EXECUTION COPY
CREDIT AGREEMENT
AMONG
AMVESTORS FINANCIAL CORPORATION,
as Borrower,
THE LENDERS NAMED HEREIN
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
DATED AS OF
December 29, 1994
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS 1
ARTICLE II
THE CREDITS 16
2.1. Advances 16
2.2. Ratable Loans 16
2.3. Types of Advances 16
2.4. Commitment Fee; Reductions in Aggregate Revolving
Credit Commitment 16
2.5. Minimum Amount of Each Advance 17
2.6. Optional Principal Payments 17
2.7. Mandatory Commitment Reductions 17
2.8. Method of Selecting Types and Interest Periods
for New Advances 18
2.9. Conversion and Continuation of Outstanding
Advances 19
2.10. Changes in Interest Rate, etc. 19
2.11. Rates Applicable After Default 20
2.12. Method of Payment 20
2.13. Notes; Telephonic Notices 20
2.14. Interest Payment Dates; Interest and Fee Basis 21
2.15. Notification of Advances, Interest Rates,
Prepayments and Commitment Reductions 21
2.16. Lending Installations 21
2.17. Non-Receipt of Funds by the Agent 22
2.18. Taxes 22
2.19. Agent's Fees 23
ARTICLE III
CHANGE IN CIRCUMSTANCES 24
3.1. Yield Protection 24
3.2. Changes in Capital Adequacy Regulations 24
3.3. Availability of Types of Advances 25
3.4. Funding Indemnification 25
3.5. Lender Statements; Survival of Indemnity 25
ARTICLE IV
CONDITIONS PRECEDENT 26
4.1. Initial Loan 26
4.2. Each Future Advance 28
ARTICLE V
REPRESENTATIONS AND WARRANTIES 28
5.1. Corporate Existence and Standing 28
5.2. Authorization and Validity 29
5.3. Compliance with Laws and Contracts 29
5.4. Governmental Consents 29
5.5. Financial Statements 30
5.6. Material Adverse Change 30
5.7. Taxes 30
5.8. Litigation and Contingent Obligations 30
5.9. Capitalization 31
5.10. ERISA 31
5.11. Defaults 32
5.12. Federal Reserve Regulations 32
5.13. Investment Company 32
5.14. Certain Fees 32
5.15. Solvency 33
5.16. Ownership of Properties 33
5.17. Indebtedness 33
5.18. Employee Controversies 33
5.19. Material Agreements 33
5.20. Environmental Laws 34
5.21. Corporate Insurance 35
5.22. Insurance Licenses. 35
5.23. Disclosure 35
ARTICLE VI
COVENANTS 36
6.1. Financial Reporting 36
6.2. Use of Proceeds 38
6.3. Notice of Default. 39
6.4. Conduct of Business 39
6.5. Taxes 40
6.6. Corporate Insurance 40
6.7. Compliance with Laws 40
6.8. Maintenance of Properties 40
6.9. Inspection 40
6.10. Dividends 40
6.11. Indebtedness 41
6.12. Merger 41
6.13. Sale of Assets 42
6.14. Sale and Leaseback 42
6.15. Investments and Purchases 42
6.16. Contingent Obligations 44
6.17. Liens 44
6.18. Affiliates 45
6.19. Amendments to Agreements 45
6.20. Environmental Matters 45
6.21. Change in Corporate Structure; Fiscal Year 46
6.22. Inconsistent Agreements 46
6.23. Financial Covenants 46
6.23.1. Net Worth 46
6.23.2. Leverage Ratio 47
6.23.3. Cash Flow Coverage Ratio 47
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6.23.4. Risk-Based Capital 47
6.23.5. Adjusted Capital and Surplus
to Assets 47
6.24. Tax Consolidation 47
6.25. ERISA Compliance 47
6.26. Derivatives 48
ARTICLE VII
DEFAULTS 48
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES 51
8.1. Acceleration 51
8.2. Amendments 51
8.3. Preservation of Rights 52
ARTICLE IX
GENERAL PROVISIONS 52
9.1. Survival of Representations 52
9.2. Governmental Regulation 52
9.3. Taxes 52
9.4. Headings 53
9.5. Entire Agreement 53
9.6. Several Obligations; Benefits of this Agreement 53
9.7. Expenses; Indemnification 53
9.8. Numbers of Documents 53
9.9. Accounting 54
9.10. Severability of Provisions 54
9.11. Nonliability of Lenders 54
9.12. Choice of Law 54
9.13. Consent to Jurisdiction 54
9.14. Waiver of Jury Trial 55
9.15. Disclosure 55
9.16. Counterparts 55
ARTICLE X
THE AGENT 55
10.1. Appointment 55
10.2. Powers 56
10.3. General Immunity 56
10.4. No Responsibility for Loans, Recitals, etc. 56
10.5. Action on Instructions of Lenders 56
10.6. Employment of Agents and Counsel 56
10.7. Reliance on Documents; Counsel 57
10.8. Agent's Reimbursement and Indemnification 57
10.9. Notice of Default 57
10.10. Rights as a Lender 57
10.11. Lender Credit Decision 58
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10.12. Successor Agent 58
ARTICLE XI
SETOFF; RATABLE PAYMENTS 59
11.1. Setoff 59
11.2. Ratable Payments 59
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS 59
12.1. Successors and Assigns 59
12.2. Participations. 60
12.2.1. Permitted Participants;
Effect. 60
12.2.2. Voting Rights 60
12.2.3. Benefit of Setoff 60
12.3. Assignments 61
12.3.1. Permitted Assignments 61
12.3.2. Effect; Effective Date 61
12.4. Dissemination of Information 61
12.5. Tax Treatment 62
ARTICLE XIII
NOTICES 62
13.1. Giving Notice 62
13.2. Change of Address 62
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EXHIBITS
Exhibit A (Section 1) Revolving Credit Note
Exhibit B (Section 4.1(h)) Money Transfer Instructions
Exhibit C (Section 6.1(a)) Accountants' Privity Letter
Exhibit D (Section 6.1(h)) Compliance Certificate
Exhibit E (Section 12.3.1) Assignment Agreement
SCHEDULES
Schedule 1.1-1 - Management Agreements
Schedule 1.1-2 - Risk Based Capital Act
Schedule 5.3 - Approvals and Consents
Schedule 5.8 - Litigation and Material Contingent Obligations
Schedule 5.9 - Capitalization
Schedule 5.10 - ERISA
Schedule 5.16 - Owned and Leased Properties
Schedule 5.17 - Indebtedness
Schedule 5.20 - Environmental
Schedule 5.22 - Insurance Licenses
Schedule 6.15 - Investments
Schedule 6.17 - Liens
Schedule 6.26 - Investment Guidelines for Derivatives
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CREDIT AGREEMENT
This Credit Agreement, dated as of December 29, 1994, is among
AMVESTORS FINANCIAL CORPORATION, a Kansas corporation, the Lenders and THE
FIRST NATIONAL BANK OF CHICAGO, individually and as Agent.
R E C I T A L S:
A. The Borrower has requested the Lenders to make
financial accommodations to it in the aggregate principal
amount of $25,000,000, the proceeds of which the Borrower will use for the
working capital needs of the Borrower and its Subsidiaries; and
B. The Lenders are willing to extend such financial
accommodations on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Borrower,
the Lenders and the Agent hereby agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Advance" means a borrowing pursuant to SECTION 2.1 consisting of
the aggregate amount of the several Loans made on the same Borrowing Date by
the Lenders to the Borrower of the same Type and, in the case of Eurodollar
Advances, for the same Interest Period.
"Adjusted Capital and Surplus" means, with respect to any
Insurance Subsidiary at any date, the sum of (a) the capital and surplus of
such Insurance Subsidiary at such date ("Liabilities, Surplus and Other
Funds" statement, Page 3, Line 37 of the Annual Statement), plus (b) the
asset valuation reserve of such Insurance Subsidiary at such date
("Liabilities, Surplus and Other Funds" statement, Page 3, Line 24.1 of the
Annual Statement), in each case as determined in accordance with SAP.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with such
Person. A Person shall be deemed to control another Person if the
controlling Person owns 10% or more of any class of voting securities (or
other ownership interests) of the controlled Person or possesses, directly or
indirectly, the power to direct or cause the direction of the management or
policies of the controlled Person, whether through ownership of stock, by
contract or otherwise.
"Agent" means First Chicago in its capacity as agent for the
Lenders pursuant to ARTICLE X, and not in its individual
capacity as a Lender, and any successor Agent appointed pursuant to ARTICLE X
"Aggregate Revolving Credit Commitment" means the aggregate of
the Revolving Credit Commitments of all the Lenders hereunder.
"Agreement" means this Credit Agreement, as it may be amended,
modified or restated and in effect from time to time.
"Agreement Accounting Principles" means generally accepted
accounting principles as in effect from time to time, applied in a manner
consistent with those used in preparing the financial statements referred to
in SECTION 5.5(A) AND (B); provided, however, that for purposes of all
computations required to be made with respect to compliance by the Borrower
with SECTION 6.23, such term shall mean generally accepted accounting
principles as in effect on the date hereof, applied in a manner consistent
with those used in preparing the financial statements referred to in SECTION
5.5(A) AND (B).
"American" means American Investors Life Insurance Company, a
Kansas insurance company.
"Annual Statement" means the annual statutory financial statement
of any Insurance Subsidiary required to be filed with the insurance
commissioner (or similar authority) of its jurisdiction of incorporation,
which statement shall be in the form required by such Insurance Subsidiary's
jurisdiction of incorporation or, if no specific form is so required, in the
form of financial statements permitted by such insurance commissioner (or
such similar authority) to be used for filing annual statutory financial
statements and shall contain the type of information permitted by such
insurance commissioner (or such similar authority) to be disclosed therein,
together with all exhibits or schedules filed therewith
"Article" means an article of this Agreement unless another
document is specifically referenced.
"Asset Disposition" means any sale, transfer or other disposition
of any asset of the Borrower or any Subsidiary in a single transaction or in
a series of related transactions (other than the sale of investment assets in
the ordinary course).
"Authorized Officer" means any of the president, chief executive
officer, chief financial officer or treasurer of the Borrower, acting singly.
"Bankruptcy Code" means Title 11, United States Code, sections 1
E
T SEQ., as the same may be amended from time to time, and any successor
thereto or replacement therefor which may be hereafter enacted.
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"Borrower" means AmVestors Financial Corporation, a Kansas
corporation, and its successors and assigns.
"Borrowing Date" means a date on which an Advance is made
hereunder.
"Borrowing Notice" is defined in SECTION 2.8.
"Business Day" means (a) with respect to any borrowing, payment
or rate selection of Eurodollar Advances, a day (other than a Saturday or
Sunday) on which banks generally are open in Chicago for the conduct of
substantially all of their commercial lending activities and on which
dealings in United States dollars are carried on in the London interbank
market, and (b) for all other purposes, a day (other than a Saturday or
Sunday) on which banks generally are open in Chicago for the conduct of
substantially all of their commercial lending activities.
"Capitalized Lease" of a Person means any lease of Property by
such Person as lessee which would be capitalized on a balance sheet of such
Person prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of
the obligations of such Person under Capitalized Leases which would be shown
as a liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Cash Equivalents" means Investments maturing within one year
from the date of investment (excluding (x) Investments as to which the
principal amount to be repaid may be subject to fluctuation and (y) mortgage
backed securities consisting of principal only or interst only strips) in (a)
certificates of deposit, Eurodollar time deposits and other interest bearing
deposits or accounts with United States commercial banks having a combined
capital and surplus of at least $500,000,000 and rated C or better by Keefe
Bruyette and Associates or with any Lender, (b) certificates of deposit,
other interest bearing accounts or deposits and demand deposits with other
United States commercial banks, which deposits and accounts are in amounts
fully insured by the Federal Deposit Insurance Corporation, (c) obligations
issued or unconditionally guaranteed by the United States government or
issued by an agency thereof and backed by the full faith and credit of the
United States, (d) direct obligations issued by any state of the United
States or any political subdivision thereof which have the highest rating
obtainable from Standard & Poor's Ratings Group on the date of investment,
(e) commercial paper rated A-1 or better by Standard & Poor's Ratings Group
and P-1 or better by Moody's Investors Services, Inc. or (f) money market
mutual funds identified by the valuation office of the NAIC as requiring no
investment reserve.
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"Cash Flow Coverage Ratio" means, as of any date of
determination, the ratio of (a) the sum of (i) the aggregate
Statutory Net Income of the Insurance Subsidiaries for the period of four
Fiscal Quarters ending on such date, PLUS (ii) the aggregate Investments of
the Borrower and its Unregulated Subsidiaries consisting of cash and Cash
Equivalents, determined on a non-consolidated basis as of such date, to (b)
the sum of (i) the aggregate interest expenses of the Borrower and its
Subsidiaries on a consolidated basis for the period of four Fiscal Quarters
ending on such date, PLUS (ii) the required principal payments and other
repayments of Indebtedness required to be made by the Borrower and its
Subsidiaries on a consolidated basis for the period of four Fiscal Quarters
immediately following the date of determination. For purposes of this
definition only, "INTEREST EXPENSES" shall mean the aggregate of all interest
paid or accrued by the Borrower and its Subsidiaries in respect of any
Indebtedness and all fees and costs related thereto, including, without
limitation, all interest, fees and costs payable with respect to the
Obligations (other than fees and costs which may be capitalized as
termination costs in accordance with Agreement Accounting Principles), the
interest portion of any Capitalized Lease Obligations and any dividends paid
or accrued on the Borrower's preferred stock, all as determined in accordance
with Agreement Accounting Principles or SAP, as applicable.
"CERCLA" is defined in SECTION 6.22.
"Change" is defined in SECTION 3.2.
"Change in Control" means (a) the acquisition by any Person, or
two or more Persons acting in concert, including without limitation any
acquisition effected by means of any transaction contemplated by SECTION
6.12,
of beneficial ownership (within the meaning of Rule 13d-3 of the Securities
and Exchange Commission under the Securities Exchange Act of 1934) of 20% or
more of the outstanding shares of voting stock of the Borrower, or (b) during
any period of 25 consecutive calendar months, commencing on the date of this
Agreement, the ceasing of those individuals (the "Continuing Directors") who
(i) were directors of the Borrower on the first day of each such period or
(ii) subsequently became directors of the Borrower and whose initial election
or initial nomination for election subsequent to that date was approved by a
majority of the Continuing Directors then on the board of directors of the
Borrower, to constitute a majority of the board of directors of the Borrower.
"Closing Transactions" is defined in SECTION 4.1(D) hereof.
"Code" means the Internal Revenue Code of 1986, as amended,
reformed or otherwise modified from time to time.
"Commitment" and "Revolving Credit Commitment" each mean, for
each Lender, the obligation of such Lender to make Loans to the Borrower
pursuant to SECTION
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2.1 in an aggregate amount at any one time outstanding not exceeding the
amount set forth opposite its name under the heading "Commitment" on the
signature page hereto, as such amount may be modified or reduced from time to
time pursuant to the terms of this Agreement.
"Condemnation" is defined in SECTION 7.8.
"Consolidated" or "consolidated", when used in connection with
any calculation, means a calculation to be determined on a consolidated basis
for the Borrower and its Subsidiaries in accordance with Agreement Accounting
Principles.
"Consolidated Person" means, for the taxable year of reference,
each Person which is a member of the affiliated group of the Borrower if
Consolidated returns are or shall be filed for such affiliated group for
federal income tax purposes or any combined or unitary group of which the
Borrower is a member for state income tax purposes.
"Contingent Obligation" of a Person means any agreement,
undertaking or arrangement by which such Person assumes, guarantees,
endorses, contingently agrees to purchase or provide funds for the payment
of, or otherwise becomes or is contingently liable upon, the obligation or
liability of any other Person, or agrees to maintain the net worth or working
capital or other financial condition of any other Person, or otherwise
assures any creditor of such other Person against loss, including, without
limitation, any comfort letter, operating agreement or take-or-pay contract.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower or any of its Subsidiaries,
are treated as a single employer under Section 414 of the Code.
"Conversion/Continuation Notice" is defined in SECTION 2.9.
"Corporate Base Rate" means a rate per annum equal to the
corporate base rate of interest announced by First Chicago from time to time,
changing when and as said corporate base rate changes. The Corporate Base
Rate is a reference rate and does not necessarily represent the lowest or
best rate of interest actually charged to any customer. First Chicago may
make commercial loans or other loans at rates of interest at, above or below
the Corporate Base Rate.
"Default" means an event described in ARTICLE VII.
"Derivatives Instruments" means (a) any and all agreements,
devices or arrangements designed to protect at least one of the parties
thereto from the fluctuations of interest rates, exchange rates or forward
rates applicable to
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such party's assets, liabilities or exchange transactions, including, but not
limited to, dollar-denominated or cross-currency interest rate exchange
agreements, forward currency exchange agreements, interest rate cap or collar
protection agreements, forward rate currency or interest rate options, puts
and warrants, and (b) any and all cancellations, buybacks, reversals,
terminations or assignments of any of the foregoing.
"Derivatives Investment" of a Person means any investment in, or
purchase or other acquisition of, any Derivatives Instrument by such Person
as to which such Person pays an amount at the time of such investment or
purchase and has no further obligation, contingent or otherwise, to pay any
additional amount in respect thereof.
"Environmental Laws" is defined in SECTION 5.20.
"Environmental Permits" is defined in SECTION 5.20.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Eurodollar Advance" means an Advance which bears interest at a
Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar
Advance for the relevant Interest Period, the rate determined by the Agent to
be the rate of interest per annum for deposits in U.S. dollars for a period
equal to the relevant Interest Period quoted on Telerate, Page 3750 (or its
successor if such page number changes) at approximately 11 a.m. (London time)
two Business Days prior to the first day of such Interest Period. If no
quotation is available on Telerate, the "Eurodollar Base Rate" shall mean the
rate determined by the Agent to be the rate at which deposits in U.S. dollars
are offered by First Chicago to first class banks in the London interbank
market at approximately 11 a.m. (London time) two Business Days prior to the
first day of such Interest Period.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for
the relevant Interest Period, the sum of (a) the quotient of (i) the
Eurodollar Base Rate applicable to such Interest Period, divided by (ii) one
minus the Reserve Requirement (expressed as a decimal) applicable to such
Interest Period, plus, (b) for the applicable period, the corresponding rate
per annum set forth below:
PERIOD RATE
Closing Date - 12/31/96 1.0%
1/1/97 - 12/31/98 1.125%
1/1/99 and thereafter 1.25%
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The Eurodollar Rate shall be rounded to the next higher multiple of 1/16 of
1% if the rate is not such a multiple.
