interests or otherwise, by any of the foregoing.
"Hazardous Materials" means all those substances that are regulated by,
or which may form the basis of liability under, any Environmental Law, including
any substance identified under any Environmental Law as a pollutant,
contaminant, hazardous waste, hazardous constituent, special waste, hazardous
substance, hazardous material or toxic substance, or petroleum or
petroleum-derived substance or waste.
"Indebtedness" of any Person means, without duplication, (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than trade
payables (including reinsurance payables) entered into in the ordinary course of
business on ordinary terms) that in accordance with GAAP would be shown on the
liability side of the balance sheet of such Person; (c) the face amount of all
letters of credit or surety bonds issued for the account of such Person and,
without duplication, all drafts drawn thereunder; (d) all obligations evidenced
by notes, bonds, debentures or similar instruments or incurred in connection
with bankers' acceptances, including obligations so evidenced incurred in
connection with the acquisition of property, assets or businesses; (e) all
indebtedness created or arising under any conditional sale or other title
retention agreement that in accordance with GAAP would be shown on the liability
side of the balance sheet of such Person; (f) all obligations with respect to
Capitalized Lease Liabilities; (g) all Indebtedness referred to in clauses (a)
through (f) above secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any Lien upon or
in property (including accounts and contracts rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
Indebtedness; (h) all obligations of such Person under Swap Contracts; (i)
obligations under synthetic leases; and (j) without duplication, all Contingent
Obligations of such Person; provided that Indebtedness shall not include
obligations of any Insurance Subsidiary under or pursuant to Insurance
Contracts, Reinsurance Agreements and Retrocession Agreements, trade payables
and accrued expenses, in each case arising in the ordinary course of business.
For all purposes of this Agreement, the Indebtedness of any Person shall include
all recourse Indebtedness of any partnership, joint venture or limited liability
company in which such Person is a general partner, a joint venturer or a member
and for which such Person has liability.
"Indemnified Liabilities" is defined in Section 11.5.
"Indemnities" is defined in Section 11.5.
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<PAGE> 22
"Independent Auditor" is defined in Section 7.1(a).
"Insolvency Proceeding" means, with respect to any Person, (a) any case,
action or proceeding with respect to such Person before any court or other
Governmental Authority relating to bankruptcy, reorganization, insolvency,
liquidation, receivership, dissolution, winding-up or relief of debtors or (b)
any general assignment for the benefit of creditors, composition, marshalling of
assets for creditors or other, similar arrangement in respect of its creditors
generally or any substantial portion of its creditors, undertaken under U.S.
Federal, state or foreign Law, including the Bankruptcy Code.
"Insurance Code" means, with respect to any insurance company, the
insurance code of its state of domicile and any successor statute of similar
import, together with the regulations thereunder, as amended or otherwise
modified and in effect from time to time. References to sections of the
Insurance Code shall be construed to also refer to successor sections.
"Insurance Contract" means any insurance contract or policy issued by an
Insurance Subsidiary but shall not include any Reinsurance Agreement or
Retrocession Agreement.
"Insurance Subsidiary" means each Subsidiary of the Borrower identified
as an Insurance Subsidiary (including Subsidiaries of such Subsidiary) on
Schedule 6.12 and each other Subsidiary (including Subsidiaries of such
Subsidiary) from time to time in the insurance business as certified by the
Borrower in writing to the Administrative Agent.
"Interest Payment Date" means, as to any Offshore Rate Loan, the last
day of each Interest Period applicable to such Loan and, as to any Base Rate
Loan, each Quarterly Payment Date and each date such Loan is converted into
another Type of Loan; provided that if any Interest Period exceeds three months,
each date that falls at three-month intervals after the beginning of such
Interest Period until the end of such Interest Period is also an Interest
Payment Date.
"Interest Period" means, as to any Offshore Rate Loan, the period
commencing on the Borrowing Date of such Loan or on the Conversion/Continuation
Date on which the Loan is converted into or continued as an Offshore Rate Loan,
and ending on the date one, two, three or six months thereafter (or ending 9 or
12 months thereafter if available to all Lenders making such Loans as determined
by such Lenders in good faith based on prevailing market conditions) as selected
by the Borrower in its Notice of Borrowing or Notice of Conversion/Continuation;
provided that:
(i) the Borrower shall not be permitted to select Interest
Periods to be in effect at any one time which have expiration dates
occurring on more than ten different dates;
(ii) if any Interest Period would otherwise end on a day that is
not a Business Day, that Interest Period shall be extended to the
following Business Day unless the result
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of such extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end on the
preceding Business Day;
(iii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the
end of such Interest Period;
(iv) no Interest Period for any Term Loan shall extend beyond
the Term Maturity Date, no Interest Period for any Revolving Loan shall
extend beyond the Revolving Commitment Termination Date and no Interest
Period for any Short Term Revolving Loan shall extend beyond the Short
Term Revolving Commitment Termination Date; and
(v) no Interest Period applicable to a Term Loan or portion
thereof shall extend beyond any date upon which is due any scheduled
principal payment in respect of the Term Loans, unless the aggregate
principal amount of Term Loans represented by Base Rate Loans or by
Offshore Rate Loans having Interest Periods that will expire on or
before such date equals or exceeds the amount of such principal payment.
"Interim Statements" means the quarterly financial statement of any
insurance company as required to be filed with the Department, together with all
exhibits or schedules filed therewith, prepared in conformity with SAP.
References to amounts on particular exhibits, schedules, lines, pages and
columns of such interim statements are based on the formats promulgated by the
NAIC for 1999 interim statements for the applicable type of insurance company.
If such format is changed in future years so that different information is
contained in such terms or they no longer exist, it is understood that the
reference is to information consistent with that recorded in the referenced item
in the 1999 interim statement of the insurance company.
"Investment Grade" means, with respect to ratings by S&P, BBB- and
above, and with respect to ratings by Moody's, Baa3 and above.
"Investments" is defined in Section 8.3.
"IRS" means the Internal Revenue Service, and any Governmental Authority
succeeding to any of its principal functions under the Code.
"Laws" or "Law" means all international, foreign, federal, state and
local statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
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"Lead Arranger" means Banc of America Securities LLC, in its capacity as
lead arranger and sole book manager hereunder.
"Legal Requirements" means all applicable laws, rules, orders and
regulations made by any governmental body or regulatory authority (including any
Department) having jurisdiction over the Borrower or a Subsidiary of the
Borrower.
"Lender" is defined in the preamble, including each financial
institution or other Person identified on Schedule 2.1 and each permitted
successor or assign thereof. References to the "Lenders" shall include BofA,
including in its capacity as Swing Line Lender, but not in its capacity as
Administrative Agent; for purposes of classification only, to the extent that
BofA may have any rights or obligations in addition to those of the Lenders due
to its status as Swing Line Lender or Administrative Agent, its status as such
will be specifically referenced.
"Lending Office" means, as to any Lender, the office or offices of such
Lender specified as its "Lending Office" or "Domestic Lending Office" or
"Offshore Lending Office," as the case may be, on Schedule 11.2, or such other
office or offices as such Lender may from time to time notify the Borrower and
the Administrative Agent.
"Lien" means any mortgage, deed of trust, pledge, security interest,
hypothecation, charge, lien (statutory or other), escrow or encumbrance of any
kind, or any other type of preferential arrangement (including any agreement to
give any of the foregoing, any conditional sale or other title retention
agreement or any lease in the nature thereof).
"Loan" means, as the context may require, a Revolving Loan, a Short Term
Revolving Loan, a Term Loan or a Swing Line Loan, and may be a Base Rate Loan or
an Offshore Rate Loan (each, a "Type" of Loan).
"Loan Documents" means this Agreement, the Notes, the Subsidiary
Guaranty, the Fee Letter and any other documents or certificates executed and
delivered pursuant to or in accordance with the requirements of this Agreement.
"Majority Lenders" means, at any time, Lenders having or holding (a) at
least 50.1% of the sum of (i) the aggregate principal amount of the Term Loans
outstanding at such time, (ii) the aggregate Revolving Commitments at such time
and (iii) the aggregate Short Term Revolving Commitments at such time, or (b) if
the Term Commitments, Revolving Commitments or Short Term Revolving Commitments
shall have been terminated or expire or for purposes of acceleration pursuant to
Section 9.2(b), at least 50.1% of the aggregate principal amount of the existing
Commitments and Loans outstanding at such time.
"Majority Revolving Lenders" means, at any time, Lenders having or
holding (a) greater than 50% of the sum of (i) the aggregate outstanding
principal amount of the Revolving Loans at such time and (ii) the aggregate
Revolving
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<PAGE> 25
Commitments at such time or (b) if the Revolving Commitments have been
terminated, greater than 50% of the aggregate outstanding principal amount of
all Revolving Loans at such time.
"Majority Short Term Revolving Lenders" means, at any time, Lenders
having or holding (a) greater than 50% of the sum of (i) the aggregate
outstanding principal amount of the Short Term Revolving Loans at such time and
(ii) the aggregate Short Term Revolving Commitments at such time or (b) if the
Short Term Revolving Commitments have been terminated, greater than 50% of the
aggregate outstanding principal amount of all Short Term Revolving Loans at such
time.
"Majority Term Lenders" means, at any time, Lenders having or holding
(a) greater than 50% of the aggregate outstanding principal amount of the Term
Loans at such time or (b) if the Term Commitments have been terminated, greater
than 50% of the aggregate outstanding principal amount of all Term Loans at such
time.
"Margin Stock" means "margin stock" as such term is defined in
Regulation T, U or X of the FRB.
"Material Adverse Change" means any event described in clause (b) of the
definition of "Material Adverse Effect".
"Material Adverse Effect" means any set of circumstances or events which
(a) has or could reasonably be expected to have any material adverse effect
whatsoever upon the validity or enforceability of any Loan Document, (b) is or
could reasonably be expected to be material and adverse to the condition
(financial or otherwise), business, assets, operations, revenues or prospects of
the Borrower and its Subsidiaries, taken as a whole, or (c) materially impairs
or could reasonably be expected to materially impair the ability of the Borrower
and its Subsidiaries, taken as a whole, to perform the Obligations, in each case
as determined by the Majority Lenders.
"Material Insurance Subsidiary" means a Material Subsidiary that is also
an Insurance Subsidiary.
"Material Subsidiary" means, at any time, (a) each UTC listed on
Schedule 6.12 and each UTC from time to time identified by the Borrower as a
Material Subsidiary pursuant to Section 7.16, (b) each Subsidiary of the
Borrower identified as a Material Subsidiary on Schedule 6.12 and (c) each other
Restricted Subsidiary having (on a consolidated basis with its Subsidiaries) at
such time either (i) total (gross) revenues for the Test Period in excess of 5%
of the total (gross) revenues of the Borrower and its Subsidiaries for such Test
Period or (ii) total assets, as of the last day of the preceding Fiscal Quarter,
having a net book value in excess of 5% of the total assets of the Borrower and
its Subsidiaries as of such day, in each case, based upon the Borrower's most
recent annual or quarterly financial statements delivered to the Administrative
Agent under Section 7.1.
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"Merger" is defined in the first recital.
"Merger Agreement" is defined in the first recital.
"Micro General" means Micro General Corporation, a Delaware corporation.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA.
"NAIC" means the National Association of Insurance Commissioners or any
successor thereto.
"Net Debt Proceeds" means, as to any issuance of Applicable Debt by any
Person, cash proceeds received or receivable by such Person in connection
therewith, net of reasonable out-of-pocket costs and expenses paid or incurred
in connection therewith in favor of any Person not an Affiliate of such Person.
"Net Disposition Proceeds" means, as to any Disposition by a Person,
proceeds in cash as and when received by such Person, net of (a) the direct
costs relating to such Disposition excluding amounts payable to such Person or
any Affiliate of such Person, (b) the amount of all taxes paid or reasonably
estimated to be payable by such Person in connection therewith, but including
the excess, if any, of the estimated taxes payable in connection with such
Disposition over the actual amount of taxes paid, immediately after the payment
of such taxes, (c) amounts required to be applied to repay principal, interest
and prepayment premiums and penalties on Indebtedness secured by a Lien on the
asset which is the subject of such Disposition, and (d) the amount of any
reasonable reserve established in accordance with GAAP against any liabilities
(other than any taxes deducted pursuant to clause (b) above) associated with the
assets sold or disposed of and retained by the Borrower or any of its Restricted
Subsidiaries (provided that the amount of any subsequent reduction of such
reserve (other than in connection with a payment in respect of any such
liability) shall be deemed to be Net Disposition Proceeds realized on the date
of such reduction).
"Net Equity Proceeds" means with respect to the sale or issuance by the
Borrower or any of its Restricted Subsidiaries to any Person of any of the
Borrower's or such Restricted Subsidiaries Equity Interests, warrants or options
or the exercise of any such warrants or options (other than the issuance of
Equity Interests (a) of the Borrower issued to employees, consultants or
directors of the Borrower or any of its Restricted Subsidiaries pursuant to a
stock option or stock purchase plan approved by the Borrower's Board of
Directors, (b) of any Restricted Subsidiary to the Borrower or to any Restricted
Subsidiary of the Borrower, or (c) described in Section 8.6(b)(ii)) the excess
of
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<PAGE> 27
(a) the gross cash proceeds received by such Person from such
sale, exercise or issuance, over
(b) all reasonable and customary underwriting commissions and
legal, investment banking, brokerage and accounting and other
professional fees, sales commissions and disbursements and all other
reasonable fees, expenses and charges, in each case actually incurred in
connection with such sale or issuance which have not been paid to
Affiliates of such Person in connection therewith.
"Net Income" means, for any period, (a) for the Borrower's Restricted
Subsidiaries which are non-Insurance Subsidiaries, the net income of such
non-Insurance Subsidiaries from continuing operations before extraordinary items
(excluding gains and losses from Dispositions of assets) for that period and (b)
for purposes of Sections 8.6(b)(iii) and 8.9(a), the net income of the Borrower
and its Restricted Subsidiaries from continuing operations before extraordinary
items (excluding gains and losses from Dispositions of assets) for that period.
"Net Worth" means, at any time, the sum of all amounts (without
duplication) which, in accordance with GAAP, would be included in the Borrower's
stockholders' equity (excluding unrealized gains or losses recorded pursuant to
FAS 115) as required to be reported in the Borrower's then most recent
consolidated balance sheet required to be delivered to the Administrative Agent
pursuant to this Agreement.
"Non-U.S. Lender" means any Lender that is not a "United States person",
as defined under section 7701(a)(30) of the Code.
"Note" means a promissory note, if any, executed by the Borrower in
favor of a Lender pursuant to Section 2.2(b), in substantially the form of
Exhibit A, and also means all promissory notes accepted from time to time in
substitution therefor or renewal thereof.
"Notice of Borrowing" means a notice in substantially the form of
Exhibit B.
"Notice of Conversion/Continuation" means a notice in substantially the
form of Exhibit C.
"Obligations" means, at any time, all monetary obligations of any type
or description owing at such time by the Borrower and any other Obligor to any
Lender, the Administrative Agent or any Indemnified Person under this Agreement,
any Loan Document or any Swap Contract, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising.
"Obligor" means the Borrower and each Subsidiary Guarantor.
"Offshore Base Rate" means, for any Interest Period, (a) the rate per
annum (carried out to the fifth decimal place) equal to the rate determined by
the Administrative Agent to be the
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offered rate that appears on the page of the Telerate Screen that displays an
average British Bankers Association Interest Settlement Rate for deposits in
Dollars (for delivery on the first day of such Interest Period) with a term
equivalent to such Interest Period, determined as of approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period,
or (b) in the event the rate referenced in the preceding clause (a) does not
appear on such page or service or such page or service shall cease to be
available, the rate per annum (carried out to the fifth decimal place) equal to
the rate determined by the Administrative Agent to be the offered rate on such
other page or other service that displays an average British Bankers Association
Interest Settlement Rate for deposits in Dollars (for delivery on the first day
of such Interest Period) with a term equivalent to such Interest Period,
determined as of approximately 11:00 a.m. (London time) two Business Days prior
to the first day of such Interest Period, or (c) in the event the rates
referenced in the preceding clauses (a) and (b) are not available, the rate per
annum determined by the Administrative Agent as the rate of interest at which
Dollar deposits (for delivery on the first day of such Interest Period) in same
day funds in the approximate amount of the applicable Offshore Rate Loan and
with a term equivalent to such Interest Period would be offered by its London
Branch to major banks in the offshore Dollar market at their request at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period. The determination of the Offshore Base Rate by the
Administrative Agent shall be conclusive in the absence of manifest error.
"Offshore Rate" means for any Interest Period with respect to any
Offshore Rate Loan, a rate per annum determined by the Administrative Agent
pursuant to the following formula:
Offshore Rate = Offshore Base Rate
------------------------------------
1.00 - Eurodollar Reserve Percentage
The Offshore Rate for each outstanding Offshore Rate Loan shall be
adjusted automatically as of the effective date of any change in the Eurodollar
Reserve Percentage.
"Offshore Rate Loan" means a Loan that bears interest based on the
Offshore Rate.
"Organization Documents" means, for any corporation, the certificate or
articles of incorporation, the bylaws, any certificate of determination or
instrument relating to the rights of preferred shareholders of such corporation.
"Originating Lender" is defined in Section 11.8(e).
"Other Taxes" means any present or future stamp, court, documentary or
similar taxes or any other excise or property taxes, charges or similar levies
which arise from any payment made hereunder or from the execution, delivery,
performance, enforcement or registration of, or otherwise with respect to, any
Loan Document.
"Participant" is defined in Section 11.8(e).
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"PBGC" means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal functions under ERISA.
"Pension Plan" means any "employee pension benefit plan" (as such term
is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer plan
(as described in Section 4064(a) of ERISA) has made contributions at any time
during the immediately preceding five plan years.
"Permitted Acquisition" means, at any time of determination, any
Acquisition by the Borrower or any of its Restricted Subsidiaries with respect
to which each of the following requirements are met:
(a) such Acquisition has been approved and recommended by the
board of directors or general partner (or similar entity) of the Person
to be acquired or which owns the assets of the Person be acquired;
(b) in respect of any Acquisition the total purchase price for
which equals or exceeds $10,000,000, the Borrower shall have furnished
to the Administrative Agent (which shall promptly distribute the same to
the Lenders), prior to the consummation of such Acquisition, pro forma
projections and other details (with reasonable assumptions and in form
and detail reasonably satisfactory to the Administrative Agent) with
respect to the Person or Persons or assets to be acquired and the
Borrower after giving effect to such Acquisition;
(c) prior to and after giving effect to such Acquisition, no
Default (including without limitation under the provisions of Section
8.9) shall have occurred and be continuing, or would result therefrom,
as confirmed in the pro forma projections referred to in clause (b)
above if required to be delivered in accordance with such clause or, if
not so required, in a certificate of a Responsible Officer delivered to
the Administrative Agent;
(d) the business of the Person or assets to be acquired
comprises the insurance business (of the types currently carried on by
the Borrower, the Company and their respective Subsidiaries on the date
hereof), a real estate related business and/or a directly related
business;
(e) the total consideration payable in cash in respect of any
one Acquisition constituting a Permitted Acquisition does not exceed
$25,000,000 and the total consideration payable in cash in respect of
all Acquisitions constituting Permitted Acquisitions in any Fiscal Year
does not exceed $50,000,000 in the aggregate; and
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(f) if the business being acquired becomes a new Subsidiary or
causes a then-existing Subsidiary to become a Material Subsidiary, such
Subsidiary shall have duly executed and delivered (and supplied
appropriate resolutions and an incumbency certificate supporting) the
Subsidiary Guaranty substantially concurrently with the consummation of
such Acquisition if required by Section 7.13;
provided that the requirements set forth in clauses (b) and (e) shall not apply
if and so long as the Borrower's Total Debt to Total Capitalization Ratio is
less than 0.35:1, as demonstrated in the then most recent Compliance Certificate
delivered to the Administrative Agent.
"Permitted Liens" is defined in Section 8.1.
"Person" means an individual, trustee, a partnership, a corporation, a
limited liability company, a business trust, a joint stock company, a trust, an
unincorporated association, business association, firm, a joint venture,
Governmental Authority or otherwise.
"Plan" means any employee benefit plan maintained or contributed to by
an Obligor or by any trade or business (whether or not incorporated) under
common control with an Obligor as defined in Section 4001(b) of ERISA and
insured by the Pension Benefit Guaranty Corporation under Title IV of ERISA.
"Primary Investments" means portfolio investments in the ordinary course
of business by the Borrower or any of its Restricted Subsidiaries in any of the
following:
(a) operating deposit accounts maintained in the Borrower's name
with FDIC member institutions;
(b) Cash Equivalents; or
(c) Approved Securities.
"Pro Rata Share" means, as to any Lender at any time, its Revolving
Percentage, Short Term Revolving Percentage or Term Percentage, as applicable,
with the term Revolving Percentage being applicable to both the Revolving Loan
Facility and (to the extent of funded participations therein) the Swing Line
Facility.
"Quarterly Payment Date" means the last day of March, June, September
and December, commencing on June 30, 2000, or, if any such day is not a Business
Day, the next succeeding Business Day.
"Rating Agency" means S&P or Moody's; collectively, the "Rating
Agencies".
"Refinancing" is defined in the third recital.
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<PAGE> 31
"Reinsurance Agreement" means any agreement, contract, treaty or other
arrangement whereby one or more insurers, as reinsurers, assume liabilities of
one or more insurance or reinsurance companies.
"Reportable Event" means any of the events set forth in Section 4043(b)
of ERISA or the regulations thereunder, a withdrawal from a Plan described in
Section 4063 of ERISA, or a cessation of operations described in Section 4062(e)
of ERISA.
"Responsible Officer" means, with respect to any Obligor, its chief
executive officer, its president or any vice president or other officer thereof
having substantially the same authority and responsibility, or, with respect to
compliance with financial covenants, the chief financial officer or the
treasurer of the Borrower, or any other officer having substantially the same
authority and responsibility.
"Restricted Payments" is defined in Section 8.6.
"Restricted Subsidiaries" means all Subsidiaries other than Excluded
Subsidiaries.
"Retrocession Agreement" means any agreement, contract, treaty or other
arrangement whereby one or more insurers or reinsures, as retrocessionaires,
assume liabilities of reinsurers under a Reinsurance Agreement or other
retrocessionaires under another Retrocession Agreement.
"Revolving Borrowing" means a Borrowing consisting of Revolving Loans of
the same Type made to the Borrower on the same day by the Lenders under Section
2.1(b), and in the case of Offshore Rate Loans, having the same Interest Period.
"Revolving Commitment" is defined in Section 2.1(b); collectively, for
all Revolving Lenders, the "Revolving Commitments".
"Revolving Commitment Amount" means $250,000,000, as such amount may be
reduced pursuant to the terms hereof.
"Revolving Commitment Termination Date" means the earliest to occur of:
(a) the Scheduled Merger Termination Date, if the Closing Date
has not occurred by such date;
(b) the Business Day immediately preceding the six year
anniversary of the Closing Date; and
(c) the date on which the Revolving Commitments terminate in
accordance with the provisions of this Agreement.
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<PAGE> 32
"Revolving Lender" means any institution specified as such on Schedule
2.1 hereto and any successor or assign thereof pursuant to Section 11.7 hereof.
"Revolving Loan" and "Revolving Loans" have the respective meanings
specified in Section 2.1(b).
"Revolving Loan Percentage" means, as to any Revolving Lender, the
percentage which (a) the amount of such Revolving Lender's Revolving Commitment
(or, after termination or expiration of the Revolving Commitments, the
outstanding principal amount of such Revolving Lender's Revolving Loans) is of
(b) the aggregate amount of all Revolving Commitments (or, after termination or
expiration of the Revolving Commitments, the outstanding principal amount of all
Revolving Loans).
"SAP" means, as to any insurance company, the statutory accounting
practices prescribed or permitted by the Department, or in the event that the
Department fails to prescribe or address such practices, NAIC guidelines;
provided that if there occurs after the date hereof any change in SAP that
affects in any respect the calculation of any covenant contained in Section 8.9,
the Lenders and the Borrower shall negotiate in good faith amendments to the
provisions of this Agreement that relate to the calculation of such covenant
with the intent of having the respective positions of the Lenders and the
Borrower after such change in SAP conform as nearly as possible to their
respective positions as of the date of this Agreement and, until any such
amendments have been agreed upon, the covenants in Section 8.9 shall be
calculated as if no such change in SAP has occurred.
"S&P" means Standard & Poor's Ratings Group.
"Scheduled Merger Termination Date" means the earlier to occur of (a)
the date the Merger Agreement is terminated in accordance with Section 10.1 of
the Merger Agreement and (b) March 31, 2000; provided that the Scheduled Merger
Termination Date may be extended by the Borrower until June 30, 2000 upon
written certification by a Responsible Officer of the Borrower to the
Administrative Agent that the "End Date" specified in the Merger Agreement has
been extended to the "Extended End Date" in accordance with all of the
requirements of Section 10.1(b)(i) of the Merger Agreement.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
"Secondary Investments" means Investments by the Borrower or any of its
Restricted Subsidiaries in the ordinary course of business not constituting
Primary Investments or Acquisitions.
"Senior Unsecured Debt Rating" means, as of any date, the rating of the
Borrower's long-term unsupported senior unsecured Applicable Debt, as given by
the Rating Agencies in their regular rating reports.
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"Short Term Revolving Borrowing" means a Borrowing consisting of Short
Term Revolving Loans of the same Type made to the Borrower on the same day by
the Lenders under Section 2.1(c), and in the case of Offshore Rate Loans, having
the same Interest Period.
