1
Exhibit 10.c
CONFORMED COPY
OHIO CASUALTY CORPORATION
_____________________________
CREDIT AGREEMENT
Dated as of October 27, 1997
______________________________
$300,000,000
______________________________
THE CHASE MANHATTAN BANK,
as Administrative Agent
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TABLE OF CONTENTS
Page
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Section 1. Definitions and Accounting Matters . . . . . . . .-1-
1.01 Certain Defined Terms. . . . . . . . . . . . . . . .-1-
1.02 Accounting Terms and Determinations. . . . . . . . -12-
1.03 Types of Loans . . . . . . . . . . . . . . . . . . -13-
1.04 S&P Ratings. . . . . . . . . . . . . . . . . . . . -13-
Section 2. Commitments, Loans, Notes and Prepayments. . . . -13-
2.01 Loans. . . . . . . . . . . . . . . . . . . . . . . -13-
2.02 Borrowings . . . . . . . . . . . . . . . . . . . . -14-
2.03 Changes of Commitments . . . . . . . . . . . . . . -14-
2.04 Lending Offices. . . . . . . . . . . . . . . . . . -14-
2.05 Several Obligations; Remedies Independent. . . . . -14-
2.06 Notes. . . . . . . . . . . . . . . . . . . . . . . -15-
2.07 Optional Prepayments and Conversions or
Continuations of Loans. . . . . . . . . . . . . . -15-
2.08 Facility Fee . . . . . . . . . . . . . . . . . . . -15-
Section 3. Payments of Principal and Interest . . . . . . . -16-
3.01 Repayment of Loans . . . . . . . . . . . . . . . . -16-
3.02 Interest . . . . . . . . . . . . . . . . . . . . . -16-
Section 4. Payments; Pro Rata Treatment; Computations;
Etc.. . . . . . . . . . . . . . . . . . . . . . . -17-
4.01 Payments . . . . . . . . . . . . . . . . . . . . . -17-
4.02 Pro Rata Treatment . . . . . . . . . . . . . . . . -18-
4.03 Computations . . . . . . . . . . . . . . . . . . . -18-
4.04 Minimum Amounts. . . . . . . . . . . . . . . . . . -19-
4.05 Certain Notices. . . . . . . . . . . . . . . . . . -19-
4.06 Non-Receipt of Funds by the Administrative
Agent. . . . . . . . . . . . . . . . . . . . . . . -20-
4.07 Sharing of Payments, Etc . . . . . . . . . . . . . -20-
Section 5. Yield Protection, Etc. . . . . . . . . . . . . . -22-
5.01 Additional Costs . . . . . . . . . . . . . . . . . -22-
5.02 Limitation on Types of Loans . . . . . . . . . . . -24-
5.03 Illegality . . . . . . . . . . . . . . . . . . . . -25-
5.04 Treatment of Affected Loans. . . . . . . . . . . . -25-
5.05 Compensation . . . . . . . . . . . . . . . . . . . -25-
5.06 U.S. Taxes . . . . . . . . . . . . . . . . . . . . -26-
Section 6. Conditions Precedent . . . . . . . . . . . . . . -28-
6.01 Initial Loan. . . . . . . . . . . . . . . . . . . . -28-
6.02 Initial and Subsequent Loans. . . . . . . . . . . . -29-
Section 7. Representations and Warranties . . . . . . . . . -29-
7.01 Corporate Existence. . . . . . . . . . . . . . . . -29-
7.02 Financial Condition. . . . . . . . . . . . . . . . -30-
7.03 Litigation . . . . . . . . . . . . . . . . . . . . -31-
7.04 No Breach. . . . . . . . . . . . . . . . . . . . . -31-
7.05 Action . . . . . . . . . . . . . . . . . . . . . . -31-
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7.06 Approvals. . . . . . . . . . . . . . . . . . . . . -31-
7.07 Use of Loans . . . . . . . . . . . . . . . . . . . -31-
7.08 ERISA. . . . . . . . . . . . . . . . . . . . . . . -31-
7.09 Taxes. . . . . . . . . . . . . . . . . . . . . . . -32-
7.10 Investment Company Act . . . . . . . . . . . . . . -32-
7.11 Public Utility Holding Company Act . . . . . . . . -32-
7.12 Credit Agreements. . . . . . . . . . . . . . . . . -32-
7.13 Hazardous Materials. . . . . . . . . . . . . . . . -32-
7.14 Subsidiaries, Etc. . . . . . . . . . . . . . . . . -33-
Section 8. Covenants of the Company . . . . . . . . . . . . -33-
8.01 Financial Statements . . . . . . . . . . . . . . . -33-
8.02 Litigation . . . . . . . . . . . . . . . . . . . . -37-