"Facility Termination Date" means December 31, 1999.
"Federal Funds Effective Rate" means, for any day, an interest
rate per annum 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 for such day (or,
if such day is not a Business Day, for the immediately preceding Business
Day) by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the quotations
at approximately 10 a.m. (Chicago time) on such day on such transactions
received by the Agent from three Federal funds brokers of recognized standing
selected by the Agent in its sole discretion.
"Financial Statements" is defined in SECTION 5.5.
"First Chicago" means The First National Bank of Chicago in its
individual capacity, and its successors.
"Fiscal Quarter" means each of the four quarterly accounting
periods in each Fiscal Year.
"Fiscal Year" means the twelve month accounting period commencing
on January 1 and ending on December 31 of each year.
"Floating Rate" means, for any day, a rate of interest per annum
equal to the higher of (a) the Corporate Base Rate for such day, and (b) the
sum of the Federal Funds Effective Rate for such day plus 1/2% per annum.
"Floating Rate Advance" means an Advance which bears interest at
the Floating Rate.
"Goodwill" means the purchase cost in excess of the fair values
assigned to all identifiable net assets.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to government including, without limitation, any board of
insurance, insurance department or insurance commissioner.
"Hazardous Materials" is defined in SECTION 5.20.
"Indebtedness" of a Person means such Person's (a) obligations
for borrowed money, (b) obligations representing the deferred purchase price
of Property or services (other than accounts payable arising in the ordinary
course of such Person's business payable on terms customary in the trade),
(c) obligations, whether or not assumed, secured by Liens or payable out of
the
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proceeds or production from Property now or hereafter owned or acquired by
such Person, (d) obligations which are evidenced by notes, acceptances, or
other instruments, (e) Capitalized Lease Obligations, (f) Rate Hedging
Obligations, (g) Contingent Obligations, (h) obligations for which such
Person is obligated pursuant to or in respect of a Letter of Credit,
including without limitation any application for a Letter of Credit, and (i)
repurchase obligations or liabilities of such Person with respect to accounts
or notes receivable sold by such Person, but excluding any obligations of
such Person arising under insurance policies issued by it.
"Insurance Subsidiary" means any Subsidiary which is engaged in
the insurance business.
"Interest Period" means, with respect to a Eurodollar Advance, a
period of one, two, three or six months commencing on a Business Day selected
by the Borrower pursuant to this Agreement. Such Interest Period shall end
on (but exclude) the day which corresponds numerically to such date one, two,
three or six months thereafter; PROVIDED, HOWEVER, that if there is no such
numerically corresponding day in such next, second, third or sixth succeeding
month, such Interest Period shall end on the last Business Day of such next,
second, third or sixth succeeding month. If an Interest Period would
otherwis
e end on a day which is not a Business Day, such Interest Period shall end on
the next succeeding Business Day; PROVIDED, HOWEVER, that if said next
succeeding Business Day falls in a new calendar month, such Interest Period
shall end on the immediately preceding Business Day.
"Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in
the trade), deposit account or contribution of capital by such Person to any
other Person or any investment in, or purchase or other acquisition of, the
stock, partnership interests, notes, debentures or other securities of any
other Person made by such Person.
"Lenders" means the lending institutions listed on the signature
pages of this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the
Agent, any office, branch, subsidiary or affiliate of such Lender or the
Agent.
"Letter of Credit" of a Person means a letter of credit or
similar instrument which is issued upon the application of such Person or
upon which such Person is an account party or for which such Person is in any
way liable.
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"Leverage Ratio" means, with respect to the Borrower on a
consolidated basis with its Subsidiaries, at any time, the ratio of (a)
Indebtedness to (b) the sum of (i) Indebtedness plus (ii) Net Worth.
"License" means any license, certificate of authority, permit or
other authorization which is required to be obtained from any Governmental
Authority in connection with the operation, ownership or transaction of
insurance business.
"Lien" means any security interest, lien (statutory or other),
mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance
or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation,
the interest of a vendor or lessor under any conditional sale, Capitalized
Lease or other title retention agreement).
"Loan" means, with respect to a Lender, such Lender's portion of
any Advance and "Loans" means, with respect to the Lenders, the aggregate of
all Advances.
"Loan Documents" means this Agreement, the Notes and the other
documents and agreements contemplated hereby and executed by the Borrower in
favor of the Agent or any Lender.
"Management Agreements" means, collectively, the agreements
listed on SCHEDULE 1.1-1 hereto.
"Margin Stock" has the meaning assigned to that term under
Regulation U.
"Material Adverse Effect" means a material adverse effect on (a)
the business, Property, condition (financial or other), performance, results
of operations, or prospects of the Borrower or any Subsidiary, (b) the
ability of the Borrower or any Subsidiary to perform its obligations under
the Loan Documents, or (c) the validity or enforceability of any of the Loan
Documents or the rights or remedies of the Agent or the Lenders thereunder.
"Multiemployer Plan" means a Plan maintained pursuant to a
collective bargaining agreement or any other arrangement to which the
Borrower or any member of the Controlled Group is a party to which more than
one employer is obligated to make contributions.
"NAIC" means the National Association of Insurance Commissioners
or any successor thereto, or in lieu thereof, any other association, agency
or other organization performing advisory, coordination or other like
functions among insurance departments, insurance commissioners and similar
Governmental Authorities of the various states of the United States toward
the promotion of uniformity in the practices of such Governmental
Authorities.
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"Net Available Proceeds" means with respect to any sale or
issuance of any equity securities of the Borrower, cash or Cash Equivalents
received (but excluding any other non-cash form) therefrom, whether at the
time of such disposition or subsequent thereto, net of all legal, title and
recording tax expenses, commissions and other fees and all costs and expenses
incurred and all federal, state, local and other taxes required to be accrued
as a liability as a consequence of such transactions.
"Net Income" means, for any computation period, with respect to
the Borrower on a consolidated basis with its Subsidiaries, cumulative net
income earned during such period as determined in accordance with Agreement
Accounting Principles.
"Net Worth" means, at any date, the consolidated stockholders'
equity of the Borrower and its consolidated Subsidiaries determined in
accordance with Agreement Accounting Principles, but excluding the effect
thereon of Statement of Financial Accounting Standards No. 115.
"Non-Excluded Taxes" is defined in SECTION 2.18(A).
"Note" means a promissory note in substantially the form of
EXHIBIT A hereto, with appropriate insertions, duly executed and delivered to
the Agent by the Borrower and payable to the order of a Lender in the amount of
its Revolving Credit Commitment, including any amendment, modification,
renewal or replacement of such promissory note.
"Notice of Assignment" is defined in SECTION 12.3.2.
"Obligations" means all unpaid principal of and accrued and
unpaid interest on the Notes, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Borrower to the
Lenders or to any Lender, the Agent or any indemnified party hereunder
arising under any of the Loan Documents and any Rate Hedging Obligations or
foreign exchange contracts of the Borrower owing to the Agent or any Lender.
"Omni-Tech" means Omni-Tech Medical, Inc., a Kansas corporation.
"Participants" is defined in SECTION 12.2.1.
"Payment Date" means the last day of each March, June, September
and December.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"Person" means any natural person, corporation, firm, joint
venture, partnership, association, enterprise, trust or other entity or
organization, or any
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government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" means an employee pension benefit plan, as defined in
Section 3(2) of ERISA, as to which the Borrower or any member of the
Controlled Group may have any liability.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets
owned, leased or operated by such Person.
"pro-rata" means, when used with respect to a Lender, and any
described aggregate or total amount, an amount equal to such Lender's
pro-rata share or portion based on its percentage of the Aggregate Revolving
Credit Commitment or if the Aggregate Revolving Credit Commitment has been
terminated, its percentage of the aggregate principal amount of outstanding
Advances.
"Purchase" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which
the Borrower or any of its Subsidiaries (a) acquires any going business or
all or substantially all of the assets of any firm, corporation or division
thereof, whether through purchase of assets, merger or otherwise, or (b)
directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) at least a majority (in number of
votes) of the securities of a corporation which have ordinary voting power for
the election of directors (other than securities having such power only by
reason of the happening of a contingency) or a majority (by percentage or
voting power) of the outstanding partnership interests of a partnership.
"Purchasers" is defined in SECTION 12.3.1.
"Quarterly Statement" means the quarterly statutory financial
statement of any Insurance Subsidiary required to be filed with the insurance
commissioner (or similar authority) of its jurisdiction of incorporation or,
if no specific form is so required, in the form of financial statements
permitted by such insurance commissioner (or such similar authority) to be
used for filing quarterly statutory financial statements and shall contain
the type of financial information permitted by such insurance commissioner
(or such similar authority) to be disclosed therein, together with all
exhibits or schedules filed therewith.
"Rate Hedging Obligations" of a Person means any and all
obligations of such Person, whether absolute or contingent and howsoever and
whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor), under
Derivatives Instruments, other than any Derivatives Instruments constituting
Derivatives Investments. The aggregate amount of Rate Hedging Obligations, as
at any date,
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shall be equal to one half of one percent (0.5%) TIMES the notional amount
thereof TIMES the square root of the remaining years to maturity.
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor
thereto or other regulation or official interpretation of said Board of
Governors relating to reserve requirements applicable to depositary
institutions.
"Regulation G" means Regulation G of the Board of Governors of
the Federal Reserve System as from time to time in effect and shall include
any successor or other regulation or official interpretation of said Board of
Governors relating to the extension of credit by Persons other than banks,
brokers and dealers for the purpose of purchasing or carrying margin stocks
applicable to such Persons.
"Regulation T" means Regulation T of the Board of Governors of
the Federal Reserve System as from time to time in effect and shall include
any successor or other regulation or official interpretation of such Board of
Governors relating to the extension of credit by securities brokers and
dealers for the purpose of purchasing or carrying margin stocks applicable to
such Persons.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor
or other regulation or official interpretation of said Board of Governors
relating to the extension of credit by banks for the purpose of purchasing or
carrying margin stocks applicable to such Persons.
"Regulation X" means Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and shall include
any successor or other regulation or official interpretation of said Board of
Governors relating to the extension of credit by the specified lenders for
the purpose of purchasing or carrying margin stocks applicable to such
Persons.
"Release" is defined in the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C. 39601 ET SEQ.
"Reportable Event" means a reportable event as defined in Section
4043 of ERISA and the regulations issued under such section, with respect to
a Plan, excluding, however, such events as to which the PBGC has by
regulation waived the requirement of Section 4043(a) of ERISA that it be
notified within 30 days of the occurrence of such event; PROVIDED, that a
failure to meet the minimum funding standard of Section 412 of the Code and
of Section 302 of ERISA shall be a Reportable Event regardless of the
issuance of any such waiver of the notice requirement in accordance with
either Section 4043(a) of ERISA or Section 412(d) of the Code.
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"Required Lenders" means Lenders in the aggregate having at least
66-2/3% of the Aggregate Revolving Credit Commitment or, if the Aggregate
Revolving Credit Commitment has been terminated, Lenders in the aggregate
holding at least 66-2/3% of the aggregate unpaid principal amount of the
outstanding Loans.
"Reserve Requirement" means, with respect to an Interest Period,
the maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on
Eurocurrency liabilities.
"Risk Based Capital Act" means the Risk-Based Capital (RBC) for
Life and/or Health Insurers Model Act in the form attached as SCHEDULE 1.1-2
hereto.
"Risk-Based Capital Guidelines" is defined in SECTION 3.2.
"SAP" means, with respect to any Insurance Subsidiary, the
statutory accounting practices prescribed or permitted by the insurance
commissioner (or other similar authority) in the jurisdiction of such Person
for the preparation of annual statements and other financial reports by
insurance companies of the same type as such Person in effect from time to
time, applied in a manner consistent with those used in preparing the
financial statements referred to in SECTION 5.5(C) AND (D); PROVIDED, that
with respect to the financial covenants contained in SECTION 6.23 hereof, and
the related definitions, "SAP" means such statutory accounting practices in
effect on the date hereof, applied in a manner consistent with those used in
preparing the financial statements referred to in SECTION 5.5(C) AND (D).
"Section" means a numbered section of this Agreement, unless
another document is specifically referenced.
"Single Employer Plan" means a Plan subject to Title IV of ERISA
maintained by the Borrower or any member of the Controlled Group for
employees of the Borrower or any member of the Controlled Group, other than a
Multiemployer Plan.
"Solvent" means, when used with respect to a Person, that (a) the
fair saleable value of the assets of such Person is in excess of the total
amount of the present value of its liabilities (including for purposes of
this definition all liabilities (including loss reserves as determined by the
Borrower), whether or not reflected on a balance sheet prepared in accordance
with Agreement Accounting Principles and whether direct or indirect, fixed or
contingent, secured or unsecured, disputed or undisputed), (b) such Person is
able to pay its debts or obligations in the ordinary course as they mature
and (c) such Person does not have unreasonably small capital to carry out its
business as conducted and as proposed to be conducted. "Solvency" shall have
a correlative meaning.
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"Statutory Net Income" means, with respect to any Insurance
Subsidiary for any computation period, the net income earned by such
Insurance Subsidiary during such period, as determined in accordance with SAP
("Summary of Operations" statement, Page 4, Line 33 of the Annual Report).
"Subsidiary" of a Person means (a) any corporation more than 50%
of the outstanding securities having ordinary voting power of which shall at
the time be owned or controlled, directly or indirectly, by such Person or by
one or more of its Subsidiaries or by such Person and one or more of its
Subsidiaries, or (b) any partnership, association, joint venture or similar
business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Borrower.
"Substantial Portion" means, with respect to the Property of the
Borrower and its Subsidiaries, Property which (a) represents more than 10% of
the consolidated assets of the Borrower and its Subsidiaries, as would be
shown in the consolidated financial statements of the Borrower and its
Subsidiaries as at the end of the Fiscal Quarter next preceding the date on
which such determination is made, or (b) is responsible for more than 10% of
the consolidated net revenues or of the consolidated net income of the
Borrower and its Subsidiaries for the 12-month period ending as of the end of
the Fiscal Quarter next preceding the date of determination.
"Tax Sharing Agreement" means that certain Amended and Restated
Agreement for the Sharing of Federal and State Income Taxes dated as of
October 29, 1992 among the Borrower, American, American Investors Sales
Group, Inc., AmVestors Investment Group, Inc. and Omni-Tech, as amended,
supplemented or modified from time to time in accordance with the terms of
this Agreement.
"Termination Event" means, with respect to a Plan which is
subject to Title IV of ERISA, (a) a Reportable Event, (b) the withdrawal of
the Borrower or any other member of the Controlled Group from such Plan
during a plan year in which the Borrower or any other member of the
Controlled Group was a "substantial employer" as defined in Section
4001(a)(2) of ERISA or was deemed such under Section 4068(f) of ERISA, (c)
the termination of such Plan, the filing of a notice of intent to terminate
such Plan or the treatment of an amendment of such Plan as a termination
under Section 4041 of ERISA, (d) the institution by the PBGC of proceedings
to terminate such Plan or (e) any event or condition which might constitute
grounds under Section 4042 of ERISA for the termination of, or appointment of
a trustee to administer, such Plan.
"Transferee" is defined in SECTION 12.4.
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"Type" means, with respect to any Advance, its nature as a
Floating Rate Advance or Eurodollar Advance.
"UCC" means the Illinois Uniform Commercial Code as amended or
modified and in effect from time to time.
"Unfunded Liability" means the amount (if any) by which the
present value of all vested and unvested accrued benefits under a Single
Employer Plan exceeds the fair market value of assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
"Unmatured Default" means an event which but for the lapse of
time or the giving of notice, or both, would constitute a Default.
"Unregulated Subsidiary" means a Subsidiary which is neither (a)
an Insurance Subsidiary nor (b) an entity subject to governmental regulation
(other than laws or regulations applicable to business corporations
generally) with respect to its dividends, distributions or other payments or
transfers to its shareholders or affiliates.
"Wholly-Owned Subsidiary" of a Person means (a) any Subsidiary
all of the outstanding voting securities of which shall at the time be owned
or controlled, directly or indirectly, by such Person or one or more
Wholly-Owned Subsidiaries of such Person, or by such Person and one or more
Wholly-Owned Subsidiaries of such Person, or (b) any partnership,
association, joint
venture or similar business organization 100% of the ownership interests
having ordinary voting power of which shall at the time be so owned or
controlled.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms. References herein to
particular columns, lines or sections of any Person's Annual Statement shall
be deemed, where appropriate, to be references to the corresponding column,
line or section of such Person's Quarterly Statement, or if no such
corresponding column, line or section exists or if any report form changes,
then to the corresponding item referenced thereby. References herein to the
Risk Based Capital Act shall be deemed to be references to such act as in
effect on the date of this Agreement; PROVIDED, that the Agent, the Lenders
and the Borrower agree to make mutually acceptable modifications to SECTION
6.23.4 hereof following the request by any thereof upon any modification to
such act. Each accounting term used herein which is not otherwise defined
herein shall be defined in accordance with Agreement Accounting Principles
unless otherwise specified.
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ARTICLE II
THE CREDITS
2.1. ADVANCES. (a) From and including the date hereof to
but not including the Facility Termination Date, each
Lender severally (and not jointly) agrees, on the terms and conditions set
forth in this Agreement, to make Advances to the Borrower from time to time
in amounts not to exceed in the aggregate at any one time outstanding the
amount of its pro-rata share of the Aggregate Revolving Credit Commitment
existing at such time. Subject to the terms of this Agreement, the Borrower
may borrow, repay and reborrow Advances at any time prior to the Facility
Termination Date.
(b)The Borrower hereby agrees that if at any time the
aggregate balance of the Loans exceeds the Aggregate
Revolving Credit Commitment, the Borrower shall repay immediately its then
outstanding Loans in such amount as may be necessary to eliminate such
excess.
(c)The Borrower's obligation to pay the principal of,
and interest on, the Loans shall be evidenced by the
Notes. Although the Notes shall be dated the date of the initial Advance,
interest in respect thereof shall be payable only for the periods during
which the Loans evidenced thereby are outstanding and, although the stated
amount of each Note shall be equal to the applicable Lender's Revolving
Credit Commitment, each Note shall be enforceable, with respect to the
Borrower's obligation to pay the principal amount thereof, only to the extent
of the unpaid principal amount of the Loan at the time evidenced thereby.