"Short Term Revolving Commitment" is defined in Section 2.1(c);
collectively, for all Short Term Revolving Lenders, the "Short Term Revolving
Commitments".
"Short Term Revolving Commitment Amount" means $100,000,000, as such
amount may be reduced pursuant to the terms hereof.
"Short Term Revolving Commitment Termination Date" means the earliest to
occur of:
(a) the Scheduled Merger Termination Date, if the Closing Date
has not occurred by such date;
(b) the Business Day immediately preceding the eighteen month
anniversary of the Closing Date; and
(c) the date on which the Short Term Revolving Commitments
terminate in accordance with the provisions of this Agreement.
"Short Term Revolving Lender" means any institution specified as such on
Schedule 2.1 hereto and any successor or assign thereof pursuant to Section 11.7
hereof.
"Short Term Revolving Loan" and "Short Term Revolving Loans" have the
respective meanings specified in Section 2.1(c).
"Short Term Revolving Loan Percentage" means, as to any Short Term
Revolving Lender, the percentage which (a) the amount of such Short Term
Revolving Lender's Short Term Revolving Commitment (or, after termination or
expiration of the Short Term Revolving Commitments, the outstanding principal
amount of such Short Term Revolving Lender's Short Term Revolving Loans) is of
(b) the aggregate amount of all Short Term Revolving Commitments (or, after
termination or expiration of the Short Term Revolving Commitments, the
outstanding principal amount of all Short Term Revolving Loans).
"Solvent" means, as to any Person at any time, that (a) the fair value
of the property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(31) of the Bankruptcy Code and for purposes of the New York Uniform
Fraudulent Transfer Act; (b) the present fair saleable value of the property of
such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured; (c) such Person is able to realize upon its property and pay its debts
and other liabilities (including disputed, contingent and unliquidated
liabilities) as they mature in the normal course of business; (d) such Person
does not intend to, and does not believe
25
<PAGE> 34
that it will, incur debts or liabilities beyond such Person's ability to pay as
such debts and liabilities mature; and (e) such Person is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute unreasonably
small capital.
"Statutory Surplus" means, with respect to an Insurance Subsidiary as of
any date, the total amount reported on line 26, page 3, column 1 of the Annual
Statement or of the Interim Statement of such Insurance Subsidiary, in each case
as of such date, or an amount determined in a consistent manner in accordance
with SAP for any date other than one as of which an Annual Statement or Interim
Statement is prepared. Notwithstanding the foregoing, if the format of the
Annual Statement or Interim Statement is changed in future years so that
different information is contained in such line or such line no longer exists,
it is understood that the foregoing shall refer to information consistent with
that reported in the referenced line in the 1998 Annual Statement of such
Insurance Subsidiary.
"Subsidiary" of a Person means any Person of which more than 50% of the
Voting Stock, or other Equity Interests (in the case of Persons other than
corporations), is owned or controlled directly or indirectly by the Person, or
one or more of the Subsidiaries of the Person, or a combination thereof. Unless
the context otherwise clearly requires, references herein to a "Subsidiary"
refer to a Subsidiary of the Borrower.
"Subsidiary Guarantor" means each Material Subsidiary of the Borrower
identified as a Subsidiary Guarantor on Schedule 6.12, each of which are
required to execute and deliver to the Administrative Agent the Subsidiary
Guaranty, and each other Material Subsidiary that is required to execute the
Subsidiary Guaranty pursuant to Sections 7.13 or 7.16.
"Subsidiary Guaranty" means the subsidiary guaranty executed and
delivered by each Subsidiary Guarantor pursuant to the terms of this Agreement,
substantially in the form of Exhibit F hereto, as amended, supplemented, amended
and restated or otherwise modified from time to time.
"Swap Contract" means any agreement relating to any transaction that is
a rate swap, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap or option, bond, note or bill option,
interest rate option, forward foreign exchange transaction, cap, collar or floor
transaction, currency swap, cross-currency rate swap, swap option, currency
option or any other, similar transaction (including any option to enter into any
of the foregoing) or any combination of the foregoing, and, unless the context
otherwise clearly requires, any master agreement relating to or governing any or
all of the foregoing.
"Swing Line Commitment" means the commitment of the Swing Line Lender to
make, and the commitment of the Lenders severally to participate in, Swing Line
Loans from time to time made or outstanding under Section 2.5, in an aggregate
amount not to exceed the Swing Line Commitment Amount; provided that the Swing
Line Commitment is a part of the
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Revolving Commitments, rather than a separate, independent commitment and shall
not at any time exceed the Revolving Commitments.
"Swing Line Commitment Amount" means $10,000,000, as such amount may be
reduced from time to time pursuant to the terms hereof.
"Swing Line Lender" means BofA in its capacity as swing line lender
hereunder, together with any replacement swing line lender substituted therefor
with the prior written consent of BofA and the Borrower.
"Swing Line Loan" is defined in Section 2.5.
"Syndication Agent" is defined in the preamble.
"Taxes" means all present or future taxes, levies, assessments, imposts,
duties, deductions, fees, withholdings or similar charges now or hereafter
imposed, levied, collected, withheld or assessed by any Governmental Authority,
and all interest, penalties or similar liabilities with respect thereto,
excluding, in the case of each Lender and the Administrative Agent,
respectively, taxes imposed on or measured by its net income by the jurisdiction
(or any political subdivision thereof) under the Laws of which such Lender or
the Administrative Agent, as the case may be, is organized or maintains a
lending office.
"Tax Sharing Agreement" means the Tax Sharing Agreement between the
Company and Alleghany Corporation.
"Term Borrowing" means a borrowing hereunder consisting of Term Loans of
the same Type made to the Borrower on the same day by the Term Lenders under
Section 2.1(a), and, in the case of Offshore Rate Loans, having the same
Interest Period.
"Term Commitment" is defined in Section 2.1(a); collectively, for all
Term Lenders, the "Term Commitments". The Term Commitments shall not exceed an
aggregate principal amount equal to $450,000,000.
"Term Commitment Termination Date" means the earliest to occur of:
(a) the Scheduled Merger Termination Date, if the Closing Date
has not occurred by such date;
(b) immediately following the Closing Date; and
(c) the date on which the Term Commitments terminate in
accordance with this Agreement.
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"Term Lender" means a financial institution identified as such on
Schedule 2.1, and each permitted successor or assign thereof pursuant to Section
11.7 hereof.
"Term Loan" is defined in Section 2.1(a).
"Term Maturity Date" means the Business Day immediately preceding the
six year anniversary of the Closing Date.
"Term Percentage" means, as to any Term Lender, (a) until the funding of
the Term Loans, the percentage which (i) such Lender's Term Commitment is of
(ii) all Term Commitments, and thereafter (b) the percentage which (i) the
principal amount of such Lender's Term Loan is of (ii) the aggregate principal
amount of all Term Loans.
"Termination Date" means the date on which all Obligations have been
paid in full in cash and all Commitments have been terminated or expired.
"Test Period" means, for any determination under this Agreement, the
four consecutive Fiscal Quarters of the Borrower then last ended. Until the date
by which four full Fiscal Quarters shall have occurred since the Closing Date,
for purposes of computing Cash Flow for Test Periods, including periods prior to
the Closing Date, Cash Flow of the Borrower and the Company shall be included
and determined on a pro forma combined basis using historical results from the
first day of such Test Period as reported to the SEC and Departments.
"Total Capitalization" means, at any time, the sum of Net Worth and
Total Debt.
"Total Debt" means, at any time, with respect to the Borrower and its
Restricted Subsidiaries, the sum, without duplication, of (a) Applicable Debt at
such time, (b) non-contingent reimbursement or payment obligations in respect of
the items referred to in clause (c) of the definition of Indebtedness contained
in this Agreement at such time, and (c) Contingent Obligations in respect of
Applicable Debt of another Person (including Excluded Subsidiaries) at such
time.
"Total Debt to Total Capitalization Ratio" means, at any time, the ratio
of Total Debt to Total Capitalization at such time.
"Total Percentage" means, as to any Lender, the percentage which (a) the
sum of (i) the aggregate principal amount of all Term Loans held by such Lender,
(ii) the amount of such Lender's Revolving Commitment (or, after termination or
expiration of the Revolving Commitments, the outstanding principal amount of
such Lender's Revolving Loans and obligations) and (iii) the amount of such
Lender's Short Term Revolving Commitment (or, after termination or expiration of
the Short Term Revolving Commitments, the outstanding principal amount of such
Lender's Short Term Revolving Loans and obligations) is of (b) the sum of (i)
the aggregate principal amount of all Term Loans, (ii) the aggregate amount of
all Revolving Commitments (or, after termination or expiration of the Revolving
Commitments,
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the outstanding principal amount of all Revolving Loans and obligations) and
(iii) the aggregate amount of all Short Term Revolving Commitments (or, after
termination or expiration of the Short Term Revolving Commitments, the
outstanding principal amount of all Short Term Revolving Loans and obligations).
"Transaction" is defined in the third recital.
"Transferee" is defined in Section 11.8(f).
"Type" is defined in the definition of "Loan".
"Unfunded Pension Liability" means the excess of a Pension Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Pension Plan's assets, determined in accordance with the assumptions
used for funding the Pension Plan pursuant to Section 412 of the Code for the
applicable plan year.
"United States" and "U.S." each mean the United States of America.
"UTCs" means each of the Subsidiaries, whether direct or indirect, of
the Borrower that comprise underwritten title companies or their functional
equivalent in States other than California.
"Voting Stock" means, with respect to any Person, shares of such
Person's Equity Interests having the right to vote for the election of directors
of such Person under ordinary circumstances.
"Wholly-Owned Subsidiary" means any Person in which (other than
directors' qualifying Equity Interests required by Law) 100% of the Voting Stock
and 100% of the Equity Interests of every other class, in each case, at the time
as of which any determination is being made, is owned, beneficially and of
record, by the Borrower, or by one or more of the other Wholly-Owned
Subsidiaries, or both.
1.2. Other Interpretive Provisions. (a) The meanings of defined terms
are equally applicable to the singular and plural forms of the defined terms.
(b) The words "hereof," "herein," "hereunder" and similar words refer to
this Agreement as a whole and not to any particular provision of this Agreement;
and clause, Section, Schedule and Exhibit references are to this Agreement
unless otherwise specified.
(c) (i) The term "documents" includes all instruments, documents,
agreements, certificates, indentures, notices and other writings, however
evidenced.
(ii) The term "including" is not limiting and means "including
without limitation."
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(iii) In the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and
including"; the words "to" and "until" each mean "to but excluding", and
the word "through" means "to and including."
(iv) The term "property" includes any kind of property or asset,
real, personal or mixed, tangible or intangible.
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document and (ii) references to any statute or regulation
are to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation.
(e) The captions and headings of this Agreement are for convenience of
reference only and shall not affect the interpretation of this Agreement.
1.3. Accounting Principles. Unless the context otherwise clearly
requires, all accounting terms not expressly defined herein shall be construed,
and all financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied and calculated on a consolidated
basis.
ARTICLE II
THE CREDITS
2.1. Amounts and Terms of Commitments. (a) The Term Credit. Each Term
Lender severally agrees, on the terms and conditions set forth herein, to make a
single loan to the Borrower (each such loan, a "Term Loan"; collectively, the
"Term Loans") on the Closing Date in a principal amount not to exceed the amount
specified for such Term Lender on Schedule 2.1 (such Term Lender's "Term
Commitment"). Amounts borrowed as Term Loans which are repaid or prepaid by the
Borrower may not be reborrowed.
(b) The Revolving Credit. Each Revolving Lender severally agrees, on the
terms and conditions set forth herein, to make loans to the Borrower (each such
loan, a "Revolving Loan"; collectively, the "Revolving Loans") from time to time
on any Business Day during the period from the Closing Date to the Revolving
Commitment Termination Date in an aggregate principal amount not to exceed at
any time outstanding the amount specified for such Revolving Lender on Schedule
2.1 (as the same may be reduced under Section 3.1, or as a result of one or more
assignments under Section 11.8, such Revolving Lender's "Revolving Commitment");
provided that, after giving effect to any Borrowing of Revolving Loans, the
aggregate principal amount of all outstanding Revolving Loans plus all
outstanding and Swing Line Loans shall not at any time exceed the Revolving
Commitment Amount. Within the limits of each Lender's Revolving
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Commitment, and subject to the other terms and conditions hereof, the
Borrower may borrow under this Section, prepay or repay and reborrow under this
Section.
(c) The Short Term Revolving Credit. Each Short Term Revolving Lender
severally agrees, on the terms and conditions set forth herein, to make loans to
the Borrower (each such loan, a "Short Term Revolving Loan"; collectively, the
"Short Term Revolving Loans") from time to time on any Business Day during the
period from the Closing Date to the Short Term Revolving Commitment Termination
Date in an aggregate principal amount not to exceed at any time outstanding the
amount specified for such Short Term Revolving Lender on Schedule 2.1 (as the
same may be reduced under Section 3.1, or as a result of one or more assignments
under Section 11.8, such Short Term Revolving Lender's "Short Term Revolving
Commitment"). Within the limits of each Lender's Short Term Revolving
Commitment, and subject to the other terms and conditions hereof, the Borrower
may borrow under this Section, prepay or repay and reborrow under this Section.
2.2. Loan Accounts. (a) The Loans made by each Lender shall be evidenced
by one or more loan accounts or records maintained by such Lender in the
ordinary course of business. The loan accounts or records maintained by the
Administrative Agent, the Swing Line Lender and each Lender shall be conclusive
absent manifest error of the amount of the Loans made by the Lenders to or for
the account of the Borrower and the interest and payments thereon. Any failure
so to record or any error in doing so shall not, however, limit or otherwise
affect the obligation of the Borrower hereunder to pay any amount owing with
respect to the Loans.
(b) Upon the request of any Lender made through the Administrative
Agent, the Loans made by such Lender may be evidenced by one or more Notes,
instead of or in addition to loan accounts. Each such Lender is irrevocably
authorized by the Borrower to endorse on the schedules annexed to its Note(s)
the date, amount and maturity of each Loan made, continued or converted by it
and the amount of each payment of principal made by the Borrower with respect
thereto. Each such Lender's record shall be conclusive absent manifest error;
provided that the failure of a Lender to make, or an error in making, a notation
thereon with respect to any Loan shall not limit or otherwise affect the
obligations of the Borrower hereunder or under any such Note to such Lender.
2.3. Procedure for Borrowing. (a) Each Borrowing other than Swing Line
Loans shall be made upon the Borrower's irrevocable written notice delivered to
the Administrative Agent in the form of a Notice of Borrowing (which notice must
be received by the Administrative Agent prior to 12:00 noon (Chicago time)) (i)
three Business Days prior to the requested Borrowing Date, in the case of
Offshore Rate Loans and (ii) on the requested Borrowing Date, in the case of
Base Rate Loans, specifying:
(A) the amount of the Borrowing, which shall (x) in the case of
Term Loans, be in an aggregate minimum amount of $20,000,000 for both
Offshore Rate Loans and Base Rate Loans or any multiple of $1,000,000 in
excess thereof and (y) in the case of Revolving Loans or Short Term
Revolving Loans, be in an aggregate minimum amount of
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$3,000,000 for Base Rate Loans or $5,000,000 for Offshore Rate Loans or,
in each case, any multiple of $1,000,000 in excess thereof;
(B) the requested Borrowing Date, which shall be a Business Day;
(C) the Type of Loans comprising the Borrowing; and
(D) the duration of the Interest Period applicable to Offshore
Rate Loans included in such notice. If the Notice of Borrowing fails to
specify the duration of the Interest Period for any Borrowing comprised
of Offshore Rate Loans, such Interest Period shall be three months.
(b) The Administrative Agent will promptly notify each Lender of its
receipt of any Notice of Borrowing and of the amount of such Lender's Pro Rata
Share of that Borrowing.
(c) Each Lender will make the amount of its Pro Rata Share of each
Borrowing available to the Administrative Agent for the account of the Borrower
at the Administrative Agent's Payment Office by 2:00 p.m. (Chicago time) on the
Borrowing Date requested by the Borrower in funds immediately available to the
Administrative Agent. The proceeds of all such Loans will then be made available
to the Borrower by the Administrative Agent at such office by crediting the
account of the Borrower on the books of BofA with the aggregate of the amounts
made available to the Borrower by the Lenders or by wire transfer in accordance
with written instructions provided to the Administrative Agent by the Borrower,
in each case in like funds as received by the Administrative Agent.
(d) All Borrowings made on the Closing Date shall be comprised solely of
Base Rate Loans (unless an appropriate breakage indemnity letter has been duly
executed and delivered by the Borrower in favor of the Administrative Agent for
the benefit of the Lenders, reasonably satisfactory in form and substance to the
Administrative Agent, in which case Borrowings referred to in such indemnity
letter to be made on the Closing Date may be comprised of Offshore Rate Loans).
2.4. Conversion and Continuation Elections. (a) The Borrower may, upon
irrevocable written or telephonic (confirmed promptly the same day by the
Borrower in writing) notice to the Administrative Agent in accordance with
Section 2.4(b):
(i) elect, as of any Business Day, in the case of Base Rate
Loans, or as of the last day of the applicable Interest Period, in the
case of Offshore Rate Loans, to convert any such Loans (or any part
thereof in an amount not less than $20,000,000 in the case of
conversions relating to Term Loans to Offshore Rate Loans or Base Rate
Loans and $5,000,000 in the case of conversions of Revolving Loans or
Short Term Revolving Loans to Offshore Rate Loans or $3,000,000 in the
case of conversions of Revolving Loans or Short Term Revolving Loans to
Base Rate Loans, or in each case that is in an integral multiple of
$1,000,000 in excess thereof) into Loans of any other Type; or
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(ii) elect, as of the last day of the applicable Interest
Period, to continue any Offshore Rate Loans having Interest Periods
expiring on such day (or any part thereof in an amount not less than
$20,000,000 in the case of continuations of Term Loans or $5,000,000 in
the case of continuations of Revolving Loans or Short Term Revolving
Loans, or in each case that is in an integral multiple of $1,000,000 in
excess thereof);
provided that if at any time the aggregate amount of Offshore Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment or conversion of
part thereof to be less that $20,000,000 in the case of Term Loans or $5,000,000
in the case of Revolving Loans or Short Term Revolving Loans, such Offshore Rate
Loans shall automatically convert into Base Rate Loans, and on and after such
date the right of the Borrower to continue such Loans as, and convert such Loans
into, Offshore Rate Loans, as the case may be, shall terminate.
(b) The Borrower shall provide telephonic (confirmed promptly the same
day by the Borrower in a written Notice of Conversion/Continuation) or written
notice (comprised of a Notice of Conversion/Continuation), to be received by the
Administrative Agent not later than 11:00 a.m. (Chicago time) (i) at least three
Business Days in advance of the Conversion/ Continuation Date, if the Loans are
to be converted into or continued as Offshore Rate Loans and (ii) on the
Conversion/Continuation Date, if the Loans are to be converted into Base Rate
Loans, specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Loans to be converted or continued;
(C) the Type of Loans resulting from the proposed conversion or
continuation; and
(D) other than in the case of conversions into Base Rate Loans,
the duration of the requested Interest Period.
(c) If the Borrower has failed to select a new Interest Period to be
applicable to such Offshore Rate Loans by the time required under clause (b)
above, or if any Default or Event of Default then exists, the Borrower shall be
deemed to have elected to convert such Offshore Rate Loans into Base Rate Loans
effective as of the expiration date of such Interest Period.
(d) The Administrative Agent will promptly notify each Lender of its
receipt of a Notice of Conversion/Continuation, or, if no timely notice is
provided by the Borrower, the Administrative Agent will promptly notify each
Lender of the details of any automatic conversion. All conversions and
continuations shall be made ratably according to the respective outstanding
principal amounts of the Loans with respect to which the notice was given held
by each Lender.
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(e) Unless the Majority Lenders otherwise consent, during the existence
of a Default or Event of Default, the Borrower may not elect to have a Loan
converted into or continued as an Offshore Rate Loan.
(f) Prior to (i) the end of an Interest Period and (ii) each date a
payment of interest or principal is due, the Administrative Agent will provide
the Borrower with notice (whether by phone, telecopy, e-mail or otherwise) of
such event; provided that the failure to provide such notice to the Borrower
shall not in any way limit or affect the obligations of the Borrower or any of
its Subsidiaries hereunder or under any Loan Document.
(g) Without in any way limiting the obligation of the Borrower to
confirm in writing any notice it may give hereunder by telephone, the
Administrative Agent (and the Swing Line Lender) may act prior to receipt of
written confirmation without liability upon the basis of such telephonic notice
believed by the Administrative Agent (and the Swing Line Lender) in good faith
to be from a Responsible Officer of the Borrower (or a designee of such
Responsible Officer). In each such case the Borrower hereby waives the right to
dispute the Administrative Agent's (and the Swing Line Lender's) record of the
terms of any such telephonic notice.
2.5. The Swing Line Loans Subfacility.
(a) Swing Line Loans. Subject to the terms and conditions of this
Agreement (including the limitations set forth in Section 2.1(b)), the Swing
Line Lender shall from time to time make loans to the Borrower (collectively the
"Swing Line Loans" and individually each a "Swing Line Loan") in accordance with
this Section in an aggregate amount not at any time exceeding the lesser of (a)
the Swing Line Commitment Amount and (b) the Revolving Commitment Amount less
the aggregate principal amount of all outstanding Revolving Loans less all
outstanding Swing Line Loans. Amounts borrowed under this Section may be
borrowed, repaid and reborrowed until the Revolving Termination Date.
(b) Swing Line Loan Procedures. The Borrower shall give written or
telephonic notice to the Administrative Agent (which shall promptly inform the
Swing Line Lender) of each proposed Swing Line Loan not later than 12:00 noon
(Chicago time) on the proposed date of such Swing Line Loan. Each such notice
shall be effective upon receipt by the Administrative Agent and shall specify
the date and amount of such Swing Line Loan, which shall be $100,000 or a higher
integral multiple thereof. So long as the Swing Line Lender has not received
written notice that the conditions precedent set forth in Section 5.2 with
respect to the making of such Swing Line Loan have not been satisfied (and does
not have actual knowledge of any default in the payment of any principal,
interest or fees to be paid to either the Administrative Agent for the account
of the applicable Lenders), the Swing Line Lender shall make the requested Swing
Line Loan and shall pay over the requested amount to the Borrower on the
requested borrowing date. Concurrently with the making of any Swing Line Loan,
the Swing Line Lender shall be deemed to have sold and transferred, and each
other Revolving Lender shall be deemed to have irrevocably purchased and
received from the Swing Line Lender, an undivided interest and participation to
the extent of such other Revolving Lender's Revolving Loan Percentage in such
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Swing Line Loan (but such participation shall remain unfunded until required to
be funded pursuant to Section 2.5(c)).
(c) Refunding of, or Funding of Participations in, Swing Line Loans. The
Swing Line Lender may at any time, in its sole discretion, on behalf of the
Borrower (which hereby irrevocably authorizes the Swing Line Lender to act on
its behalf) deliver a notice to the Administrative Agent requesting that each
Revolving Lender (including the Swing Line Lender in its individual capacity)
make a Revolving Loan (which shall be a Base Rate Loan) in such Revolving
Lender's Revolving Loan Percentage of the aggregate amount of Swing Line Loans
outstanding on such date for the purpose of repaying all Swing Line Loans (and,
upon receipt of the proceeds of such Revolving Loans, the Administrative Agent
shall apply such proceeds to repay Swing Line Loans); provided that if the
conditions precedent to a borrowing of Revolving Loans are not then satisfied or
for any other reason the Revolving Lenders may not then make Loans, then instead
of making Revolving Loans each Revolving Lender (other than the Swing Line
Lender) shall become immediately obligated to fund its participation in all
outstanding Swing Line Loans and shall pay to the Administrative Agent for the
account of the Swing Line Lender an amount equal to such Revolving Lender's
Revolving Loan Percentage of such Swing Line Loans. If and to the extent any
Revolving Lender shall not have made such amount available to the Administrative
Agent by 2:00 p.m. (Chicago time) on the Business Day on which such Lender
receives notice from the Administrative Agent of its obligation to fund its
participation in Swing Line Loans (it being understood that any such notice
received after 12:00 noon (Chicago time) on any Business Day shall be deemed to
have been received on the next following Business Day), such Revolving Lender
agrees to pay interest on such amount to the Administrative Agent for the Swing
Line Lender's account forthwith on demand for each day from the date such amount
was to have been delivered to the Administrative Agent to the date such amount
is paid, at a rate per annum equal to (a) for the first three days after demand,
the Federal Funds Rate from time to time in effect and (b) thereafter, the Base
Rate from time to time in effect. Any Revolving Lender's failure to make
available to the Administrative Agent its Revolving Percentage of the amount of
all outstanding Swing Line Loans shall not relieve any other Revolving Lender of
its obligation hereunder to make available to the Administrative Agent such
other Revolving Lender's Revolving Loan Percentage of such amount, but no
Revolving Lender shall be responsible for the failure of any other Revolving
Lender to make available to the Administrative Agent such other Revolving
Lender's Revolving Loan Percentage of any such amount.