8.03 Existence, Etc . . . . . . . . . . . . . . . . . . -37-
8.04 Insurance. . . . . . . . . . . . . . . . . . . . . -37-
8.05 Prohibition of Fundamental Changes . . . . . . . . -38-
8.06 Certain Obligations Respecting Subsidiaries. . . . -39-
8.07 Limitation on Liens. . . . . . . . . . . . . . . . -39-
8.08 Investments. . . . . . . . . . . . . . . . . . . . -41-
8.09 Minimum Statutory Surplus. . . . . . . . . . . . . -41-
8.10 Consolidated Funded Debt . . . . . . . . . . . . . -42-
8.11 Funded Debt of Consolidated Subsidiaries . . . . . -42-
8.12 Lines of Business. . . . . . . . . . . . . . . . . -42-
8.13 Transactions with Affiliates . . . . . . . . . . . -42-
8.14 Use of Proceeds. . . . . . . . . . . . . . . . . . -42-
Section 9. Events of Default . . . . . . . . . . . . . . . -43-
Section 10. The Administrative Agent. . . . . . . . . . . . -46-
10.01 Appointment, Powers and Immunities. . . . . . . . -46-
10.02 Reliance by Administrative Agent. . . . . . . . . -46-
10.03 Defaults. . . . . . . . . . . . . . . . . . . . . -47-
10.04 Rights as a Lender. . . . . . . . . . . . . . . . -47-
10.05 Indemnification . . . . . . . . . . . . . . . . . -47-
10.06 Non-Reliance on Administrative Agent and
Other Lenders . . . . . . . . . . . . . . . . . . -48-
10.07 Failure to Act. . . . . . . . . . . . . . . . . . -48-
10.08 Resignation or Removal of Administrative Agent. . -48-
10.09 Agency Fee. . . . . . . . . . . . . . . . . . . . -49-
Section 11. Miscellaneous . . . . . . . . . . . . . . . . . -49-
11.01 Waiver. . . . . . . . . . . . . . . . . . . . . . -49-
11.02 Notices . . . . . . . . . . . . . . . . . . . . . -49-
11.03 Expenses, Etc . . . . . . . . . . . . . . . . . . -49-
11.04 Amendments, Etc . . . . . . . . . . . . . . . . . -50-
11.05 Successors and Assigns. . . . . . . . . . . . . . -51-
11.06 Assignments and Participation . . . . . . . . . . -51-
11.07 Survival. . . . . . . . . . . . . . . . . . . . . -53-
11.08 Captions. . . . . . . . . . . . . . . . . . . . . -53-
11.09 Counterparts. . . . . . . . . . . . . . . . . . . -53-
11.10 Governing Law; Submission to Jurisdiction . . . . -53-
11.11 Waiver of Jury Trial. . . . . . . . . . . . . . . -53-
11.12 Treatment of Certain Information;
Confidentiality . . . . . . . . . . . . . . . . . -54-
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SCHEDULE I - Material Agreements and Liens
SCHEDULE II - Subsidiaries and Investments
EXHIBIT A - Form of Note
EXHIBIT B - Form of Opinion of Counsel to the Company
EXHIBIT C Form of Opinion of Special New York
Counsel to the Lenders
EXHIBIT D - Form of Confidentiality Agreement
Annex 1 - Applicable Lending Office and Notice Information
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CREDIT AGREEMENT dated as of October 27, 1997 (this
"Agreement"), among: OHIO CASUALTY CORPORATION, a corporation
duly organized and validly existing under the law of the State of
Ohio (together with its successors and permitted assigns, the
"Company"); each of the financial institutions that is a
signatory hereto identified under the caption "LENDERS" on the
signature pages hereto or that, pursuant to Section 11.06(b)
hereof, shall become a "Lender" hereunder (individually, a
"Lender" and, collectively, the "Lenders"); and THE CHASE
MANHATTAN BANK, a New York banking corporation, as administrative
agent for the Lenders (in such capacity, together with its
successors in such capacity, the "Administrative Agent"); with
THE FIRST NATIONAL BANK OF CHICAGO and FIRST UNION NATIONAL BANK,
as co-agents.
The Company has requested that the Lenders make loans
to it in an aggregate principal amount not exceeding $300,000,000
at any one time outstanding to refinance certain existing
indebtedness, to finance the operations of the Company, and for
other purposes. The Lenders are willing to make such loans on
the terms and conditions hereof.