(d)Each Advance included in the Loan shall mature, and
the principal amount thereof and the unpaid accrued
interest thereon shall be due and payable, on the Facility Termination Date.
2.2. RATABLE LOANS. Each Advance hereunder shall consist of
Loans made from the several Lenders ratably in
proportion to the ratio that their respective Revolving Credit Commitments
bear to the Aggregate Revolving Credit Commitment.
2.3. TYPES OF ADVANCES. The Advances may be Floating Rate
Advances or Eurodollar Advances, or a combination
thereof, selected by the Borrower in accordance with SECTIONS 2.8 and 2.9.
2.4. COMMITMENT FEE; REDUCTIONS IN AGGREGATE REVOLVING
CREDIT COMMITMENT. (a) The Borrower agrees to pay to
the Agent for the account of each Lender a commitment fee of one quarter of
one percent (0.25%) per annum on the average daily unborrowed portion of such
Lender's Revolving Credit Commitment from the date hereof to and including
the Facility Termination Date, payable on each Payment Date hereafter and on
the Facility Termination Date. All accrued com-
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mitment fees shall be payable on the effective date of any termination of the
obligations of the Lenders to make Loans hereunder.
(b)The Borrower may permanently reduce the Aggregate
Revolving Credit Commitment in whole, or in part
ratably among the Lenders in a minimum aggregate amount of $3,000,000 or any
integral multiple of $1,000,000 in excess thereof, upon at least three (3)
Business Days' prior written notice to the Agent, which notice shall specify
the amount of any such reduction; PROVIDED, HOWEVER, that the amount of the
Aggregate Revolving Credit Commitment may not be reduced below the aggregate
principal amount of the outstanding Advances. Such reductions shall be in
addition to reductions occurring pursuant to SECTION 2.7.
2.5. MINIMUM AMOUNT OF EACH ADVANCE. Each Advance shall be
in the minimum amount of $1,000,000 (and in
multiples of $250,000 if in excess thereof); PROVIDED, HOWEVER, that (a) any
Floating Rate Advance may be in the amount of the
unused Aggregate Revolving Credit Commitment and (b) in no event shall more
than four (4) Eurodollar Advances be permitted to be outstanding at any time.
2.6. OPTIONAL PRINCIPAL PAYMENTS. The Borrower may from
time to time pay, without penalty or premium, all
outstanding Floating Rate Advances, or, in a minimum aggregate amount of
$250,000 or any integral multiple of $100,000 in excess thereof, any portion
of the outstanding Floating Rate Advances upon notice to the Agent not later
than 10:00 a.m. (Chicago time) on the date of payment. Subject to SECTION 3.4
and upon two Business Days' notice to the Agent, a Eurodollar Advance may be
paid prior to the last day of the applicable Interest Period.
2.7. MANDATORY COMMITMENT REDUCTIONS. (a) The Aggregate
Revolving Credit Commitment shall be automatically and
permanently reduced by the following amounts on the following dates:
DATE REDUCTION AMOUNT
3/31/97 $1,625,000
6/30/97 1,625,000
9/30/97 1,625,000
12/31/97 1,625,000
3/31/98 2,000,000
6/30/98 2,000,000
9/30/98 2,000,000
12/31/98 2,000,000
3/31/99 2,625,000
6/30/99 2,625,000
9/30/99 2,625,000
12/31/99 2,625,000 or such other
amount as shall
then be
outstanding
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(b)The Aggregate Revolving Credit Commitment shall
also be automatically and permanently reduced
concurrently with the receipt thereof, in an amount equal to twenty-five
percent (25%) of the Net Available Proceeds received by the Borrower of sales
(including without limitation upon the exercise of options or conversion of
convertible securities) of equity securities of the Borrower in excess of
$500,000 during each Fiscal Year. Contemporaneously with any automatic
reductions in the Aggregate Revolving Credit Commitment pursuant to this
SECTI
ON 2.7(B), the Borrower shall prepay the Loans in an amount equal to the
lesser of (A) the outstanding principal amount of Loans and (B) the amount of
such reduction; provided, however, that no such prepayment shall be required
if, at such time, the Borrower could satisfy the conditions set forth in
SECTION 4.2(B) for the reborrowing thereof. The preceding sentence shall not
affect the obligations of the Borrower under SECTION 2.1(B).
(c)Mandatory commitment reductions under this SECTION
2.7 shall be cumulative and in addition to
reductions occurring pursuant to SECTION 2.4(B). Any mandatory commitment
reductions under SECTION 2.7(B) or voluntary
commitment reduction pursuant to SECTION 2.4(B) shall be applied to the
mandatory commitment reductions required to be made
pursuant to SECTION 2.7(A) in the inverse order of maturity.
(d)Any reduction in the Aggregate Revolving Credit
Commitment pursuant to this SECTION 2.7 or otherwise
shall ratably reduce the Revolving Credit Commitment of each Lender.
2.8. METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR NEW
ADVANCES. The Borrower shall select the Type of
Advance and, in the case of each Eurodollar Advance, the Interest Period
applicable to each Advance from time to time; PROVIDED, HOWEVER, that for a
period of sixty-five (65) days after the date hereof, the Borrower will keep
all of the Loans in a Eurodollar Advance with a one month Interest Period and
with the same maturity date, or in a combination of Floating Rate Advances
and one Eurodollar Advance meeting the qualifications set forth above. The
Borrower shall give the Agent irrevocable notice (a "BORROWING NOTICE") not
later than 10:00 a.m. (Chicago time) at least one (1) Business Day before the
Borrowing Date of each Floating Rate Advance and at least three (3) Business
Days before the Borrowing Date for each Eurodollar Advance, specifying:
(a) the Borrowing Date, which shall be a Business Day, of
such Advance;
(b) the aggregate amount of such Advance;
(c) the Type of Advance selected; and
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(d) in the case of each Eurodollar Advance, the Interest
Period applicable thereto, which shall end on or
prior to the Facility Termination Date.
Not later than noon (Chicago time) on each Borrowing Date, each Lender shall
make available its Loan or Loans, in funds immediately available in Chicago,
to the Agent at its address specified pursuant to ARTICLE XIII. The Agent
will make the funds so received from the Lenders available to the Borrower at
the Agent's aforesaid address.
2.9. CONVERSION AND CONTINUATION OF OUTSTANDING ADVANCES.
Floating Rate Advances shall continue as Floating Rate
Advances unless and until such Floating Rate Advances are converted into
Eurodollar Advances. Each Eurodollar Advance shall continue as a Eurodollar
Advance until the end of the then applicable Interest Period therefor, at
which time such Eurodollar Advance shall be automatically converted into a
Floating Rate Advance unless the Borrower shall have given the Agent a
Conversion/Continuation Notice requesting that, at the end of such Interest
Period, such Eurodollar Advance continue as a Eurodollar Advance for the same
or another Interest Period. Subject to the terms of SECTION 2.5, the
Borrower may elect from time to time to convert all or any part of an Advance
of any Type into any other Type or Types of Advances; PROVIDED, HOWEVER, that
any conversion of any Eurodollar Advance shall be made on, and only on, the
last day of the Interest Period applicable thereto. The Borrower shall give
the Agent irrevocable notice (a "CONVERSION/CONTINUATION NOTICE") of each
conversion ofa a Floating Rate Advance or continuation of a Eurodollar
Advance not later than 10:00 a.m. (Chicago time) at least one (1) Business
Day, in the case of a conversion into a Floating Rate Advance, or at least
three (3) Business Days, in the case of a conversion into or continuation of
a Eurodollar Advance, prior to the date of the requested conversion or
continuation, specifying:
(a) the requested date of such conversion or continuation
which shall be a Business Day;
(b) the aggregate amount and Type of the Advance which is
to be converted or continued; and
(c) the amount(s) and Type(s) of Advance(s) into which
such Advance is to be converted or continued and, in
the case of a conversion into or continuation of a Eurodollar Advance, the
duration of the Interest Period applicable thereto, which shall end on or
prior to the Facility Termination Date.
2.10. CHANGES IN INTEREST RATE, ETC. Each Floating Rate
Advance shall bear interest at the Floating Rate from and
including the date of such Advance or the date on which such Advance was
converted into a Floating Rate Advance to (but not including) the date on
which such Floating Rate Advance is paid or converted to a Eurodollar
Advance. Changes in the rate of interest on that
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portion of any Advance maintained as a Floating Rate Advance will take effect
simultaneously with each change in the Corporate Base Rate. Each Eurodollar
Advance shall bear interest from and including the first day of the Interest
Period applicable thereto to, but not including, the last day of such
Interest Period at the interest rate determined as applicable to such
Eurodollar Advance. No Interest Period may end after the Facility Termination
Date. The Borrower shall select Interest Periods so that it is not necessary
to repay any portion of a Eurodollar Advance prior to the last day of the
applicable Interest Period in order to make a mandatory repayment required
pursuant to SECTION 2.7.
2.11. RATES APPLICABLE AFTER DEFAULT. Notwithstanding anything
to the contrary contained in SECTION 2.8 or 2.9, no Advance may be made as,
converted into or continued as a Eurodollar Advance (except with the consent
of the Agent and the Required Lenders) when any Default or Unmatured Default
has occurred and is continuing. During the continuance of a Default the
Required Lenders may, at their option, by notice to the Borrower (which
notice may be revoked at the option of the Required Lenders notwithstanding
any provision of SECTION 8.2 requiring unanimous consent of the Lenders to
changes in interest rates), declare that each Eurodollar Advance and Floating
Rate Advance shall bear interest at a rate per annum equal to the Floating
Rate plus two percent (2%) per annum.
2.12. METHOD OF PAYMENT. All payments of the Obligations
hereunder shall be made, without setoff, deduction or counterclaim, in
immediately available funds to the Agent at the Agent's address specified
pursuant to ARTICLE XIII, or at any other Lending Installation of the Agent
specified in writing by the Agent to the Borrower, by noon (Chicago time) on
the date when due and shall be applied ratably by the Agent among the
Lenders. Each payment delivered to the Agent for the account of any Lender
shall be delivered promptly by the Agent to such Lender in the same type of
funds that the Agent received at its address specified pursuant to ARTICLE
XIII or at any Lending Installation specified in a notice received by the
Agent from such Lender. The Agent is hereby authorized to charge the account
of the Borrower maintained with First Chicago for each payment of principal,
interest and fees as it becomes due hereunder.
2.13. NOTES; TELEPHONIC NOTICES. Each Lender is hereby
authorized to record the principal amount of each of its Loans and each
repayment on the schedule attached to its Note; PROVIDED, HOWEVER, that
neither the failure to so record nor any error in such recordation shall
affect the Borrower's obligations under such Note. The Borrower hereby
authorizes the Lenders and the Agent to extend, convert or continue Advances,
effect selections of Types of Advances and to transfer funds to the
Borrower's direct deposit account at First Chicago based on telephonic
notices made by any person or persons the Agent or any Lender in good faith
believes to be acting on behalf of the Borrower. The Borrower agrees to
deliver promptly to the Agent a written con-
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firmation, if such confirmation is requested by the Agent or any Lender, of
each telephonic notice signed by an Authorized Officer. If the written
confirmation differs in any material respect from the action taken by the
Agent and the Lenders, the records of the Agent and the Lenders shall govern
absent manifest error.
2.14. INTEREST PAYMENT DATES; INTEREST AND FEE BASIS. Interest
accrued on each Floating Rate Advance shall be payable on each Payment Date,
commencing on March 31, 1995, on any date on which a Floating Rate Advance is
prepaid, whether due to acceleration or otherwise, and at maturity. Interest
accrued on that portion of the outstanding principal amount of any Floating
Rate Advance converted into a Eurodollar Advance on a day other than a
Payment Date shall be payable on the next Payment Date. Interest accrued on
each Eurodollar Advance shall be payable on the last day of its applicable
Interest Period, on any date on which the Eurodollar Advance is prepaid,
whether by acceleration or otherwise, and at maturity. Interest accrued on
each Eurodollar Advance having an Interest Period longer than three months
shall also be payable on the last day of each three-month interval during
such Interest Period. Interest with respect to Eurodollar Advances shall be
calculated for actual days elapsed on the basis of a 360-day year, and
interest with respect to Floating Rate Advances and commitment fees shall be
calculated for actual days elapsed on the basis of a 365/366-day year.
Interest shall be payable for the day an Advance is made but not for the day
of any payment on the amount paid if payment is received prior to noon
(Chicago time) at the place of payment. If any payment of principal of or
interest on an Advance shall become due on a day which is not a Business Day,
such payment shall be made on the next succeeding Business Day and, in the
case of a principal payment, such extension of time shall be included in
computing interest in connection with such payment.
2.15. NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND
COMMITMENT REDUCTIONS. Promptly after receipt thereof, the Agent will notify
each Lender of the contents of each Aggregate Revolving Credit Commitment
reduction notice, Borrowing Notice, Conversion/Continuation Notice, and
repayment notice received by it hereunder. The Agent will notify each Lender
of the interest rate applicable to each Eurodollar Advance promptly upon
determination of such interest rate and will give each Lender prompt notice
of each change in the Corporate Base Rate.
2.16. LENDING INSTALLATIONS. Each Lender may book its Loans at
any Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to
any such Lending Installation and the Notes shall be deemed held by each
Lender for the benefit of such Lending Installation. Each Lender may, by
written
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notice to the Agent and the Borrower, designate a Lending Installation
through which Loans will be made by it and for whose account Loan payments
are to be made.
2.17. NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Borrower or
a Lender, as the case may be, notifies the Agent prior to the date on which
it is scheduled to make payment to the Agent of (a) in the case of a Lender,
the proceeds of a Loan, or (b) in the case of the Borrower, a payment of
principal, interest or fees to the Agent for the account of the Lenders, that
it does not intend to make such payment, the Agent may assume that such payment
has been made. The Agent may, but shall not be obligated to, make the amount
of such payment available to the intended recipient in reliance upon such
assumption. If the Borrower has not in fact made such payment to the Agent,
the Lenders shall, on demand by the Agent, repay to the Agent the amount so
made available together with interest thereon in respect of each day during
the period commencing on the date such amount was so made available by the
Agent until the date the Agent recovers such amount at a rate per annum equal
to the Federal Funds Effective Rate for such day. If any Lender has not in
fact made such payment to the Agent, such Lender or the Borrower shall, on
demand by the Agent, repay to the Agent the amount so made available together
with interest thereon in respect of each day during the period commencing on
the date such amount was so made available by the Agent until the date the
Agent recovers such amount at a rate per annum equal to (a) in the case of
payment by a Lender, the Federal Funds Effective Rate for such day, or (b) in
the case of payment by the Borrower, the interest rate applicable to the
relevant Loan.
2.18. TAXES. (a) Any payments made by the Borrower under this
Agreement shall be made free and clear of, and
without deduction or withholding for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority, excluding net income
taxes and franchise taxes or any other tax based upon any income imposed on
the Agent or any Lender by the jurisdiction in which the Agent or such
Lender, as the case may be, is incorporated or has its principal place of
business. If any such non-excluded taxes, levies, imposts, duties, charges,
fees deductions or withholdings ("Non-Excluded Taxes") are required to be
withheld from any amounts payable to the Agent or any Lender hereunder, the
amounts so payable to the Agent or such Lender shall be increased to the
extent necessary to yield to the Agent or such Lender (after payment of all
Non-Excluded Taxes) interest or any such other amounts payable hereunder at
the rates or in the amounts specified in or pursuant to this Agreement;
PROVIDED, HOWEVER, that the Borrower shall not be required to increase any such
amounts payable to any Lender that is not organized under the laws of the
U.S. or a state thereof if such Lender fails to comply with the requirements
of paragraph (b) of this SECTION 2.18. Whenever any Non-Excluded Taxes are
payable by the Borrower, as promptly as practicable thereafter the Borrower
shall send to the Agent for its own account or for the account of such
Lender,
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as the case may be, a certified copy of an original official receipt received
by the Borrower showing payment thereof. If the Borrower fails to pay any
Non-Excluded Taxes when due to the appropriate taxing authority or fails to
remit to the Agent the required receipts or other required documentary
evidence, the Borrower shall indemnify the Agent and the Lenders for any
incremental taxes, interest or penalties that may become payable by any Agent
or any Lender as a result of any such failure. The agreements in this
SECTION
2.18 shall survive the termination of this Agreement and the payment of all
other amounts payable hereunder.
(b)At least five Business Days prior to the first date
on which interest or fees are payable hereunder for
the account of any Lender, each Lender that is not incorporated under the
laws of the United States of America, or a state thereof, agrees that it will
deliver to each of the Borrower and the Agent two duly completed copies of
United States Internal Revenue Service Form 1001 or 4224, certifying in
either case that such Lender is entitled to receive payments under this
Agreement and the Notes without deduction or withholding of any United States
federal income taxes. Each Lender which so delivers a Form 1001 or 4224
further undertakes to deliver to each of the Borrower and the Agent two
additional copies of such form (or a successor form) on or before the date
that such form expires (currently, three successive calendar years for Form
1001 and one calendar year for Form 4224) or becomes obsolete or after the
occurrence of any event requiring a change in the most recent forms so
delivered by it, and such amendments thereto or extensions or renewals
thereof as may be reasonably requested by the Borrower or the Agent, in each
case certifying that such Lender is entitled to receive payments under this
Agreement and the Notes without deduction or withholding of any United States
federal income taxes, unless an event (including, without limitation, any
change in treaty, law or regulation) has occurred prior to the date on which
any such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender advises the
Borrower and the Agent that it is not capable of receiving payments without
any deduction or withholding of United States federal income tax.
2.19. AGENT'S FEES. The Borrower shall pay to the Agent those
fees, in addition to the commitment fees referenced
in SECTION 2.4(A), in the amounts and at the times separately agreed to
between the Agent and the Borrower.