(d) Repayment of Participations. Upon (and only upon) receipt by the
Administrative Agent for the account of the Swing Line Lender of immediately
available funds from or on behalf of the Borrower (a) in reimbursement of any
Swing Line Loan with respect to which a Revolving Lender has paid the
Administrative Agent for the account of the Swing Line Lender the amount of such
Revolving Lender's participation therein or (b) in payment of any interest on a
Swing Line Loan, the Administrative Agent will pay to such Revolving Lender its
pro rata share (according to its Revolving Percentage) thereof (and the Swing
Line Lender shall receive the amount otherwise payable to any Revolving Lender
which did not so pay the Administrative Agent the amount of such Revolving
Lender's participation in such Swing Line Loan).
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(e) Participation Obligations Unconditional. (i) Each Revolving Lender's
obligation to make available to the Administrative Agent for the account of the
Swing Line Lender the amount of its participation interest in all Swing Line
Loans as provided in Section 2.5(c) shall be absolute and unconditional and
shall not be affected by any circumstance, including (A) any set-off,
counterclaim, recoupment, defense or other right which such Revolving Lender may
have against the Swing Line Lender or any other Person, (B) the occurrence or
continuance of an Event of Default, (C) any adverse change in the condition
(financial or otherwise) of the Borrower or any Subsidiary thereof, (D) any
termination of the Commitments or (E) any other circumstance, happening or event
whatsoever.
(ii) Notwithstanding the provisions of clause (i) above, no Revolving
Lender shall be required to purchase a participation interest in any Swing Line
Loan if (A) at a reasonable time prior to the making by the Swing Line Lender of
such Swing Line Loan, the Swing Line Lender received written notice specifying
that one or more of the conditions precedent to the making of such Swing Line
Loan were not satisfied and, in fact, such conditions precedent were not
satisfied at the time of the making of such Swing Line Loan or (B) at the time
of the making of such Swing Line Loan, the Swing Line Lender had actual
knowledge of any default in the payment of any principal, interest or fees to be
paid to the Administrative Agent for the account of the applicable Lenders.
ARTICLE III
PREPAYMENTS, REPAYMENTS, INTEREST AND FEES
3.1. Termination or Reduction of Short Term Revolving, Revolving or
Swing Line Commitments. (a) The Borrower may, upon not less than one Business
Day's prior notice to the Administrative Agent, terminate the Commitments, the
Revolving Commitments or the Swing Line Commitment, or permanently reduce the
Short Term Revolving Commitment Amount, the Revolving Commitment Amount and/or
the Swing Line Commitment by an aggregate minimum amount of $5,000,000 or any
multiple of $1,000,000 in excess thereof, unless, after giving effect thereto
and to any prepayments of Revolving Loans made on the effective date thereof,
the then outstanding principal amount of the Revolving Loans and Swing Line
Loans would exceed the Revolving Commitment Amount then in effect. Once reduced
in accordance with this Section, the Short Term Revolving Commitments, the
Revolving Commitments and the Swing Line Commitment may not be increased. Any
reduction of the Short Term Revolving Commitments, the Revolving Commitments and
the Swing Line Commitment shall be applied to each Lender according to its
Revolving Loan Percentage or Short Term Revolving Loan Percentage, as
applicable. All accrued commitment fees to but not including the effective date
of any reduction or termination of the Short Term Revolving Commitments, the
Revolving Commitments and/or the Swing Line Commitment shall be paid on the
effective date of such reduction or termination.
(b) On any date upon which the Revolving Commitments are reduced, if the
outstanding principal amount of all Revolving Loans plus all outstanding Swing
Line Loans exceeds the
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aggregate Revolving Commitments on such date, the Borrower shall immediately
prepay the Revolving Loans or Swing Line Loans in an amount equal to such
excess.
3.2. Optional Prepayments. Subject to Section 4.4, the Borrower may, at
any time or from time to time, upon not less than one Business Day's irrevocable
notice to the Administrative Agent, prepay the Loans in whole or in part, in
minimum amounts of $5,000,000 or any multiple of $1,000,000 in excess thereof.
Such notice of prepayment shall specify the date and amount of such prepayment,
and the Type(s) of Loans to be prepaid. The Administrative Agent will promptly
notify each Lender of its receipt of any such notice, and of such Lender's Pro
Rata Share of such prepayment. If such notice is given by the Borrower, the
Borrower shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein, together with
accrued interest to each such date on the amount prepaid and any amounts
required pursuant to Section 4.4. Optional prepayments of Term Loans shall be
applied pro rata to the remaining installments of the Term Loans.
3.3. Mandatory Prepayments of Loans. (a) Asset Dispositions. Without
derogation of the requirements of Section 8.2, if the Borrower or any Restricted
Subsidiary shall at any time or from time to time make a Disposition, then
promptly upon, and in no event later than five Business Days after, receipt by
the Borrower of the Net Disposition Proceeds of such Disposition, the Borrower
shall prepay the Loans in an aggregate amount equal to the amount of such Net
Disposition Proceeds; provided that the Borrower may notify the Administrative
Agent in writing that such Net Disposition Proceeds shall be reinvested by it in
its business within 180 days after the receipt of such Net Disposition Proceeds
and the Borrower may retain such amount, so long as such amount is so applied
within such period.
(b) Applicable Debt Issuance. If the Borrower or any of its Restricted
Subsidiaries shall issue Applicable Debt pursuant to Section 8.4(i), then
promptly upon, and in no event later than five Business Days after, receipt by
the Borrower or any of its Restricted Subsidiaries of Net Debt Proceeds of such
issuance, the Borrower shall prepay the Loans in an aggregate amount equal to
the amount of such Net Debt Proceeds.
(c) Equity Issuance. Upon the receipt by the Borrower or any of its
Restricted Subsidiaries of any Net Equity Proceeds, promptly upon, and in no
event later than five Business Days after, receipt by the Borrower or any of its
Restricted Subsidiaries of any Net Equity Proceeds, the Borrower shall prepay
the Loans in an aggregate amount equal to the amount of 25% of such Net Equity
Proceeds.
(d) Application of Proceeds. Any prepayment made pursuant to clauses
(a), (b) and (c) shall be allocated among the Loans as follows: (i) first, to
the outstanding principal amount of Short Term Revolving Loans and a
corresponding reduction of the Short Term Revolving Commitment Amount, (ii)
second, to the next four quarterly scheduled and unpaid principal installments
of the Term Loans in order of maturities, (iii) third, to the remaining
installments of the Term Loans pro rata, and (iv) fourth, after repayment in
full of all Term Loans, to the
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<PAGE> 46
outstanding principal amount of Revolving Loans and Swing Line Loans and a
corresponding reduction of the Revolving Commitment Amount.
(e) General. Any prepayments pursuant to this Section shall be applied
to Types of Loans as the Borrower shall direct (and in the absence of any such
direction, shall be applied first to any Base Rate Loans then outstanding and
then to Offshore Rate Loans with the shortest Interest Periods remaining);
provided that Offshore Rate Loans may be designated for prepayment pursuant to
this clause (e) only on the last day of an Interest Period applicable thereto
unless all Offshore Rate Loans with Interest Periods ending on such date of
required prepayment and all Base Rate Loans have been paid in full. The Borrower
shall pay, together with each prepayment under this Section, accrued interest on
the amount prepaid and any amounts required pursuant to Section 4.4.
(f) Interest Periods. In lieu of making any payment pursuant to this
Section in respect of any Offshore Rate Loan other than on the last day of the
Interest Period therefor, so long as no Default or Event of Default shall have
occurred and be continuing, the Borrower at its option may deposit with the
Administrative Agent an amount equal to the amount of the Offshore Rate Loan to
be prepaid and such Offshore Rate Loan shall be repaid on the last day of the
Interest Period therefor in the required amount. Such deposit shall be held by
the Administrative Agent in a corporate time deposit account established on
terms reasonably satisfactory to the Administrative Agent, earning interest at
the then-customary rate for accounts of such type. Such deposit shall Cash
Collateralize the Obligations; provided that the Borrower may at any time direct
that such deposit be applied to make the applicable payment required pursuant to
this Section.
3.4. Repayment. (a) The Term Credit. On the Term Maturity Date and on
each Quarterly Payment Date occurring during any period set forth below, the
Borrower shall make a scheduled repayment of the aggregate outstanding principal
amount, if any, of all Term Loans in an amount equal to the amount set forth
below opposite the Term Maturity Date or such period, as applicable:
<TABLE>
<CAPTION>
Amount of Required
Period Principal Repayment
----------------------------------------- -------------------
<S> <C>
06/30/00 through (and including) 06/29/01 $12,500,000
06/30/01 through (and including) 06/29/02 $15,000,000
06/30/02 through (and including) 06/29/03 $17,500,000
06/30/03 through (and including) 06/29/04 $20,000,000
06/30/04 through (and including) 06/29/05 $22,500,000
</TABLE>
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<PAGE> 47
<TABLE>
<CAPTION>
Amount of Required
Period Principal Repayment
----------------------------------------- -------------------
<S> <C>
06/30/05 through (and including) the Term $25,000,000
Maturity Date or the then outstanding
principal amount of all
Term Loans, if different.
</TABLE>
(b) The Revolving Credit. The Borrower shall repay to the Revolving
Lenders on the Revolving Commitment Termination Date, the aggregate principal
amount of Revolving Loans outstanding on such date.
(c) The Short Term Revolving Credit. The Borrower shall repay to the
Short Term Revolving Lenders on the Short Term Revolving Commitment Termination
Date, the aggregate principal amount of Short Term Revolving Loans outstanding
on such date.
3.5. Interest. (a) Rate. (i) Each Loan, other than Swing Line Loans,
shall bear interest on the outstanding principal amount thereof from the
applicable Borrowing Date at a rate per annum equal to the Offshore Rate or the
Base Rate, as the case may be (and subject to the Borrower's right to convert to
other Types of Loans under Section 2.4), plus the Applicable Margin and (ii)
each Swing Line Loan shall bear interest on the outstanding principal amount
thereof from the applicable Borrowing Date at a rate per annum equal to the Base
Rate plus the Applicable Margin.
(b) Payment Dates. Interest on each Loan shall be paid in arrears on
each Interest Payment Date. Interest shall also be paid on the date of any
prepayment of Loans under Section 3.2 or 3.3 for the portion of the Loans so
prepaid and upon payment (including prepayment) in full thereof and, at and
after maturity (whether by acceleration or otherwise) of a Loan, interest shall
be paid on demand of the Administrative Agent at the request or with the consent
of the Majority Lenders.
(c) Default Rate. Notwithstanding clause (a) of this Section, if any
amount of principal of or interest on any Loan is not paid in full when due
(whether at stated maturity, by acceleration, demand or otherwise), or if any
other Event of Default has occurred and is continuing, the Borrower agrees to
pay interest on any Obligations outstanding during the period of continuance of
such payment Default or Event of Default, and after as well as before any entry
of judgment thereon to the extent permitted by Law, payable on demand, at a
fluctuating rate per annum equal to the Base Rate plus the Applicable Margin
plus 2%.
3.6. Fees. The Borrower agrees to pay the fees set forth below. All such
fees shall be non-refundable.
(a) Arrangement, Agency Fees; etc. The Borrower shall pay all fees
required by the letter agreement (the "Fee Letter") among the Borrower, the Lead
Arranger and the Administrative Agent dated September 16, 1999.
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<PAGE> 48
(b) Commitment Fees. The Borrower shall pay to the Administrative Agent
for the account of each Revolving Lender, Short Term Revolving Lender or Term
Loan Lender, as applicable, a commitment fee (the "Commitment Fee") on the
average daily unused portion of such Lender's Revolving Commitment, Short Term
Revolving Commitment or Term Commitment, as applicable, computed on a quarterly
basis in arrears on each Quarterly Payment Date based upon the daily utilization
for that quarter, at a rate per annum equal to (a) for the period from and
including the Effective Date until the Closing Date, 0.25%, and (b) for the
period from and after the Closing Date, the Applicable Margin for commitment
fees. Such Commitment Fee shall accrue from and including the Effective Date to
the Revolving Commitment Termination Date, the Short Term Revolving Commitment
Termination Date or the Term Commitment Termination Date, as applicable, and
shall be due and payable initially on the Closing Date and thereafter quarterly
on each Quarterly Payment Date, with the final payment to be made in any event
on the Revolving Commitment Termination Date, the Short Term Revolving
Commitment Termination Date or the Term Commitment Termination Date, as
applicable. The Commitment Fees provided in this clause (b) shall accrue at all
times after the above-mentioned Effective Date, including at any time during
which one or more conditions in Article V are not met. For purposes of computing
the commitment fee with respect to the Revolving Commitment, outstanding Swing
Line Loans shall not be deemed to be usage of the Revolving Commitment Amount.
3.7. Computation of Fees and Interest. (a) All computations of interest
for Offshore Rate Loans shall be made on the basis of a 360-day year and actual
days elapsed. All other computations (including for interest on Base Rate Loans,
commitment fees and the other fees set forth in Section 3.6) shall be made on
the basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed. Interest and fees shall accrue during each period during which interest
or such fees are computed from (and including) the first day thereof to (but
excluding) the last day thereof.
(b) Each determination of an interest rate by the Administrative Agent
shall be conclusive and binding on the Borrower and the Lenders in the absence
of manifest error. The Administrative Agent shall promptly notify the Borrower
of changes in the interest rate and, at the written request of the Borrower,
shall deliver to the Borrower a statement showing the calculations of the
interest rate and quotations used in determining the interest rate; provided
that the failure to provide such notice or calculations to the Borrower shall
not in any way limit or affect the obligations of the Borrower or any of its
Subsidiaries hereunder or under any Loan Document.
3.8. Payments by the Borrower. (a) All payments to be made by the
Borrower shall be made without set-off, recoupment or counterclaim. Except as
otherwise expressly provided herein, all payments by the Borrower shall be made
to the Administrative Agent for the account of the Lenders at the Administrative
Agent's Payment Office, and shall be made in dollars and in immediately
available funds, no later than 1:00 p.m. (Chicago time) on the date specified
herein. The Administrative Agent will promptly distribute to each Lender its Pro
Rata Share (or other applicable share as expressly provided herein) of such
payment in like funds as received. Any
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<PAGE> 49
payment received by the Administrative Agent later than 3:00 p.m. (Chicago time)
shall be deemed to have been received on the following Business Day and any
applicable interest or fee shall continue to accrue.
(b) Subject to the provisions set forth in the definition of "Interest
Period" herein, whenever any payment is due on a day other than a Business Day,
such payment shall be made on the following Business Day, and such extension of
time shall in such case be included in the computation of interest or fees, as
the case may be.
(c) Unless the Administrative Agent receives written notice from the
Borrower prior to the date on which any payment is due to the Lenders that the
Borrower will not make such payment in full as and when required, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date in immediately available funds and the
Administrative Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent the Borrower has not made such
payment in full to the Administrative Agent, each Lender shall repay to the
Administrative Agent on demand such amount distributed to such Lender, together
with interest thereon at the Federal Funds Rate for each day from the date such
amount is distributed to such Lender until the date repaid.
3.9. Payments by the Lenders to the Administrative Agent. (a) Unless the
Administrative Agent receives written notice from a Lender prior to the Closing
Date or, with respect to any Borrowing after the Closing Date, at least one
Business Day prior to the date of such Borrowing, that such Lender will not make
available as and when required hereunder to the Administrative Agent for the
account of the Borrower the amount of that Lender's Pro Rata Share of the
Borrowing, the Administrative Agent may assume that each Lender has made such
amount available to the Administrative Agent in immediately available funds on
the Borrowing Date and the Administrative Agent may (but shall not be so
required), in reliance upon such assumption, make available to the Borrower on
such date a corresponding amount. If and to the extent any Lender shall not have
made its full amount available to the Administrative Agent in immediately
available funds and the Administrative Agent in such circumstances has made
available to the Borrower such amount, that Lender shall on the Business Day
following such Borrowing Date make such amount available to the Administrative
Agent, together with interest at the Federal Funds Rate for each day during such
period. A notice of the Administrative Agent submitted to any Lender with
respect to amounts owing under this clause (a) shall be conclusive, absent
manifest error. If such amount is so made available, such payment to the
Administrative Agent shall constitute such Lender's Loan on the date of
Borrowing for all purposes of this Agreement. If such amount is not made
available to the Administrative Agent on the Business Day following the
Borrowing Date, the Administrative Agent will notify the Borrower of such
failure to fund and, upon demand by the Administrative Agent, the Borrower shall
immediately pay such amount to the Administrative Agent for the Administrative
Agent's account, together with interest thereon for each day elapsed since the
date of such Borrowing, at a rate per annum equal to the interest rate
applicable at the time to the Loans comprising such Borrowing.
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<PAGE> 50
(b) The failure of any Lender to make any Loan on any Borrowing Date
shall not relieve any other Lender of any obligation hereunder to make a Loan on
such Borrowing Date, but no Lender shall be responsible for the failure of any
other Lender to make the Loan to be made by such other Lender on any Borrowing
Date.
3.10. Sharing of Payments, etc. If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Loans made by it any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off or otherwise) in excess of its ratable share (or other share
contemplated hereunder) of such Loans, such Lender shall immediately (a) notify
the Administrative Agent of such fact and (b) purchase from the other Lenders
such participations in the Loans made by them as shall be necessary to cause
such purchasing Lender to share the excess payment pro rata with each of them;
provided that if all or any portion of such excess payment is thereafter
recovered from the purchasing Lender, such purchase shall to that extent be
rescinded and each other Lender shall repay to the purchasing Lender the
purchase price paid therefor, together with an amount equal to such paying
Lender's ratable share (according to the proportion of (i) the amount of such
paying Lender's required repayment to (ii) the total amount so recovered from
the purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender may, to
the fullest extent permitted by Law, exercise all its rights of payment
(including the right of set-off, but subject to Section 11.10) with respect to
such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation. The Administrative Agent will keep
records (which shall be conclusive and binding in the absence of manifest error)
of participations purchased under this Section and will in each case notify the
Lenders following any such purchases or repayments.
ARTICLE IV
TAXES, YIELD PROTECTION AND ILLEGALITY
4.1. Taxes. (a) Any and all payments by the Borrower and each other
Obligor to or for the account of the Administrative Agent or any Lender under
any Loan Document shall be made without setoff, counterclaim or other defense,
and free and clear of and without deduction or withholding for any and all
present or future Taxes. If the Borrower or any other Obligor shall be required
by any Laws to deduct or withhold any Taxes from or in respect of any sum
payable under any Loan Document to the Administrative Agent or any Lender, (i)
the sum payable shall be increased as necessary so that after making all
required deductions and withholdings (including deductions applicable to
additional sums payable under this Section), the Administrative Agent and such
Lender receives an amount equal to the sum it would have received had no such
deductions or withholdings been made, (ii) the Borrower or such other Obligor
shall make such deductions or withholdings, (iii) the Borrower or such other
Obligor shall pay the full amount deducted or withheld to the relevant taxation
authority or other authority in accordance with applicable Laws, and (iv) within
30 days after the date of such
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<PAGE> 51
payment, the Borrower shall furnish to the Administrative Agent (who shall
forward the same to such Lender) the original or a certified copy of a receipt
evidencing payment thereof.
(b) In addition, the Borrower and each Obligor agrees to pay any and all
Other Taxes.
(c) If the Borrower shall be required by the Laws of any jurisdiction
outside the United States to deduct any Taxes from or in respect of any sum
payable under any Loan Document to the Administrative Agent or any Lender, the
Borrower shall also pay to such Lender or the Administrative Agent (for the
account of such Lender), at the time interest is paid, such additional amount
that the respective Lender specifies as necessary to preserve the after-tax
yield (after factoring in United States (federal and state) taxes imposed on or
measured by net income) such Lender would have received if such deductions
(including deductions applicable to additional sums payable under this Section)
had not been made.
(d) Subject to clause (f), the Borrower agrees to indemnify the
Administrative Agent and each Lender for the full amount of Taxes and Other
Taxes (including any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section) paid by the Administrative
Agent and such Lender and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto. With respect to
indemnification for Taxes and Other Taxes actually paid by the Administrative
Agent or any Lender, such indemnification shall be made within 30 days after the
Administrative Agent or such Lender, as the case may be, makes written demand
therefor. The Borrower acknowledges that any payment made to the Administrative
Agent or any Lender or to any Governmental Authority in respect of the
indemnification obligations of the Borrower provided in this clause shall
constitute a payment in respect of which the provisions of clause (a) and this
clause shall apply.
(e) Each Lender, and each holder of a participation interest herein,
that is a Non-U.S. Lender shall deliver to the Administrative Agent, prior to
receipt of any payment subject to withholding (or after accepting an assignment
or receiving a participation interest herein), two duly signed completed copies
of either Form W-8BEN or any successor thereto (relating to such Person and
entitling it to a complete exemption pursuant to an income tax treaty to which
the United States is a party from U.S. federal withholding tax on all payments
to be made to such Person by the Borrower pursuant to this Agreement) or Form
W-8ECI or any successor thereto (specifying that all payments to be made to such
Person by the Borrower pursuant to this Agreement will be effectively connected
with the conduct of a trade business in the United States) of the IRS or such
other evidence satisfactory to the Borrower and the Administrative Agent that no
withholding under the federal income tax laws is required with respect to such
Person. Thereafter and from time to time, each such Person shall (a) promptly
submit to the Administrative Agent such additional duly completed and signed
copies of one of such forms (or such successor forms as shall be adopted from
time to time by the relevant United States taxing authorities) as may then be
available under then current United States laws and regulations to avoid, or
such evidence as is satisfactory to the Borrower and the Administrative Agent of
any available exemption from, United States withholding taxes in respect of all
payments to be made to such Person by the Borrower pursuant to this Agreement,
and (b) take such steps as shall not
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<PAGE> 52
be materially disadvantageous to it, in the reasonable judgment of such Lender,
and as may be reasonably necessary (including the re-designation of its Lending
Office, if any) to avoid any requirement of applicable Laws that the Borrower
make any deduction or withholding for taxes from amounts payable to such Person.
If such Persons fails to deliver the above forms or other documentation, then
the Administrative Agent may withhold from any interest payment to such Person
an amount equivalent to the applicable withholding tax imposed by Sections 1441
and 1442 of the Code, without reduction. If any Governmental Authority asserts
that the Administrative Agent did not properly withhold any tax or other amount
from payments made in respect of such Person, such Person shall indemnify the
Administrative Agent therefor, including all penalties and interest and costs
and expenses of the Administrative Agent. The obligation of Lenders under this
clause (e) shall survive the payment of all Obligations and the resignation or
replacement of the Administrative Agent.
(f) The Borrower shall not be obligated to gross up any payments to any
Lender pursuant to clause (a), or to indemnify any Lender pursuant to clause
(d), in respect of United States federal withholding taxes to the extent imposed
as a result of (i) the failure of such Lender to deliver to the Borrower the
form or forms and/or an Exemption Certificate, as applicable to such Lender,
pursuant to clause (e), (ii) such form or forms and/or Exemption Certificate not
establishing a complete exemption from U.S. federal withholding tax or the
information or certifications made therein by the Lender being untrue or
inaccurate on the date delivered in any material respect, or (iii) the Lender
designating a successor lending office at which it maintains its Loans which has
the effect of causing such Lender to become obligated for tax payments in excess
of those in effect immediately prior to such designation; provided that the
Borrower shall be obligated to gross up any payments to any such Lender pursuant
to clause (a), and to indemnify any such Lender pursuant to clause (d), in
respect United States federal withholding taxes if (i) any such failure to
deliver a form or forms or an Exemption Certificate or the failure of such form
or forms or Exemption Certificate to establish a complete exemption from U.S.
federal withholding tax or inaccuracy or untruth contained therein resulted from
a change in any applicable statute, treaty, regulation or other applicable law
or any interpretation of any of the foregoing occurring after the date hereof,
which change rendered such Lender no longer legally entitled to deliver such
form or forms or Exemption Certificate or otherwise ineligible for a complete
exemption from U.S. federal withholding tax, or rendered the information or
certifications made in such form or forms or Exemption Certificate untrue or
inaccurate in a material respect, (ii) the redesignation of the Lender's lending
office was made at the request of the Borrower or (iii) the obligation to gross
up payments to any such Lender pursuant to clause (a) or to indemnify any such
Lender pursuant to clause (d) is with respect to an Assignee Lender that becomes
an Assignee Lender as a result of an assignment made at the request of the
Borrower.
4.2. Illegality. (a) If any Lender determines that the introduction of
any Law, or any change in any Law, or in the interpretation or administration of
any Law, has made it unlawful, or that any central bank or other Governmental
Authority has asserted that it is unlawful, for any Lender or its applicable
Lending Office to make Offshore Rate Loans, then, on notice thereof by such
Lender to the Borrower through the Administrative Agent, any obligation of such
Lender to
44
<PAGE> 53
make Offshore Rate Loans shall be suspended until such Lender notifies the
Administrative Agent and the Borrower that the circumstances giving rise to such
determination no longer exist.
(b) If a Lender determines that it is unlawful to maintain any Offshore
Rate Loan, the Borrower shall, upon its receipt of notice of such fact and
demand from such Lender (with a copy to the Administrative Agent), prepay in
full such Offshore Rate Loans of that Lender then outstanding, together with
interest accrued thereon and amounts required under Section 4.4, either on the
last day of the Interest Period thereof, if such Lender may lawfully continue to
maintain such Offshore Rate Loans to such day, or immediately, if such Lender
may not lawfully continue to maintain such Offshore Rate Loan. If the Borrower
is required to so prepay any Offshore Rate Loan, then concurrently with such
prepayment, the Borrower shall borrow from the affected Lender, in the amount of
such repayment, a Base Rate Loan.