Accordingly, the parties hereto agree as follows:
Section 1. Definitions and Accounting Matters.
1.01 Certain Defined Terms. As used herein, the
following terms shall have the following meanings (all terms
defined in this Section 1.01 or in other provisions of this
Agreement in the singular to have the same meanings when used in
the plural and vice versa):
"Affiliate" shall mean any Person which directly or
indirectly controls, or is under common control with, or is
controlled by, the Company. As used in this definition,
"control" (including, with its correlative meanings, "controlled
by" and "under common control with") shall mean possession,
directly or indirectly, of power to direct or cause the direction
of management or policies (whether through ownership of
securities or partnership or other ownership interests, by
contract or otherwise), provided that, in any event, any Person
which owns (other than in a fiduciary capacity) directly or
indirectly 10% or more of the securities having ordinary voting
power for the election of directors or other governing body of a
corporation or 10% or more of the partnership or other ownership
interests of any other Person (other than as a limited partner of
such other Person) will be deemed to control such corporation or
other Person. Notwithstanding the foregoing, no individual shall
be deemed to be an Affiliate solely by reason of his or her being
a director, officer or employee of the Company or any of its
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Subsidiaries and the Company and its Subsidiaries shall not be
deemed to be Affiliates of each other.
"Applicable Insurance Regulatory Authority" shall mean,
for each Insurance Subsidiary, the insurance department or
similar administrative authority or agency located in the State
in which such Insurance Subsidiary is domiciled.
"Applicable Lending Office" shall mean, for each Lender
and for each Type of Loan, the "Lending Office" of such Lender
(or of an affiliate of such Lender) designated for such Type of
Loan on Annex 1 or such other office of such Lender (or of an
affiliate of such Lender) as such Lender may from time to time
specify to the Administrative Agent and the Company as the office
by which its Loans of such Type are to be made and maintained.
"Applicable Margin" shall mean, subject to the
following sentence: (a) with respect to Base Rate Loans, 0% per
annum; and (b) with respect to Eurodollar Loans, as at any date
of determination, the percentage per annum (expressed in number
of basis points) determined by reference to the S&P Rating as at
such date:
Category S&P Rating Applicable Margin
(a) AA+ or higher 17 basis points
(b) Less than AA+ but 18.5 basis points
equal to or
greater than AA-
(c) Less than AA- 20 basis points
but equal to or
greater than A+
(d) Less than A+ but 24 basis points
equal to or
greater than A
(e) Less than A but 31.5 basis points
equal to or
greater than A-
(f) Less than A- or 46.5 basis points
no rating
provided that if a Default shall have occurred and be continuing,
category (f) shall be deemed applicable for as long as the same
shall continue. Each change in any Applicable Margin in respect
of Eurodollar Loans resulting from a change in the S&P Rating
shall take effect at the time of such change in the S&P Rating.
Credit Agreement
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"Base Rate" shall mean, for any day, the higher of (a)
the Federal Funds Rate for such day plus 1/2 of 1% per annum and
(b) the Prime Rate for such day. Each change in any interest
rate provided for herein based upon the Base Rate resulting from
a change in the Base Rate shall take effect at the time of such
change in the Base Rate.
"Base Rate Loans" shall mean Loans which bear interest
at rates based upon the Base Rate.
"Basle Accord" shall mean the proposals for risk-based
capital framework described by the Basle Committee on Banking
Regulations and Supervisory Practices in its paper entitled
"International Convergence of Capital Measurement and Capital
Standards" dated July 1988, as amended, modified and supplemented
and in effect from time to time or any replacement thereof.
"Basic Documents" shall mean, collectively, this
Agreement and the Notes.
"Business Day" shall mean (a) any day on which
commercial banks are not authorized or required to close in New
York City and (b) if such day relates to a borrowing of, a
payment or prepayment of principal of or interest on, a
Conversion of or into, or an Interest Period for, a Eurodollar
Loan or a notice by the Company with respect to any such
borrowing, payment, prepayment, Conversion or Interest Period,
which is also a day on which dealings in Dollar deposits are
carried out in the London interbank market.
"Capital Lease Obligations" shall mean, for any Person,
the obligations of such Person to pay rent or other amounts under
a lease of (or other agreement conveying the right to use) real
and/or personal Property which obligations are required to be
classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP (including Statement of Financial
Accounting Standards No. 13 of the Financial Accounting Standards
Board) and, for purposes of this Agreement, the amount of such
obligations shall be the capitalized amount thereof.
"Chase" shall mean The Chase Manhattan Bank.