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ARTICLE III
CHANGE IN CIRCUMSTANCES
3.1. YIELD PROTECTION. If, after the date hereof, the
adoption or any change in any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether
or not having the force of law), or any
interpretation thereof, or the compliance of any Lender therewith,
(a)subjects any Lender or any applicable Lending
Installation to any tax, duty, charge or withholding on
or from payments due from the Borrower (excluding taxation of the overall net
income of any Lender or applicable Lending Installation imposed by the
jurisdiction in which such Lender or Lending Installation is incorporated or
has its principal place of business), or changes the basis of taxation of
principal, interest or any other payments to any Lender or Lending
Installation in respect of its Loans or other amounts due it hereunder, or
(b)imposes or increases or deems applicable any
reserve, assessment, insurance charge, special deposit or
similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Lender or any applicable Lending Installation
(other than reserves and assessments taken into account in determining the
interest rate applicable to Eurodollar Advances), or
(c)imposes any other condition the result of which is
to increase the cost to any Lender or any applicable
Lending Installation of making, funding or maintaining loans or reduces any
amount receivable by any Lender or any applicable Lending Installation in
connection with loans, or requires any Lender or any applicable Lending
Installation to make any payment calculated by reference to the amount of
loans held, or interest received by it, by an amount deemed material by such
Lender,
then, within 15 days of demand by such Lender, the Borrower shall pay such
Lender that portion of such increased expense incurred or resulting in an
amount received which such Lender determines is attributable to making,
funding and maintaining its Loans and its Commitment.
3.2. CHANGES IN CAPITAL ADEQUACY REGULATIONS. If a Lender
determines the amount of capital required or expected
to be maintained by such Lender, any Lending Installation of such Lender or
any corporation controlling such Lender is increased as a result of a Change,
then, within 15 days of demand by such Lender, the Borrower shall pay such
Lender the amount necessary to compensate for any shortfall in the rate of
return on the portion of such increased capital which such Lender determines
is attributable to this Agreement, its Loans or its obligation to make Loans
hereunder (after taking into account such
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Lender's policies as to capital adequacy). "CHANGE" means (a) any change
after the date of this Agreement in the Risk-Based Capital Guidelines, or (b)
any adoption of or change in any other law, governmental or
quasi-governmental
rule, regulation, policy, guideline, interpretation, or directive (whether
or not having the force of law) after the date of this Agreement which
affects the amount of capital required or expected to be maintained by any
Lender or any Lending Installation or any corporation controlling any Lender.
"RISK-BASED CAPITAL GUIDELINES" means (a) the risk-based capital guidelines
in effect in the United States on the date of this Agreement, including
transition rules, and (b) the corresponding capital regulations promulgated
by regulatory authorities outside the United States implementing the July
1988 report of the Basle Committee on Banking Regulation and Supervisory
Practices entitled "International Convergence of Capital Measurements and
Capital Standards," including transition rules, and any amendments to such
regulations adopted prior to the date of this Agreement.
3.3. AVAILABILITY OF TYPES OF ADVANCES. If any Lender
determines that maintenance of its Eurodollar Advances at
a suitable Lending Installation would violate any applicable law, rule,
regulation, or directive, whether or not having the force of law, or if the
Required Lenders determine that (a) deposits of a type and maturity
appropriate to match fund Eurodollar Advances are not available, or (b) the
interest rate applicable to a Type of Advance does not accurately or fairly
reflect the cost of making or maintaining such Advance, then the Agent shall
suspend the availability of the affected Type of Advance and require any
Eurodollar Advances of the affected Type to be repaid.
3.4. FUNDING INDEMNIFICATION. If any payment of a
Eurodollar Advance occurs on a date which is not the last day
of the applicable Interest Period, whether because of acceleration,
prepayment or otherwise, or a Eurodollar Advance is not made on the date
specified by the Borrower for any reason other than default by the Lenders,
the Borrower will indemnify the Agent and each Lender for any loss or cost
incurred by it resulting therefrom, including, without limitation, any loss
or cost in liquidating or employing deposits acquired to fund or maintain the
Eurodollar Advance.
3.5. LENDER STATEMENTS; SURVIVAL OF INDEMNITY. To the extent
reasonably possible, each Lender shall designate an
alternate Lending Installation with respect to its Eurodollar Advances to
reduce any liability of the Borrower to such Lender under SECTIONS 3.1 and
3.2
or to avoid the unavailability of a Type of Advance under SECTION 3.3, so
long as such designation is not disadvantageous to such Lender. Each Lender
shall deliver a written statement of such Lender to the Borrower (with a copy
to the Agent) as to the amount due, if any, under SECTION 3.1, 3.2 or 3.4.
Such written statement shall set forth in reasonable detail the calculations
upon which such Lender determined such amount
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and shall be final, conclusive and binding on the Borrower in the absence of
manifest error. Determination of amounts payable under such Sections in
connection with a Eurodollar Advance shall be calculated as though each
Lender funded its Eurodollar Advances through the purchase of a deposit of
the type and maturity corresponding to the deposit used as a reference in
determining the Eurodollar Rate applicable to such Loan, whether in fact that
is the case or not. Unless otherwise provided herein, the amount specified
in the written statement of any Lender shall be payable on demand after
receipt by the Borrower of the written statement. The obligations of the
Borrower under SECTIONS 3.1, 3.2 and 3.4 shall survive payment of the
Obligations and termination of this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. INITIAL LOAN. The Lenders shall not be required to
make the initial Advance hereunder unless the Borrower
has furnished the following to the Agent with sufficient copies for the
Lenders and the other conditions set forth below have been satisfied, in each
case on or before December 31, 1994:
(a)CHARTER DOCUMENTS. Copies of the articles of
incorporation of the Borrower, together with all
amendments, and a certificate of good standing, both certified by the
appropriate governmental officer in its jurisdiction of incorporation.
(b)BY-LAWS AND RESOLUTIONS. Copies, certified by the
Secretary or Assistant Secretary of the Borrower, of
its by-laws and of its Board of Directors' resolutions authorizing the
execution, delivery and performance of the Loan Documents
to which the Borrower is a party.
(c)SECRETARY'S CERTIFICATE. An incumbency
certificate, executed by the Secretary or Assistant Secretary
of the Borrower, which shall identify by name and title and bear the
signature of the officers of the Borrower authorized to sign the Loan
Documents and to make borrowings hereunder, upon which certificate the Agent
and the Lenders shall be entitled to rely until informed of any change in
writing by the Borrower.
(d)OFFICER'S CERTIFICATE. A certificate, dated as of
the date of this Agreement, signed by an Authorized
Officer of the Borrower, in form and substance satisfactory to the Agent, to
the effect that: (i) as of the date of this Agreement (both before and after
giving effect to the making of the Loans hereunder) no Default or Unmatured
Default has occurred and is continuing; (ii) no injunction or temporary
restraining order which would prohibit the making of the Loans or any of the
other transactions contemplated hereby (collectively, including the making of
the Loans, the "Closing Transactions"), or
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other litigation which could reasonably be expected to have a Material
Adverse Effect is pending or, to the best of such Person's knowledge,
threatened; (iii) all orders, consents, approvals, licenses, authorizations,
or validations of, or filings, recordings or registrations with, or
exemptions by, any governmental or public body or authority, or any
subdivision thereof, required to make or consummate the Closing Transactions
have been or, prior to the time required, will have been, obtained, given,
filed or taken and are or will be in full force and effect (or the Borrower has
obtained effective judicial relief with respect to the application thereof)
and all applicable waiting periods have expired; (iv) the Borrower has not
failed to perform any material obligation or covenant required in connection
with any Closing Transaction to be performed or complied with by it on or
before the date of this Agreement; (v) each of the representations and
warranties set forth in ARTICLE V of this Agreement is true and correct on
and as of the date hereof; and (vii) since December 31, 1993, no event or
change has occurred that has caused or evidences a Material Adverse Effect.
(e)LEGAL OPINIONS. A written opinion of Bryan Cave,
counsel to the Borrower, addressed to the Agent and
the Lenders in form and substance acceptable to the Agent and its counsel.
(f)NOTES. Notes payable to the order of each of the
Lenders duly executed by the Borrower.
(g)LOAN DOCUMENTS. Executed originals of this
Agreement and each of the Loan Documents, which shall be in
full force and effect, together with all schedules, exhibits, certificates,
instruments, opinions, documents and financial statements required to be
delivered pursuant hereto and thereto.
(h)LETTERS OF DIRECTION. Written money transfer
instructions with respect to the initial Advances and to
future Advances in the form of EXHIBIT B hereto addressed to the Agent and
signed by an Authorized Officer, together with such
other related money transfer authorizations as the Agent may have reasonably
requested.
(i)SOLVENCY CERTIFICATE. A written solvency
certificate from the chief financial officer of the Borrower
in form and content satisfactory to the Agent, dated as of the date of this
Agreement, with respect to the value, Solvency and other factual information
of, or relating to, as the case may be, the Borrower on a consolidated basis,
after giving effect to the Closing Transactions.
(j)SUBSIDIARY CHARTER DOCUMENTS. Copies of the
articles or certificates of incorporation of each
Subsidiary of the Borrower, together with all amendments, and a certificate
of good standing, both certified by the appropriate governmental officer in
its jurisdiction of incorporation, together with a certificate of compliance
from each Insurance Subsidiary's
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jurisdiction of domicile and, with respect to American, from the States of
Ohio, Illinois, California, Florida, Wisconsin and Texas.
(k)SUBSIDIARY BY-LAWS. Copies, certified by the
Secretary or Assistant Secretary of each Subsidiary of
the Borrower, of its by-laws.
(l)OTHER. Such other documents as the Agent, any
Lender or their counsel may have reasonably requested.
4.2. EACH FUTURE ADVANCE. The Lenders shall not be required
to make any Advance unless on the applicable
Borrowing Date:
(a) There exists no Default or Unmatured Default and none
would result from such Advance;
(b) The representations and warranties contained in
ARTICLE V are true and correct as of such Borrowing Date
except for changes in the Schedules hereto (submitted to the Agent and each
Lender in writing by the Borrower) reflecting transactions permitted by this
Agreement;
(c) A Borrowing Notice shall have been properly submitted;
and
(d) All legal matters incident to the making of such
Advance shall be satisfactory to the Lenders and their
counsel.
Each Borrowing Notice with respect to each such Advance shall
constitute a representation and warranty by the Borrower that the conditions
contained in SECTION 4.2 have been satisfied. Any Lender may require a duly
completed compliance certificate in substantially the form of EXHIBIT D
hereto as a condition to making an Advance.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that, both
before and after giving effect to the Closing Transactions:
5.1. CORPORATE EXISTENCE AND STANDING. Each of the Borrower
and each Subsidiary is a corporation duly
incorporated, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation and is duly qualified and in good
standing as a foreign corporation and is duly authorized to conduct its
business in each jurisdiction in which its business is conducted or proposed
to be conducted.
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5.2. AUTHORIZATION AND VALIDITY. The Borrower has all
requisite power and authority (corporate and otherwise)
and legal right to execute and deliver (or file, as the case may be) each of
the Loan Documents and to perform its obligations thereunder. The execution
and delivery (or filing, as the case may be) by the Borrower of the Loan
Documents and the performance of its obligations thereunder have been duly
authorized by proper corporate proceedings and the Loan Documents constitute
legal, valid and binding obligations of the Borrower, enforceable against the
Borrower, in accordance with their terms, except as enforceability may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement
of creditors' rights generally.
5.3. COMPLIANCE WITH LAWS AND CONTRACTS. The Borrower and
its Subsidiaries have complied in all material
respects with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof, having jurisdiction over the conduct of their respective
businesses or the ownership of their respective properties, except where the
failure to so comply could not reasonably be expected to have a Material
Adverse Effect. Neither the execution and delivery by the Borrower of the
Loan Documents, the application of the proceeds of the Loans, the
consummation of the Closing Transactions or any other transaction
contemplated in the Loan Documents, nor compliance with the provisions of the
Loan Documents will, or at the relevant time did, (a) violate any law, rule,
regulation (including Regulations G, T, U or X), order, writ, judgment,
injunction, decree or award binding on the Borrower or any Subsidiary or the
Borrower's or any Subsidiary's charter, articles or certificate of
incorporation or by-laws, (b) violate the provisions of or require the
approval or consent of any party to any indenture, instrument or agreement to
which the Borrower or any Subsidiary is a party or is subject, or by which
it, or its property, is bound, or conflict with or constitute a default
thereunder, or result in the creation or imposition of any Lien (other than
Liens permitted by, the Loan Documents) in, of or on the property of the
Borrower or any Subsidiary pursuant to the terms of any such indenture,
instrument or agreement, or (c) require any consent of the stockholders of
any Person, except for approvals or consents which will be obtained on or
before the initial Advance and are disclosed on SCHEDULE 5.3, except for any
violation of, or failure to obtain an approval or consent required under, any
such indenture, instrument or agreement that could not reasonably be expected
to have a Material Adverse Effect.
5.4. GOVERNMENTAL CONSENTS. No order, consent, approval,
qualification, license, authorization, or validation
of, or filing, recording or registration with, or exemption by, or other
action in respect of, any court, governmental or public body or authority, or
any subdivision thereof, any securities exchange or other Person is or at the
relevant time was required to authorize, or is or at the relevant time was
required in connection with the execution,
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delivery, consummation or performance of, or the legality, validity, binding
effect or enforceability of, any of the Loan Documents, the application of
the proceeds of the Loans or any other transaction contemplated in the Loan
Documents.
5.5. FINANCIAL STATEMENTS. The Borrower has heretofore
furnished to each of the Lenders (a) the December 31,
1993 audited consolidated financial statements of the Borrower and its
Subsidiaries, (b) the unaudited consolidated financial statements of the
Borrower and its Subsidiaries through September 30, 1994, (c) the December
31,
1993 audited financial statements of American and (d) the unaudited
financial statements of American through September 30, 1994 (collectively,
the "FINANCIAL STATEMENTS"). Each of the Financial Statements was prepared in
accordance with generally accepted accounting principles or statutory
accounting practices, as applicable, and (in the case of the Financial
Statements prepared in accordance with generally accepted accounting
principles) fairly presents the consolidated financial condition and
operations of the Borrower and its Subsidiaries at such dates and the
consolidated results of their operations for the respective periods then
ended (except, in the case of such unaudited statements, for normal year-end
audit adjustments).
5.6. MATERIAL ADVERSE CHANGE. No material adverse change in
the business, Property, condition (financial or
otherwise), performance, prospects or results of operations of the Borrower
and its Subsidiaries has occurred since December 31, 1993.
5.7. TAXES. The Borrower and its Subsidiaries have filed or
caused to be filed on a timely basis and in correct
form all United States federal and applicable foreign, state and local tax
returns and all other tax returns which are required to be filed and have
paid
all taxes due pursuant to said returns or pursuant to any assessment
received by the Borrower or any Subsidiary, except such taxes, if any, as are
being contested in good faith and as to which adequate reserves have been
provided in accordance with Agreement Accounting Principles and as to which
no Lien exists. The United States income tax returns of the Borrower on a
consolidated basis for all Fiscal Years through 1990 are closed, and there
are no pending audits or investigations regarding the Borrower's or its
Subsidiaries' federal, foreign, state or local tax returns, other than a
pending audit of the Borrower in the State of Florida, as to which the
Borrower's liability is not expected to exceed $100,000. No tax liens have
been filed and no claims are being asserted with respect to any such taxes
which could reasonably be expected to have a Material Adverse Effect. The
charges, accruals and reserves on the books of the Borrower and its
Subsidiaries in respect of any taxes or other governmental charges are in
accordance with Agreement Accounting Principles.
5.8. LITIGATION AND CONTINGENT OBLIGATIONS. There is no
litigation, arbitration, proceeding, inquiry or
governmental investigation pending or, to the knowledge of any of their
officers, threatened against or affecting the Borrower or any Subsidiary or
any of their respective properties except as set
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forth on SCHEDULE 5.8, and no such matter set forth therein could reasonably
be expected to have a Material Adverse Effect or to prevent, enjoin or unduly
delay the making of the Loans or Advances under this Agreement. Neither the
Borrower nor any Subsidiary has any material contingent obligations except as
set forth on SCHEDULE 5.8.
5.9. CAPITALIZATION. SCHEDULE 5.9 hereto contains (a) an
accurate description of the Borrower's capitalization
and (b) an accurate list of all of the existing Subsidiaries as of the date
of this Agreement, setting forth their respective jurisdictions of
incorporation and the percentage of their capital stock owned by the Borrower
or other Subsidiaries. All of the issued and outstanding shares of capital
stock of the Borrower and of each Subsidiary have been duly authorized and
validly issued and are fully paid and non-assessable, and all such shares of
each Subsidiary are free and clear of all Liens, other than the Liens created
by the Loan Documents. Except as set forth on SCHEDULE 5.9, no authorized
but unissued or treasury shares of capital stock of the Borrower or any
Subsidiary are subject to any option, warrant, right to call or commitment of
any kind or character. Except as set forth on SCHEDULE 5.9, neither the
Borrower nor any Subsidiary has any outstanding stock or securities
convertible into or exchangeable for any shares of its capital stock, or any
right issued to any Person (either preemptive or other) to subscribe for or
to purchase, or any options for the purchase of, or any agreements providing
for the issuance (contingent or otherwise) of, or any calls, commitments or
claims of any character relating to any of its capital stock or any stock or
securities convertible into or exchangeable for any of its capital stock
other than as expressly set forth in the certificate or articles of
incorporation of the Borrower or such Subsidiary. Neither the Borrower nor
any Subsidiary is subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of its capital stock or
any convertible securities, rights or options of the type described in the
preceding sentence except as otherwise set forth on SCHEDULE 5.9.
5.10. ERISA. Except as disclosed on SCHEDULE 5.10, neither the
Borrower nor any other member of the Controlled Group maintains any Single
Employer Plans, and no Single Employer Plan has any Unfunded Liability.
Neither the Borrower nor any other member of the Controlled Group maintains,
or is obligated to contribute to, any Multiemployer Plan or has incurred, or
is reasonably expected to incur, any withdrawal liability to any
Multiemployer Plan. Each Plan complies in all material respects with all
applicable requirements of law and regulations. Neither the Borrower nor any
member of the Controlled Group has, with respect to any Plan, failed to make
any contribution or pay any amount required under Section 412 of the IRC or
Section 302 of ERISA or the terms of such Plan. There are no pending or, to
the knowledge of the Borrower, threatened claims, actions, investigations or
lawsuits against any Plan, any fiduciary thereof, or the Borrower or any
member of the Controlled Group with respect to a Plan. The Borrower has not
engaged in any prohibited
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transaction (as defined in Section 4975 of the IRC or Section 406 of ERISA)
in connection with any Plan which would subject the Borrower to any material
liability. Within the last five years neither the Borrower nor any member of
the Controlled Group has engaged in a transaction which resulted in a Single
Employer Plan with an Unfunded Liability being transferred out of the
Controlled Group. No Termination Event has occurred or is reasonably
expected to occur with respect to any Plan which is subject to Title IV of
ERISA.
5.11. DEFAULTS. No Default or Unmatured Default has occurred and
is continuing.