4.3. Increased Costs and Reduction of Return. (a) If any Lender
reasonably determines that, due to either (i) the introduction of or any change
in or in the interpretation of any Law or regulation (including FRB Regulation
D) after the Effective Date (other than changes with respect to Taxes) or (ii)
the compliance by any Lender with any guideline or request from any central bank
or other Governmental Authority (whether or not having the force of law), there
shall be any increase in the cost to such Lender of agreeing to make or making,
funding or maintaining any Offshore Rate Loans, then the Borrower shall be
liable for, and shall from time to time, upon written demand thereafter (with a
copy of such demand to be sent to the Administrative Agent), accompanied by a
written notice showing in reasonable detail the basis for the calculation of any
such increased costs (which notice shall, absent manifest error, be final and
conclusive and binding upon all parties hereto), pay to the Administrative Agent
for the account of such Lender, additional amounts as are sufficient to
compensate such Lender for such increased costs.
(b) If, after the Effective Date, (i) the introduction of any Capital
Adequacy Regulation, (ii) any change in any Capital Adequacy Regulation, (iii)
any change in the interpretation or administration of any Capital Adequacy
Regulation by any central bank or other Governmental Authority, or by NAIC or
any other comparable agency charged with the interpretation or administration
thereof or (iv) compliance by any Lender (or its Lending Office) or any
corporation controlling any Lender with any Capital Adequacy Regulation, affects
or would affect the amount of capital required or expected to be maintained by
such Lender or any corporation controlling such Lender and (taking into
consideration such Lender's or such corporation's policies with respect to
capital adequacy and such Lender's desired return on capital) the amount of such
capital is increased as a consequence of its Commitment, loans, credits,
participation interests or obligations under this Agreement, then, upon demand
of such Lender to the Borrower through the Administrative Agent, the Borrower
shall pay to such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender for such increase.
4.4. Funding Losses. If (a) any payment of principal of any Offshore
Rate Loan is made by the Borrower to or for the account of a Lender other than
on the last day of the Interest Period
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<PAGE> 54
for such Offshore Rate Loan, as a result of a payment or conversion pursuant to
Section 2.4, 3.2, 3.3, 4.2 or 4.3, as a result of acceleration of the maturity
of the Loans pursuant to the Article IX or for any other reason, or if any
prepayment of Offshore Rate Loans is not made on any date specified in a notice
of prepayment given by the Borrower or if any payment of Offshore Rate Loans is
not made when due, (b) if any Borrowing of Offshore Rate Loans is not made as a
result of a withdrawn Notice of Borrowing or for any other reason (other than a
default by any Lender or the Administrative Agent), (c) if any Offshore Rate
Loan or Base Rate Loan is not converted as a result of a withdrawn Notice of
Conversion/Continuation or for any other reason (other than a default by any
Lender or the Administrative Agent), or (d) if any Offshore Rate Loan is not
continued as a result of a withdrawn Notice of Conversion/Continuation or for
any other reason (other than a default by any Lender or the Administrative
Agent), the Borrower shall, after receipt of a written request by such Lender
(which request shall set forth in reasonable detail the basis for requesting
such amount), pay to the Administrative Agent for the account of such Lender any
amounts required to compensate such Lender for any additional losses, costs or
expenses that such Lender may reasonably incur as a result of such payment,
failure to convert or failure to continue, including any loss, cost or expense
(excluding loss of anticipated profits) actually incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by any Lender to
fund or maintain such Offshore Rate Loan. For purposes of calculating amounts
payable by the Borrower to the Lenders under this Section and under Section
4.3(a), each Offshore Rate Loan made by a Lender (and each related reserve,
special deposit or similar requirement) shall be conclusively deemed to have
been funded by a matching deposit or other borrowing in the interbank eurodollar
market for a comparable amount and for a comparable period, whether or not such
Offshore Rate Loan is in fact so funded.
4.5. Inability to Determine Rates. If the Majority Lenders determine
that for any reason adequate and reasonable means do not exist for determining
the Offshore Base Rate for any requested Interest Period with respect to a
proposed Offshore Rate Loan, or that the Offshore Base Rate applicable pursuant
to Section 3.5(a) for any requested Interest Period with respect to a proposed
Offshore Rate Loan does not adequately and fairly reflect the cost to the
Lenders of funding such Loan, the Administrative Agent will promptly so notify
the Borrower and each Lender. Thereafter, the obligation of the Lenders to make
or maintain Offshore Rate Loans hereunder shall be suspended until the
Administrative Agent upon the instruction of the Majority Lenders revokes such
notice in writing. Upon receipt of such notice, the Borrower may revoke any
Notice of Borrowing or Notice of Conversion/Continuation then submitted by it.
If the Borrower does not revoke such Notice, the Lenders shall make, convert or
continue the Loans, as proposed by the Borrower, in the amount specified in the
applicable notice submitted by the Borrower, but such Loans shall be made,
converted or continued as Base Rate Loans instead of Offshore Rate Loans.
4.6. Notice from Lenders. Any Lender claiming reimbursement or
compensation under this Article IV shall deliver to the Borrower (with a copy to
the Administrative Agent) a notice setting forth in reasonable detail the amount
payable to the Lender hereunder and such notice shall be conclusive and binding
on the Borrower in the absence of manifest error.
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<PAGE> 55
4.7. Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 4.1, 4.2 or 4.3
with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another Lending Office for any Loans affected by such event; provided
that such designation is made on such terms that such Lender and its Lending
Office suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of any such
Section. Nothing in this Section shall affect or postpone any of the Obligations
of the Borrower or the right of any Lender provided in Section 4.1, 4.2 or 4.3.
4.8. Notice of Certain Costs. Notwithstanding anything in this Agreement
to the contrary, to the extent any notice or demand required by Section 4.1,
4.2, 4.3 or 4.4 is given by any Lender more than 180 days after such Lender has
knowledge of the occurrence of the event giving rise to the additional cost,
reduction in amounts, loss, tax or other additional amounts described in such
Section, such Lender shall not be entitled to compensation under such Section
4.1, 4.2, 4.3 or 4.4, as the case may be, for any such amount incurred or
accruing prior to the giving of such notice or demand to the Borrower.
4.9. Survival. The agreements and obligations of the Borrower in this
Article IV shall survive the payment of all other Obligations.
4.10. Replacement of Certain Lenders. If a Lender (an "Affected Lender")
shall have requested or becomes entitled to receive compensation from the
Borrower under Sections 4.1 or 4.3 to recover Taxes or other additional costs
incurred by such Lender which are not being incurred generally by the other
Lenders, or shall have delivered a notice pursuant to Section 4.2 claiming that
such Lender is unable to extend or continue Offshore Rate Loans to the Borrower
for reasons not generally applicable to the other Lenders, then in any such
case, so long as no Default or Event of Default has occurred and shall be
continuing, the Borrower may make written demand on such Affected Lender (with a
copy to the Administrative Agent) for the Affected Lender to assign, and such
Affected Lender shall assign to one or more Eligible Assignees (that are
reasonably acceptable to the Administrative Agent) which the Borrower shall have
engaged for such purpose (each a "Replacement Lender"), pursuant to a duly
executed Assignment and Acceptance within thirty (30) Business Days after the
date of such demand, all of such Affected Lender's rights and obligations under
this Agreement and the other Loan Documents (including its Revolving Commitment
and Short Term Revolving Commitment its Term Loans and all Revolving Loans and
Short Term Revolving Loans owing to it) in accordance with Section 11.8.
Further, with respect to any such assignment, the Affected Lender shall have
concurrently received, in cash, all amounts due and owing to such Affected
Lender hereunder or under any other Loan Document. Upon such Affected Lender's
replacement, such Affected Lender shall cease to be a party hereto but shall
continue to be entitled to the benefits of Sections 4.1, 4.3 and 11.4 accruing
with respect to such Affected Lender prior to the date such Affected Lender is
replaced, as well as to any fees accrued for its account hereunder prior to
being replaced and not yet paid, and shall continue to be obligated under
Section 10.7.
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ARTICLE V
CONDITIONS PRECEDENT
5.1. Conditions of Initial Credit Extensions. The obligation of each
Lender to make its initial Loan hereunder is subject to the fulfillment of the
following conditions precedent to the satisfaction of the Administrative Agent
(all documents to be provided in sufficient quantity so that each Lender may
receive a copy):
(a) Credit Agreement. The Administrative Agent shall have received full
counterparts of this Agreement, duly executed by each party thereto.
(b) Organization Documents; Good Standing. The Administrative Agent
shall have received each of the following documents:
(i) the articles or certificate of incorporation and the bylaws
of the Borrower and each Subsidiary Guarantor as in effect on the
Closing Date, certified by the Secretary or Assistant Secretary of the
Borrower and such Subsidiary Guarantor as of the Closing Date;
(ii) copies of the resolutions of the board of directors of the
Borrower authorizing the execution, delivery and performance of this
Agreement, each other Loan Document to be delivered by the Borrower and
the transactions contemplated hereby and thereby, certified as of the
Closing Date by the Secretary or an Assistant Secretary of the Borrower,
together with a certificate of the Secretary or Assistant Secretary of
the Borrower, dated the Closing Date, certifying the names and true
signatures of the officers of the Borrower authorized to execute,
deliver and perform, as applicable, this Agreement and all other Loan
Documents to be delivered by it hereunder; and
(iii) good standing certificates for each of the Borrower and
each Subsidiary Guarantor from the Secretary of State (or similar,
applicable Governmental Authority) of its state of incorporation and
each state where it is qualified to do business as a foreign corporation
as of a recent date, together with a bring-down certificate by
facsimile, dated the Closing Date.
(c) Legal Opinions. The Administrative Agent shall have received a
favorable legal opinion of Stradling Yocca Carlson & Rauth, counsel to the
Borrower and the Subsidiary Guarantors, and any other legal opinions reasonably
requested by the Administrative Agent, in each case addressed to the
Administrative Agent and the Lenders and dated the Closing Date, in form and
substance reasonably satisfactory to the Administrative Agent.
(d) Payment of Fees. The Administrative Agent shall have received
evidence of payment by the Borrower of all accrued and unpaid fees, costs and
expenses to the extent then due and payable under this Agreement or the Fee
Letter on the Closing Date, together with all
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reasonable legal costs and expenses of BofA to the extent invoiced prior to or
on the Closing Date, plus such additional amounts of legal costs and expenses as
shall constitute BofA's reasonable estimate of the legal costs and expenses
incurred or to be incurred by it through the closing proceedings (provided that
such estimate shall not thereafter preclude final settling of accounts between
the Borrower and BofA), including any such costs, fees and expenses arising
under or referenced in Sections 3.6 and 11.4.
(e) Subsidiary Guaranty. The Administrative Agent shall have received
the Subsidiary Guaranty, duly executed by each Subsidiary Guarantor.
(f) Solvency Certificate. The Administrative Agent shall have received a
solvency certificate from the chief financial officer of the Borrower, dated the
Closing Date, substantially in the form of Exhibit G.
(g) Consummation of Transaction. The Borrower shall have consummated the
Merger for aggregate merger consideration not in excess of $1,250,000,000 in
accordance with applicable Law and pursuant to the Merger Agreement, which
Merger Agreement shall not have been amended nor shall any provision thereof
have been waived by any party thereto, in each case without the prior written
consent of the Administrative Agent and the Syndication Agent, and the Merger
Agreement shall have been approved by the Board of Directors of the Company
(which approval shall not have been rescinded or withdrawn). In connection with
such consummation, the Borrower shall have issued new Equity Interests with an
aggregate value of not less than $500,000,000 (based upon the Average Fidelity
Sales Price (as defined in the Merger Agreement)) or not less than 40% of the
value of the merger consideration (as determined pursuant to Section 3.1(c) of
the Merger Agreement), and shall have confirmed the same to the Administrative
Agent. The opinions and/or rulings required to be delivered under Sections 9.2
and 9.3 of the Merger Agreement shall have been issued in accordance with the
provisions thereof and shall also be reasonably satisfactory to the
Administrative Agent and the Syndication Agent.
(h) Closing Balance Sheet. The Administrative Agent shall have received
a pro forma consolidated balance sheet for the Borrower and its Subsidiaries, as
of the end of the most recently completed Fiscal Quarter for which the Borrower
and the Company have filed reports with the SEC, and reasonably satisfactory to
the Administrative Agent and the Syndication Agent (after giving effect to the
consummation of the Transaction) and reflecting estimated purchase price
accounting adjustments, prepared by the Borrower in consultation with KPMG LLP,
and such other information relating to the Transaction as the Administrative
Agent may request.
(i) Other Indebtedness. After giving effect to the Transaction and the
other transactions contemplated hereby, the Existing Credit Agreement shall have
been terminated, all amounts owing by the Borrower thereunder shall have been
paid in full and all Liens securing amounts owing by the Borrower thereunder
shall have been released, all in a manner satisfactory to the Administrative
Agent, and the Borrower and its Subsidiaries shall have outstanding no
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Indebtedness other than (a) the Obligations hereunder and (b) Indebtedness
listed on Schedule 8.4.
(j) Approvals. All necessary material governmental, shareholders' and
third-party approvals in connection with the Transaction, the execution,
delivery and performance of each Loan Document and the execution, delivery and
performance of the Merger Agreement and each other document, instrument and
agreement delivered in connection with the Transaction shall have been duly
obtained and all applicable waiting periods shall have expired without, in all
such cases, any action being taken by any competent authority that restrains,
prevents or imposes conditions upon the consummation of the Transaction or the
transactions contemplated thereby that would have a Material Adverse Effect and
no Law shall be applicable which in the judgment of the Administrative Agent and
the Syndication Agent could have such effect.
(k) Closing Date Certificate. The Administrative Agent shall have
received, with counterparts for each Lender, the Closing Date Certificate, dated
the Closing Date and duly executed and delivered by a Responsible Officer of the
Borrower, in which certificate the Borrower shall agree and acknowledge that the
statements made therein shall be deemed to be true and correct representations
and warranties of the Borrower as of such date, and, at the time each such
certificate is delivered, such statements shall in fact be true and correct. All
documents and agreements required to be appended to the Borrower Closing Date
Certificate shall be in form and substance satisfactory to the Administrative
Agent.
(l) Unused Commitments. After giving effect to the Transaction and to
the making of the initial Credit Extensions, there shall be unused Revolving
Commitments of at least $50,000,000.
(m) No Litigation. There shall not exist (a) any order, decree,
judgment, ruling or injunction which restrains the consummation of the Merger in
the manner contemplated by the Merger Agreement; and (b) any pending or
threatened action, suit, investigation or proceeding which has any reasonable
likelihood of materially and adversely affecting the Borrower or its
Subsidiaries (including the Company), any transaction contemplated hereby or the
ability of the Borrower and its Subsidiaries or any other Obligor to perform its
obligations under the Loan Documents or the ability of the Lenders to exercise
their rights thereunder.
5.2. Conditions to All Credit Extensions. The obligation of any Lender
to make any Credit Extension, is subject to the satisfaction of the following
conditions precedent on the relevant Borrowing Date:
(a) Notice of Borrowing. The Administrative Agent shall have
received (with, in the case of the initial Loan only, a copy for each
Lender) a Notice of Borrowing as required under Section 2.3;
(b) Continuation of Representations and Warranties. The
representations and warranties in Article VI hereof and in the Loan
Documents shall be true and correct in all
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material respects on and as of such Borrowing Date with the same effect
as if made on and as of such Borrowing Date (except to the extent such
representations and warranties expressly refer to an earlier date, in
which case they shall be true and correct in all material respects as of
such earlier date); and
(c) No Existing Default. No Default or Event of Default shall
exist or shall result from such Borrowing.
Each Notice of Borrowing submitted by the Borrower hereunder shall
constitute a representation and warranty by the Borrower hereunder, as of the
date of each such notice and as of each Borrowing Date, that the conditions in
this Section are satisfied.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Borrower, on behalf of itself and its Subsidiaries (and, on the
Closing Date, after giving pro forma effect to the consummation of the Merger),
represents and warrants to the Administrative Agent and each Lender that:
6.1. Corporate Existence and Power. The Borrower and each of its
Subsidiaries (a) is a corporation duly organized, validly existing and in good
standing under the Laws of the jurisdiction of its incorporation, (b) has the
corporate power and authority and all governmental licenses, authorizations,
consents and approvals to own its assets, carry on its business and to execute,
deliver and perform its obligations under each Loan Document to which it is a
party and (c) is duly qualified as a foreign corporation and is licensed and in
good standing under the Laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
or license, except to the extent that the failure to be so qualified would not
have a Material Adverse Effect.
6.2. Corporate Authorization; No Contravention; Binding Effect. The
execution, delivery and performance by the Borrower of the Merger Agreement and
each Loan Document to which the Borrower is or is to be a party and the
consummation of the Transaction, have in each case been duly authorized by all
necessary corporate action, and do not and will not (a) contravene the terms of
any of the Borrower's Organization Documents, (b) conflict with or result in any
default, breach or contravention of, or the creation of any Lien under, any
document evidencing any material Contractual Obligation to which the Borrower or
any of its Subsidiaries is a party or any order, injunction, writ or decree of
any Governmental Authority to which the Borrower or any of its Subsidiaries or
any of their respective property is subject or (c) violate any material Law
applicable to the Borrower or any of its Subsidiaries or any of their respective
property (except, with respect to the Merger Agreement for purposes of the
foregoing clauses (b) and (c), to the extent such conflict, default, breach,
contravention, Lien or violation would not have a Material Adverse Effect). The
Merger Agreement and each Loan Document to which the
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Borrower is a party have been duly executed and delivered by the Borrower and
the Merger Agreement and each Loan Document to which the Borrower is or is to be
a party constitute the legal, valid and binding obligations of the Borrower,
enforceable against the Borrower in accordance with its respective terms, except
as enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally or by general
equitable principles relating to enforceability.
6.3. Governmental Authorization. No approval, consent, exemption,
authorization or other action by, or notice to, or filing with, any Governmental
Authority is necessary or required in connection with the execution, delivery or
performance by, or enforcement against, the Borrower of the Merger Agreement or
any Loan Document to which the Borrower is or is to be a party, or the
consummation of the Transaction, except (a) for any thereof which have been
obtained and are in full force and effect, (b) any of the foregoing the failure
to obtain would not have a Material Adverse Effect and (c) as such performance
or enforcement may be subject to the exceptions identified on Schedule 6.3.
6.4. Litigation. Except for liabilities of Insurance Subsidiaries under
Insurance Contracts, Reinsurance Agreements and Retrocession Agreements, and
except as specifically disclosed on Schedule 6.4, there are no actions, suits,
proceedings or claims pending or, to the knowledge of the Borrower, threatened,
at Law, in equity, in arbitration or before any Governmental Authority, against
the Borrower or its Subsidiaries or any of their respective properties which (a)
purport to affect or pertain to any Loan Document, the Merger Agreement or the
Transaction or (b) have a Material Adverse Effect. No injunction, writ,
temporary restraining order or any order of any nature has been issued by any
court or other Governmental Authority purporting to enjoin or restrain the
execution, delivery or performance of any Loan Document, the Merger Agreement or
the Transaction or directing that the Transaction not be consummated.
6.5. ERISA Compliance. Except as specifically disclosed on Schedule 6.5:
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state Law.
Each Plan which is intended to qualify under Section 401(a) of the Code
has received a favorable determination letter from the IRS and to the
best knowledge of the Borrower, nothing has occurred which would cause
the loss of such qualification. The Borrower and each ERISA Affiliate
has made all required contributions to each Plan subject to Section 412
of the Code, and no application for a funding waiver or an extension of
any amortization period pursuant to Section 412 of the Code has been
made with respect to any Plan.
(b) There are no pending or, to the best knowledge of Borrower,
threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan which has a Material Adverse Effect.
There has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan which has a Material
Adverse Effect.
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(c) (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii)
neither the Borrower nor any ERISA Affiliate has incurred, or reasonably
expects to incur, any liability under Title IV of ERISA with respect to
any Pension Plan (other than premiums due and not delinquent under
Section 4007 of ERISA); (iv) neither the Borrower nor any ERISA
Affiliate has incurred, or reasonably expects to incur, any liability
(and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Section
4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v)
neither the Borrower nor any ERISA Affiliate has engaged in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA.
6.6. Margin Regulations; Investment Company Act; etc. No Obligor is
engaged or will engage, principally or as one of its important activities, in
the business of extending credit for the purpose of "purchasing" or "carrying"
"margin stock" within the respective meanings of each of the quoted terms under
Regulation U of the Board of Governors of the Federal Reserve System as now and
from time to time hereafter in effect. No part of the proceeds of any Credit
Extensions hereunder will be used for "purchasing" or "carrying" "margin stock"
as so defined or for any purpose which violates, or which would be inconsistent
with, the provisions of Regulations U or X of such Board of Governors. No
Obligor or any of its Subsidiaries (a) 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, or (b) is or is required to be registered
as an "investment company" under the Investment Company Act of 1940.
6.7. Title to Properties. The Borrower and each of its Subsidiaries has
good title to, or valid leasehold interests in, all of their respective assets
and properties, except where the failure to have such good title or leasehold
interests could not, individually or in the aggregate, have a Material Adverse
Effect. The property of the Borrower and its Subsidiaries is subject to no
Liens, other than Permitted Liens.
6.8. Taxes. The Borrower and its Subsidiaries have filed all material
tax returns which are required to be filed, and have paid, or made provision for
the payment of, all taxes with respect to the periods, property or transactions
covered by said returns, or pursuant to any assessment received by such Obligor
or its respective Subsidiaries, except (a) such taxes, if any, as are being
contested in good faith by appropriate proceedings and as to which adequate
reserves have been established and maintained, and (b) immaterial taxes;
provided that in each case no material item or portion of property of any
Obligor or any of its Subsidiaries is in jeopardy of being seized, levied upon
or forfeited. The Merger will be treated for federal income tax purposes as a
reorganization within the meaning of Section 368 of the Code. The Merger will
not affect the qualification of the distribution of the Company from Alleghany
Corporation as a transaction in which no gain or loss is recognized under
Section 355 of the Code and will not affect the AAM Distribution as a
transaction in which no loss or gain is recognized under Section 355 of the
Code.
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6.9. Financial Condition. (a) The audited consolidated financial
statements of the Borrower, the Company and their respective Subsidiaries, dated
December 31, 1998, and the related consolidated statements of income or
operations, shareholders' equity and cash flows for the Fiscal Year ended on
such date:
(i) were prepared in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly
noted therein;
(ii) fairly present in all material respects the respective
financial condition of the Borrower and its Subsidiaries and the Company
and its Subsidiaries as of the date thereof and results of operations
for the period covered thereby; and
(iii) except as specifically disclosed on Schedule 6.9, show all
material Indebtedness and other liabilities, direct or contingent, of
the Borrower and its Subsidiaries and of the Company and its
Subsidiaries, respectively, as of the date thereof, including
liabilities for taxes, material commitments and Contingent Obligations.
(b) The financial statements of the Insurance Subsidiaries of the
Borrower and of the Company, dated December 31, 1998:
(i) were prepared in accordance with SAP consistently applied
throughout the period covered thereby, except as otherwise expressly
noted therein; and
(ii) fairly present in all material respects in accordance with
SAP the financial condition of the Insurance Subsidiaries as of the date
thereof and results of operations for the period covered thereby.
(c) The pro forma consolidated balance sheet of the Borrower delivered
to the Lenders pursuant to Section 5.1(h), giving effect to the Transaction, was
based on good faith estimates and assumptions believed by the Borrower to be
reasonable at the time made.
(d) Since December 31, 1998 there has been no Material Adverse Change.
6.10. Environmental Compliance. The Borrower and its Subsidiaries
conduct in the ordinary course of business a review of the effect of existing
Environmental Laws and claims alleging potential liability or responsibility for
violation of any Environmental Law on their respective businesses, operations
and properties, and as a result thereof the Borrower has reasonably concluded
that such Environmental Laws and claims do not, individually or in the
aggregate, have a Material Adverse Effect.
6.11. Copyrights, Patents, Trademarks and Licenses, etc. The Borrower
and each of its Subsidiaries own or are licensed or otherwise have the right to
use all of the patents, trademarks, service marks, trade names, copyrights,
licenses and other rights that are used by the Borrower or such Subsidiary in
connection with the operation of their respective businesses, without conflict
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with the rights of any other Person, except where the failure to have any such
rights could not have a Material Adverse Effect.
6.12. Subsidiaries. (a) The Borrower and the Company have no
Subsidiaries other than those specifically disclosed on Schedule 6.12 and, after
the Effective Date, those permitted in accordance with Section 8.3, and there
are no restrictions on the Borrower or any of its Material Subsidiaries or the
Company or any of its Material Subsidiaries which prohibit or otherwise restrict
(i) the ability of the Borrower or any of its Material Subsidiaries or the
Company or any of its Material Subsidiaries to grant any Liens on any of their
respective assets or (ii) the transfer of cash or other assets from any Material
Subsidiary of the Borrower or the Company to the Borrower, other than
prohibitions or restrictions existing under or by reason of any Loan Document,
Legal Requirements and customary non-assignment provisions in contracts entered
into in the ordinary course of business and consistent with past practices.
(b) Schedule 6.12 contains a complete and correct list of all of the
Borrower's Material Subsidiaries as to which the execution and delivery of the
Subsidiary Guaranty is not unlawful.