"Closing Date" shall mean the date upon which the
conditions precedent to the initial Loan hereunder set forth in
Section 6.01 hereof have been satisfied.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Commitment" shall mean, for each Lender, the
obligation of such Lender to make Loans in an aggregate amount at
any one time outstanding up to but not exceeding the amount set
opposite the name of such Lender on the signature pages hereof
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under the caption "Commitment" (as the same may be reduced from
time to time pursuant to Section 2.03 hereof), subject, in the
case of any assignment contemplated by Section 11.06(b) hereof,
to the provisions of such Section 11.06(b).
"Commitment Termination Date" shall mean October 27,
2002; provided that if such day is not a Business Day, such day
shall be the next preceding Business Day.
"Consolidated Funded Debt" shall mean Funded Debt of
the Company and its Consolidated Subsidiaries on a consolidated
basis.
"Consolidated Subsidiary" shall mean, for any Person,
each Subsidiary of such Person (whether now existing or hereafter
created or acquired) the financial statements of which shall be
(or should have been) consolidated with the financial statements
of such Person in accordance with GAAP.
"Consolidated Tangible Net Worth" shall mean, at any
time, the aggregate of the capital stock, capital surplus, paid-in
capital, retained earnings and unrealized gains (or losses) on
equity securities (net of deferred taxes) of the Company and its
Consolidated Subsidiaries on a consolidated basis, less treasury
stock and capital stock subscribed and unissued and the book
value of good will, formula, patents, trademarks, service marks,
trade names, copyrights, charters, franchises, certificates,
permits and licenses and any other intangible assets other than
unamortized deferred policy acquisition costs.
"Continue", "Continuation" and "Continued" shall refer
to the continuation pursuant to Section 2.07 hereof of a
Eurodollar Loan as a Eurodollar Loan from one Interest Period to
the next Interest Period for such Loan.
"Convert", "Conversion" and "Converted" shall refer to
a conversion pursuant to Section 2.07 hereof of one Type of Loan
into another Type of Loan, which may be accompanied by the
transfer by a Lender (at its sole discretion) of a Loan from one
Applicable Lending Office to another.
"Default" shall mean an Event of Default or an event
which with notice or lapse of time or both would become an Event
of Default.
"Derivatives Obligations" of any Person shall mean all
obligations of such Person in respect of any rate swap
transaction, basis swap, forward rate transaction, commodity
swap, commodity option, equity swap or equity index swap, equity
option or equity index option, bond option, interest rate option,
foreign exchange transaction, cap transaction, floor transaction,
collar transaction, currency swap transaction, cross-currency
rate swap transaction (including any option with respect to any
of the foregoing transactions) or any combination of the
foregoing transactions.
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"Dividend Payment" shall mean dividends (in cash,
Property or obligations) on, or other payments or distributions
on account of, or the setting apart of money for a sinking or
other analogous fund for, or the purchase, redemption, retirement
or other acquisition of, any shares of any class of stock of the
Company, but excluding dividends payable solely in shares of
common stock of the Company.
"Dollars" and "$" shall mean lawful money of the United
States of America.
"Environmental Laws" shall mean any and all Federal,
state, local and foreign statutes, laws, regulations, ordinances,
rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or other governmental
restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes into the environment including, without
limitation, ambient air, surface water, ground water, or land, or
otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or
hazardous substances or wastes.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade
or business which is a member of the same controlled group of
corporations (within the meaning of Section 414(b) of the Code)
as the Company or is under common control (within the meaning of
Section 414(c) of the Code) with the Company.
"Eurodollar Base Rate" shall mean, with respect to any
Eurodollar Loan for any Interest Period therefor, the rate per
annum (rounded upwards, if necessary, to the nearest 1/16 of 1%),
as determined by the Administrative Agent, appearing on the
Telerate Page 3750 at approximately 11:00 a.m. London time (or as
soon thereafter as practicable) on the date two Business Days
prior to the first day of such Interest Period for Dollar
deposits having a term comparable to such Interest Period.
"Eurodollar Loans" shall mean Loans the interest rates
on which are determined on the basis of rates referred to in the
definition of "Eurodollar Base Rate" in this Section 1.01.
"Eurodollar Rate" shall mean, for any Eurodollar Loan
for any Interest Period therefor, a rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) determined by
the Administrative Agent to be equal to the Eurodollar Base Rate
for such Loan for such Interest Period divided by 1 minus the
Reserve Requirement for such Loan for such Interest Period.
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"Event of Default" shall have the meaning assigned to
such term in Section 9 hereof.