5.12. FEDERAL RESERVE REGULATIONS. Neither the Borrower nor any
Subsidiary is engaged, directly or indirectly, principally, or as one of its
important activities, in the business of extending, or arranging for the
extension of, credit for the purpose of purchasing or carrying Margin Stock.
No part of the proceeds of any Loan will be used in a manner which would
violate, or result in a violation of, Regulation G, Regulation T, Regulation
U or Regulation X. Neither the making of any Advance hereunder, nor the use
of the proceeds thereof, will violate or be inconsistent with the provisions
of Regulation G, Regulation T, Regulation U or Regulation X. Following the
application of the proceeds of the Loans, less than 25% of the value (as
determined by any reasonable method) of the assets of the Borrower and its
Subsidiaries which are subject to any limitation on sale, pledge, or other
restriction hereunder taken as a whole have been, and will continue to be,
represented by Margin Stock.
5.13. INVESTMENT COMPANY. Neither the Borrower nor any
Subsidiary is, or after giving effect to any Advance will be, an "investment
company" or a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
5.14. CERTAIN FEES. No broker's or finder's fee or commission
was, is or will be payable by the Borrower or any Subsidiary with respect to
any of the transactions contemplated by this Agreement. The Borrower hereby
agrees to indemnify the Agent and the Lenders against and agrees that it will
hold each of them harmless from any claim, demand or liability for broker's
or finder's fees or commissions alleged to have been incurred by the Borrower
in connection with any of the transactions contemplated by this Agreement and
any expenses (including, without limitation, attorneys' fees and time charges
of attorneys for the Agent or any Lender, which attorneys may be employees of
the Agent or any Lender) arising in connection with any such claim, demand or
lia-
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bility. No other similar fee or commissions will be payable by the Borrower
or any Subsidiary for any other services rendered to the Borrower or any
Subsidiary ancillary to any of the transactions contemplated by this
Agreement.
5.15. SOLVENCY. As of the date hereof, after giving effect to
the consummation of the transactions contemplated by the Loan Documents and
the payment of all fees, costs and expenses payable by the Borrower with
respect to the transactions contemplated by the Loan Documents, each of the
Borrower and each Subsidiary is Solvent.
5.16. OWNERSHIP OF PROPERTIES. Except as set forth on SCHEDULE
5.16 hereto, the Borrower and its Subsidiaries have a subsisting leasehold
interest in, or good and marketable title, free of all Liens, other than
those permitted by SECTION 6.18 or by any of the other Loan Documents, to all
of the properties and assets reflected in the Financial Statements as being
owned by it, except for assets sold, transferred or otherwise disposed of in
the ordinary course of business since the date thereof. To the knowledge of
the Borrower, there are no actual, threatened or alleged defaults with
respect to any leases of real property under which the Borrower or any
Subsidiary is lessee or lessor which could reasonably be expected to have a
Material Adverse Effect. The Borrower and its Subsidiaries own or possess
rights to use all licenses, patents, patent applications, copyrights, service
marks, trademarks and trade names necessary to continue to conduct their
business as heretofore conducted, and no such license, patent or trademark
has been declared invalid, been limited by order of any court or by agreement
or is the subject of any infringement, interference or similar proceeding or
challenge, except for proceedings and challenges which could not reasonably
be expected to have a Material Adverse Effect.
5.17. INDEBTEDNESS. Attached hereto as SCHEDULE 5.17 is a
complete and correct list of all Indebtedness of the Borrower and its
Subsidiaries outstanding on the date of this Agreement (other than
Indebtedness in a principal amount not exceeding $25,000 for a single item of
Indebtedness and $100,000 in the aggregate for all such Indebtedness listed),
showing the aggregate principal amount which was outstanding on such date
after giving effect to the making of the Loans.
5.18. EMPLOYEE CONTROVERSIES. There are no strikes, work
stoppages or controversies pending or threatened between the Borrower or any
Subsidiary and any of its employees, other than employee grievances arising
in the ordinary course of business, which, in the aggregate, could not
reasona
bly be expected to have a Material Adverse Effect.
5.19. MATERIAL AGREEMENTS. Neither the Borrower nor any
Subsidiary is a party to any agreement or instrument or subject to any
charter or other corporate restriction which could reasonably be expected to
have a Material
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Adverse Effect. Neither the Borrower nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any agreement to which it is a party, which
default could reasonably be expected to have a Material Adverse Effect.
5.20. ENVIRONMENTAL LAWS. Except as set forth on SCHEDULE 5.20,
there are no claims, investigations, litigation, administrative proceedings,
notices, requests for information, whether pending or threatened, or
judgments or orders asserting violations of applicable federal, state and
local environmental, health and safety statutes, regulations, ordinances,
codes, rules, orders, decrees, directives and standards ("ENVIRONMENTAL
LAWS")
or relating to any toxic or hazardous waste, substance or chemical or any
pollutant, contaminant, chemical or other substance defined in or regulated
pursuant to any Environmental Law, including, without limitation, asbestos,
petroleum, crude oil or any fraction thereof ("HAZARDOUS MATERIALS") asserted
against the Borrower or any of its Subsidiaries. Neither the Borrower nor
any Subsidiary has caused or permitted any Hazardous Materials to be
released, either on or under real property, currently or formerly, legally or
beneficially owned or operated by the Borrower or any Subsidiary or on or
under real property to which the Borrower or any of its Subsidiaries
transported, arranged for the transport or disposal of, or disposed of
Hazardous Materials. Except as set forth on SCHEDULE 5.20, no real property
currently or formerly owned or operated by the Borrower or any Subsidiary has
ever been used as a dump or disposal site or as a treatment or storage site
for Hazardous Materials. The Borrower and each of its Subsidiaries have
obtained and are in compliance with all permits, certificates, licenses,
approvals and other authorizations ("ENVIRONMENTAL PERMITS") required for the
operation of their business and have filed all required notifications or
reports relating to chemical substances, air emissions, effluent discharges
and the storage, treatment, transport and disposal of Hazardous Materials.
Except as set forth on SCHEDULE 5.20, no asbestos containing materials,
polychlorinated biphenyls or underground storage tanks are or have been
located in, on or under real property owned or operated by the Borrower or
any of its Subsidiaries. There are no liens threatened or attached to real
property owned or operated by the Borrower or any of its Subsidiaries. As of
the date hereof, the Borrower and its Subsidiaries do not have liabilities
exceeding $100,000 in the aggregate for all of them with respect to
compliance with applicable Environmental Laws and Environmental Permits or
related to the generation, treatment, storage, disposal, release,
investigation or cleanup of Hazardous Materials, except for the matter set
forth on SCHEDULE 5.20, as to which such liabilities do not exceed $500,000
in the aggregate, and, except as set forth on SCHEDULE 5.20, no facts or
circumstances exist which could give rise to such liabilities with respect to
compliance with applicable Environmental Laws and Environmental Permits and
the generation, treatment, storage, disposal, release, investigation or
cleanup of Hazardous Materials. The operation and production of the Borrower
and its
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Subsidiaries will not be materially impacted or affected by the compliance by
any such Person with applicable Environmental Laws and Environmental Permits
or related to the generation, treatment, storage, disposal, release,
investigation or cleanup of Hazardous Materials.
5.21. CORPORATE INSURANCE. The Borrower and its Subsidiaries
maintain with financially sound and reputable insurance companies insurance
on their Property in such amounts and covering such risks as is consistent
with sound business practice.
5.22. INSURANCE LICENSES. SCHEDULE 5.22 hereto lists all of the
jurisdictions in which any Insurance Subsidiary holds actual Licenses and is
authorized to transact insurance business as of the date of this Agreement.
No such License, the loss of which could reasonably be expected to have a
Material Adverse Effect, is the subject of a proceeding for suspension or
revocation. To the Borrower's knowledge, there is no sustainable basis for
such suspension or revocation, and no such suspension or revocation has been
threatened by any Governmental Authority. SCHEDULE 5.22 also indicates the
line or lines of insurance in which each such Insurance Subsidiary is engaged
and the state or states in which such Insurance Subsidiary is licensed to
engage in any line of insurance, in each case as of the date of this
Agreement.
5.23. DISCLOSURE. None of the (a) information, exhibits or
reports furnished or to be furnished by the Borrower or any Subsidiary to the
Agent or to any Lender in connection with the negotiation of the Loan
Documents, or (b) representations or warranties of the Borrower or any
Subsidiary contained in this Agreement, the other Loan Documents, or any
other document, certificate or written statement furnished to the Agent or
the Lenders by or on behalf of the Borrower or any Subsidiary for use in
connection with the transactions contemplated by this Agreement, contained,
contains or will contain any untrue statement of a material fact or omitted,
omits or will omit to state a material fact necessary in order to make the
statements contained herein or therein not misleading in light of the
circumstances in which the same were made. The pro forma financial
information contained in such materials is based upon good faith estimates
and assumptions believed by the Borrower to be reasonable at the time made.
There is no fact known to the Borrower (other than matters of a general
economic nature) that has had or could reasonably be expected to have a
Material Adverse Effect and that has not been disclosed herein or in such
other documents, certificates and statements furnished to the Lenders for use
in connection with the transactions contemplated by this Agreement.
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ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders
shall otherwise consent in writing:
6.1. FINANCIAL REPORTING. The Borrower will maintain, for
itself and each Subsidiary, a system of accounting
established and administered in accordance with generally accepted accounting
principles, consistently applied, or SAP as applicable, and will furnish to
the Lenders:
(a)As soon as practicable and in any event within 90
days after the close of each of its Fiscal Years, an
unqualified audit report (which shall not be qualified as to scope of audit
or going concern or in any other material respect) certified by independent
certified public accountants, acceptable to the Lenders, prepared in
accordance with Agreement Accounting Principles on a consolidated and
consolidating basis (consolidating statements need not be certified by such
accountants) for itself and its Subsidiaries, including balance sheets as of
the end of such period, related income and reconciliation of shareholders'
equity statements, and a statement of cash flows, accompanied by (i) any
management letter prepared by said accountants, (ii) a certificate of said
accountants that, in the course of the examination necessary for their
certification of the foregoing, they have obtained no knowledge of any
Default or Unmatured Default, or if, in the opinion of such accountants, any
Default or Unmatured Default shall exist, stating the nature and status
thereof, (iii) a letter from said accountants substantially in the form of
EXH
IBIT C hereto addressed to the Lenders acknowledging that the Lenders are
extending credit in primary reliance on such financial statements and
authorizing such reliance; and (iv) a copy of a written reconciliation
between SAP and Agreement Accounting Principles with respect to such
financial statements if such reconciliation is provided to the insurance
regulatory authority in the state of domicile of any Insurance Subsidiary.
(b)As soon as practicable and in any event within 45
days after the close of the first three quarterly
periods of each of its Fiscal Years, for itself and its Subsidiaries,
consolidated and consolidating unaudited balance sheets as at the close of
each such period and consolidated and consolidating profit and loss and
reconciliation of surplus statements and a statement of cash flows for the
period from the beginning of such Fiscal Year to the end of such Fiscal
Quarter, all certified by its chief financial officer and prepared in
accordance with Agreement Accounting Principles.
(c)(i) Upon the earlier of (A) fifteen days after the
regulatory filing date or (B) 75 days after the close of each Fiscal Year of
each Insurance Subsidiary, copies of the unaudited Annual Statement of such
Insurance Subsidiary, certified by the President, Secretary and Treasurer of
and the
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actuary for such Insurance Subsidiary, all such statements to be prepared in
accordance with SAP consistently applied throughout the periods reflected
therein and (ii) no later than each June 15, copies of such Annual Statements
audited and certified by independent certified public accountants of
recognized annual standing.
(d) Upon the earlier of (i) ten (10) days after the
regulatory filing date or (ii) 60 days after the close of each of the first
three Fiscal Quarters of each Fiscal Year of each Insurance Subsidiary,
copies of the Quarterly Statement of each of the Insurance Subsidiaries,
certified by the president, secretary and treasurer of such Insurance
Subsidiary, all such statements to be prepared in accordance with SAP
consistently applied through the period reflected herein.
(e)Promptly and in any event within ten days after (i)
learning thereof, notification of any changes after
the date hereof in the rating given by A.M. Best & Co. in respect of any
Insurance Subsidiary and (ii) receipt thereof, copies of any ratings analysis
by A.M. Best & Co. relating to any Insurance Subsidiary.
(f)Copies of any actuarial certificates prepared with
respect to any Insurance Subsidiary, promptly after
the receipt thereof.
(g)As soon as available, but in any event not later
than the last Business Day in March of each year, a
copy of the plan and forecast of the Borrower and its Subsidiaries for the
next Fiscal Year (including a projected consolidated balance sheet, income
statement and funds flow statement of the Borrower and its Subsidiaries and a
projected balance sheet and income statement of each Insurance Subsidiary).
(h)Together with the financial statements required by
CLAUSES (A) and (B) above, a compliance certificate
in substantially the form of EXHIBIT D hereto signed by the Borrower; chief
financial officer showing the calculations necessary
to determine compliance with this Agreement and stating that no Default or
Unmatured Default exists, or if any Default or Unmatured Default exists,
stating the nature and status thereof.
(i)Within 270 days after the close of each Fiscal
Year, a statement of the Unfunded Liabilities of each
Single Employer Plan, certified as correct by an actuary enrolled under
ERISA.
(j)As soon as possible and in any event within 10 days
after the Borrower knows that any Termination Event
has occurred with respect to any Plan, a statement, signed by the chief
financial officer of the Borrower, describing said Termination Event and the
action which the Borrower proposes to take with respect thereto.
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(k)As soon as possible and in any event within 10 days
after receipt by the Borrower, a copy of (i) any
notice, claim, complaint or order to the effect that the Borrower or any of
its Subsidiaries is or may be liable to any Person as a result of the release
by the Borrower, any of its Subsidiaries, or any other Person of any
Hazardous Materials into the environment or requiring that action be taken to
respond to or clean up a Release of Hazardous Materials into the environment,
and (ii) any notice, complaint or citation alleging any violation of any
Environmental Law or Environmental Permit by the Borrower or any of its
Subsidiaries. Within ten days of the Borrower or any Subsidiary having
knowledge of the proposal, enactment or promulgation of any Environmental Law
which could reasonably be expected to have a Material Adverse Effect, the
Borrower shall provide the Agent with written notice thereof.
(l)Promptly upon the furnishing thereof to the
shareholders of the Borrower, copies of all financial
statements, reports and proxy statements so furnished.
(m)Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly
or other regular reports which the Borrower or any of its Subsidiaries files
with the Securities and Exchange Commission, the National Association of
Securities Dealers, any securities exchange, the NAIC or any insurance
commission or department or analogous Governmental Authority (including
without limitation, any filing made by the Borrower or any Subsidiary
pursuant to any insurance holding company act or related rules or
regulations), but excluding routine or non-material filings with the NAIC,
any insurance commissioner or department or analogous Governmental Authority.
(n)Promptly and in any event within ten (10) days
after learning thereof, notification of (i) any tax
assessment, demand, notice of proposed deficiency or notice of deficiency
received by the Borrower or any other Consolidated Person or (ii) the filing
of any tax Lien or commencement of any judicial proceeding by or against any
such Consolidated Person, if any such assessment, demand, notice, Lien or
judicial proceeding relates to tax liabilities in excess of ten percent (10%)
of shareholders' equity.
(o)Such other information (including, without
limitation, the annual Best's Advance Report Service report
prepared with respect to each Insurance Subsidiary rated by A.M. Best & Co.)
as the Agent or any Lender may from time to time reasonably request.
6.2. USE OF PROCEEDS. The Borrower will use the proceeds of
the Advances for the general corporate purposes of
the Borrower and its Subsidiaries. The Borrower will not, nor will it permit
any Subsidiary to, use any of the proceeds of the Advances to purchase or
carry any "margin stock" (as defined in Regulation U).
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6.3. NOTICE OF DEFAULT. The Borrower will, and will cause
each Subsidiary to, give prompt notice in writing to
the Lenders of (a) the occurrence of any Default or Unmatured Default, (b)
the occurrence of any other development, financial or other, relating
specifically to the Borrower or any of its Subsidiaries (and not of a general
economic or political nature) which could reasonably be expected to have a
Material Adverse Effect, (c) the receipt of any notice from any Governmental
Authority of the expiration without renewal, revocation or suspension of, or
the institution of any proceedings to revoke or suspend, any License now or
hereafter held by any Insurance Subsidiary which is required to conduct
insurance business in compliance with all applicable laws and regulations and
the expiration, revocation or suspension of which could reasonably be
expected to have a Material Adverse Effect, (d) the receipt of any notice
from any Governmental Authority of the institution of any disciplinary
proceedings against or in respect of any Insurance Subsidiary, or the
issuance of any order, the taking of any action or any request for an
extraordinary audit for cause by any Governmental Authority which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect, (e) any judicial or administrative order limiting or controlling the
insurance business of any Insurance Subsidiary (and not the insurance
industry generally) which has been issued or adopted and which has had, or
could reasonably be expected to have, a Material Adverse Effect, or (f) the
commencement of any litigation which could reasonably be expected to create a
Material Adverse Effect.
6.4. CONDUCT OF BUSINESS. The Borrower will, and will cause
each Subsidiary to, (a) carry on and conduct its
business only in substantially the same manner and in substantially the same
fields of enterprise as it is presently conducted, (b) with respect to each
Insurance Subsidiary, only engage in the life insurance business, (c) do all
things necessary to remain duly incorporated, validly existing and in good
standing in its jurisdiction of incorporation and its jurisdiction of
domicile and maintain all requisite authority to conduct its business in each
other jurisdiction in which its business is conducted, and (d) do all things
necessary to renew, extend and continue in effect all Licenses which may at
any time and from time to time be necessary for any Insurance Subsidiary to
operate its insurance business in compliance with all applicable laws and
regulations; PROVIDED, that any Insurance Subsidiary may withdraw from one or
more states (other than its state of domicile) as an admitted insurer if such
withdrawal is determined by the Borrower's Board of Directors to be in the
best interest of the Borrower and could not reasonably be expected to have a
Material Adverse Effect. No Insurance Subsidiary shall change its state of
domicile or incorporation without the prior written consent of the Required
Lenders. Each Wholly-Owned Subsidiary in existence as of the date of this
Agreement shall continue to be a Wholly-Owned Subsidiary; PROVIDED, that the
Borrower may sell all of the capital stock of any Subsidiary other than
American, subject to SECTION 6.13 hereof.