6.13. Solvency. The Borrower is Solvent.
6.14. Full Disclosure. (a) All factual information (taken as a whole)
heretofore or contemporaneously furnished by or on behalf of the Borrower or any
of its Subsidiaries in writing to the Administrative Agent and/or any Lender
(including (i) the Confidential Memorandum and (ii) all information contained in
the Loan Documents) for purposes of or in connection with this Agreement or any
transactions contemplated herein is, and all other such factual information
(taken as a whole) hereafter furnished by or on behalf of the Borrower in
writing to the Administrative Agent and/or any Lender will be, true and complete
in all material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any material fact necessary to
make such information (taken as a whole) not misleading at such time in light of
the circumstances under which such information was provided, it being understood
and agreed that for purposes of this paragraph (a), such factual information
shall not include projections and pro forma financial information.
(b) The projections and pro forma financial information contained in the
factual information referred to in clause (a) above were or are based on good
faith estimates and assumptions believed by such Persons to be reasonable at the
time made.
6.15. Insurance Subsidiaries. All of the Annual Statements and Interim
Statements, together with any other financial or similar statements of the
Insurance Subsidiaries provided to the Administrative Agent, or which shall
hereafter be provided to the Administrative Agent pursuant to the terms of any
Loan Document, are full and true statements of all of the assets and liabilities
and of the condition and affairs of the said Insurance Subsidiaries.
6.16. Merger Agreement; Representations; Consummation of Transaction.
(a) To the best of the Borrower's knowledge, all the representations and
warranties set forth in the Merger
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Agreement are true and correct in all material respects as of the dates when
made and deemed made thereunder.
(b) As of the Closing Date, the Transaction has been consummated in
accordance with, in all material respects, the terms and conditions of the
Merger Agreement (without any amendment or waiver with respect thereto) and all
applicable Laws. All material consents and approvals of, and material filings
and registrations with, and all other material actions in respect of, all
Governmental Authorities required in order to consummate the Transaction in
accordance with the terms and conditions of the Merger Agreement and all
applicable material laws have been, or prior to the time required, will have
been, obtained, given, filed or taken (with no concessions, agreements or
understandings having been made or entered into by the Borrower or any of its
Subsidiaries in connection therewith other than those disclosed to the Lenders
in writing prior to the Closing Date and found reasonably acceptable by the
Administrative Agent) and are or will be in full force and effect. All
applicable waiting periods with respect thereto have, or, prior to the time when
required, will have, expired without, in all such cases, any action being taken
by any Governmental Authority which restrains, prevents, or imposes material
adverse conditions upon the consummation of the Transaction. Additionally, there
does not exist any judgment, order, or injunction prohibiting or imposing
material adverse conditions upon the Transaction or the performance by the
Borrower of its obligations under the Merger Agreement or the Loan Documents.
The aggregate amount of all costs, fees and expenses (excluding in any event
expenses relating to severance and retention) required to be paid by the
Borrower and its Subsidiaries in connection with and on or about the time of the
consummation and financing of the Transaction does not exceed $50,000,000.
6.17. Compliance with Statutes, etc. The Borrower and each of its
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all Governmental
Authorities, in respect of the conduct of its business and the ownership of its
property, except such noncompliances as could not, in the aggregate, have a
Material Adverse Effect.
6.18. Year 2000. The Year 2000 date change has not resulted in
disruption of the Borrower's and its Subsidiaries' computer hardware, software,
databases, systems and other equipment containing embedded microchips (including
systems and equipment supplied by others or with which the Borrower's or its
Subsidiaries' systems interface), or to the Borrower's or its Subsidiaries'
operations or business systems, or to the best of the Borrower's and its
Subsidiaries' knowledge, to the operations or business systems of the Borrower's
major vendors, customers, suppliers and counterparties. The Borrower has no
reason to believe that liabilities and expenditures related to the Year 2000
date change (including, without limitation, costs caused by reprogramming
errors, the failure of others' systems or equipment and the potential liability,
if any, of the Borrower or its Subsidiaries for Year 2000 related costs incurred
or disruption experienced by others) will result in a Default or a Material
Adverse Effect.
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ARTICLE VII
AFFIRMATIVE COVENANTS
At all times prior to the Termination Date, the Borrower will comply
with the terms of this Article (and, on the Closing Date, after giving pro forma
effect to the consummation of the Merger).
7.1. Financial Statements. The Borrower shall deliver to the
Administrative Agent, in form and detail satisfactory to the Administrative
Agent, with sufficient copies for each Lender:
(a) as soon as available, but not later than 105 days after the
end of each Fiscal Year, a copy of the audited consolidated balance
sheet of the Borrower and its Subsidiaries (and for the 1999 Fiscal
Year, of the Company and its Subsidiaries) as at the end of such year
and the related consolidated statements of income or operations,
shareholders' equity and cash flows for such year, setting forth in each
case in comparative form the figures for the previous fiscal year, and
accompanied by the opinion of KPMG LLP or another nationally recognized
independent public accounting firm ("Independent Auditor") which report
shall state that such consolidated financial statements present fairly
the financial position for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years. Such opinion shall not
be qualified or limited because of a restricted or limited examination
by the Independent Auditor of any material portion of the Borrower's or
any Subsidiary's (or the Company's or any of its Subsidiaries) records,
and shall not contain any qualification or exception which is of a
"going concern" or similar nature;
(b) as soon as available, but not later than 60 days after the
end of each of the first three Fiscal Quarters of each fiscal year, a
copy of the unaudited consolidated balance sheet of the Borrower and its
Subsidiaries (and for the 1999 Fiscal Year and the first Fiscal Quarter
of the 2000 Fiscal Year, of the Company and its Subsidiaries, unless
covered in the Borrower's financial statements) as of the end of such
quarter and the related consolidated statements of income, shareholders'
equity and cash flows for the period commencing on the first day and
ending on the last day of such quarter, and certified by a Responsible
Officer as fairly presenting, in accordance with GAAP (subject to
ordinary, good faith year-end audit adjustments), the financial position
and the results of operations of the Borrower and the Subsidiaries as of
the date thereof;
(c) as soon as available, but not later than 105 days after the
end of each Fiscal Year, a copy of an unaudited consolidating balance
sheet of the Borrower and its Subsidiaries (but not until 105 days after
the end of the 2000 Fiscal Year, in the case of Subsidiaries which,
prior to the Merger, were Subsidiaries of the Company) as at the end of
such year and the related consolidating statement of income for such
year, certified by a Responsible Officer as having been developed and
used in connection with preparation of the financial statements referred
to in Section 7.1(a);
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(d) as soon as available, but not later than 60 days after the
end of each of the first three Fiscal Quarters of each fiscal year, a
copy of the unaudited consolidating balance sheets of the Borrower and
its Subsidiaries (but not until the end of the third Fiscal Quarter of
the 2000 Fiscal Year in the case of Subsidiaries which, prior to the
Merger, were Subsidiaries of the Company), and the related consolidating
statements of income for such quarter, all certified by a Responsible
Officer as having been developed and used in connection with the
preparation of the financial statements referred to in Section 7.1(b);
(e) as soon as available, but not later than 75 days after the
end of each Fiscal Year, a copy of the Annual Statement of each Material
Insurance Subsidiary for such Fiscal Year prepared in accordance with
SAP and accompanied by the certification of a Responsible Officer
authorized by the chief financial officer of such Material Insurance
Subsidiary that such Annual Statement presents fairly in accordance with
SAP the financial position of such Material Insurance Subsidiary for the
period then ended;
(f) as soon as possible, but no later than 60 days after the end
of each of the first three Fiscal Quarters of each fiscal year, a copy
of the quarterly Interim Statement of each Material Insurance Subsidiary
for each such Fiscal Quarter, all prepared in accordance with SAP and
accompanied by the certification of a Responsible Officer authorized by
the chief financial officer of such Insurance Subsidiary that all such
quarterly statements present fairly in accordance with SAP the financial
position of such Insurance Subsidiary for the period then ended;
(g) within 75 days after the close of each Fiscal Year, a copy
of each Material Insurance Subsidiary's "Statement of Actuarial Opinion"
which is provided to the Department (or equivalent information should
the Department no longer require such a statement) as to the adequacy of
loss reserves of such Material Insurance Subsidiary, which opinion shall
be in the format prescribed by the Insurance Code; and
(h) as soon as available, a copy of the Management Discussion
and Analysis filed with the Department with respect to any of the
foregoing financial statements and such other information.
7.2. Certificates; Other Information. After the Closing Date, the
Borrower shall furnish to the Administrative Agent, with sufficient copies for
each Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 7.1(a), a certificate of the Independent Auditor
stating that in making the examination necessary therefor no knowledge
was obtained of any Default or Event of Default, except as specified in
such certificate;
(b) concurrently with the delivery of the financial statements
referred to in Sections 7.1(a) and (b), a Compliance Certificate
executed by a Responsible Officer;
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(c) promptly, copies of all financial statements and material
reports that the Borrower or any of its Subsidiaries sends or may make
to, or file with, any applicable Department;
(d) the following certificates and other information:
(i) not later than 30 days after the end of each Fiscal
Year, to the extent prepared by the Borrower, a copy of the
Borrower's budget for the following Fiscal Year, together with
revised projections through the Term Maturity Date;
(ii) not later than 60 days after received, a copy of
any final financial examination reports or market conduct
examination reports issued by a Governmental Authority with
respect to any Material Subsidiary of the Borrower (and the
Borrower, should it at any time engage or become involved in the
business of insurance), relating to the insurance business of
each Material Subsidiary or, if applicable, the Borrower (when,
and if, prepared) and of any and all interim reports; provided
that such Subsidiary or, if applicable, the Borrower shall not
have to deliver any interim report hereunder if (A) the items
described in such report could not reasonably have a Material
Adverse Effect or (B) a final report is issued and delivered to
the Administrative Agent within 90 days of such interim report;
(iii) within two Business Days of the receipt of such
notice, notice of the actual suspension, termination or
revocation of any material license of the Borrower or any of its
Material Subsidiaries by any Governmental Authority or notice
from any Governmental Authority notifying the Borrower or any of
its Material Subsidiaries of a hearing relating to such a
suspension, termination or revocation, including any request by
a Governmental Authority which commits the Borrower or any of
its Material Subsidiaries to take, or refrain from taking, any
action or which otherwise materially and adversely affects the
authority of the Borrower or any of its Material Subsidiaries to
conduct its business;
(iv) within two Business Days of the receipt of such
notice, notice of any material pending or threatened
investigation or regulatory proceeding (other than routine
periodic investigations or reviews) by any Governmental
Authority concerning the business practices or operations of the
Borrower or any of its Material Subsidiaries; and
(v) promptly upon the receipt of such notice, notice of
any actual material changes in the Insurance Code governing the
investment or dividend practices of insurance companies
domiciled in any of the states in which any Insurance Subsidiary
is domiciled;
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(e) promptly, copies of all financial statements and reports
that the Borrower sends to its shareholders, and copies of all financial
statements and regular, periodical or special reports (including Forms
10K, 10Q and 8K) that the Borrower or any of its Subsidiaries may make
to, or file with, the SEC;
(f) promptly upon (i) the acquisition by the Borrower or any of
its Subsidiaries of any Person which engages in any material respect in
an insurance business or (ii) any Subsidiary of the Borrower or any of
its Subsidiaries becoming engaged in any material respect in an
insurance business, a certificate of a Responsible Officer stating that
such Person or Subsidiary shall be deemed to be an "Insurance
Subsidiary" for all purposes of each Loan Document;
(g) promptly, but in any event within two days of having
knowledge thereof, notice of any change in the ratings by either Rating
Agency of any senior unsecured Indebtedness of the Borrower;
(h) promptly, but in any event within two days of having
knowledge thereof, notice of any change in the "financial strength"
rating by either Rating Agency of any Material Insurance Subsidiary; and
(i) promptly, such additional information regarding the
business, financial or corporate affairs of the Borrower or any
Subsidiary as the Administrative Agent, at the request of any Lender,
may from time to time reasonably request.
7.3. Notices. After the Closing Date, the Borrower shall promptly notify
the Administrative Agent:
(a) promptly after a Responsible Officer of the Borrower obtains
knowledge thereof, of (i) the occurrence of any event that constitutes a
Default or Event of Default, (ii) any litigation or governmental
proceeding pending against the Borrower or any of its Subsidiaries (x)
in which the amount of damages claimed is $5,000,000 (or its equivalent
in another currency or currencies) or more as to the Borrower and all
Subsidiaries other than Insurance Subsidiaries or (y) that has a
Material Adverse Effect; and
(b) of the occurrence of any of the following events affecting
the Borrower or any ERISA Affiliate (but in no event more than 10 days
after a Responsible Officer of the Borrower obtains knowledge of such
event), and deliver to the Administrative Agent and each Lender a copy
of any notice with respect to such event that is filed with a
Governmental Authority and any notice delivered by a Governmental
Authority to the Borrower or any ERISA Affiliate with respect to such
event:
(i) an ERISA Event;
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(ii) a material increase in the contributions to, or the
Unfunded Pension Liability of, any Pension Plan since the last
annual valuation date;
(iii) the adoption of, or the commencement of
contributions to, any Plan subject to Section 412 of the Code by
the Borrower or any ERISA Affiliate; or
(iv) the adoption of any amendment to a Plan subject to
Section 412 of the Code, if such amendment results in a material
increase in contributions or Unfunded Pension Liability; and
(c) of any material change in accounting policies or financial
reporting practices by the Borrower or any of its consolidated Material
Subsidiaries.
Each notice under this Section shall be accompanied by a written
statement by a Responsible Officer setting forth details of the occurrence
referred to therein, and stating what action the Borrower or any affected
Subsidiary proposes to take with respect thereto and at what time. Each notice
under Section 7.3(a) shall describe with particularity all clauses or provisions
of this Agreement or other Loan Document that have been (or foreseeably will be)
breached or violated.
7.4. Preservation of Corporate Existence, etc. The Borrower shall, and
shall cause each Material Subsidiary to:
(a) preserve and maintain in full force and effect its corporate
existence and good standing under the Laws of its state or jurisdiction
of incorporation (provided that the Borrower and its Restricted
Subsidiaries may consummate any transaction permitted under Section
8.2);
(b) preserve and maintain in full force and effect all material
governmental rights, privileges, qualifications, permits, licenses and
franchises necessary in the normal conduct of its business, except to
the extent that the failure to do so could not have a Material Adverse
Effect;
(c) use reasonable efforts, in the ordinary course of business,
to preserve its business organization and goodwill; and
(d) in the case of the Borrower, engage in no business (other
than as conducted on the Effective Date) except to hold the Equity
Interests of its Subsidiaries.
7.5. Maintenance of Property. The Borrower will, and will cause each of
its Subsidiaries to, ensure that its properties and equipment used or useful in
its business in whomsoever's possession they may be to the extent that it is
within the Borrower's or such Subsidiary's control to cause same, are kept in
good repair, working order and condition, normal wear and tear excepted, and
that from time to time there are made in such properties and equipment all
needful
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and proper repairs, renewals, replacements, extensions, additions, betterments
and improvements thereto, to the extent and in the manner customary for
companies in similar businesses and consistent with third-party leases, except
in each case to the extent the failure to do so could not have a Material
Adverse Effect.
7.6. Insurance. The Borrower shall maintain, and shall cause each of its
Subsidiaries to maintain, insurance in full force and effect with respect to its
properties and business in such amounts, covering such risks and liabilities and
with such deductibles or self-insured retentions as are in accordance with
normal industry practice.
7.7. Payment of Taxes. The Borrower shall, and shall cause each
Subsidiary to, pay and discharge all material taxes, assessments and
governmental charges or levies upon it or upon its income or profits, or upon
any properties belonging to it, prior to the date on which material penalties
attach thereto, and all lawful material claims that, if unpaid, could reasonably
be expected to become a material Lien upon any properties of the Borrower or any
of its Subsidiaries; provided that neither the Borrower nor any of its
Subsidiaries shall be required hereunder to pay any such tax, assessment,
charge, levy or claim that is being contested in good faith and by proper
proceedings if it has maintained adequate reserves (in the good faith judgment
of the management of the Borrower) with respect thereto in accordance with GAAP.
7.8. Compliance with Laws. The Borrower shall comply, and shall cause
each Subsidiary to (a) comply with the requirements of all applicable Laws and
orders of any Governmental Authority, noncompliance with which has a Material
Adverse Effect and (b) conduct its operations and keep and maintain its property
in compliance with all Environmental Laws.
7.9. Compliance with ERISA. The Borrower shall, and shall cause each of
its ERISA Affiliates to: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state Law; (b) cause each Plan which is qualified under Section 401(a) of the
Code to maintain such qualification; and (c) make all required contributions to
any Plan subject to Section 412 of the Code.
7.10. Inspection of Property and Books and Records. The Borrower shall
permit, and shall cause each Material Subsidiary to permit, representatives and
independent contractors of the Administrative Agent or any Lender to visit and
inspect any of their respective properties, to examine their respective
corporate, financial and operating records, and make copies thereof or abstracts
therefrom, and to discuss their respective affairs, finances and accounts with
their respective officers and independent public accountants, all at such
reasonable times during normal business hours and as often as may be reasonably
desired, upon reasonable advance notice to the Borrower; provided that, when a
Default or Event of Default exists, the Administrative Agent or any Lender may
do any of the foregoing at the expense of the Borrower at any time during normal
business hours and without advance notice.
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7.11. Interest Rate Protection Agreements. The Borrower shall, within
one year after the Closing Date, enter into interest rate swap, cap or collar
agreements (or fixed rate refinancing arrangements) with respect to the Term
Loans in amounts and with counterparties, and on terms and conditions reasonably
satisfactory to the Administrative Agent and the Borrower.
7.12. Use of Proceeds. The Borrower shall use the initial Credit
Extensions to fund, in part, the Transaction and to pay costs and expenses
related thereto and hereto, and, thereafter, the Borrower may use Credit
Extensions for general corporate purposes.
7.13. Future Subsidiaries. Without limiting the effect of any provision
contained herein (including Section 8.3), upon any Person becoming, after the
date hereof, a direct or indirect Domestic Subsidiary of the Borrower that is a
Material Subsidiary, but not an Insurance Subsidiary or an Excluded Subsidiary,
the Borrower shall cause such Domestic Subsidiary to promptly execute the
Subsidiary Guaranty.
7.14. Merger Agreement. The Borrower shall, and shall cause its
Subsidiaries to, comply with all the covenants contained in the Merger Agreement
for the express benefit of the Administration Agent and the Lenders, including
without limitation Section 7.2 thereof.
7.15. Maintenance of Corporate Separateness. The Borrower shall, and
shall cause each of its Subsidiaries to, satisfy customary corporate
formalities, including the holding of regular board of directors' and
shareholders' meetings and the maintenance of corporate offices and records.
Neither the Borrower nor any Restricted Subsidiary shall make any payment to a
creditor of any Excluded Subsidiary in respect of any liability of such Excluded
Subsidiary other than in connection with Contingent Obligations permitted
hereunder, and no bank account of an Excluded Subsidiary shall be commingled
with any bank account of the Borrower or any of its Restricted Subsidiaries. Any
financial statements distributed to any creditors of an Excluded Subsidiary
shall clearly establish the separateness of such Excluded Subsidiary from the
Borrower and its Restricted Subsidiaries. Neither the Borrower nor any of its
Subsidiaries shall take action, or conduct its affairs in a manner, which is
likely to result in the corporate existence of any Excluded Subsidiary being
ignored by any court of competent jurisdiction, or in the assets and liabilities
of the Borrower or any Restricted Subsidiary being substantively consolidated
with those of any Excluded Subsidiary in an Insolvency Proceeding.
7.16. UTCs. The Borrower shall at all times cause a number of UTCs to be
identified as Material Subsidiaries that, collectively, have EBITDA for the most
recently ended Test Period that comprises at least 90% of the EBITDA of all UTCs
in the aggregate, and shall cause each such UTC that can legally execute a
guaranty to execute the Subsidiary Guaranty. The Borrower shall not, and shall
not allow any of its non-Insurance Subsidiaries to, transfer its Equity
Interests in a UTC to an Insurance Subsidiary.
7.17. Debt Rating Downgrade. The Borrower covenants and agrees that, if
the Borrower's Senior Unsecured Debt Rating is not rated Investment Grade by
both Rating Agencies prior to the Closing Date or if the Borrower's Senior
Unsecured Debt Rating ceases to
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be rated Investment Grade by both Rating Agencies at any time following the
Closing Date, it will, and will cause each of its Domestic Subsidiaries that are
Material Subsidiaries to, within 30 days following the Closing Date or, if such
downgrade occurs after the Closing Date, within 30 days following the date of
such downgrade, pledge to the Administrative Agent, for the benefit of the
Lenders, pursuant to a pledge agreement (in form and substance satisfactory to
the Administrative Agent), 100%, in the case of each Domestic Subsidiary, and
65%, in the case of each non-Domestic Subsidiary, of the issued and outstanding
Equity Interests of each of its Subsidiaries; provided that each Domestic
Subsidiary that is an Insurance Subsidiary shall only be required within such 30
day period to submit to the applicable Governmental Authorities applications for
regulatory approval to so pledge such percentages of the Equity Interests of
such Subsidiaries, and shall obtain such regulatory approvals within 210 days of
the Closing Date or the date of such downgrade. The Borrower shall, and shall
cause each such Subsidiary to, take all such actions as requested by the
Administrative Agent to ensure that the Administrative Agent has a first
priority perfected Lien on and security interest in all Equity Interests pledged
in favor of the Administrative Agent and to deliver legal opinions addressed to
all Lenders and the Administrative Agent, in form and substance, and from
counsel, reasonably acceptable to the Administrative Agent, relating to the
actions described in this Section. If, at any time thereafter, the Borrower's
Senior Unsecured Debt Rating is rated Investment Grade by both Rating Agencies,
the Administrative Agent shall, at the expense of the Borrower, release its
Liens on the Equity Interests of Subsidiaries pledged hereunder and shall take
all actions reasonably necessary to evidence such release.
ARTICLE VIII
NEGATIVE COVENANTS
At all times after the Closing Date and prior to the Termination Date,
the Borrower will comply with the terms of this Article.
8.1. Limitation on Liens. The Borrower shall not, and shall not allow
any of its Restricted Subsidiaries to, directly or indirectly, make, create,
incur, assume or suffer to exist any Lien upon or with respect to any part of
its property, whether now owned or hereafter acquired, other than the following
("Permitted Liens"):
(a) any Lien created under any Loan Document;
(b) Liens for taxes, fees, assessments or other governmental
charges which are not delinquent or remain payable without penalty, or
to the extent that non-payment thereof is permitted by Section 7.7;
(c) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other similar Liens arising in the
ordinary course of business which are not
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delinquent or remain payable without penalty or which are being
contested in good faith by appropriate proceedings diligently
prosecuted;
(d) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds, reinsurance agreements
and other similar obligations incurred in the ordinary course of
business (exclusive of obligations in respect of the payment for
borrowed money);
(e) Liens existing on the Effective Date and identified on
Schedule 8.1;
(f) Liens consisting of pledges or deposits of cash or
securities made by any Insurance Subsidiary as a condition to obtaining
or maintaining any licenses issued to it by, or to satisfy the
requirements of, any Department;
(g) Liens consisting of judgment or judicial attachment Liens
(other than arising as a result of claims under or related to Insurance
Contracts, Retrocession Agreements or Reinsurance Agreements); provided
that the enforcement of such Liens is effectively stayed or fully
covered by insurance and all such liens in the aggregate at any time
outstanding for the Borrower and its Restricted Subsidiaries do not
exceed $15,000,000;
(h) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto or
interfere with the ordinary conduct of the businesses of the Borrower
and its Restricted Subsidiaries;
(i) Liens securing obligations in respect of Capital Leases
permitted pursuant to Section 8.4(d) on assets subject to such leases;
provided that such Capital Leases are otherwise permitted hereunder;
(j) Liens securing obligations permitted under Sections 8.4(f)
and (g), to the extent such Liens are identified and permitted under
such Sections;
(k) Liens arising as a result of claims under or related to
Insurance Contracts, Reinsurance Agreements or Retrocession Agreements
in the ordinary course of business, or securing Indebtedness of
Insurance Subsidiaries incurred or assumed in connection with the
settlement of claim losses in the ordinary course of business of such
Insurance Subsidiaries;
(l) Liens on assets of a Person that becomes a Restricted
Subsidiary after the Effective Date pursuant to a Permitted Acquisition
securing Indebtedness permitted by
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Section 8.4(h), which Liens previously existed and were not created in
contemplation thereof and which are not spread to cover any other
property;
(m) Liens on assets of the Borrower or its Restricted
Subsidiaries securing Indebtedness owed to the Borrower or a Restricted
Subsidiary;
(n) so long as no Default or Event of Default has occurred and
is continuing, other Liens securing obligations in an aggregate amount
not exceeding $15,000,000; and
(o) any extension, renewal or replacement of the foregoing;
provided that the Liens permitted hereby shall not be spread to cover
any additional Indebtedness or property (other than a substitution of
like property).