"Existing Agreement" shall mean the existing Credit
Agreement dated as of October 25, 1994 among the Company, certain
financial institutions party thereto and Chase, as agent.
"Federal Funds Rate" shall mean, for any day, the rate
per annum (rounded upwards, if necessary, to the nearest l/100 of
1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day, provided that (i) if the day for
which such rate is to be determined is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published
on the next succeeding Business Day and (ii) if such rate is not
so published for any day, the Federal Funds Rate for such day
shall be the average rate charged to Chase on such day on such
transactions as determined by the Administrative Agent.
"Funded Debt" shall mean, for any Person, all
indebtedness created, issued or incurred by such Person for
borrowed money (whether by loan or the issuance and sale of debt
securities or the sale of Property to another Person subject to
an understanding or agreement, contingent or otherwise, to
repurchase such Property from such Person).
"GAAP" shall mean generally accepted accounting
principles applied on a basis consistent with those which, in
accordance with the last sentence of Section 1.02(a) hereof, are
to be used in making the calculations for purposes of determining
compliance with the terms of this Agreement.
"Guarantee" shall mean a guarantee, an endorsement, a
contingent agreement to purchase or to furnish funds for the
payment or maintenance of, or otherwise to be or become
contingently liable under or with respect to, the Indebtedness,
other obligations, net worth, working capital or earnings of any
Person, or a guarantee of the payment of dividends or other
distributions upon the stock or equity interests of any Person,
or an agreement to purchase, sell or lease (as lessee or lessor)
Property, products, materials, supplies or services primarily for
the purpose of enabling a debtor to make payment of his, her or
its obligations or an agreement to assure a creditor against
loss, and including, without limitation, causing a bank or other
financial institution to issue a letter of credit or other
similar instrument for the benefit of another Person, but
excluding endorsements for collection or deposit in the ordinary
course of business. The terms "Guarantee" and "Guaranteed" used
as a verb shall have a correlative meaning.
"Indebtedness" shall mean, for any Person: (a)
indebtedness created, issued or incurred by such Person for
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borrowed money (whether by loan or the issuance and sale of debt
securities or the sale of Property to another Person subject to
an understanding or agreement, contingent or otherwise, to
repurchase such Property from such Person); (b) obligations of
such Person to pay the deferred purchase or acquisition price of
Property or services, other than trade accounts payable (other
than for borrowed money) arising, and accrued expenses incurred,
in the ordinary course of business so long as such trade accounts
payable are payable within 90 days of the date the respective
goods are delivered or the respective services are rendered; (c)
Indebtedness of others secured by a Lien on the Property of such
Person, whether or not the respective indebtedness so secured has
been assumed by such Person; (d) obligations of such Person in
respect of letters of credit or similar instruments issued or
accepted by banks and other financial institutions for account of
such Person; (e) Capital Lease Obligations of such Person; and
(f) Indebtedness of others Guaranteed by such Person.
Notwithstanding the foregoing, the term "Indebtedness" shall not
include obligations under any surety bond issued by any Insurance
Subsidiary in the ordinary course of its business.
"Insurance Subsidiary" shall mean any Subsidiary
engaged in the insurance business.
"Interest Period" shall mean, for any Eurodollar Loan,
each period commencing on the date such Eurodollar Loan is made,
Continued or Converted from a Loan of another Type or the last
day of the next preceding Interest Period for such Loan and
ending on the numerically corresponding day in the first, third
or sixth calendar month thereafter, as the Company may select as
provided in Section 4.05 hereof, except that each Interest Period
which commences on the last Business Day of a calendar month (or
on any day for which there is no numerically corresponding day in
the appropriate subsequent calendar month) shall end on the last
Business Day of the appropriate subsequent calendar month.
Notwithstanding the foregoing: (i) if any Interest Period would
otherwise end after the Commitment Termination Date, such
Interest Period shall end on the Commitment Termination Date;
(ii) each Interest Period which would otherwise end on a day
which is not a Business Day shall end on the next succeeding
Business Day (or, if such next succeeding Business Day falls in
the next succeeding calendar month, on the next preceding
Business Day); and (iii) notwithstanding clause (i) above, no
Interest Period shall have a duration of less than one month and,
if the Interest Period for any Eurodollar Loan would otherwise be
a shorter period, such Loan shall not be available hereunder for
such period.