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6.5. TAXES. The Borrower will, and will cause each
Subsidiary to, timely file complete and correct United
States federal and applicable foreign, state and local tax returns required
by applicable law and pay when due all taxes, assessments and governmental
charges and levies upon it or its income, profits or Property, except those
which are being contested in good faith by appropriate proceedings and with
respect to which adequate reserves have been set aside.
6.6. CORPORATE INSURANCE. The Borrower will, and will cause
each Subsidiary to, maintain with financially sound
and reputable insurance companies insurance on all their Property in such
amounts and covering such risks as is consistent with sound business
practice, and the Borrower will furnish to the Agent and any Lender upon
request full information as to the insurance carried.
6.7. COMPLIANCE WITH LAWS. The Borrower will, and will
cause each Subsidiary to, comply with all laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to
which it may be subject, except where the failure so to comply could not
reasonably be expected to have a Material Adverse Effect.
6.8. MAINTENANCE OF PROPERTIES. The Borrower will, and will
cause each Subsidiary to, do all things necessary
to maintain, preserve, protect and keep its Property in good repair, working
order and condition, and make all necessary and proper repairs, renewals and
replacements so that its business carried on in connection therewith may be
properly conducted at all times.
6.9. INSPECTION. The Borrower will, and will cause each
Subsidiary to, permit the Agent and the Lenders, by
their respective representatives and agents, to inspect any of the Property,
corporate books and financial records of the Borrower and each Subsidiary, to
examine and make copies of the books of accounts and other financial records
of the Borrower and each Subsidiary, and to discuss the affairs, finances and
accounts of the Borrower and each Subsidiary with, and to be advised as to
the same by, their respective officers at such reasonable times and intervals
as the Lenders may designate. The Borrower will keep or cause to be kept,
and cause each Subsidiary to keep or cause to be kept, appropriate records
and books of account in which complete entries are to be made reflecting its
and their business and financial transactions, such entries to be made in
accordance with Agreement Accounting Principles or SAP, as applicable,
consistently applied.
6.10. DIVIDENDS. The Borrower will not, nor will it permit any
Subsidiary to, declare or pay any dividends or make any distributions on its
capital stock (other than dividends payable in its own capital stock) or
redeem, repurchase or otherwise acquire or retire any of its capital stock or
any options or other rights in respect thereof at any time outstanding,
except that (a) any Subsidiary may declare and pay dividends or make
distributions to the Borrower, and (b) so long as no Default or Event of
Default is pending before or after
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giving effect to the declaration or payment of such dividends or the
redemption, repurchase, acquisition or retirement of such stock, the Borrower
may declare and pay dividends on its capital stock or redeem, repurchase,
acquire or retire its capital stock commencing in Fiscal Year 1995 so long as
the aggregate amount of all such dividends, redemptions, repurchases and
acquisitions in any Fiscal Year does not exceed the lesser of (x) $5,000,000
and (y) 25% of Net Income for the prior Fiscal Year.
6.11. INDEBTEDNESS. The Borrower will not, nor will it permit
any Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
(a)the Loans;
(b)Indebtedness existing on the date hereof and
described in SCHEDULE 5.17 hereto;
(c)Rate Hedging Obligations incurred by the Borrower
related to the Loans;
(d)other Rate Hedging Obligations incurred by any
Insurance Subsidiary of not more than one-quarter of one
percent (.25%) of the investment assets ("Assets" statement, Page 2, Line 10A
of the Annual Report) of such Insurance Subsidiary at any one time
outstanding;
(e)Indebtedness with an initial principal amount not
to exceed $7,000,000 incurred by the Borrower in
connection with the construction or permanent financing of a headquarters
facility for the Borrower; and
(f)additional unsecured Indebtedness (other than Rate
Hedging Obligations) which, in respect of
Indebtedness with an initial principal amount in excess of $100,000, is
incurred on terms and conditions acceptable to the Required Lenders, so long
as (i) no Default or Unmatured Default has occurred and is existing or would
occur after giving effect thereto and (ii) such incurrence would not violate
S
ECTION 6.23.2 hereof.
6.12. MERGER. The Borrower will not, nor will it permit any
Subsidiary to, merge or consolidate with or into or sell all or substantially
all of its assets to any other Person, except that a Subsidiary may merge
into the Borrower or any Wholly-Owned Subsidiary of the Borrower; PROVIDED,
that the Borrower may enter into any merger or consolidation with a
corporation organized under the laws of any state of the United States so
long as (a) such transaction is permitted under SECTION 6.15(A)(IV) or (b)(i)
the Borrower is the surviving corporation, (ii) no Default or Unmatured
Default has occurred and is continuing
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or would occur after giving effect thereto and (iii) the Required Lenders
have given their prior written consent to such transaction, which shall not
unreasonably be withheld.
6.13. SALE OF ASSETS. The Borrower will not, nor will it permit
any Subsidiary to, lease, sell, transfer or otherwise dispose of its
Property, to any other Person except for (a) sales of investment assets in
the ordinary course of business, and (b) leases, sales, transfers or other
dispositions of its Property that, together with all other Property of the
Borrower and its Subsidiaries previously leased, sold or disposed of (other
than inventory sold in the ordinary course of business) as permitted by this
S
ECTION 6.13 since the date hereof, do not constitute a Substantial Portion of
the Property of the Borrower and its Subsidiaries.
6.14. SALE AND LEASEBACK. The Borrower will not, nor will it
permit any Subsidiary to, sell or transfer any of its Property in order to
concurrently or subsequently lease as lessee such or similar Property.
6.15. INVESTMENTS AND PURCHASES. (a) The Borrower will not, nor
will it permit any Subsidiary which is not an Insurance Subsidiary to, make
or suffer to exist any Investments (including, without limitation, loans and
advances to, and other Investments in, Subsidiaries), or commitments
therefor, or to create any Subsidiary or to become or remain a partner in any
partnership or joint venture, or to make any Purchases, except:
(i) Cash and Cash Equivalents;
(ii) Investments in existence on the date hereof
(including Investments in Subsidiaries) and described
in SCHEDULE 6.15 hereto;
(iii) Other Investments by the Borrower in American so long
as (A) no Default or Unmatured Default has occurred
and is continuing either before or after giving effect thereto and (B) the
Borrower has provided the Agent with pro forma financial statements as of the
end of the next succeeding quarter after giving effect to such Investment
demonstrating compliance with each of the covenants set forth in SECTION
6.23;
(iv) Purchases of businesses or entities engaged in
the life insurance business which do not constitute
hostile takeovers made (A) for consideration consisting of the Borrower's
capital stock not to exceed $50,000,000 in the aggregate after the date of
this Agreement or (B) for other types of consideration not to exceed (x)
$10,000,000 in the aggregate after the date of this Agreement (including the
amount of any consideration other than the Borrower's capital stock paid in
connection with Purchases made pursuant to clause (A)), less (y) the
aggregate consideration paid in respect of any Purchases made pursuant to
SECTION 6.15(B)(V);
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(v)Other Investments in Omni-Tech not to exceed
$500,000 in the aggregate made after the date of this
Agreement;
(vi) Derivatives Investments made by the Borrower in
respect of the Obligations; and
(vii) Up to $10,000,000 in the aggregate at any time
outstanding of other Investments which do not constitute Purchases or
Derivatives Investments.
(b) The Borrower will not permit any Insurance Subsidiary
to make or suffer to exist any Investments
(including, without limitation, loans and advances to and other Investments
in, Subsidiaries), or commitments therefor, or to create any Subsidiary or to
become or remain a partner in any partnership or joint venture, or to make
any Purchases, except:
(i)Cash and Cash Equivalents;
(ii) Investments in debt securities rated BBB- or
better by Standard & Poor's Ratings Group, Baa-3 or
better by Moody's Investors Services, Inc. or NAIC-2 or better by the NAIC;
PROVIDED, that any such Investment which, at any time
after which it is made, ceases to meet such rating requirements shall (A)
cease to be permitted hereby if then permitted by SECTIO
N 6.15(B)(III) and (B) if not then permitted by SECTION 6.15(B)(III) remain
permitted hereby until the earlier of the time it is
permitted under SECTION 6.15(B)(III) and the date which is 30 days after the
date on which such rating requirement is no longer
met;
(iii) Other Investments (other than Derivatives
Investments) of a quality acceptable to the insurance commissioner in the
respective domiciliary state of such Insurance Subsidiary; PROVIDED, that
such Investments do not exceed, in the aggregate at any one time outstanding,
15% of the Investments of any Insurance Subsidiary, of which not more than
(A) four percent (4%) of such Investments shall consist of Investments in
real estate mortgages, (B) three percent (3%) of such Investments shall
consist of Investments in real estate, (C) ten percent of such Investments
shall consist of Investments in debt securities rated not less than BB- by
Standard & Poor's Ratings Group, Ba3 by Moody's Investors Services, Inc. and
NAIC-3 by the NAIC, (D) three and one-half percent (3.5%) of such Investments
shall consist of Investments in equity securities or (E) four percent (4%) of
such Investments shall consist of Investments other than those described in
clauses (A) through (D);
(iv) Existing Investments in Subsidiaries and other
Investments in existence on the date hereof and described in SCHEDULE 6.15
hereto;
(v) Purchases of businesses or entities engaged in
the life insurance business (which do not constitute hostile takeovers) made
after the date
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of this Agreement for an aggregate consideration not to exceed (A)
$10,000,000, less (B) the aggregate consideration paid in respect of any
Purchases made pursuant to SECTION 6.15(A)(IV)(B);
(vi) Derivatives Investments made after the date of
this Agreement not to exceed either (A) $20,000,000 in the aggregate for all
Insurance Subsidiaries or (B) in the aggregate, 1% of the investment assets
("Assets" statement, Page 2, Line 10A of the Annual Report) as of the date of
determination of the Insurance Subsidiary making the Investment; PROVIDED,
that any such Investment which, at any time after which it is made, ceases to
meet such requirement, shall remain permitted hereby until the date which is
30 days after the date on which such requirement is no longer met; and
(vii) An Investment by American consisting of a loan
made to the Borrower for the purposes described in SECTION 6.11(E);
provided, that in no event shall more than three percent (3%) of the combined
Investments (other than Investments described in clause (c) of the definition
of "Cash Equivalents") of the Insurance Subsidiaries be Investments in any
one Person; PROVIDED, FURTHER, that for purposes of the preceding proviso,
each specific group of collateralized assets created under a
quasi-governmental agency shall constitute a separate Person.
6.16. CONTINGENT OBLIGATIONS. The Borrower will not, nor will it
permit any Subsidiary to, make or suffer to exist any Contingent Obligation
(including, without limitation, any Contingent Obligation with respect to the
obligations of a Subsidiary), except by endorsement of instruments for
deposit or collection in the ordinary course of business.
6.17. LIENS. The Borrower will not, nor will it permit any
Subsidiary to, create, incur, or suffer to exist any Lien in, of or on the
Property of the Borrower or any of its Subsidiaries, except:
(a)Liens for taxes, assessments or governmental
charges or levies on its Property if the same shall not at
the time be delinquent or thereafter can be paid without penalty, or are
being contested in good faith and by appropriate proceedings and for which
adequate reserves in accordance with Agreement Accounting Principles or SAP,
as applicable, shall have been set aside on its books;
(b)Liens imposed by law, such as carriers',
warehousemen's and mechanics' liens and other similar liens
arising in the ordinary course of business which secure payment of
obligations not more than 60 days past due or which are being contested in
good faith by appropriate proceedings and for which adequate reserves in
accordance with Agreement Accounting Principles or SAP, as applicable, shall
have been set aside on its books;
-44-
(c)Liens arising out of pledges or deposits under
worker's compensation laws, unemployment insurance, old
age pensions, or other social security or retirement benefits, or similar
legislation;
(d)Utility easements, building restrictions and such
other encumbrances or charges against real property
as are of a nature generally existing with respect to properties of a similar
character and which do not in any material way affect the marketability of
the same or interfere with the use thereof in the business of the Borrower or
the Subsidiaries; and
(e)Liens on securities constituting joint custody
receipts in favor of the Kansas Department of Insurance;
(f)Liens securing Indebtedness incurred pursuant to
SECTION 6.11(E); and
(g)Liens existing on the date hereof and described in
SCHEDULE 6.17 hereto.
6.18. AFFILIATES. The Borrower will not, and will not permit any
Subsidiary to, enter into any transaction
(including, without limitation, the purchase or sale of any Property or
service) with, or make any payment or transfer to, any Affiliate except (a)
in
the ordinary course of business and pursuant to the reasonable requirements
of the Borrower's or such Subsidiary's business and upon fair and reasonable
terms no less favorable to the Borrower or such Subsidiary than the Borrower
or such Subsidiary would obtain in a comparable arms-length transaction and
(b) a loan permitted pursuant to SECTION 6.15(B)(VII).
6.19. AMENDMENTS TO AGREEMENTS. The Borrower will not, and will
not permit any Subsidiary to, amend, waive, modify or terminate (a) the terms
and conditions of any agreement or charter provision governing any preferred
stock or (b) any Management Agreement, except as required by applicable law
or regulation.
6.20. ENVIRONMENTAL MATTERS. The Borrower shall and shall cause
each of its Subsidiaries to (a) at all times comply in all material respects
with all applicable Environmental Laws and (b) promptly take any and all
necessary remedial actions in response to the presence, storage, use,
disposal, transportation or Release of any material amount of Hazardous
Materials on, under or about any real property owned, leased or operated by
the Borrower or any of its Subsidiaries. In the event that the Borrower or
any Subsidiary undertakes any remedial action with respect to any Hazardous
Material on, under or about any real property, the Borrower or such
Subsidiary shall conduct and complete such remedial action in material
compliance with all applicable Environmental Laws and in accordance with the
policies, orders and directives of all federal, state and local governmental
authorities, except when the Borrower's or such Subsidiary's liability for
such presence, storage, use, disposal, transportation or Release of any
Hazardous Material is being contested in good faith by the Borrower or such
Subsidiary and appropriate reserves therefor have been
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established. If the Agent or any Lender at any time has a reasonable basis to
believe that there may be a material violation of any Environmental Law by
the Borrower or any of its Subsidiaries, or any material liability arising
thereunder or related to a Release of Hazardous Materials on any real
property owned, leased or operated by the Borrower or any of its Subsidiaries
or a Release on real property adjacent to such real property, then the
Borrower shall, upon the request of the Agent or such Lender, provide the
Agent and each Lender with all such reports, certificates, engineering
studies and other written material or data relating thereto as the Agent or
any Lender may reasonably require.
6.21. CHANGE IN CORPORATE STRUCTURE; FISCAL YEAR. The Borrower
shall not, nor shall it permit any Subsidiary to, (a) permit any amendment or
modification to be made to its certificate or articles of incorporation or
by-laws which is materially adverse to the interests of the Lenders (provided
that the Borrower shall notify the Agent of any other amendment or
modification thereto as soon as practicable thereafter) or (b) change its
Fiscal Year to end on any date other than December 31 of each year.
6.22. INCONSISTENT AGREEMENTS. The Borrower shall not, nor shall
it permit any Subsidiary to, enter into any indenture, agreement, instrument
or other arrangement which, (a) directly or indirectly prohibits or
restrains, or has the effect of prohibiting or restraining, or imposes
materia
lly adverse conditions upon, the incurrence of the Obligations, the granting
of Liens to secure the Obligations, or the amendment of the Loan Documents or
(b) contains any provision which would be violated or breached by the making
of Advances or by the performance by the Borrower of any of its obligations
under any Loan Document.
6.23. FINANCIAL COVENANTS. Subject to normal year-end and
closing audit adjustments for calculations or determinations made in
accordance with Agreement Accounting Principles or SAP, as applicable, prior
to the end of a Fiscal Year, the Borrower on a consolidated basis with its
Subsidiaries shall:
6.23.1. NET WORTH. At all times after the date
hereof, maintain a Net Worth (less the aggregate Goodwill of the Borrower and
its Subsidiaries) equal to or greater than the sum of (a) $97,000,000, PLUS
(b) fifty percent (50%) of the sum of the Net Income (but not net loss) of
the Borrower and its Subsidiaries for each Fiscal Quarter ending on or after
December 31, 1994, PLUS (c) an amount equal to 100% of the cash and non-cash
proceeds of any equity securities issued by the Borrower after the date of
this Agreement.
6.23.2. LEVERAGE RATIO. At all times after the date
hereof, maintain a Leverage Ratio of not more .20:1.0.
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6.23.3. CASH FLOW COVERAGE RATIO. As of the end of
each Fiscal Quarter, maintain a Cash Flow Coverage Ratio of not less than
1.5:1.0.
6.23.4. RISK-BASED CAPITAL. At all times after the
date hereof, cause each Insurance Subsidiary to maintain a ratio of (a) Total
Adjusted Capital (as defined in the Risk-Based Capital Act or in the rules
and procedures prescribed from time to time by the NAIC with respect thereto)
to (b) the Company Action Level RBC (as defined in the Risk-Based Capital Act
or in the rules and procedures prescribed from time to time by the NAIC with
respect thereto) of at least 200%.
6.23.5. ADJUSTED CAPITAL AND SURPLUS TO ASSETS. At
all times after the date hereof, cause each Insurance Subsidiary to maintain
Adjusted Capital and Surplus of greater than or equal to 5% of its assets
("Assets" statement, Page 2, Line 22, Column 1 of the Annual Statement).
6.24. TAX CONSOLIDATION. The Borrower will not and will not
permit any of its Subsidiaries to (a) file or consent to the filing of any
consolidated, combined or unitary income tax return with any Person other
than the Borrower and its Subsidiaries or (b) amend, terminate or fail to
enforce the Tax Sharing Agreement or enter into any other tax sharing
agreement or similar arrangement.
6.25. ERISA COMPLIANCE.
With respect to any Plan, neither the Borrower nor any
Subsidiary shall:
(a)engage in any "prohibited transaction" (as such
term is defined in Section 406 of ERISA or Section 4975
of the IRC) for which a civil penalty pursuant to Section 502(i) of ERISA or
a tax pursuant to Section 4975 of the IRC in excess of $100,000 could be
imposed;
(b)incur any "accumulated funding deficiency" (as such
term is defined in Section 302 of ERISA) in excess
of $100,000, whether or not waived, or permit any Unfunded Liability to
exceed $100,000;
(c)permit the occurrence of any Termination Event
which could result in a liability to the Borrower or any
other member of the Controlled Group in excess of $100,000;
(d)be an "employer" (as such term is defined in
Section 3(5) of ERISA) required to contribute to any
Multiemployer Plan or a "substantial employer" (as such term in defined in
Section 4001(a)(2) of ERISA) required to contribute to any Multiemployer
Plan;
or
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(e)permit the establishment or amendment of any Plan
or fail to comply with the applicable provisions of
ERISA and the IRC with respect to any Plan which could result in liability to
the Borrower or any other member of the Controlled Group which, individually
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect.