8.2. Consolidations and Mergers; Sales of Assets. The Borrower shall
not, and shall not allow any of its Restricted Subsidiaries to, merge,
consolidate with or into, or convey, transfer, lease or otherwise dispose of
(whether in one transaction or in a series of transactions) all or any part of
its assets (including receivables and Equity Interests, and in all cases whether
now owned or hereafter acquired) to or in favor of any Person, except:
(a) any Restricted Subsidiary may merge with the Borrower;
provided that the Borrower shall be the continuing or surviving Person,
or with any one or more Restricted Subsidiaries; provided that if any
transaction shall be between a Restricted Subsidiary and a Restricted
Subsidiary that is a Wholly-Owned Subsidiary, the Restricted Subsidiary
that is a Wholly-Owned Subsidiary shall be the continuing or surviving
Person;
(b) any Restricted Subsidiary may sell all or any part of its
assets (upon voluntary liquidation or otherwise) to the Borrower or
another Restricted Subsidiary that is a Wholly-Owned Subsidiary;
(c) the Borrower or any Restricted Subsidiary may sell, lease,
convey or otherwise dispose of assets if such sale, lease, conveyance or
other disposition is (i) of portfolio Investments in the ordinary course
of its business at fair market value, (ii) of obsolete, worn-out or
surplus property, (iii) a sale of property to the extent such property
is exchanged for credit against the purchase price of similar
replacement property or the Net Disposition Proceeds thereof are
promptly applied to the purchase of such replacement property; (iv)
ordinary course dispositions of real estate and related properties in
connection with relocation activities for employees of the Borrower and
its Restricted Subsidiaries; (v) dispositions of tangible property as
part of a like kind exchange under Section 1031 of the Code in the
ordinary course of business; (vi) dispositions of real estate and
related properties as part of the resolution or settlement of claims
under an Insurance Contract in the ordinary course of business; and
(vii) other Dispositions of assets and properties since the Effective
Date with an aggregate fair market value of $10,000,000;
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(d) Dispositions of properties directly related to the
consolidation of the Company with the Borrower (including Dispositions
of real estate owned by the Company) set forth on Schedule 8.2 for fair
market value; provided that (i) together with its delivery of the
Compliance Certificate, the Borrower shall provide the Administrative
Agent with a status update as to such dispositions and the proceeds
received to such date, (ii) the Borrower shall have complied with all
the requirements of Section 3.3(a), if and to the extent the Net
Disposition Proceeds from all dispositions made pursuant to this clause
(d) exceeds $25,000,000, and (iii) after $25,000,000 in Net Disposition
Proceeds have been received by the Borrower and/or its Restricted
Subsidiaries pursuant to this clause (d), the consideration for all
further dispositions shall comprise at least 50% cash; and
(e) so long as no Default or Event of Default shall have
occurred and be continuing or would occur after giving effect thereto,
the Borrower or any Restricted Subsidiary may sell, lease, convey or
otherwise dispose of any other assets in any transaction that
constitutes a Disposition; provided that the Borrower complies with all
the requirements of Section 3.3(a); and provided, further, that (i) all
of such dispositions shall be for fair market value, (ii) at least 50%
of the consideration received for such dispositions shall be cash and
(iii) the aggregate fair market value of all assets so disposed of from
and after the Effective Date pursuant to this clause (e) shall not
exceed $10,000,000 in any Fiscal Year or $60,000,000 in the aggregate
since the Effective Date.
8.3. Loans, Acquisitions and Investments. The Borrower shall not
purchase or acquire, and shall not allow any of its Restricted Subsidiaries to
purchase or acquire, or make any commitment to purchase or acquire, any Equity
Interest in, any Person, or make or commit to make any Acquisitions, or make or
commit to make any advance, loan, extension of credit or capital contribution to
or any other investment in any Person including any Affiliate of the Borrower
(together, "Investments"), except for:
(a) Investments held by the Borrower or any of its Restricted
Subsidiaries in the form of (i) Primary Investments and (ii) so long as
no Default or Event of Default has occurred and is continuing at the
time of the making of such Investment, Secondary Investments; provided
that, (A) such Investments comply with all Legal Requirements, (B) the
aggregate amount of Secondary Investments shall not exceed 15% of the
aggregate amount of the Borrower's total investment portfolio and (C)
the aggregate amount of Investments in Secondary Investments that are
issued by a single issuer shall not exceed 2.5% of the aggregate amount
of the Borrower's total investment portfolio (with all valuations for
purposes of compliance with this clause (ii) being on a cost basis);
(b) extensions of credit and capital contributions by the
Borrower to any of its Subsidiaries existing on the Closing Date or to
new Subsidiaries created after the Closing Date in accordance with this
Agreement or by any of its Subsidiaries to another of its Subsidiaries
existing on the Closing Date or to new Subsidiaries created after the
Closing Date in accordance with this Agreement; provided that (i) the
aggregate amount of
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investments permitted to be made (whether pursuant to this clause (b)(i)
or otherwise, including investments permitted pursuant to clause (e)
below) in Excluded Subsidiaries and in any and all other Subsidiaries
engaged in the same or a similar business shall not exceed 15% of Net
Worth, as reflected in the most recent financial statements delivered to
the Administrative Agent pursuant to this Agreement, and (ii) the
aggregate amount of investments permitted to be made (whether pursuant
to this clause (b)(ii) or otherwise, including investments permitted
pursuant to clause (e) below) in the restaurant business shall not
exceed $30,000,000 (valued on a cost basis);
(c) Investments by the Insurance Subsidiaries in the ordinary
course of business and in compliance with all applicable regulatory
requirements;
(d) Investments incurred in order to consummate the Merger
pursuant to the terms of the Merger Agreement;
(e) Investments existing on the Effective Date and identified on
Schedule 8.3;
(f) extensions of credit in the nature of accounts receivable,
notes receivable, lease obligations and similar obligations arising in
the ordinary course of business;
(g) note and loan receivables held by the Borrower and its
Restricted Subsidiaries with an aggregate book value, determined in
accordance with GAAP, for the Borrower and all of its Restricted
Subsidiaries not to exceed $50,000,000 (inclusive of any thereof
permitted under clause (e) above);
(h) Investments constituting Permitted Acquisitions;
(i) Investments consisting of non-cash proceeds from
Dispositions permitted under Section 8.2(c), (d) and (e); and
(j) so long as no Default or Event of Default has occurred and
is continuing, other Investments in an aggregate amount not to exceed
$25,000,000 at any one time outstanding.
8.4. Limitation on Indebtedness. The Borrower shall not, and shall not
allow any of its Restricted Subsidiaries to, create, incur, assume, suffer to
exist, or otherwise become or remain directly or indirectly liable with respect
to, any Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement;
(b) Indebtedness consisting of Contingent Obligations in an
aggregate amount not to exceed (in respect of obligations of all Persons
other than Excluded Subsidiaries) $25,000,000 at any one time
outstanding and (in respect of obligations of Excluded Subsidiaries)
that dollar amount which when added to all Investments in all Excluded
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Subsidiaries permitted under Section 8.3(b)(i) does not exceed 15% of
Net Worth as reflected in the most recent financial statements delivered
to the Administrative Agent pursuant to this Agreement;
(c) Indebtedness existing on the Effective Date and identified
on Schedule 8.4;
(d) Indebtedness incurred in the ordinary course of business in
connection with (i) Capital Leases which are non-recourse to the
Borrower or its Restricted Subsidiaries and (ii) other Capital Leases in
an aggregate amount not to exceed $10,000,000 at any one time
outstanding;
(e) Obligations under Swap Contracts entered into for hedging
purposes;
(f) Indebtedness of the Borrower and its Restricted Subsidiaries
having a maturity of 92 days or less representing borrowings from a bank
or banks with which the Borrower or such Restricted Subsidiary has a
depository relationship, which borrowings shall be fully secured by Cash
Equivalents purchased by the Borrower or such Restricted Subsidiary with
the proceeds of such borrowings;
(g) Obligations incurred in the ordinary course of business in
connection with "1031 exchange" or relocation service transactions and
secured by the properties which are the subject of such transactions;
(h) Indebtedness of a Person that becomes a Restricted
Subsidiary after the Effective Date pursuant to a Permitted Acquisition,
which Indebtedness previously existed and was not created in
contemplation thereof;
(i) so long as no Default or Event of Default has occurred and
is continuing at the time of incurrence thereof, unsecured Indebtedness
of the Borrower in an aggregate principal amount not to exceed
$300,000,000 at any one time outstanding; provided that the Net Debt
Proceeds of such Indebtedness shall be used to prepay the Loans in
accordance with Section 3.3(b) and such Indebtedness (i) shall mature no
earlier than seven years from the Closing Date, (ii) shall not have any
scheduled principal payments or provide for any mandatory prepayments or
redemptions or repurchases not otherwise provided to the Lenders
hereunder (including by way of a default under this Agreement) prior to
the date that is seven years after the Closing Date, and (iii) has
covenants, defaults and other terms and conditions (other than interest
rates) no more restrictive than those contained in this Agreement;
(j) so long as no Default or Event of Default has occurred and
is continuing at the time of incurrence thereof, (i) other Indebtedness
of the Borrower in an aggregate principal amount not to exceed
$40,000,000 at any one time outstanding, (ii) other Indebtedness of
Subsidiary Guarantors of the Borrower in an aggregate principal amount
not to exceed $20,000,000 at any one time outstanding, and (iii) other
Indebtedness of
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Restricted Subsidiaries of the Borrower in an aggregate principal amount
not to exceed $5,000,000 at any one time outstanding; provided that in
any event the aggregate amount of Indebtedness permitted pursuant to the
foregoing clauses (i), (ii) and (iii) shall not exceed $40,000,000 at
any one time outstanding;
(k) obligations consisting of guarantees of Indebtedness of
insurance agents of an Insurance Subsidiary in an aggregate amount not
to exceed $15,000,000 at any one time outstanding;
(l) Indebtedness of the Borrower or a Restricted Subsidiary
owing to the Borrower or another Restricted Subsidiary; and
(m) any extensions, renewals or refinancings of the foregoing or
terms substantially similar to, or more favorable to the Borrower than
(but not less favorable to the Lenders), the terms of the Indebtedness
being extended, renewed or refinanced.
8.5. Transactions with Affiliates. The Borrower shall not, and shall not
allow any of its Subsidiaries to, enter into any transaction with any Affiliate
of the Borrower, except upon fair and reasonable terms no less favorable to the
Borrower or such Subsidiary than would obtain in a comparable arm's-length
transaction with a Person not an Affiliate of the Borrower or such Subsidiary;
provided that the foregoing restrictions shall not apply to (a) customary fees
paid to members of the Board of Directors of the Borrower and its Subsidiaries,
(b) transactions permitted by Section 8.6 and (c) the performance of any of the
agreements identified on Schedule 8.5.
8.6. Restricted Payments. The Borrower shall not, and shall not allow
any of its Restricted Subsidiaries to, declare or make any dividend payment or
other distribution of assets, properties, cash, rights, obligations or
securities on account of any shares of any class of its Equity Interests, or
purchase, redeem or otherwise acquire for value any shares of its Equity
Interest or any warrants, rights or options to acquire such shares, now or
hereafter outstanding, or directly or indirectly voluntarily prepay, defease or
in substance defease, purchase, redeem, retire or otherwise acquire, any
Indebtedness described in Section 8.4(j) (collectively, "Restricted Payments"),
except that (a) any Restricted Subsidiary may pay dividends and tax sharing
payments to the corporations which own its Equity Interest and (b) the Borrower
may, so long as before and after giving effect to any such payment no Event of
Default or Default shall have occurred:
(i) declare and make dividend payments or other distributions
payable solely in its Equity Interests;
(ii) purchase, redeem or otherwise acquire Equity Interests or
warrants or options to acquire any such Equity Interests, or prepay,
defease or in substance defease, purchase, redeem, retire or otherwise
acquire such Indebtedness, with the proceeds received from
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<PAGE> 79
the substantially concurrent issue of new Equity Interests or
Indebtedness, as applicable, with substantially the same terms or terms
which are more favorable to the Borrower;
(iii) declare and make other Restricted Payments; provided that,
so long as the Total Debt to Total Capitalization Ratio shall exceed
0.35:1 (both before and after giving effect thereto), the aggregate
amount of all such Restricted Payments made after the Closing Date
pursuant to this clause (iii) shall not exceed the sum of $30,000,000
plus 50% of the Net Income of the Borrower and its Restricted
Subsidiaries after the Closing Date; and
(iv) pay cash dividends declared by the Company for which the
record date is on or prior to the Merger and the payment date is after
the Closing Date, and in amounts permitted by the Merger Agreement,
including the provisions of Section 8.5 thereof.
8.7. Change in Business. The Borrower shall not, and shall not allow any
of its Material Subsidiaries to, engage in any material line of business
substantially different from those lines of business carried on by the Borrower
and its Subsidiaries on the date hereof and businesses directly related thereto.
8.8. Accounting Changes. The Borrower shall not, and shall not allow any
of its Material Subsidiaries to, make any significant change in accounting
treatment or reporting practices, except as required by GAAP or SAP, or change
the fiscal year of the Borrower or of any Subsidiary.
8.9. Financial Covenants. The Borrower shall not permit any of the
events set forth below to occur.
(a) The Borrower shall not permit its Net Worth as of the
Closing Date or as at the end of any Fiscal Quarter after the Closing
Date to be less than (i) $850,000,000, plus (ii) 50% of Net Income (in
excess of zero) for the period from the beginning of the first full
Fiscal Quarter following the Closing Date to the last day of the Fiscal
Quarter for which such determination is made, plus (iii) 100% of
cumulative cash equity contributions received by the Borrower after the
Closing Date through the issuance of Equity Interests.
(b) The Borrower shall not permit, at the end of any Fiscal
Quarter occurring during any period set forth below, its Debt Service
Coverage Ratio to be less than the ratio set forth opposite such period
below:
<TABLE>
<CAPTION>
Debt Service
Period Coverage Ratio
------------------------- --------------
<S> <C>
Closing Date through (and 1.65:1
including) 03/31/01
</TABLE>
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<TABLE>
<S> <C>
04/01/01 through (and 1.65:1
including) 03/31/02
04/01/02 through (and 1.70:1
including) 03/31/03
04/01/03 and thereafter 1.75:1
</TABLE>
(c) The Borrower shall not permit, at any time after the Closing
Date, the combined Statutory Surplus of the Insurance Subsidiaries to be
less than $335,000,000.
(d) The Borrower shall not permit, on the Closing Date and at
the end of any Fiscal Quarter occurring during any period set forth
below, its Total Debt to Total Capitalization Ratio to be greater than
the ratio set forth opposite such period below:
<TABLE>
<CAPTION>
Total Debt to Total
Period Capitalization Ratio
------------------------- --------------------
<S> <C>
Closing Date through (and 0.45:1
including) 03/31/01
04/01/01 through (and 0.40:1
including) 03/31/02
04/01/02 through (and 0.35:1
including) 03/31/03
04/01/03 and thereafter 0.30:1
</TABLE>
8.10. Negative Pledges, Restrictive Agreements, etc. The Borrower will
not, and will not allow any of its Restricted Subsidiaries to, enter into any
agreement (other than pursuant to Legal Requirements and excluding any Loan
Document) prohibiting:
(a) the creation or assumption of any Lien upon its properties,
revenues or assets, whether now owned or hereafter acquired, or the
ability of the Borrower or any of its Restricted Subsidiaries to amend
or otherwise modify any Loan Document; or
(b) the ability of any of its Restricted Subsidiaries to make
any payments, directly or indirectly, to the Borrower by way of
dividends, advances, repayments of loans or advances, reimbursements and
accruals or other returns on investments, or any other agreement or
arrangement which restricts the ability of any such Restricted
Subsidiary to make any payment, directly or indirectly, to the Borrower.
8.11. ERISA. At any time engage in a transaction which could be subject
to Sections 4069 or 4212(c) of ERISA, or permit any Pension Plan to (a) engage
in any non-exempt "prohibited transaction" (as defined in Section 4975 of the
Code); (b) fail to comply with ERISA
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or any other applicable Laws; or (c) incur any material "accumulated funding
deficiency" (as defined in Section 302 of ERISA), which, with respect to each
event listed above, has a Material Adverse Effect.
8.12. Modification of Certain Agreements. The Borrower will not, and
will not permit any of its Restricted Subsidiaries to, consent to any amendment,
supplement, waiver or other modification of, or enter into any forbearance from
exercising any rights with respect to the terms or provisions contained in, the
Merger Agreement or the Tax Sharing Agreement.
8.13. Capital Expenditures. The Borrower will not, and will not permit
any of its Subsidiaries (other than FNFC, Micro General and their respective
Subsidiaries) to, make or commit to make Capital Expenditures in any Fiscal Year
which aggregate in excess of $50,000,000 for such Fiscal Year; provided that to
the extent Capital Expenditures are made or committed to be made in any Fiscal
Year in an amount less than the maximum amount permitted for such Fiscal Year,
the Capital Expenditures which the Borrower or any of its Subsidiaries may make
or commit to make in the next following Fiscal Year shall be increased by the
amount of the permitted Capital Expenditures not so made or committed to be made
in the immediately preceding Fiscal Year.
ARTICLE IX
EVENTS OF DEFAULT
9.1. Event of Default. Any of the following shall constitute an "Event
of Default" (with all references to the "Borrower" or an "Obligor" to be deemed
to also be references to the Company and all references to "Subsidiaries" to be
deemed to also be references to the Company's Subsidiaries, in each case until
the Closing Date, except where the context otherwise requires):
(a) Non-Payment. The Borrower fails to make (i) when and as
required to be made herein, payments of any amount of principal of any
Loan or (ii) within five days after the same becomes due, payment of any
interest, fee or any other amount payable hereunder or under any other
Loan Document; or
(b) Representation or Warranty. Any representation or warranty
by the Borrower or any Subsidiary made or deemed made herein, in any
other Loan Document, or which is contained in any certificate, document
or financial or other statement by the Borrower, any Subsidiary or any
Responsible Officer, furnished at any time under this Agreement, or in
or under any other Loan Document, is incorrect in any material respect
on or as of the date made or deemed made; or
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<PAGE> 82
(c) Specific Defaults. The Borrower or any Subsidiary Guarantor
fails to perform or observe any term, covenant or agreement contained in
any of Section 7.3 or Section 7.13 or Sections 8.1 through 8.13
applicable to it; or
(d) Other Defaults. The Borrower or any Subsidiary Guarantor
fails to perform or observe any other term or covenant contained in any
Loan Document to which it is a party, and such default shall continue
unremedied for a period of 30 days after the date upon which written
notice thereof is given to the Borrower or such Subsidiary Guarantor by
the Administrative Agent; or
(e) Cross-Default. The Borrower or any of its Material
Subsidiaries (i) fails to make any payment in respect of any
Indebtedness (other than the Obligations) in an aggregate amount of more
than $15,000,000 when due (whether by scheduled maturity, required
prepayment, acceleration, demand, or otherwise) and such failure
continues after the applicable grace or notice period, if any, specified
in the relevant document on the date of such failure; or (ii) fails to
perform or observe any other condition or covenant, or any other event
shall occur or condition exist, under any agreement or instrument
relating to any such Indebtedness, and such failure continues after the
applicable grace or notice period, if any, specified in the relevant
document on the date of such failure in either case if the effect of
such failure of payment or performance, event or condition is to cause,
or to permit the holder or holders of such Indebtedness or beneficiary
or beneficiaries of such Indebtedness (or a trustee or agent on behalf
of such holder or holders or beneficiary or beneficiaries) to cause,
such Indebtedness to be declared to be due and payable prior to its
stated maturity, or, in the case of such Indebtedness consisting of
Contingent Obligations of Applicable Debt, to become payable and not be
paid in full in accordance with its terms; or
(f) Insolvency; Voluntary Proceedings. The Borrower or any
Material Subsidiary (i) ceases or fails to be Solvent, or generally
fails to pay, or admits in writing its inability to pay, its debts as
they become due, subject to applicable grace periods, if any, whether at
stated maturity or otherwise; (ii) voluntarily ceases to conduct its
business in the ordinary course (except as permitted under Section 8.2);
(iii) commences any Insolvency Proceeding with respect to itself; or
(iv) takes any action to effectuate or authorize any of the foregoing;
or
(g) Involuntary Proceedings. (i) Any involuntary Insolvency
Proceeding is commenced or filed against the Borrower, or any Material
Subsidiary, or any writ, judgment, warrant of attachment, execution or
similar process is issued or levied against a substantial part of the
Borrower's or any Material Subsidiary's properties, and any such
proceeding or petition shall not be dismissed, or such writ, judgment,
warrant of attachment, execution or similar process shall not be
released, vacated or fully bonded within 60 days after commencement,
filing or levy; (ii) the Borrower or any Material Subsidiary admits the
material allegations of a petition against it in any Insolvency
Proceeding, or an order for relief (or similar order under non-U.S. Law)
is ordered in any
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Insolvency Proceeding; or (iii) the Borrower or any Material Subsidiary
acquiesces in the appointment of a receiver, trustee, custodian,
conservator, liquidator, mortgagee in possession (or agent therefor) or
other similar Person for itself or a substantial portion of its property
or business; or
(h) ERISA. Other than in connection with the actions described
on Schedule 6.5, (i) An ERISA Event occurs with respect to a Pension
Plan or Multiemployer Plan which has resulted or could reasonably be
expected to result in liability of the Borrower under Title IV of ERISA
to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate
amount in excess of $1,000,000; (ii) the aggregate amount of Unfunded
Pension Liability among all Pension Plans at any time exceeds
$1,000,000; or (iii) the Borrower or any ERISA Affiliate fails to pay
when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under
Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount
in excess of $1,000,000; or
(i) Judgments. One or more final judgments, orders, decrees or
arbitration awards is entered against the Borrower or any of its
Material Subsidiaries involving in the aggregate a liability (to the
extent not covered by independent third-party insurance as to which the
insurer does not dispute coverage or by reserves duly established in
accordance with GAAP) as to any single or related series of
transactions, incidents or conditions, involving a liability of
$15,000,000 or more, and the same shall remain unsatisfied, unvacated
and unstayed pending appeal for a period of 30 days after the entry
thereof; or
(j) Change of Control. There occurs any Change of Control; or
(k) Loss of Material License. The Borrower or any of its
Subsidiaries loses or has terminated or expired a material license, the
loss, expiration or termination of which has a Material Adverse Effect;
or
(l) Environmental Damages. A reasonable basis shall exist for
the assertion against the Borrower or any of its Restricted Subsidiaries
or any predecessor in interest of the Borrower or any of its Restricted
Subsidiaries of (or there shall have been asserted against the Borrower
or any of its Restricted Subsidiaries) any claims or liabilities,
whether accrued, absolute or contingent, based on or arising from the
generation, storage, transport, handling or disposal of Hazardous
Materials by the Borrower or any of its Restricted Subsidiaries or
predecessors thereof that, in the judgment of the Majority Lenders are
reasonably likely to be determined adversely to the Borrower or such
Restricted Subsidiary and the amount payable as a result thereof has a
Material Adverse Effect (after deducting such amounts that are
reasonably expected to be paid by other creditworthy Persons jointly and
severally liable therefor); or
(m) Governmental Action. The Borrower or any of its Restricted
Subsidiaries shall be required by any applicable bank regulatory
authority, any applicable insurance regulatory authority or other
Governmental Authority to enter into, after the date hereof,
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any indenture, agreement, instrument or other arrangement (including any
capital maintenance agreement) that directly or indirectly, prohibits or
restrains, or has the effect of prohibiting or restraining, or imposes
material adverse conditions upon the incurrence or payment of
Indebtedness, the granting of Liens, the declaration or payment of
dividends, the making of Investments or the Disposition of property or
requires the making of capital contributions to, or other Investments
in, any such Restricted Subsidiary in an aggregate amount which has a
Material Adverse Effect; or
(n) Governmental Action. Any Loan Document shall (except in
accordance with its terms), in whole or in part, terminate, cease to be
effective or cease to be the legally valid, binding and enforceable
obligation of any Obligor thereto, or any Obligor or any other party
shall, directly or indirectly, contest in any manner such effectiveness,
validity, binding nature or enforceability.
9.2. Remedies. If any Event of Default occurs, the Administrative Agent
shall, at the request of, or may, with the consent of, the Majority Lenders:
(a) declare the commitment of each Lender to make Loans to be
terminated, whereupon such commitments shall be terminated;
(b) declare the unpaid principal amount of all outstanding
Loans, all interest accrued and unpaid thereon and all other amounts
owing or payable hereunder or under any other Loan Document to be
immediately due and payable, all without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived by
the Borrower; and/or
(c) exercise on behalf of itself and the Lenders all rights and
remedies available to it and the Lenders under the Loan Documents or
applicable Law; provided that upon the occurrence of any event specified
in clauses (f) or (g) of Section 9.1 (in the case of clause (g)(i), upon
the expiration of the 60-day period mentioned therein), the obligation
of each Lender to make Loans shall automatically terminate and the
unpaid principal amount of all outstanding Loans and all interest and
other amounts as aforesaid shall automatically become immediately due
and payable without further act of the Administrative Agent or any
Lender.
9.3. Rights Not Exclusive. The rights provided for in each Loan Document
are cumulative and are not exclusive of any other rights, powers, privileges or
remedies provided by Law or in equity, or under any other instrument, document
or agreement now existing or hereafter arising.
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ARTICLE X
THE ADMINISTRATIVE AGENT
10.1. Appointment and Authorization; "Administrative Agent". (a) Each
Lender hereby irrevocably (subject to Section 10.9) appoints, designates and
authorizes the Administrative Agent to take such action on its behalf under the
provisions of each Loan Document and to exercise such powers and perform such
duties as are expressly delegated to it by the terms of any Loan Document,
together with such powers as are reasonably incidental thereto. Notwithstanding
any provision to the contrary contained elsewhere in any Loan Document, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, nor shall the Administrative Agent have or be deemed
to have any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into any Loan Document or otherwise exist against the Administrative Agent.
Without limiting the generality of the foregoing sentence, the use of the term
"agent" in this Agreement with reference to the Administrative Agent is not
intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any applicable Law. Instead, such term is used
merely as a matter of market custom, and is intended to create or reflect only
an administrative relationship between independent contracting parties.