"Investment" shall mean, for any Person: (a) the
acquisition (whether for cash, Property, services or securities
or otherwise) of capital stock, bonds, notes, debentures,
partnership or other ownership interests or other securities of
any other Person or any agreement to make any such acquisition
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(including, without limitation, any "short sale" or any sale of
any securities at a time when such securities are not owned by
the Person entering into such short sale); (b) the making of any
deposit with, or advance, loan or other extension of credit to,
any other Person including the purchase of Property from another
Person subject to an understanding or agreement, contingent or
otherwise, to resell such Property to such Person, but excluding
any such advance, loan or extension of credit having a term not
exceeding 90 days representing the purchase price of inventory or
supplies sold in the ordinary course of business); or (c) the
entering into of any Guarantee of, or other contingent obligation
with respect to, Indebtedness or other liability of any other
Person and (without duplication) any amount committed to be
advanced, lent or extended to such Person; provided that the term
Investment shall not include a loan by an Insurance Subsidiary to
any of its policyholders secured by a Lien against a life
insurance policy issued by such Insurance Subsidiary to such
policyholder with a cash surrender value at least equal to the
amount of such loan.
"Lien" shall mean, with respect to any Property, any
mortgage, lien, pledge, charge, security interest or encumbrance
of any kind in respect of such Property. For purposes of this
Agreement, the Company or any of its Subsidiaries shall be deemed
to own subject to a Lien any Property which it has acquired or
holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title
retention agreement (other than an operating lease) relating to
such Property.
"Loans" shall mean the loans provided for by Section
2.01 hereof, which may be Base Rate Loans or Eurodollar Loans.
"Majority Lenders" shall mean Lenders holding at least
51% of the aggregate principal amount of the Loans or if no Loans
shall be outstanding, at least 51% of the Commitments, provided
that for such purpose there shall be excluded any Commitments or
Loans directly or indirectly held by the Company or any of its
Affiliates following an assignment or participation as
contemplated by Section 11.06 hereof.
"Margin Stock" shall mean margin stock within the
meaning of Regulations U and X.
"Material Adverse Effect" shall mean a material adverse
effect on (a) the Property, business, operations, financial
condition, liabilities or capitalization of the Company and its
Subsidiaries taken as a whole, (b) the ability of the Company to
perform its obligations under any of the Basic Documents, (c) the
validity or enforceability of any of the Basic Documents, (d) the
rights and remedies of the Lenders and the Administrative Agent
under any of the Basic Documents or (e) the timely payment of the
principal of or interest on the Loans or other amounts payable in
connection therewith.
Credit Agreement
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"Multiemployer Plan" shall mean a multiemployer plan
defined as such in Section 3(37) of ERISA to which contributions
have been made by the Company or any ERISA Affiliate and which is
covered by Title IV of ERISA.
"NAIC" shall mean the National Association of Insurance
Commissioners or any successor thereto, or in lieu thereof, any
other association, agency or other organization performing
substantially similar advisory, coordination or other like
functions among insurance departments, insurance commissions and
similar governmental authorities of the various states of the
United States of America toward the promotion of uniformity in the
practices of such governmental authorities.
"NAIC Ratings" shall mean the quality ratings assigned
by the Securities Valuation Office of the NAIC to investments of
the Company and its Consolidated Subsidiaries. References in this
Agreement to particular NAIC Ratings are references to such
ratings as currently defined and classified by the Securities
Valuation Office of the NAIC and if such rating system is changed
then each reference to a particular rating in this Agreement shall
be deemed to be a reference to the rating under such changed
rating system which most closely approximates the credit quality
of the particular rating as defined on the date of this Agreement.
"Net Premiums Written" shall mean, for any period, for
the Property and Casualty Insurance Subsidiaries determined on a
consolidated basis in accordance with SAP, the aggregate amount of
premiums written during such period after deducting or adding
premiums on business ceded to or assumed from others (which amount
as at December 31, 1996, by way of example, is shown on the 1996
Consolidated Annual Statement Underwriting and Investment Exhibit,
[Part 2, page 7, column 1, line 32], of such Persons).
"Notes" shall mean the promissory notes provided for by
Section 2.06(a) hereof and all promissory notes delivered in
substitution or exchange therefor, in each case as the same shall
be modified and supplemented and in effect from time to time.
"OCIC" shall mean The Ohio Casualty Insurance Company,
an Ohio corporation, and its successors and assigns.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation or any entity succeeding to any or all of its
functions under ERISA.
"Person" shall mean any individual, corporation,
company, voluntary association, partnership, limited liability
company, joint venture, trust, unincorporated organization or
government (or any agency, instrumentality or political
subdivision thereof).
"Plan" shall mean an employee benefit or other plan
established or maintained by the Company or any ERISA Affiliate
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and which is covered by Title IV of ERISA, other than a
Multiemployer Plan.