6.26. DERIVATIVES. The Borrower and its Insurance Subsidiaries
may enter into Derivatives Investments (a) subject to the limitations set
forth in SECTIONS 6.11 AND 6.15 hereof and (b) for so long as such
transactions are within the Investment Guidelines for Interest Rate Exchange
Agreements (Swaps) provided to the Borrower by NISA Investment Advisors LLC,
as set forth on SCHEDULE 6.26 hereto and as in effect on the date of this
Agreement; PROVIDED, that notwithstanding clause (b) above, the Borrower and
its Insurance Subsidiaries may enter into interest rate cap (under which such
Person is the cap purchaser) or collar (under which such Person is the floor
provider and the cap purchaser) protection agreements.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
7.1. Any representation or warranty made or deemed made by
or on behalf of the Borrower or any of its
Subsidiaries to the Lenders or the Agent under or in connection with this
Agreement, any Loan, or any certificate or information delivered in
connection
with this Agreement or any other Loan Document shall be false in any
material respect on the date as of which made.
7.2. Nonpayment of (a) principal of any Note when due, or
(b) interest upon any Note or any commitment fee or
other fee or obligations under any of the Loan Documents within five days
after the same becomes due.
7.3. The breach by the Borrower of any of the terms or
provisions of SECTION 6.2, SECTION 6.3(A) or SECTIONS
6.10 through 6.26.
7.4. The breach by the Borrower (other than a breach which
constitutes a Default under SECTION 7.1, 7.2 or 7.3)
of any of the terms or provisions of this Agreement which is not remedied
within ten (10) days after written notice from the Agent or any Lender.
7.5. The default by the Borrower or any of its Subsidiaries
in the performance of any term, provision or
condition contained in any agreement or agreements under which any
Indebtedness aggregating in excess of $100,000 was
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created or is governed, or the occurrence of any other event or existence of
any other condition, the effect of any of which is to cause, or to permit the
holder or holders of such Indebtedness to cause, such Indebtedness to become
due prior to its stated maturity; or any such Indebtedness of the Borrower or
any of its Subsidiaries shall be declared to be due and payable or required
to be prepaid in whole (other than by a regularly scheduled payment) prior to
the stated maturity thereof.
7.6. The Borrower or any of its Subsidiaries shall (a) have
an order for relief entered with respect to it under
the Federal bankruptcy laws as now or hereafter in effect, (b) make an
assignment for the benefit of creditors, (c) apply for, seek, consent to, or
acquiesce in, the appointment of a receiver, custodian, trustee, examiner,
liquidator or similar official for it or any Substantial Portion of its
Property, (d) institute any proceeding seeking an order for relief under the
Federal bankruptcy laws as now or hereafter in effect or seeking to
adjudicate it a bankrupt or insolvent, or seeking dissolution, winding up,
liquidation, reorganization, arrangement, adjustment or composition of it or
its debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors or fail to file an answer or other pleading denying the
material allegations of any such proceeding filed against it, (e) take any
corporate action to authorize or effect any of the foregoing actions set
forth in this SECTION 7.6, (f) fail to contest in good faith any appointment
or proceeding described in SECTION 7.7 or (g) become unable, not pay, or
admit in writing its inability to pay, its debts generally as they become
due.
7.7. Without the application, approval or consent of the
Borrower or any of its Subsidiaries, a receiver,
trustee, examiner, liquidator or similar official shall be appointed for the
Borrower or any of its Subsidiaries or any Substantial Portion of its
Property
, or a proceeding described in SECTION 7.6(D) shall be instituted against the
Borrower or any of its Subsidiaries and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for a
period of thirty consecutive days.
7.8. Any court, government or governmental agency shall
condemn, seize or otherwise appropriate, or take custody
or control of (each a "CONDEMNATION"), all or any portion of the Property of
the Borrower and its Subsidiaries which, when taken
together with all other Property of the Borrower and its Subsidiaries so
condemned, seized, appropriated, or taken custody or control of, during the
twelve-month period ending with the month in which any such Condemnation
occurs, constitutes a Substantial Portion.
7.9. The Borrower or any of its Subsidiaries shall fail
within thirty days to pay, bond or otherwise discharge
any judgment or order for the payment of money in excess of $100,000 (or
multiple judgments or orders for the pay-
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ment of an aggregate amount in excess of $500,000), which is not stayed on
appeal or otherwise being appropriately contested in good faith.
7.10. The Borrower or any of its Subsidiaries shall be the
subject of any proceeding or investigation pertaining to the discovery of any
Hazardous Materials on the leased or owned property of the Borrower or any of
its Subsidiaries, the release by the Borrower or any of its Subsidiaries, or
any other Person of any Hazardous Materials into the environment, or any
violation of any Environmental Law or Environmental Permit, which, in any
such case, could reasonably be expected to have a Material Adverse Effect.
7.11. Any Change in Control shall occur.
7.12. Nonpayment by the Borrower of any Rate Hedging Obligation
or the breach by the Borrower of any term, provision or condition contained
in any agreement, device or arrangement giving rise to any Rate Hedging
Obligation.
7.13. Any License of any Insurance Subsidiary (a) shall be
revoked by the Governmental Authority which issued such License, or any
action (administrative or judicial) to revoke such License shall have been
commenced against such Insurance Subsidiary and shall not have been dismissed
within 30 days after the commencement thereof, (b) shall be suspended by such
Governmental Authority for a period in excess of 30 days or (c) shall not be
reissued or renewed by such Governmental Authority upon the expiration
thereof following application for such reissuance or renewal of such
Insurance Subsidiary.
7.14. Any Insurance Subsidiary shall be the subject of a final
non-appealable order imposing a fine in an amount in excess of $250,000 in
any single instance or other such orders imposing fines in excess of
$1,000,000 in the aggregate after the date of this Agreement by or at the
request of any state insurance regulatory agency as a result of the violation
by such Insurance Subsidiary of such state's applicable insurance laws or the
regulations promulgated in connection therewith.
7.15. Any Insurance Subsidiary shall become subject to (a) any
conservation or liquidation order, directive or mandate issued by any
Governmental Authority or (b) any other directive or mandate issued by any
Governmental Authority, which in either case is not stayed within ten (10)
days.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. ACCELERATION. If any Default described in SECTION 7.6
or 7.7 occurs with respect to the Borrower, the
obligations of the Lenders to make Loans hereunder shall automatically
terminate and the Obligations shall immediately
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become due and payable without any election or action on the part of the
Agent or any Lender. If any other Default occurs, the Required Lenders (or
the Agent with the consent of the Required Lenders) may terminate or suspend
the obligations of the Lenders to make Loans hereunder, or declare the
Obligations to be due and payable, or both, whereupon the Obligations shall
become immediately due and payable, without presentment, demand, protest or
notice of any kind, all of which the Borrower hereby expressly waives.
If, within ten Business Days after acceleration of the maturity
of the Obligations or termination of the obligations of the Lenders to make
Loans hereunder as a result of any Default (other than any Default as
described in SECTION 7.6 or 7.7 with respect to the Borrower) and before any
judgment or decree for the payment of the Obligations due shall have been
obtained or entered, the Required Lenders (in their sole discretion) shall so
direct, the Agent shall, by notice to the Borrower, rescind and annul such
acceleration and/or termination.
8.2. AMENDMENTS. Subject to the provisions of this ARTICLE
VIII, the Required Lenders (or the Agent with the
consent in writing of the Required Lenders) and the Borrower may enter into
agreements supplemental hereto for the purpose of adding or modifying any
provisions to the Loan Documents or changing in any manner the rights of the
Lenders or the Borrower hereunder or waiving any Default hereunder; PROVIDED,
HOWEVER, that no such supplemental agreement shall, without the consent of
each Lender affected thereby:
(a)Extend the final maturity of any Loan or Note or
reduce the principal amount thereof, or reduce the
rate or extend the time of payment of interest or fees thereon;
(b)Reduce the percentage specified in the definition
of Required Lenders;
(c)Reduce the amount or extend the payment date for
the mandatory payments required under SECTION 2.1(B)
or 2.7, or increase the amount of the Commitment of any Lender hereunder;
(d)Extend the Facility Termination Date or reduce the
amount or extend the time of any mandatory
commitment reduction required by SECTION 2.7;
(e)Amend this SECTION 8.2; or
(f)Permit any assignment by the Borrower of its
Obligations or its rights hereunder.
No amendment of any provision of this Agreement relating to the Agent shall
be effective without the written consent of the
Agent. The Agent may waive payment of the fee required under SECTION 12.3.2
without obtaining the consent of any other party to
this Agreement.
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8.3. PRESERVATION OF RIGHTS. No delay or omission of the
Lenders or the Agent to exercise any right under the
Loan Documents shall impair such right or be construed to be a waiver of any
Default or an acquiescence therein, and the making of a Loan notwithstanding
the existence of a Default or the inability of the Borrower to satisfy the
conditions precedent to such Loan shall not constitute any waiver or
acquiescence. Any single or partial exercise of any such right shall not
preclude other or further exercise thereof or the exercise of any other
right, and no waiver, amendment or other variation of the terms, conditions
or provisions of the Loan Documents whatsoever shall be valid unless in
writing signed by the Lenders required pursuant to SECTION 8.2, and then only
to the extent in such writing specifically set forth. All remedies contained
in the Loan Documents or by law afforded shall be cumulative and all shall be
available to the Agent and the Lenders until the Obligations have been paid
in full.
ARTICLE IX
GENERAL PROVISIONS
9.1. SURVIVAL OF REPRESENTATIONS. All representations and
warranties of the Borrower contained in this
Agreement or of the Borrower or any Subsidiary contained in any Loan Document
shall survive delivery of the Notes and the making of the Loans herein
contemplated.
9.2. GOVERNMENTAL REGULATION. Anything contained in this
Agreement to the contrary notwithstanding, no Lender
shall be obligated to extend credit to the Borrower in violation of any
limitation or prohibition provided by any applicable statute or regulation.
9.3. TAXES. Any taxes (excluding income taxes on the
overall net income of any Lender) or other similar
assessments or charges payable or ruled payable by any governmental authority
in respect of the Loan Documents shall be paid by the Borrower, together with
interest and penalties, if any.
9.4. HEADINGS. Section headings in the Loan Documents are
for convenience of reference only, and shall not
govern the interpretation of any of the provisions of the Loan Documents.
9.5. ENTIRE AGREEMENT. The Loan Documents embody the entire
agreement and understanding among the Borrower, the
Agent and the Lenders and supersede all prior agreements and understandings
among the Borrower, the Agent and the Lenders relating to the subject matter
thereof other than the fee letter dated November 18, 1994 in favor of First
Chicago.
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9.6. SEVERAL OBLIGATIONS; BENEFITS OF THIS AGREEMENT. The
respective obligations of the Lenders hereunder are
several and not joint and no Lender shall be the partner or agent of any
other (except to the extent to which the Agent is authorized to act as such).
The failure of any Lender to perform any of its obligations hereunder shall
not relieve any other Lender from any of its obligations hereunder. This
Agreement shall not be construed so as to confer any right or benefit upon
any Person other than the parties to this Agreement and their respective
successors and assigns.
9.7. EXPENSES; INDEMNIFICATION. The Borrower shall
reimburse the Agent for any reasonable costs, internal
charges and out-of-pocket expenses (including attorneys' fees and time
charges of attorneys for the Agent, which attorneys may be
employees of the Agent) paid or incurred by the Agent in connection with the
preparation, negotiation, execution, delivery, review, amendment,
modification
, and administration of the Loan Documents. The Borrower also agrees to
reimburse the Agent and the Lenders for any costs, internal charges and
out-of
-pocket expenses (including attorneys' fees and time charges of attorneys for
the Agent and the Lenders, which attorneys may be employees of the Agent or
the Lenders) paid or incurred by the Agent or any Lender in connection with
the collection and enforcement of the Loan Documents. The Borrower further
agrees to indemnify the Agent and each Lender, its directors, officers and
employees against all losses, claims, damages, penalties, judgments,
liabilities and expenses (including, without limitation, all expenses of
litigation or preparation therefor whether or not the Agent or any Lender is
a party thereto) which any of them may pay or incur arising out of or
relating to this Agreement and the other Loan Documents, the transactions
contemplated hereby or thereby or the direct or indirect application or
proposed application of the proceeds of any Loan hereunder except to the
extent that they arise out of the gross negligence or willful misconduct of
the party seeking indemnification. The obligations of the Borrower under
this SECTION 9.7 shall survive the termination of this Agreement.
9.8. NUMBERS OF DOCUMENTS. All statements, notices, closing
documents, and requests hereunder shall be
furnished to the Agent with sufficient counterparts so that the Agent may
furnish one to each of the Lenders.
9.9. ACCOUNTING. Except as provided to the contrary herein,
all accounting terms used herein shall be
interpreted and all accounting determinations hereunder shall be made in
accordance with (a)SAP in the case of determinations applicable to the
insurance operations of the Insurance Subsidiaries and (b)
Agreement Accounting Principles in the case of all other determinations.
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9.10. SEVERABILITY OF PROVISIONS. Any provision in any Loan
Document that is held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable,
or invalid without affecting the remaining provisions in that jurisdiction or
the operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are
declared to be severable.
9.11. NONLIABILITY OF LENDERS. The relationship between the
Borrower and the Lenders and the Agent shall be solely that of borrower and
lender. Neither the Agent nor any Lender shall have any fiduciary
responsibilities to the Borrower. Neither the Agent nor any Lender
undertakes any responsibility to the Borrower to review or inform the
Borrower of any matter in connection with any phase of the Borrower's
business or operations. The Borrower agrees that neither the Agent nor any
Lender shall have liability to the Borrower (whether sounding in tort,
contract or otherwise) for losses suffered by the Borrower in connection
with, arising out of, or in any way related to, the transactions contemplated
and the relationship established by the Loan Documents, or any act, omission
or event occurring in connection therewith, unless it is determined by a
court of competent jurisdiction by final and non-appealable judgment that
such losses resulted from the gross negligence or willful misconduct of the
party from which recovery is sought. Neither the Agent nor any Lender shall
have any liability with respect to, and the Borrower hereby waives, releases
and agrees not to sue for, any special, indirect or consequential damages
suffered by the Borrower in connection with, arising out of, or in any way
related to the Loan Documents or the transactions contemplated thereby.
9.12. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE
CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS, WITHOUT REGARD TO CONFLICT OF LAWS
PROVISIONS, OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.
9.13. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
ILLINOIS STATE COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY
AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY
NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING
HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY LENDER TO BRING PROCEEDINGS
AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL
PROCEEDING BY THE
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BORROWER AGAINST THE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE AGENT OR ANY
LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN
A COURT IN CHICAGO, ILLINOIS; PROVIDED, THAT SUCH PROCEEDINGS MAY BE BROUGHT
IN OTHER COURTS IF JURISDICTION MAY NOT BE OBTAINED IN A COURT IN CHICAGO,
ILLINOIS.
9.14. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT AND EACH
LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
9.15. DISCLOSURE. The Borrower and each Lender hereby (a)
acknowledge and agree that First Chicago and/or its Affiliates from time to
time may hold other investments in, make other loans to or have other
relationships with the Borrower, including, without limitation, in connection
with any interest rate hedging instruments or agreements or swap
transactions, and (b) waive any liability of First Chicago or such Affiliate
in connection with the transaction contemplated hereby to the Borrower or any
Lender, respectively, arising out of or resulting from such investments,
loans or relationships other than liabilities arising out of the gross
negligence or willful misconduct of First Chicago or its Affiliates.
9.16. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one agreement,
and any of the parties hereto may execute this Agreement by signing any such
counterpart. This Agreement shall be effective when it has been executed by
the Borrower, the Agent and the Lenders and each party has notified the Agent
by telex or telephone, that it has taken such action.
ARTICLE X
THE AGENT
10.1. APPOINTMENT. First Chicago is hereby appointed Agent
hereunder and under each other Loan Document, and each of the Lenders
authorizes the Agent to act as the agent of such Lender. The Agent agrees to
act as such upon the express conditions contained in this ARTICLE X. The
Agent shall not have a fiduciary relationship in respect of the Borrower or
any Lender by reason of this Agreement.
10.2. POWERS. The Agent shall have and may exercise such powers
under the Loan Documents as are specifically delegated to the Agent by the
terms of each thereof, together with such powers as are reasonably incidental
thereto.
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The Agent shall have no implied duties to the Lenders, or any obligation to
the Lenders to take any action thereunder, except any action specifically
provided by the Loan Documents to be taken by the Agent.
10.3. GENERAL IMMUNITY. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable to the Borrower or
any Lender for any action taken or omitted to be taken by it or them
hereunder or under any other Loan Document or in connection herewith or
therewith except for its or their own gross negligence or willful misconduct.
10.4. NO RESPONSIBILITY FOR LOANS, RECITALS, ETC. Neither the
Agent nor any of its directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into, or verify (a)
any statement, warranty or representation made in connection with any Loan
Document or any borrowing hereunder, (b) the performance or observance of any
of the covenants or agreements of any obligor under any Loan Document,
including, without limitation, any agreement by an obligor to furnish
information directly to each Lender; (c) the satisfaction of any condition
specified in ARTICLE IV, except receipt of items required to be delivered to
the Agent and not waived at closing, or (d) the validity, effectiveness,
sufficiency, enforceability or genuineness of any Loan Document or any other
instrument or writing furnished in connection therewith. The Agent shall
have no duty to disclose to the Lenders information that is not required to
be furnished by the Borrower to the Agent at such time, but is voluntarily
furnished by the Borrower to the Agent (either in its capacity as Agent or in
its individual capacity).
10.5. ACTION ON INSTRUCTIONS OF LENDERS. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder
and under any other Loan Document in accordance with written instructions
signed by the Required Lenders (or, to the extent required by SECTION 8.2,
all Lenders), and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders and on all holders of
Notes. The Agent shall be fully justified in failing or refusing to take any
action hereunder and under any other Loan Document unless it shall first be
indemnified to its satisfaction by the Lenders pro rata against any and all
liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.