(b) Each Revolving Lender hereby irrevocably (subject to Section 10.9)
appoints the Swing Line Lender to act on behalf of the Revolving Lenders with
respect to any Swing Line Loans made by it and the documents associated
therewith until such time and except for so long as the Administrative Agent may
agree at the request of the Majority Lenders to act for the Swing Line Lender
with respect thereto; provided that the Swing Line Lender shall have all of the
benefits and immunities (i) provided to the Administrative Agent in this Article
X with respect to any acts taken or omissions suffered by the Swing Line Lender
in connection with Swing Line Loans made by it or proposed to be made by it, in
each case, as fully as if the term "Administrative Agent," as used in this
Article X, included the Swing Line Lender with respect to such acts or omissions
and (ii) as additionally provided in this Agreement with respect to the Swing
Line Lender.
10.2. Delegation of Duties. The Administrative Agent may execute any of
its duties under any Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agent or attorney-in-fact
that it selects with reasonable care.
10.3. Limitation on Liability of Agent and Agent-Related Persons. None
of the Administrative Agent-Related Persons shall (a) be liable for any action
taken or omitted to be taken by any of them under or in connection with any Loan
Document or the transactions contemplated hereby (except for its own gross
negligence or willful misconduct) or (b) be responsible in any manner to any of
the Lenders for any recital, statement, representation or warranty made by the
Borrower or any Subsidiary or Affiliate of the Borrower, or any officer
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thereof, contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, any Loan
Document, or for the value of or title to any Collateral, or the validity,
effectiveness, genuineness, enforceability or sufficiency of any Loan Document,
or for any failure of the Borrower or any other party to any Loan Document to
perform its obligations hereunder or thereunder. No Agent-Related Person shall
be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, any Loan Document, or to inspect the properties, books or records of the
Borrower or any of the Borrower's Subsidiaries or Affiliates.
10.4. Reliance by Agent. (a) The Administrative Agent shall be entitled
to rely, and shall be fully protected in relying, upon any writing, resolution,
notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or
telephone message, statement or other document or conversation believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons, and upon advice and statements of legal counsel (including
counsel to the Borrower), independent accountants and other experts selected by
the Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under any Loan Document unless it shall
first receive such advice or concurrence of the Majority Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Lenders against all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under any Loan Document in accordance with a request or
consent of the Majority Lenders and such request and any action taken or failure
to act pursuant thereto shall be binding upon all of the Lenders.
(b) For purposes of determining compliance with the conditions specified
in Section 5.1, each Lender that has executed this Agreement shall be deemed to
have consented to, approved or accepted or to be satisfied with, each document
or other matter either sent by the Administrative Agent to such Lender for
consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to a Lender.
10.5. Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest and fees
required to be paid to the Administrative Agent for the account of the Lenders,
unless the Administrative Agent shall have received written notice from a Lender
or the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default." The
Administrative Agent will promptly notify the Lenders of its receipt of any such
notice. The Administrative Agent shall take such action with respect to such
Default or Event of Default as may be requested by the Majority Lenders in
accordance with Article IX; provided that unless and until the Administrative
Agent has received any such request, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable or in the
best interest of the Lenders.
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10.6. Credit Decision. Each Lender acknowledges that none of the
Administrative Agent-Related Persons has made any representation or warranty to
it, and that no act by the Administrative Agent hereinafter taken, including any
review of the affairs of the Borrower and its Subsidiaries, shall be deemed to
constitute any representation or warranty by any Agent-Related Person to any
Lender. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower and
its Subsidiaries, the value of and title to any Collateral, and all applicable
Lender regulatory laws relating to the transactions contemplated hereby, and
made its own decision to enter into this Agreement and to extend credit to the
Borrower hereunder. Each Lender also represents that it will, independently and
without reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
any Loan Document, and to make such investigations as it deems necessary to
inform itself as to the business, prospects, operations, property, financial and
other condition and creditworthiness of the Borrower. Except for notices,
reports and other documents expressly herein required to be furnished to the
Lenders by the Administrative Agent, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of the Borrower which may come into the
possession of any of the Administrative Agent-Related Persons.
10.7. Indemnification of Agent and Agent-Related Persons. Whether or not
the transactions contemplated hereby are consummated, the Lenders shall
indemnify upon demand the Administrative Agent-Related Persons (to the extent
not reimbursed by or on behalf of the Borrower and without limiting the
obligation of the Borrower to do so), in accordance with its Total Percentage
or, if indemnification is sought after Commitments are terminated or expire, the
Total Percentages in effect immediately prior to such termination or expiration,
from and against all Indemnified Liabilities; provided that no Lender shall be
liable for the payment to the Administrative Agent-Related Persons of any
portion of such Indemnified Liabilities resulting solely from such Person's
gross negligence or willful misconduct. Without limitation of the foregoing,
each Lender shall reimburse the Administrative Agent upon demand for its ratable
share of any costs or out-of-pocket expenses (including legal costs and
expenses) incurred by the Administrative Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document or any document contemplated by or referred to herein,
to the extent that the Administrative Agent is not reimbursed for such expenses
by or on behalf of the Borrower. The undertaking in this Section shall survive
the payment of all Obligations hereunder and the resignation or replacement of
the Administrative Agent.
10.8. Administrative Agent in Individual Capacity. BofA and its
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and
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generally engage in any kind of banking, trust, financial advisory, underwriting
or other business with the Borrower and its Subsidiaries and Affiliates as
though BofA were not the Administrative Agent hereunder and without notice to or
consent of the Lenders. The Lenders acknowledge that, pursuant to such
activities, BofA or its Affiliates may receive information regarding the
Borrower or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Borrower or such Subsidiary) and
acknowledge that the Administrative Agent shall be under no obligation to
provide such information to them. With respect to its Credit Extensions, BofA
shall have the same rights and powers under this Agreement as any other Lender
and may exercise the same as though it were not the Administrative Agent or the
Swing Line Lender, and the terms "Lender" and "Lenders" include BofA in its
individual capacity.
10.9. Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Lenders. If the
Administrative Agent resigns under this Agreement, the Majority Lenders shall
appoint from among the Lenders a successor agent for the Lenders which successor
agent shall, so long as no Event of Default has occurred and is continuing, be
approved by the Borrower, which approval shall not be unreasonably withheld or
delayed. If no successor agent is appointed prior to the effective date of the
resignation of the Administrative Agent, the Administrative Agent may appoint,
after consulting with the Lenders and the Borrower, a successor agent from among
the Lenders, which successor agent shall, so long as no Event of Default has
occurred and is continuing, be approved by the Borrower, which approval shall
not be unreasonably withheld or delayed. Upon the acceptance of its appointment
as successor agent hereunder, such successor agent shall succeed to all the
rights, powers and duties of the retiring Administrative Agent and the term
"Administrative Agent" shall mean such successor agent and the retiring
Administrative Agent's appointment, powers and duties as Administrative Agent
shall be terminated. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Article and Sections
11.4 and 11.5 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent under this Agreement. If no
successor agent has accepted appointment as Administrative Agent by the date
which is 30 days following a retiring Administrative Agent's notice of
resignation, the retiring Administrative Agent's resignation shall nevertheless
thereupon become effective and the Lenders shall perform all of the duties of
the Administrative Agent hereunder until such time, if any, as the Majority
Lenders appoint a successor agent as provided for above. Notwithstanding the
foregoing, however, BofA may not be removed as the Administrative Agent at the
request of the Majority Lenders unless BofA shall also simultaneously be
replaced as "Swing Line Lender" hereunder pursuant to documentation in form and
substance reasonably satisfactory to BofA.
10.10. Documentation Agent and Co-Documentation Agent. Notwithstanding
anything else to the contrary contained in any Loan Document, the Documentation
Agent and the Co-Documentation Agent, in such capacities, shall have no duties
or responsibilities under this any Loan Document nor any fiduciary relationship
with any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into any Loan Document
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or otherwise exist against the Documentation Agent or the Co-Documentation
Agent, in such capacities.
ARTICLE XI
MISCELLANEOUS
11.1. Amendments and Waivers. No amendment or waiver of any provision of
any Loan Document, and no consent with respect to any departure by the Borrower
therefrom, shall be effective unless the same shall be in writing and signed by
the Majority Lenders (or by the Administrative Agent at the written request of
the Majority Lenders) and the Borrower and acknowledged by the Administrative
Agent, and then any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided that,
in addition:
(a) no such waiver, amendment or consent shall, unless in
writing and signed by the Borrower and each Lender directly affected
thereby and acknowledged by the Administrative Agent, do any of the
following:
(i) increase the amount of or extend the Commitment of
any Lender (or reinstate any Commitment terminated pursuant to
Section 9.2);
(ii) postpone or delay any date fixed by any Loan
Document for any payment of principal, interest, fees or other
amounts due to the Lenders (or any of them) hereunder or under
any other Loan Document; or
(iii) reduce any scheduled payment of principal of, or
the rate of interest specified herein on, any Loan, or (subject
to clauses (e), (f) and (g) below) any fees or other amounts
payable hereunder or under any other Loan Document;
(b) no such waiver, amendment or consent shall amend this
Section or amend any provision herein providing for consent or other
action by all Lenders, unless in writing and signed by the Borrower and
all Lenders and acknowledged by the Administrative Agent;
(c) in addition to the requirements set forth in clause (a)
above, no such waiver, amendment or consent shall:
(i) increase or extend the Revolving Commitment, Short
Term Revolving Commitment or Term Commitment, unless in writing
and signed by the Borrower and Majority Revolving Lenders,
Majority Short Term Revolving Lenders and Majority Term Lenders,
as applicable, and acknowledged by the Administrative Agent;
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(ii) decrease the amount of any mandatory prepayment to
be received by the Revolving Lenders, the Term Lenders or the
Short Term Revolving Lenders, unless in writing and signed by
the Borrower and the Majority Revolving Lenders, the Majority
Term Lenders or the Majority Short Term Revolving Lenders, as
applicable, and acknowledged by the Administrative Agent; or
(iii) amend the definition of "Majority Revolving
Lenders", "Majority Term Lenders" or "Majority Short Term
Revolving Lenders" unless in writing and signed by the Borrower
and all Lenders and acknowledged by the Administrative Agent;
(d) no such waiver, amendment or consent shall release any
Subsidiary Guarantor that is a Material Subsidiary from the Subsidiary
Guaranty unless in writing and signed by all Lenders and acknowledged by
the Administrative Agent;
(e) no amendment, waiver or consent shall, unless in writing and
signed by the Swing Line Lender (in addition to the Lenders required
under this Section to sign such amendment, waiver or consent), affect
the rights or duties of the Swing Line Lender under this Agreement, any
Swing Line Loan or any other document relating to any Swing Line Loan
made or to be made by it;
(f) no amendment, waiver or consent shall, unless in writing and
signed by the Administrative Agent (in addition to the Lenders required
under this Section to sign such amendment, waiver or consent), affect
the rights or duties of the Administrative Agent under any Loan
Document; and
(g) the Fee Letter may not be amended, nor may the rights or
privileges thereunder be waived, except in a writing executed by the
parties thereto.
11.2. Notices. (a) All notices, requests, consents, approvals, waivers
and other communications shall be in writing (including, unless the context
expressly otherwise provides, by facsimile transmission; provided that any
matter transmitted by the Borrower by facsimile (i) shall be immediately
confirmed by a telephone call to the recipient at the number specified on
Schedule 11.2 and (ii) shall be followed promptly by delivery of a hard copy
original thereof) and mailed, faxed or delivered to the address or facsimile
number specified for notices on Schedule 11.2; or, as directed to the Borrower
or the Administrative Agent, to such other address as shall be designated by
such party in a written notice to the other parties, and as directed to any
other party, at such other address as shall be designated by such party in a
written notice to the Borrower and the Administrative Agent.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon the third Business Day after the date
deposited into the U.S. mail, or if delivered, upon delivery, except that
notices
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pursuant to Articles II, III or X to the Administrative Agent shall not be
effective until actually received by the Administrative Agent, and notices
pursuant to Article III to the Swing Line Lender shall not be effective until
actually received by the Swing Line Lender at the address specified for the
"Swing Line Lender" on Schedule 11.2.
(c) Any agreement of the Administrative Agent and the Lenders herein to
receive certain notices by telephone or facsimile is solely for the convenience
and at the request of the Borrower. The Administrative Agent and the Lenders
shall be entitled to rely on the authority of any Person purporting to be a
Person authorized by the Borrower to give such notice and the Administrative
Agent and the Lenders shall not have any liability to the Borrower or any other
Person on account of any action taken or not taken by the Administrative Agent
or the Lenders in reliance upon such telephonic or facsimile notice. The
obligation of the Borrower to repay the Loans shall not be affected in any way
or to any extent by any failure by the Administrative Agent and the Lenders to
receive written confirmation of any telephonic or facsimile notice or the
receipt by the Administrative Agent and the Lenders of a confirmation which is
at variance with the terms understood by the Administrative Agent and the
Lenders to be contained in the telephonic or facsimile notice.
11.3. No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. All remedies provided
in this Agreement are cumulative, and not exclusive of other remedies, at Law or
otherwise.
11.4. Costs and Expenses. The Borrower shall:
(a) pay or reimburse BofA (including in its capacity as
Administrative Agent) (subject to Section 5.1.4) promptly for all
reasonable costs and expenses incurred by BofA (including in its
capacity as Administrative Agent) in connection with the development,
preparation, delivery, execution, syndication and closing of, and all
reasonable costs and expenses incurred by BofA (including in its
capacity as Administrative Agent) in connection with any amendment,
supplement, waiver or modification to (in each case, whether or not
consummated), and ongoing legal advice in connection with, this
Agreement, any Loan Document and any other documents prepared in
connection herewith or therewith, and the consummation of the
transactions contemplated hereby and thereby, including the reasonable
fees, costs and expenses of counsel incurred by BofA (including in its
capacity as Administrative Agent and Swing Line Lender) with respect
thereto; and
(b) pay or reimburse the Administrative Agent, the Arranger and
each Lender promptly for all costs and expenses, including reasonable
and documented legal costs and expenses, incurred by them in connection
with the enforcement, attempted enforcement, or preservation of any
rights or remedies under any Loan Document during the existence
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of an Event of Default or after acceleration of the Loans (including in
connection with any "workout" or restructuring regarding the Loans, and
including in any Insolvency Proceeding or appellate proceeding).
11.5. Borrower Indemnification. The Borrower agrees to indemnify, save
and hold harmless each Agent-Related Person and each Lender and their respective
Affiliates, directors, officers, agents, attorneys and employees (collectively
the "Indemnitees") from and against: (a) any and all claims, demands, actions or
causes of action that are asserted against any Indemnitee by any Person (other
than the Administrative Agent or any Lender) relating directly or indirectly to
a claim, demand, action or cause of action that such Person asserts or may
assert against any Obligor, any of their Affiliates or any of their officers or
directors; (b) any and all claims, demands, actions or causes of action arising
out of or relating to, the Loan Documents, any predecessor loan documents, the
Commitments, the use or contemplated use of the proceeds of any Loan, or the
relationship of any Obligor, the Administrative Agent and Lenders under this
Agreement; (c) any administrative or investigative proceeding by any
Governmental Authority arising out of or related to a claim, demand, action or
cause of action described in clauses (a) or (b) above; and (d) any and all
liabilities, losses, costs or expenses (including attorney costs) that any
Indemnitee suffers or incurs as a result of the assertion of any foregoing
claim, demand, action, cause of action or proceeding, or as a result of the
preparation of any defense in connection with any foregoing claim, demand,
action, cause of action or proceeding, in all cases, whether or not an
Indemnitee is a party to such claim, demand, action, cause of action or
proceeding, including those liabilities caused by an Indemnitee's own negligence
(all the foregoing, collectively, the "Indemnified Liabilities"); provided that
no Indemnitee shall be entitled to indemnification for any loss caused by its
own gross negligence or willful misconduct or for any loss asserted against it
by another Indemnitee. The obligations in this Section shall survive payment of
all other Obligations. At the request of any Indemnified Person, the Borrower
shall defend such Indemnified Person using legal counsel satisfactory to such
Indemnified Person, at the sole cost and expense of the Borrower.
11.6. Marshalling; Payments Set Aside. Neither the Administrative Agent
nor the Lenders shall be under any obligation to marshall any assets in favor of
the Borrower or any other Person or against or in payment of any or all of the
Obligations. To the extent that the Borrower makes a payment to the
Administrative Agent or the Lenders, or the Administrative Agent or the Lenders
exercise their right of set-off, and such payment or the proceeds of such
set-off or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any Insolvency Proceeding or otherwise, then (a) to the extent
of such recovery the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such set-off had not occurred and (b) each Lender
severally agrees to pay to the Administrative Agent upon demand its Pro Rata
Share of any amount so recovered from or repaid by the Administrative Agent.
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11.7. Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
permitted successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of each Lender.
11.8. Assignments, Participations, etc. (a) Any Lender may, with the
written consent of the Borrower and the Administrative Agent, each of which
consents shall not be unreasonably withheld or delayed, at any time assign and
delegate to one or more Eligible Assignees (provided that no consent shall be
required in connection with any assignment and delegation by a Lender to an
Eligible Assignee that is an Affiliate of such Lender or to another Lender, and
no consent of the Borrower shall be required so long as a Default or Event of
Default has occurred and is continuing) all or any portion, of its Commitments
or Credit Extensions and the other rights and obligations of such Lender
hereunder, in a minimum amount of the lesser of $5,000,000 and the full
remaining amount of such Lender's Commitments or Credit Extensions (except that
no such minimum shall be applicable to an assignment to a Lender or an Affiliate
of a Lender); provided that the Borrower and the Administrative Agent may
continue to deal solely and directly with such Lender in connection with the
interest so assigned to an Eligible Assignee until (i) written notice of such
assignment, together with payment instructions, addresses and related
information with respect to the Eligible Assignee, shall have been given to the
Borrower and the Administrative Agent by such Lender and the Eligible Assignee;
(ii) such Lender and its Eligible Assignee shall have delivered to the Borrower
and the Administrative Agent an Assignment and Acceptance in the form of Exhibit
D ("Assignment and Acceptance") together with any Note or Notes subject to such
assignment and (iii) the assignor Lender has paid to the Administrative Agent a
processing fee in the amount of $3,500.
(b) From and after the date that the Administrative Agent notifies the
assignor Lender that it has received (and provided its consent with respect to)
an executed Assignment and Acceptance and payment of the above-referenced
processing fee, (i) the Eligible Assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned to
it pursuant to such Assignment and Acceptance, shall have the rights and
obligations of a Lender under the Loan Documents and (ii) the assignor Lender
shall, to the extent that rights and obligations hereunder and under the other
Loan Documents have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under the
Loan Documents. Upon the request of the assignee, the Borrower shall issue Notes
to the Eligible Assignee. Upon the request of the assignor, if applicable, the
Borrower shall issue a reduced Note to such assignor in exchange and replacement
for its then existing Note.
(c) Immediately upon each Assignee's making its processing fee payment
under the Assignment and Acceptance, this Agreement shall be deemed to be
amended to the extent, but only to the extent, necessary to reflect the addition
of the Assignee and the resulting adjustment of the Commitments arising
therefrom. The Commitment allocated to each Assignee shall reduce such
Commitments of the assigning Lender dollar for dollar.
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(d) The Borrower hereby designates the Administrative Agent to serve as
the Borrower's agent, solely for the purpose of this Section, to maintain a
register (the "Register") on which the Administrative Agent will record each
Lender's Commitment, the Loans made by each Lender and the Notes evidencing such
Loans, and each repayment in respect of the principal amount of the Loans of
each Lender and annexed to which the Administrative Agent shall retain a copy of
each Lender Assignment Agreement delivered to the Administrative Agent pursuant
to this Section. Failure to make any recordation, or any error in such
recordation, shall not affect the Borrower's or any other Obligor's Obligations
in respect of such Loans or Notes. The entries in the Register shall be
conclusive (provided that any failure to make any recordation or any error in
such recordation shall be corrected by the Administrative Agent upon notice or
discovery thereof), and the Borrower, the Administrative Agent and the Lenders
shall treat each Person in whose name a Loan and related Note is registered as
the owner thereof for all purposes of this Agreement, notwithstanding notice or
any provision herein to the contrary. A Lender's Commitment and the Loans made
pursuant thereto and the Notes evidencing such Loans may be assigned or
otherwise transferred in whole or in part only by registration of such
assignment or transfer in the Register. Any assignment or transfer of a Lender's
Commitment or the Loans or the Notes evidencing such Loans made pursuant thereto
shall be registered in the Register only upon delivery to the Administrative
Agent of a Lender Assignment Agreement duly executed by the assignor thereof. No
assignment or transfer of a Lender's Commitment or the Loans made pursuant
thereto or the Notes evidencing such Loans shall be effective unless such
assignment or transfer shall have been recorded in the Register by the
Administrative Agent as provided in this Section.
(e) Any Lender may at any time, without the consent of any Person, sell
to one or more commercial Lenders or other Persons not Affiliates of the
Borrower (a "Participant") participating interests in any Loans, the Commitment
of that Lender and the other interests of that Lender (the "Originating Lender")
hereunder and under the other Loan Documents; provided that (i) the Originating
Lender's obligations under this Agreement shall remain unchanged, (ii) the
Originating Lender shall remain solely responsible for the performance of such
obligations, (iii) the Borrower and the Administrative Agent shall continue to
deal solely and directly with the Originating Lender in connection with the
Originating Lender's rights and obligations under any Loan Document and (iv) no
Lender shall transfer or grant any participating interest under which the
Participant has rights to approve any amendment to, or any consent or waiver
with respect to, any Loan Document, except to the extent such amendment, consent
or waiver would require the consent of the Originating Lender as an affected
Lender as described in Section 11.1(a). In the case of any such participation,
the Participant shall be entitled to the benefit of Sections 4.1, 4.3 and 11.5
as though it were also a Lender hereunder, but shall not be entitled to any
greater amount than would be payable to the original Lender if no participation
had been made and if amounts outstanding under this Agreement are due and
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall be deemed to have
the right of set-off in respect of its participating interest in amounts owing
under this Agreement to the same extent as if the amount of its participating
interest were owing directly to it as a Lender under this Agreement. Each Lender
shall, as agent of the Borrower solely for the purpose of this Section, record
in book entries
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maintained by such Lender the name and the amount of the participating interest
of each Participant entitled to receive payments in respect of any participating
interests sold pursuant to this Section.
(f) Subject to Section 11.9, the Borrower authorizes each Lender to
disclose to any Eligible Assignee or Participant (each, a "Transferee") and any
prospective Transferee all financial information in such Lender's possession
concerning the Borrower and its Affiliates that has been delivered to such
Lender by or on behalf of the Borrower in connection with such Lender's credit
evaluation of the Borrower and its Affiliates prior to such Transferee or
prospective Transferee becoming a party to this Agreement; provided that neither
the Administrative Agent nor any Lender shall provide to any Transferee or
prospective Transferee any of the Confidential Information unless such person
shall have previously executed a confidentiality agreement containing
substantially similar terms to the terms specified in Section 11.9.
(g) Notwithstanding any other provision in this Agreement, any Lender
may at any time create a security interest in, or pledge, all or any portion of
its rights under and interest in this Agreement and the Note held by it in favor
of any Federal Reserve Bank in accordance with Regulation A of the FRB or U.S.
Treasury Regulation 31 CAR ss. 203.14, and such Federal Reserve Bank may enforce
such pledge or security interest in any manner permitted under applicable Law.
11.9. Confidentiality. Each Lender agrees to take precautions in
accordance with its customary procedures for handling confidential information
to maintain the confidentiality of all information identified in writing as
"confidential" or "secret" by the Borrower and provided to it by or on behalf of
the Borrower or any Subsidiary, or by the Administrative Agent on the Borrower's
or such Subsidiary's behalf, under any Loan Document ("Confidential
Information"), except to the extent such information (a) was or becomes
generally available to the public other than as a result of disclosure by the
Lender or (b) was or becomes available on a non-confidential basis from a source
other than the Borrower (provided that such source is not bound by a
confidentiality agreement with the Borrower known to the Lender); provided that
any Lender may disclose such information (i) at the request or pursuant to any
requirement of any Governmental Authority to which the Lender is subject or in
connection with an examination of such Lender by any such Authority; (ii)
pursuant to subpoena or other court process; (iii) when required to do so in
accordance with the provisions of any applicable Law; (iv) to the extent
reasonably required in connection with any litigation or proceeding to which the
Administrative Agent, any Lender or their respective Affiliates may be party;
(v) to the extent reasonably required in connection with the exercise of any
remedy hereunder or under any other Loan Document; (vi) to such Lender's
independent auditors and other professional advisors who have been advised that
such information is confidential pursuant to this Section; (vii) to any
Participant or Assignee, actual or potential; provided that such Person shall
have agreed to keep such information confidential to the same extent required of
the Lenders hereunder; and (viii) to its Affiliates who have been advised that
such information is confidential pursuant to this Section. Unless prohibited by
applicable Law or court order, each Lender and the Administrative
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Agent shall make all reasonable efforts to notify the Borrower of any request
by any Governmental Authority (other than any request in connection with an
examination of the financial condition of such Lender) for disclosure of
Confidential Information prior to such disclosure; provided that in no event
shall the Administrative Agent or any Lender be obligated to return any
materials furnished by the Borrower or any of its Subsidiaries. This Section
shall supersede any confidentiality letter or agreement with respect to the
Borrower or the Facilities entered into prior to the date hereof.