"Post-Default Rate" shall mean, in respect of any
principal of any Loan or any other amount under this Agreement or
any Note that is not paid when due (whether at stated maturity, by
acceleration or otherwise), a rate per annum during the period
from and including the due date to but excluding the date on which
such amount is paid in full equal to 2% above the Base Rate as in
effect from time to time (provided that, if the amount so in
default is principal of a Eurodollar Loan and the due date thereof
is a day other than the last day of an Interest Period therefor,
the "Post-Default Rate" for such principal shall be, for the
period from and including such due date to but excluding the last
day of such Interest Period, 2% above the interest rate for such
Loan as provided in Section 3.02(b) hereof and, thereafter, the
rate provided for above in this definition).
"Prime Rate" shall mean the rate of interest from time
to time announced by Chase at the Principal Office as its prime
commercial lending rate.
"Principal Office" shall mean the principal office of
Chase, located on the date hereof at 270 Park Avenue, New York,
New York 10017.
"Property" shall mean any right or interest in or to
property of any kind whatsoever, whether real, personal or mixed
and whether tangible or intangible.
"Property and Casualty Subsidiary" shall mean any
Subsidiary engaged in the property and casualty insurance
business.
"Quarterly Dates" shall mean the last day of March,
June, September and December in each year, the first of which
shall be the first such day after the date of this Agreement;
provided that if any such day is not a Business Day, then such
Quarterly Date shall be the next succeeding Business Day (unless
such Business Day falls in a subsequent calendar month, in which
event such Quarterly Date shall be the next preceding Business
Day).
"Regulations D, U and X" shall mean, respectively,
Regulations D, U and X of the Board of Governors of the Federal
Reserve System (or any successor), as the same may be amended or
supplemented from time to time.
"Regulatory Change" shall mean, with respect to any
Lender, any change after the date of this Agreement in United
States Federal, state or foreign law or regulations (including,
without limitation, Regulation D) or the adoption or making after
such date of any interpretation, directive or request applying to
a class of banks including such Lender of or under any United
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States Federal, state or foreign law or regulations (whether or
not having the force of law and whether or not failure to comply
therewith would be unlawful) by any court or governmental or
monetary authority charged with the interpretation or
administration thereof.
"Reserve Requirement" shall mean, for any Interest
Period for any Eurodollar Loan, the average maximum rate at which
reserves (including any marginal, supplemental or emergency
reserves) are required to be maintained during such Interest
Period under Regulation D by member banks of the Federal Reserve
System in New York City with deposits exceeding one billion
Dollars against, "Eurocurrency liabilities" (as such term is used
in Regulation D). Without limiting the effect of the foregoing,
the Reserve Requirement shall include any other reserves required
to be maintained by such member banks by reason of any Regulatory
Change against (i) any category of liabilities which includes
deposits by reference to which the Eurodollar Base Rate for
Eurodollar Loans is to be determined as provided in the definition
of "Eurodollar Base Rate" in this Section 1.01 or (ii) any
category of extensions of credit or other assets which includes
Eurodollar Loans.
"SAP" shall mean, with respect to any Insurance
Subsidiary, the accounting procedures and practices prescribed or
permitted by the Applicable Insurance Regulatory Authority,
applied on a basis consistent with those that, in accordance with
the last sentence of Section 1.02(a) hereof, are to be used in
making the calculations for purposes of determining compliance
with certain terms of this Agreement.
"S&P Rating" shall mean, as at any date of
determination, the rating assigned by Standard & Poor's Ratings
Service to the claims paying ability of OCIC as at such date.
"Settlement Amount" shall mean, in respect of any
Derivative Obligation to which the Company or any of its
Consolidated Subsidiaries is a party, the net aggregate
marked-to-market (in accordance with standard industry practice)
amount, if any, that would be due in respect of such Derivative
Obligation (together with all other Derivative Obligations under
the same Master Agreement and giving effect to any netting
arrangements between the parties to such Master Agreement) if
such Derivative Obligation was (and such other Derivative Obligations
were) terminated because of a default by the Company or such Subsidiary.
"Statutory Surplus" shall mean, at any time, for the
Property and Casualty Insurance Subsidiaries on a consolidated
basis calculated in accordance with SAP, the amount by which
assets exceed liabilities at such time (which amount as at
December 31, 1996, by way of example, is shown on the 1996
Consolidated Annual Statement, Statement of Liabilities, Surplus
and Other Funds, page 3, column 1, line 25, of such Persons).