10.6. EMPLOYMENT OF AGENTS AND COUNSEL. The Agent may execute
any of its duties as Agent hereunder and under any other Loan Document by or
through employees, agents and attorneys-in-fact and shall not be answerable
to the Lenders, except as to money or securities received by it or its
authorized agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The Agent shall be
entitled to advice of counsel concerning all matters pertaining to the agency
hereby created and its duties hereunder and under any other Loan Document.
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10.7. RELIANCE ON DOCUMENTS; COUNSEL. The Agent shall be
entitled to rely upon any Note, notice, consent, certificate, affidavit,
letter, telegram, statement, paper or document believed by it to be genuine
and correct and to have been signed or sent by the proper person or persons,
and, in respect to legal matters, upon the opinion of counsel selected by the
Agent, which counsel may be employees of the Agent.
10.8. AGENT'S REIMBURSEMENT AND INDEMNIFICATION. The Lenders
agree to reimburse and indemnify the Agent ratably in proportion to their
respective Commitments (or, if the Commitments have been terminated, in
proportion to their Commitments immediately prior to such termination) (a)
for any amounts not reimbursed by the Borrower for which the Agent is
entitled to reimbursement by the Borrower under the Loan Documents, (b) for
any other expenses incurred by the Agent, on behalf of the Lenders, in
connection with the preparation, execution, delivery, administration and
enforcement of the Loan Documents, and (c) for any liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising
out of the Loan Documents or any other document delivered in connection
therewith or the transactions contemplated thereby, or the enforcement of any
of the terms thereof or of any such other documents; PROVIDED, that no Lender
shall be liable for any of the foregoing to the extent they arise from the
gross negligence or willful misconduct of the Agent. The obligations of the
Lenders under this SECTION 10.8 shall survive payment of the Obligations and
termination of this Agreement.
10.9. NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Unmatured Default
hereunder unless the Agent has received written notice from a Lender or the
Borrower referring to this Agreement describing such Default or Unmatured
Default and stating that such notice is a "notice of default". In the event
that the Agent receives such a notice, the Agent shall give prompt notice
thereof to the Lenders.
10.10. RIGHTS AS A LENDER. In the event the Agent is a Lender,
the Agent shall have the same rights and powers hereunder and under any other
Loan Document as any Lender and may exercise the same as though it were not
the Agent, and the term "Lender" or "Lenders" shall, at any time when the
Agent is a Lender, unless the context otherwise indicates, include the Agent
in its individual capacity. The Agent may accept deposits from, lend money
to, and generally engage in any kind of trust, debt, equity or other
transaction, in addition to those contemplated by this Agreement or any other
Loan Document, with the Borrower or any of its Subsidiaries in which the
Borrower or such Subsidiary is not restricted hereby from engaging with any
other Person. The Agent, in its individual capacity, is not obligated to
remain a Lender.
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10.11. LENDER CREDIT DECISION. Each Lender acknowledges that it
has, independently and without reliance upon the Agent or any other Lender
and based on the financial statements prepared by the Borrower and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and
without reliance upon the Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue
to make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents.
10.12. SUCCESSOR AGENT. The Agent may resign at any time by
giving written notice thereof to the Lenders and the Borrower, such
resignation to be effective upon the appointment of a successor Agent or, if
no successor Agent has been appointed, forty-five days after the retiring
Agent gives notice of its intention to resign. Upon any such resignation, the
Required Lenders shall have the right to appoint, on behalf of the Borrower
and the Lenders, a successor Agent. If no successor Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within thirty days after the resigning Agent's giving notice of its intention
to resign, then the resigning Agent may appoint, on behalf of the Borrower
and the Lenders, a successor Agent. If the Agent has resigned and no
successor Agent has been appointed, the Lenders may perform all the duties of
the Agent hereunder and the Borrower shall make all payments in respect of
the Obligations to the applicable Lender and for all other purposes shall
deal directly with the Lenders. No successor Agent shall be deemed to be
appointed hereunder until such successor Agent has accepted the appointment.
Any such successor Agent shall be a commercial bank having capital and
retained earnings of at least $50,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the resigning Agent. Upon the effectiveness of the
resignation of the Agent, the resigning Agent shall be discharged from its
duties and obligations hereunder and under the Loan Documents. After the
effectiveness of the resignation of an Agent, the provisions of this ARTICLE
X shall continue in effect for the benefit of such Agent in respect of any
actions taken or omitted to be taken by it while it was acting as the Agent
hereunder and under the other Loan Documents.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. SETOFF. In addition to, and without limitation of, any
rights of the Lenders under applicable law, if the Borrower becomes
insolvent, however evidenced, or any Default or Unmatured Default occurs, any
and all deposits
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(including all account balances, whether provisional or final and whether or
not collected or available) and any other Indebtedness at any time held or
owing by any Lender to or for the credit or account of the Borrower may be
offset and applied toward the payment of the Obligations owing to such
Lender, whether or not the Obligations, or any part hereof, shall then be
due.
11.2. RATABLE PAYMENTS. If any Lender, whether by setoff or
otherwise, has payment made to it upon its Loans (other than payments
received pursuant to SECTIONS 3.1, 3.2 or 3.4) in a greater proportion than
its pro-rata share of such Loans, such Lender agrees, promptly upon demand,
to purchase a portion of the Loans held by the other Lenders so that after
such purchase each Lender will hold its ratable proportion of Loans. If any
Lender, whether in connection with setoff or amounts which might be subject
to setoff or otherwise, receives collateral or other protection for its
Obligations or such amounts which may be subject to setoff, such Lender
agrees, promptly upon demand, to take such action necessary such that all
Lenders share in the benefits of such collateral ratably in proportion to
their Loans. In case any such payment is disturbed by legal process, or
otherwise, appropriate further adjustments shall be made. If an amount to be
setoff is to be applied to Indebtedness of the Borrower to a Lender, other
than Indebtedness evidenced by any of the Notes held by such Lender, such
amount shall be applied ratably to such other Indebtedness and to the
Indebtedness evidenced by such Notes.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. SUCCESSORS AND ASSIGNS. The terms and provisions of the
Loan Documents shall be binding upon and inure to the benefit of the Borrower
and the Lenders and their respective successors and assigns, except that (a)
the Borrower shall not have the right to assign its rights or obligations
under the Loan Documents, and (b) any assignment by any Lender must be made
in compliance with SECTION 12.3. Notwithstanding CLAUSE (B) of this Section,
any Lender may at any time, without the consent of the Borrower or the Agent,
assign all or any portion of its rights under this Agreement and its Notes to
a Federal Reserve Bank; PROVIDED, HOWEVER, that no such assignment to a
Federal Reserve Bank shall release the transferor Lender from its obligations
hereunder. The Agent may treat the payee of any Note as the owner thereof
for all purposes hereof unless and until such payee complies with SECTION
12.3 in the case of an assignment thereof or, in the case of any other
transfer, a written notice of the transfer is filed with the Agent. Any
assignee or transferee of a Note agrees by acceptance thereof to be bound by
all the terms and provisions of
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the Loan Documents. Any request, authority or consent of any Person, who at
the time of making such request or giving such authority or consent is the
holder of any Note, shall be conclusive and binding on any subsequent holder,
transferee or assignee of such Note or of any Note or Notes issued in
exchange therefor.
12.2. PARTICIPATIONS.
12.2.1. PERMITTED PARTICIPANTS; EFFECT. Any Lender
may, in the ordinary course of its business and in accordance with applicable
law, at any time sell to one or more banks or other entities ("PARTICIPANTS")
participating interests in any Loan owing to such Lender, any Note held by
such Lender, any Commitment of such Lender or any other interest of such
Lender under the Loan Documents. In the event of any such sale by a Lender
of participating interests to a Participant, such Lender's obligations under
the Loan Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, such Lender shall remain the holder of any such Note for all
purposes under the Loan Documents, all amounts payable by the Borrower under
this Agreement shall be determined as if such Lender had not sold such
participating interests, and the Borrower and the Agent shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under the Loan Documents.
12.2.2. VOTING RIGHTS. Each Lender shall retain the
sole right to approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other than any
amendment, modification or waiver which effects any of the modifications
referenced in clauses (a), (c) and (d) of SECTION 8.2.
12.2.3. BENEFIT OF SETOFF. The Borrower agrees that
each Participant shall be deemed to have the right of setoff provided in
SECTION 11.1 in respect of its participating interest in amounts owing under
the Loan Documents to the same extent as if the amount of its participating
interest were owing directly to it as a Lender under the Loan Documents;
PROVIDED, that each Lender shall retain the right of setoff provided in SECTION
11.1 with respect to the amount of participating interests sold to each
Participant. The Lenders agree to share with each Participant, and each
Participant, by exercising the right of setoff provided in SECTION 11.1,
agrees to share with each Lender, any amount received pursuant to the
exercise of its right of setoff, such amounts to be shared in accordance with
SECTION 11.2 as if each Participant were a Lender.
12.3. ASSIGNMENTS.
12.3.1. PERMITTED ASSIGNMENTS. Any Lender may, in
the ordinary course of its business and in accordance with applicable law, at
any time assign to one or more banks or other entities ("PURCHASERS") all or
any part of its
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rights and obligations under the Loan Documents; provided, however, that in
the case of an assignment to an entity which is not a Lender or an Affiliate
of a lender, such assignment shall be in a minimum amount of $5,000,000. Such
assignment shall be substantially in the form of EXHIBIT E hereto or in such
other form as may be agreed to by the parties thereto. The consent of the
Agent and, prior to the occurrence of any Default, the Borrower, shall be
required prior to an assignment becoming effective with respect to a
Purchaser which is not a Lender or an Affiliate thereof. Such consent shall
not be unreasonably withheld.
12.3.2. EFFECT; EFFECTIVE DATE. Upon (a) delivery to
the Agent of a notice of assignment, substantially in the form attached as
Exhibit I to EXHIBIT E hereto (a "NOTICE OF ASSIGNMENT"), together with any
consents required by SECTION 12.3.1, and (b) payment of a $2,500 fee to the
Agent for processing such assignment, such assignment shall become effective
on the effective date specified in such Notice of Assignment. On and after
the effective date of such assignment, (a) such Purchaser shall for all
purposes be a Lender party to this Agreement and any other Loan Document
executed by the Lenders and shall have all the rights and obligations of a
Lender under the Loan Documents, to the same extent as if it were an original
party hereto, and (b) the transferor Lender shall be released with respect to
the percentage of the Aggregate Revolving Credit Commitment and Loans
assigned to such Purchaser without any further consent or action by the
Borrower, the Lenders or the Agent. Upon the consummation of any assignment
to a Purchaser pursuant to this SECTION 12.3.2, the transferor Lender, the
Agent and the Borrower shall make appropriate arrangements so that
replacement Notes are issued to such transferor Lender and new Notes or, as
appropriate, replacement Notes, are issued to such Purchaser, in each case in
principal amounts reflecting their Revolving Credit Commitment, as adjusted
pursuant to such assignment.
12.4. DISSEMINATION OF INFORMATION. The Borrower authorizes
each Lender to disclose to any Participant or Purchaser or any other Person
acquiring an interest in the Loan Documents by operation of law (each a
"TRANSFEREE") and any prospective Transferee any and all information in such
Lender's possession concerning the creditworthiness of the Borrower and its
Subsidiaries.
12.5. TAX TREATMENT. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the
transferor Lender shall cause such Transferee, concurrently with the
effectiveness of such transfer, to comply with the provisions of SECTION 2.18.
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ARTICLE XIII
NOTICES
13.1. GIVING NOTICE. Except as otherwise permitted by SECTION
2.13 with respect to borrowing notices, all notices and other communications
provided to any party hereto under this Agreement or any other Loan Document
shall be in writing, by facsimile, first class U.S. mail or overnight courier
and addressed or delivered to such party at its address set forth below its
signature hereto or at such other address as may be designated by such party
in a notice to the other parties. Any notice, if mailed and properly
addressed with first class postage prepaid, return receipt requested, shall
be deemed given three (3) Business Days after deposit in the U.S. mail; any
notice, if transmitted by facsimile, shall be deemed given when transmitted;
and any notice given by overnight courier shall be deemed given when received
by the addressee.
13.2. CHANGE OF ADDRESS. The Borrower, the Agent and any Lender
may each change the address for service of notice upon it by a notice in
writing to the other parties hereto.
[signature pages to follow]
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IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have
executed this Agreement as of the date first above
written.
FINANCIAL CORPORATION
By:
Print Name:
Title:
Address: 415 Southwest 8th Avenue
P.O. Box 2039
Topeka, Kansas 66601
Attn: Lynn F. Hammes
Telecopy: (913) 232-3594
Telephone: (913) 232-6945
COMMITMENTS
$12,500,000 THE FIRST NATIONAL BANK OF CHICAGO,
Individually and as Agent
By:
Print Name: Cynthia W. Priest
Title: Vice President
Address: One First National Plaza
Chicago, Illinois 60670
Attn: Cynthia W. Priest
Telecopy: (312) 732-4033
Telephone: (312) 732-9565
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$12,500,000 BOATMEN'S FIRST NATIONAL BANK OF KANSAS CITY
By:
Print Name: Barry P. Sullivan
Title: Vice President
Address: 14 West Tenth Street
5th Floor
Kansas City, Missouri
64105
Attn: Barry P. Sullivan
Telecopy: (816)
691-7426
Telephone: (816) 691-7569
Aggregate Initial
Commitment $25,000,000
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NOTE
$12,500,000 Chicago, Illinois
December 29, 1994
FOR VALUE RECEIVED, AMVESTORS FINANCIAL CORPORATION, a
Kansas corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
BOATMEN'S FIRST NATIONAL BANK OF KANSAS CITY (the "Lender") the principal sum
of Twelve Million Five Hundred Thousand United States Dollars ($12,500,000)
or, if less, the aggregate unpaid principal amount of the Loans made by the
Lender to the Borrower pursuant to Section 2.1 of the Credit Agreement (as
hereinafter defined), on or before the Facility Termination Date; together,
in each case, with interest on any and all principal amounts remaining unpaid
hereunder from time to time. Interest upon the unpaid principal amount
hereof shall accrue at the rates, shall be calculated in the manner and shall
be payable on the dates set forth in the Credit Agreement. After maturity,
whether by acceleration or otherwise, accrued interest shall be payable upon
demand. Both principal and interest shall be payable in accordance with the
Credit Agreement to The First National Bank of Chicago, as Agent (the
"Agent") on behalf of the Lender, at its main office in Chicago, Illinois in
immediately available funds. The Loans made by the Lender to the Borrower
pursuant to the Credit Agreement and all payments on account of principal
here of shall be recorded by the Lender and, prior to any transfer thereof,
endorsed on SCHEDULE A attached hereto which is part of this Note or
otherwise in accordance with its usual practices; PROVIDED, HOWEVER, that the
failure to so record shall not affect the Borrower's obligations under this
Note.
This Note is a Note referred to in, and is entitled to
the benefits of, the Credit Agreement dated as of December 29, 1994 by and
among the Borrower, the financial institutions signatory thereto (including
the Lender) and the Agent (as amended, modified, restated or supplemented
from time to time, the "Credit Agreement") and the other Loan Documents.
Capitalized terms used but not otherwise defined herein shall have the
respective meanings ascribed thereto in the Credit Agreement. The Credit
Agreement, among other things, contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof upon
the terms and conditions therein specified.
The Borrower hereby waives presentment, demand, protest
or notice of any kind in connection with this Note.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS, WITHOUT REGARD TO CONFLICT OF LAWS
PROVISIONS, AND DECISIONS OF THE STATE OF ILLINOIS BUT GIVING EFFECT TO
FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
AMVESTORS FINANCIAL CORPORATION
By:
Title:
SCHEDULE A
Note
dated December 29, 1994
payable to the order of
Boatmen's First National Bank of Kansas City
PRINCIPAL PAYMENTS
Amount of Amount of Unpaid
Principal Principal Principal Notation
DATE BORROWED -REPAID BALANCE- MADE BY-
NOTE
$12,500,000 Chicago, Illinois
December 29, 1994
FOR VALUE RECEIVED, AMVESTORS FINANCIAL CORPORATION, a
Kansas corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
THE FIRST NATIONAL BANK OF CHICAGO (the "Lender") the principal sum of Twelve
Million Five Hundred Thousand United States Dollars ($12,500,000) or, if
less, the aggregate unpaid principal amount of the Loans made by the Lender
to the Borrower pursuant to Section 2.1 of the Credit Agreement (as
hereinafter defined), on or before the Facility Termination Date; together,
in each case, with interest on any and all principal amounts remaining unpaid
hereunder from time to time. Interest upon the unpaid principal amount
hereof shall accrue at the rates, shall be calculated in the manner and shall
be payable on the dates set forth in the Credit Agreement. After maturity,
whether by acceleration or otherwise, accrued interest shall be payable upon
demand. Both principal and interest shall be payable in accordance with the
Credit Agreement to The First National Bank of Chicago, as Agent (the
"Agent") on behalf of the Lender, at its main office in Chicago, Illinois in
immediately available funds. The Loans made by the Lender to the Borrower
pursuant to the Credit Agreement and all payments on account of principal
hereof shall be recorded by the Lender and, prior to any transfer thereof,
endorsed on SCHEDULE A attached hereto which is part of this Note or
otherwise in accordance with its usual practices; PROVIDED, HOWEVER, that the
failure to so record shall not affect the Borrower's obligations under this
Note.
This Note is a Note referred to in, and is entitled to
the benefits of, the Credit Agreement dated as of December 29, 1994 by and
among the Borrower, the financial institutions signatory thereto (including
the Lender) and the Agent (as amended, modified, restated or supplemented
from time to time, the "Credit Agreement") and the other Loan Documents.
Capitalized terms used but not otherwise defined herein shall have the
respective meanings ascribed thereto in the Credit Agreement. The Credit
Agreement, among other things, contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof upon
the terms and conditions therein specified.
The Borrower hereby waives presentment, demand, protest
or notice of any kind in connection with this Note.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS, WITHOUT REGARD TO
CONFLICT OF LAWS PROVISIONS, AND DECISIONS OF THE STATE OF ILLINOIS BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
AMVESTORS FINANCIAL CORPORATION
By:
Title:
SCHEDULE A
Note
dated December 29, 1994
payable to the order of
The First National Bank of Chicago
PRINCIPAL PAYMENTS
Amount of Amount of Unpaid
Principal Principal Principal Notation
DATE BORROWED -REPAID BALANCE- MADE BY-