11.10. Set-off. In addition to any rights and remedies of the Lenders
provided by Law, if an Event of Default exists or the Loans have been
accelerated, each Lender is authorized at any time and from time to time,
without prior notice to the Borrower, any such notice being waived by the
Borrower to the fullest extent permitted by Law, to set off and apply all
deposits (general or special, time or demand, provisional or final, but not any
deposits held in a custodial, trust or other fiduciary capacity) at any time
held by, and other indebtedness at any time owing by, such Lender to or for the
credit or the account of the Borrower against all Obligations then due and
payable by the Borrower hereunder, now or hereafter existing, although such
Obligations may be contingent or unmatured. Each Lender agrees promptly to
notify the Borrower and the Administrative Agent after any such set-off and
application made by such Lender; provided that the failure to give such notice
shall not affect the validity of such set-off and application.
11.11. Notification of Addresses, Lending Offices, etc. Each Lender
shall notify the Administrative Agent in writing of any changes in the address
to which notices to the Lender should be directed, of addresses of any Lending
Office, of payment instructions in respect of all payments to be made to it
hereunder and of such other administrative information as the Administrative
Agent shall reasonably request.
11.12. Counterparts, Effectiveness. This Agreement may be executed in
any number of separate counterparts, each of which, when so executed, shall be
deemed an original, and all of said counterparts taken together shall be deemed
to constitute but one and the same instrument. This Agreement shall become
effective when counterparts hereof executed on behalf of the Borrower, the
Administrative Agent and each Lender (or notice thereof satisfactory to the
Administrative Agent), shall have been received by the Administrative Agent.
11.13. Severability. The illegality or unenforceability of any provision
of this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
11.14. No Third Parties Benefited. This Agreement is made and entered
into for the sole protection and legal benefit of the Borrower, the Lenders, and
the Administrative Agent-Related Persons, and their permitted successors and
assigns, and no other Person shall be a direct or indirect legal beneficiary of,
or have any direct or indirect cause of action or claim in connection with, this
Agreement or any of the other Loan Documents.
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11.15. Governing Law and Jurisdiction. (a) THIS AGREEMENT AND THE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK; PROVIDED THAT THE ADMINISTRATIVE AGENT AND THE LENDERS SHALL RETAIN
ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO ANY LOAN DOCUMENT MAY
BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR
THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH OF THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. EACH OF THE BORROWER, THE ADMINISTRATIVE AGENT AND
THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE
BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS EACH WAIVE PERSONAL SERVICE
OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY NEW YORK LAW.
11.16. Waiver of Jury Trial. THE BORROWER, THE LENDERS AND THE
ADMINISTRATIVE AGENT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE THEIR
RESPECTIVE RIGHTS TO A TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO ANY LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
11.17. Entire Agreement. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding among the Borrower,
the Lenders and the Administrative Agent, and supersedes all prior or
contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof, except that the
matters contained in the sixth paragraph of the Commitment Letter (and the
clarification of certain fees contained in the penultimate paragraph thereof)
shall survive the execution and delivery of this Agreement and the Closing Date.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in New York, New York by their proper and duly
authorized officers as of the day and year first above written.
FIDELITY NATIONAL FINANCIAL, INC.
By: /s/ ALAN L. STINSON
---------------------------------------
Name: Alan L. Stinson
Title: Executive Vice President, Chief
Financial Officer
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BANK OF AMERICA, N.A.,
as the Administrative Agent
By: /s/ ELIZABETH W.F. BISHOP
---------------------------------------
Name: Elizabeth W.F. Bishop
Title: Vice President
S-2
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CHASE SECURITIES INC.,
as the Syndication Agent
By: /s/ ISOLDE G. O'HANLON
---------------------------------------
Name: Isolde G. O'Hanlon
Title: Managing Director
S-3
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MORGAN STANLEY SENIOR FUNDING, INC.,
as the Documentation Agent
By: /s/ T. MORGAN EDWARDS III
---------------------------------------
Name: T. Morgan Edwards III
Title: Vice President
S-4
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PARIBAS,
as the Co-Documentation Agent
By: /s/ CLARK C. KING, III
---------------------------------------
Name: Clark C. King, III
Title: Managing Director
S-5
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LENDERS:
BANCA COMMERCIALE ITALIANA - NEW
YORK BRANCH
By: /s/ E. BERMANT
---------------------------------------
Title: E. Bermant
FVP/Deputy Manager
By: /s/ CHARLES DOUGHERTY
---------------------------------------
Title: Charles Dougherty
VP
S-6
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BANCA DI ROMA - SAN FRANCISCO
By: /s/ RICHARD G. DIETZ
---------------------------------------
Title: Richard G. Dietz (97271)
Vice President
By: /s/ FRANCESCO BAROLO
---------------------------------------
Title: Francesco Barolo (20538)
Senior Vice President & Manager
S-7
<PAGE> 105
BANK OF MONTREAL
By: /s/ KANU MODI
---------------------------------------
Title: Kanu Modi
Director
S-8
<PAGE> 106
BANK ONE, NA (MAIN OFFICE CHICAGO)
By: /s/ THOMAS J. CONNALLY
---------------------------------------
Title: First Vice President
S-9
<PAGE> 107
COMERICA BANK - CALIFORNIA
By: /s/ [ILLEGIBLE]
---------------------------------------
Title: Vice President
S-10
<PAGE> 108
THE DAI-ICHI KANGYO BANK, LTD.
By: /s/ NELSON J. CHANG
---------------------------------------
Title: Assistant Vice President
S-11
<PAGE> 109
FIRST BANK & TRUST
By: /s/ K.P. BALKRISHNA
---------------------------------------
Title: K.P. "Bala" Balkrishna
Executive Vice President
S-12
<PAGE> 110
FIRSTAR BANK, N.A.
By: /s/ JAMES SPREDEMANN
---------------------------------------
Title: James Spredemann
Vice President
S-13
<PAGE> 111
FIRST HAWAIIAN BANK
By: /s/ JEFFREY N. HIGASHI
---------------------------------------
Title: Jeffrey N. Higashi
Corporate Banking Officer
S-14
<PAGE> 112
FIRST UNION NATIONAL BANK
By: /s/ THOMAS L. STITCHBERRY
---------------------------------------
Title: Thomas L. Stitchberry
Senior Vice President
S-15
<PAGE> 113
FLEET NATIONAL BANK
By: /s/ ANTIMO F. BARBIERI
---------------------------------------
Title: Antimo F. Barbieri
Vice President
S-16
<PAGE> 114
IMPERIAL BANK, A CALIFORNIA BANKING
CORPORATION
By: /s/ RAY VADAIMA
---------------------------------------
Title: Ray Vadaima
Senior Managing Director
S-17
<PAGE> 115
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ JANET R. GATES
---------------------------------------
Title: Senior Vice President
S-18
<PAGE> 116
MITSUBISHI TRUST & BANKING
CORPORATION (U.S.A.)
By: /s/ GARY T. MACIAK
---------------------------------------
Title: Gary T. Maciak
First Vice President
S-19
<PAGE> 117
SANWA BANK CALIFORNIA
By: /s/ F. FRANK HERRERA
----------------------------------------
Title: F. Frank Herrera
Vice President
S-20
<PAGE> 118
THE SUMITOMO BANK, LIMITED
By: /s/ AL GALLUZZO
---------------------------------------
Title: Al Galluzzo
Senior Vice President
S-21
<PAGE> 119
UNION BANK OF CALIFORNIA, N.A.
By: /s/ JOE ARGABRITE
---------------------------------------
Title: Joe Argabrite
Vice President
S-22
<PAGE> 120
U.S. BANK NATIONAL ASSOCIATION
By: /s/ STEVEN T. WILLIAMS
---------------------------------------
Title: Steven T. Williams
Vice President
S-23
<PAGE> 121
WELLS FARGO BANK, N.A.
By: /s/ DAVID B. HOLLINGSWORTH
---------------------------------------
Title: David B. Hollingsworth
Vice President
By: /s/ MARK HABERECHT
---------------------------------------
Title: Mark Haberecht
Assistant Vice President
S-24
<PAGE> 122
WESTERN FINANCIAL BANK
By: /s/ ROBERT ROURKE
---------------------------------------
Title: Vice President
S-25
<PAGE> 123
BANK OF AMERICA, N.A.
By: /s/ ELIZABETH W.F. BISHOP
---------------------------------------
Title: Elizabeth W.F. Bishop
Vice President
S-26
<PAGE> 124
CHASE MANHATTAN BANK
By: /s/ ELISABETH N. SCHWABE
---------------------------------------
Title: Managing Director
S-27
<PAGE> 125
MORGAN STANLEY SENIOR FUNDING, INC.
By: /s/ T. MORGAN EDWARDS II
---------------------------------------
Title: T. Morgan Edwards II
Vice President
S-28
<PAGE> 126
PARIBAS
By: /s/ CLARK KING
---------------------------------------
Title: Clark C. King, III
Managing Director
By: /s/ MICHAEL COLIAS
---------------------------------------
Title: Michael C. Colias
Assistant Vice President
S-29
<PAGE> 127
SCHEDULE 2.1
COMMITMENTS AND TOTAL PERCENTAGES
<TABLE>
<CAPTION>
SHORT TERM
REVOLVING REVOLVING TERM TOTAL
LENDER COMMITMENT COMMITMENT COMMITMENT PERCENTAGE
- --------------------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Bank of America, N.A 9,375,000 23,437,500 42,187,500 9.375%
Chase Manhattan Bank 9,375,000 23,437,500 42,187,500 9.375%
Morgan Stanley Senior 3,125,000 7,812,500 14,062,500 3.125%
Funding, Inc.
Paribas 5,000,000 12,500,000 22,500,000 5.000%
Banca Commerciale Italiana 3,125,000 7,812,500 14,062,500 3.125%
- - New York Branch
BANCA DI ROMA - San 1,875,000 4,687,500 8,437,500 1.875%
Francisco
Bank of Montreal 3,125,000 7,812,500 14,062,500 3.125%
Bank One, NA (Main 3,125,000 7,812,500 14,062,500 3.125%
Office Chicago)
Comerica Bank - California 3,125,000 7,812,500 14,062,500 3.125%
The Dai-Ichi Kangyo Bank, 3,125,000 7,812,500 14,062,500 3.125%
Ltd.
First Bank & Trust 3,125,000 7,812,500 14,062,500 3.125%
Firstar Bank, N.A 5,000,000 12,500,000 22,500,000 5.000%
First Hawaiian Bank 3,125,000 7,812,500 14,062,500 3.125%
First Union National Bank 3,125,000 7,812,500 14,062,500 3.125%
Fleet National Bank 3,125,000 7,812,500 14,062,500 3.125%
Imperial Bank, a California 3,125,000 7,812,500 14,062,500 3.125%
Banking Corporation
LaSalle Bank National 7,812,500 19,531,250 35,156,250 7.813%
Association
Mitsubishi Trust & Banking 625,000 1,562,500 2,812,500 0.625%
Corporation (U.S.A.)
</TABLE>
<PAGE> 128
<TABLE>
<CAPTION>
SHORT TERM
REVOLVING REVOLVING TERM TOTAL
LENDER COMMITMENT COMMITMENT COMMITMENT PERCENTAGE
- ------------------------- ------------ ------------ ------------ ----------
<S> <C> <C> <C> <C>
Sanwa Bank California 3,750,000 9,375,000 16,875,000 3.750%
The Sumitomo Bank, 3,125,000 7,812,500 14,062,500 3.125%
Limited
Union Bank of California, 5,000,000 12,500,000 22,500,000 5.000%
N.A
U.S. Bank National 7,812,500 19,531,250 35,156,250 7.813%
Association
Wells Fargo Bank, N.A 5,000,000 12,500,000 22,500,000 5.000%
Western Financial Bank 1,875,000 4,687,500 8,437,500 1.875%
------------ ------------ ------------ --------
Total: $100,000,000 $250,000,000 $450,000,000 100.000%
</TABLE>
ii
<PAGE> 129
SCHEDULE 11.2
OFFSHORE AND DOMESTIC LENDING OFFICES,
ADDRESSES FOR NOTICES
Borrower's Notice Address:
Fidelity National Financial, Inc.
3916 State Street, Suite 300
Santa Barbara, CA 93105
Attn: Alan Stinson
(Chief Financial Officer)
Tel: (805) 898-7153
Fax: (805) 898-7191
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
LENDER NAME DOMESTIC OFFICE LIBOR OFFICE NOTICE ADDRESS
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Bank of America, N.A. 231 S. LaSalle Street 231 S. LaSalle Street 231 S. LaSalle Street
Chicago, IL 60697 Chicago, IL 60697 Chicago, IL 60697
Attn: Elizabeth Bishop Attn: Elizabeth Bishop Attn: Elizabeth Bishop
Tel: (312) 828-6550 Tel: (312) 828-6550 Tel: (312) 828-6550
Fax: (312) 987-0889 Fax: (312) 987-0889 Fax: (312) 987-0889
Chase Manhattan Bank 270 Park Avenue 270 Park Avenue 270 Park Avenue
20th Floor 20th Floor 20th Floor
New York, NY 10017 New York, NY 10017 New York, NY 10017
Attention: Elisabeth Schwabe Attention: Elisabeth Schwabe Attention: Elisabeth Schwabe
Tel: (212) 270-4954 Tel: (212) 270-4954 Tel: (212) 270-4954
Fax: (212) 270-1511 Fax: (212) 270-1511 Fax: (212) 270-1511
Morgan Stanley Senior Funding, 1221 Avenue of the Americas 1221 Avenue of the Americas 1221 Avenue of the Americas
Inc. 35th Floor 35th Floor 35th Floor
New York, NY 10020 New York, NY 10020 New York, NY 10020
Attn: Morgan Edwards/ Attn: Morgan Edwards/ Attn: Morgan Edwards/
Mark Cross Mark Cross Mark Cross
Tel: (212) 762-5814/6755 Tel: (212) 762-5814/6755 Tel: (212) 762-5814/6755
Fax: (212) 762-9181 Fax: (212) 762-9181 Fax: (212) 762-9181
Paribas 227 West Monroe 227 West Monroe 227 West Monroe
Suite 3300 Suite 3300 Suite 3300
Chicago, IL 60606 Chicago, IL 60606 Chicago, IL 60606
Attn: Michael Colias Attn: Michael Colias Attn: Forest Vaughn -
Tel: (312) 853-6033 Tel: (312) 853-6033 Loan Administration Dept.
Fax: (312) 853-6020 Fax: (312) 853-6020 Tel: (312) 853-6032
Fax: (312) 853-3087
Banca Commerciale Italiana - One William Street One William Street One William Street
New York Branch New York, NY 10004 New York, NY 10004 New York, NY 10004
Attn: Charles Dougherty Attn: Charles Dougherty Attn: Charles Dougherty
Tel: (212) 607-3656 Tel: (212) 607-3656 Tel: (212) 607-3656
Fax: (212) 809-2124 Fax: (212) 809-2124 Fax: (212) 809-2124
</TABLE>
<PAGE> 130
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
LENDER NAME DOMESTIC OFFICE LIBOR OFFICE NOTICE ADDRESS
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BANCA DI ROMA - San One Market, Steuart Tower, One Market, Steuart Tower, One Market, Steuart Tower,
Franciso Suite 1000 Suite 1000 Suite 1000
San Francisco, CA 94105 San Francisco, CA 94105 San Francisco, CA 94105
Attn: Thomas Woodruff Attn: Thomas Woodruff Attn: Cecilia Gin
Tel: (415) 977-7306 Tel: (415) 977-7306 Tel: (415) 977-9721
Fax: (415) 357-9869 Fax: (415) 357-9869 Fax: (415) 357-9869
Bank of Montreal 115 S. LaSalle Street 12W 115 S. LaSalle Street 12W 115 S. LaSalle Street 12W
Chicago, IL 60603 Chicago, IL 60603 Chicago, IL 60603
Attn: Susan Hewett Attn: Susan Hewett Attn: Susan Hewett
Tel: (312) 750-5903 Tel: (312) 750-5903 Tel: (312) 750-5903
Fax: (312) 750-6057 Fax: (312) 750-6057 Fax: (312) 750-6057
Bank One, NA (Main Office 1 Bank One Plaza 1 Bank One Plaza 1 Bank One Plaza
Chicago) Mail Suite 0098 Mail Suite 0098 Mail Suite 0098
Chicago, IL 60670 Chicago, IL 60670 Chicago, IL 60670
Attn: Tom Connally Attn: Tom Connally Attn: Lynn Poszgay - Primary/
Tel: (312) 732-3225 Tel: (312) 732-3225 Jose Rodriguez - Backup
Fax: (312) 732-6222 Fax: (312) 732-6222 Tel: (312) 732-6455/6982
Fax: (312) 732-3852
Comerica Bank - California 333 W. Santa Clara Street 333 W. Santa Clara Street 611 Anton Boulevard
2nd Floor 2nd Floor 2nd Floor
San Jose, CA 95113 San Jose, CA 95113 Costa Mesa, CA 92626
Attn: Fernando Loza Attn: Fernando Loza Attn: Karla Koykka
Tel: (714) 435-3961 Tel: (714) 435-3961 Tel: (714) 435-3984
Fax: (714) 435-3988 Fax: (714) 435-3988 Fax: (714) 435-3988
The Dai-Ichi Kangyo Bank, Ltd. One World Trade Center One World Trade Center One World Trade Center
Suite 4911 Suite 4911 Suite 4911
New York, NY 10048 New York, NY 10048 New York, NY 10048
Attn: Wendy Yuen Attn: Wendy Yuen Attn: Wendy Yuen
Tel: (212) 432-6691 Tel: (212) 432-6691 Tel: (212) 432-6691
Fax: (212) 524-0049 Fax: (212) 524-0049 Fax: (212) 524-0049
First Bank & Trust 4301 MacArthur Boulevard 4301 MacArthur Boulevard 4301 MacArthur Boulevard
Newport Beach, CA 92660 Newport Beach, CA 92660 Newport Beach, CA 92660
Attn: K.P. Balkrishna Attn: K.P. Balkrishna Attn: K.P. Balkrishna
Tel: (949) 475-6318 Tel: (949) 475-6318 Tel: (949) 475-6318
Fax: (949) 476-8445 Fax: (949) 476-8445 Fax: (949) 476-8445
Firstar Bank, N.A. 777 E. Wisconsin Avenue 777 E. Wisconsin Avenue 1850 Osborn Avenue
Milwaukee, WI 53202 Milwaukee, WI 53202 Oshkosh, WI 54901
Attn: John Franceschi Attn: John Franceschi Attn: Connie Sweeney
Tel: (414) 765-5656 Tel: (414) 765-5656 Tel: (920) 426-7604
Fax: (414) 765-5367 Fax: (414) 765-5367 Fax: (920) 426-7655
First Hawaiian Bank 999 Bishop Street 999 Bishop Street 999 Bishop Street
11th Floor 11th Floor 11th Floor
Honolulu, HI 96813 Honolulu, HI 96813 Honolulu, HI 96813
Attn: Charles Jenkins/ Attn: Charles Jenkins/ Attn: Charles Jenkins/
Jeff Higashi Jeff Higashi Jeff Higashi
Tel: (808) 525-6289/8781 Tel: (808) 525-6289/8781 Tel: (808) 525-6289/8781
Fax: (808) 525-6372 Fax: (808) 525-6372 Fax: (808) 525-6372
</TABLE>
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<PAGE> 131
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
LENDER NAME DOMESTIC OFFICE LIBOR OFFICE NOTICE ADDRESS
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
First Union National Bank 301 S. College Street, TW-10 301 S. College Street, TW-10 201 S. College Street, CP-24
Charlotte, NC 28288-0735 Charlotte, NC 28288-0735 Charlotte, NC 28288-1183
Attn: Dan Norton Attn: Dan Norton Attn: Chanue Bynes
Tel: (704) 374-4279 Tel: (704) 374-4279 Tel: (704) 715-1195
Fax: (704) 383-7611 Fax: (704) 383-7611 Fax: (704) 383-7999
Fleet National Bank 777 Main Street 777 Main Street 777 Main Street
Hartford, CT 06115 Hartford, CT 06115 Hartford, CT 06115
Attn: David Albanisi Attn: David Albanisi Attn: Laura McDonough
Tel: (860) 986-7932 Tel: (860) 986-7932 Tel: (860) 986-5769
Fax: (860) 986-1094 Fax: (860) 986-1094 Fax: (860) 986-1094
Imperial Bank, a California 9920 South La Cienega Blvd. 9920 South La Cienega Blvd. 9920 South La Cienega Blvd.
Banking Corporation Syndicated Finance Division Syndicated Finance Division Syndicated Finance Division
(#2405) (#2405) (#2405)
11th Floor 11th Floor 11th Floor
Inglewood, CA 90301-4423 Inglewood, CA 90301-4423 Inglewood, CA 90301-4423
Attn: Renee J. Faber Attn: Renee J. Faber Attn: Judy Varner
Tel: (310) 417-5656 Tel: (310) 417-5656 Tel: (310) 417-5721
Fax: (310) 417-5997 Fax: (310) 417-5997 Fax: (310) 417-5997
LaSalle Bank National 135 S. LaSalle Street 135 S. LaSalle Street 135 S. LaSalle Street
Association Chicago, IL 60603 Chicago, IL 60603 Chicago, IL 60603
Attn: Janet Gates Attn: Janet Gates Attn: Genny Padilla
Tel: (312) 904-4617 Tel: (312) 904-4617 Tel: (312) 904-8121
Fax: (312) 904-6189 Fax: (312) 904-6189 Fax: (312) 904-6189
Mitsubishi Trust & Banking 520 Madison Avenue 520 Madison Avenue 520 Madison Avenue
Corporation (U.S.A.) 39th Floor 39th Floor 39th Floor
New York, NY 10022 New York, NY 10022 New York, NY 10022
Attn: Hemlata Shah Attn: Hemlata Shah Attn: Hemlata Shah
Tel: (212) 891-8549 Tel: (212) 891-8549 Tel: (212) 891-8549
Fax: (212) 935-3508 Fax: (212) 935-3508 Fax: (212) 935-3508
Sanwa Bank California Los Angeles Commercial Los Angeles Commercial Los Angeles Commercial
Banking Center Banking Center Banking Center
601 South Figueroa Street 601 South Figueroa Street 601 South Figueroa Street
Mail Sort W8-12 Mail Sort W8-12 Mail Sort W8-12
Los Angeles, CA 90017 Los Angeles, CA 90017 Los Angeles, CA 90017
Attn: Elania Gomez/ Attn: Elania Gomez/ Attn: Elania Gomez/
Carole Seargeant Carole Seargeant Carole Seargeant
Tel: (213) 896-7632/7652 Tel: (213) 896-7632/7652 Tel: (213) 896-7632/7652
Fax: (213) 896-7090 Fax: (213) 896-7090 Fax: (213) 896-7090
The Sumitomo Bank, Limited 777 South Figueroa Street 777 South Figueroa Street 277 Park Avenue
Suite 2600 Suite 2600 New York, NY 10172
Los Angeles, CA 90017-5824 Los Angeles, CA 90017-5824 Attn: Robert Bocchicchio
Attn: Stephen Mras Attn: Stephen Mras Tel: (212) 224-4061
Tel: (213) 955-0825 Tel: (213) 955-0825 Fax: (212) 224-5192
Fax: (213) 623-6832 Fax: (213) 623-6832
</TABLE>
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<PAGE> 132
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
LENDER NAME DOMESTIC OFFICE LIBOR OFFICE NOTICE ADDRESS
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Union Bank of California, N.A. Commercial Loan Operations Commercial Loan Operations Commercial Loan Operations
(V03-120) (V03-120) (V03-120)
1980 Saturn Street 1980 Saturn Street 1980 Saturn Street
Monterey Park, CA 91755 Monterey Park, CA 91755 Monterey Park, CA 91755
Attn: Ruby Gonzales Attn: Ruby Gonzales Attn: Ruby Gonzales
Tel: (323) 720-7055 Tel: (323) 720-7055 Tel: (323) 720-7055
Fax: (323) 720-2252 Fax: (323) 720-2252 Fax: (323) 720-2252
U.S. Bank National Association 555 S.W. Oak Street, PL4 555 S.W. Oak Street, PL4 555 S.W. Oak Street, PL4
Portland, OR 97204 Portland, OR 97204 Portland, OR 97204
Attn: Stephen T. Williams Attn: Stephen T. Williams Attn: Jan Knox
Tel: (503) 275-5170 Tel: (503) 275-5170 Tel: (503) 275-6561
Fax:(503) 275-5428 Fax: (503) 275-5428 Fax: (503) 275-4600
Wells Fargo Bank, N.A. 201 Third Street 201 Third Street 201 Third Street
MAC A0187-081 MAC A0187-081 MAC A0187-081
San Francisco, CA 94103 San Francisco, CA 94103 San Francisco, CA 94103
Attn: Sue Silver Attn: Sue Silver Attn: Sue Silver
Tel: (415) 477-5374 Tel: (415) 477-5374 Tel: (415) 477-5374
Fax: (415) 512-1943 Fax: (415) 512-1943 Fax: (415) 512-1943
Western Financial Bank 15750 Alton Parkway 15750 Alton Parkway 15750 Alton Parkway
Irvine, CA 92618 Irvine, CA 92618 Irvine, CA 92618
Attn: Elaine Marshall Attn: Elaine Marshall Attn: Elaine Marshall
Tel: (949) 754-7057 Tel: (949) 754-7057 Tel: (949) 754-7057
Fax: (949) 754-4813 Fax: (949) 754-4813 Fax: (949) 754-4813
</TABLE>
iv