Credit Agreement
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"Subsidiary" shall mean, for any Person, any
corporation, partnership or other entity of which at least a
majority of the securities or other ownership interests having by
the terms thereof ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions
of such corporation, partnership or other entity (irrespective of
whether or not at the time securities or other ownership interests
of any other class or classes of such corporation, partnership or
other entity shall have or might have voting power by reason of
the happening of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more
Subsidiaries of such Person or by such Person and one or more
Subsidiaries of such Person.
"Type" shall have the meaning assigned to such term in
Section 1.03 hereof.
"Wholly-Owned Subsidiary" shall mean any such Subsidiary
of which all of such securities or other ownership interests
(other than, in the case of a corporation, directors' qualifying
shares) are so owned or controlled.
1.02 Accounting Terms and Determinations.
(a) Except as otherwise expressly provided herein, all
accounting terms used herein shall be interpreted, and all
financial statements and certificates and reports as to financial
matters required to be delivered to the Lenders hereunder shall
(unless otherwise disclosed to the Lenders in writing at the time
of delivery thereof in the manner described in subsection (b)
below) be prepared, in accordance with generally accepted
accounting principles or statutory accounting practices, as the
case may be, applied on a basis consistent with that used in the
preparation of the latest financial statements furnished to the
Lenders hereunder (which, prior to the first financial statements
delivered under Section 8.01 hereof, shall mean the financial
statements referred to in Section 7.02 hereof). All calculations
made for the purposes of determining compliance with the terms of
this Agreement shall (except as otherwise expressly provided
herein) be made by application of generally accepted accounting
principles or statutory accounting practices, as the case may be,
applied on a basis consistent with that used in the preparation of
the annual or quarterly financial statements furnished to the
Lenders pursuant to Section 8.01 hereof unless (i) the Company
shall have objected to determining such compliance on such basis
at the time of delivery of such financial statements or (ii) the
Majority Lenders shall so object in writing within 30 days after
delivery of such financial statements, in either of which events
such calculations shall be made on a basis consistent with those
used in the preparation of the latest financial statements as to
which such objection shall not have been made (which, if objection
is made in respect of the first financial statements delivered
under Section 8.01 hereof, shall mean the financial statements
referred to in Section 7.02 hereof).
Credit Agreement
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(b) The Company shall deliver to the Lenders at the
same time as the delivery of any annual or quarterly financial
statement under Section 8.01 hereof a description in reasonable
detail of any material variation between the application of
accounting principles or practices employed in the preparation of
such statement and the application of accounting principles or
practices employed in the preparation of the next preceding annual
or quarterly financial statements as to which no objection has
been made in accordance with the last sentence of subsection (a)
above, and reasonable estimates of the difference between such
statements arising as a consequence thereof.
(c) To enable the ready and consistent determination of
compliance with the covenants set forth in Section 8 hereof, the
Company will not change the last day of its fiscal year from
December 31, or the last days of the first three fiscal quarters
in each of its fiscal years from March 31, June 30, and September
30 of each year, respectively.
1.03 Types of Loans. Loans hereunder are distinguished
by "Type". The "Type" of a Loan refers to whether such Loan is a
Base Rate Loan or a Eurodollar Loan, each of which constitutes a
Type.
1.04 S&P Ratings. All references in this Agreement to
particular S&P Ratings are references to such ratings as currently
defined by Standard & Poor's Ratings Service and in the event such
corporation changes its ratings system, each reference to a
particular rating set forth in this Agreement shall be deemed to
be a reference to the rating under such changed rating system
which, in the reasonable judgment of the Administrative Agent,
after consultation with the rating service involved, most closely
approximates the level of claims paying ability associated with
the particular rating as currently defined. If for any reason an
S&P Rating is not available then the level of facility fees and
Applicable Margin shall be determined by the Majority Lenders
after consultation with the Company, based on the Majority
Lenders' good faith estimates of what such rating would have been
had it been available, the determination of the Majority Lenders
in such regard to be final and conclusive.
Section 2. Commitments, Loans, Notes and Prepayments.
2.01 Loans. Each Lender severally agrees, on the terms
of this Agreement, to make loans to the Company in Dollars during
the period from and including the Closing Date to but not
including the Commitment Termination Date in an aggregate
principal amount at any one time outstanding up to but not
exceeding the amount of the Commitment of such Lender as in effect
from time to time, provided that in no event shall the aggregate
principal amount of all outstanding Loans exceed the aggregate
amount of the Commitments as in effect from time to time. Subject
to the terms and conditions of this Agreement, during such period
the Company may borrow, repay and reborrow the amount of the
Commitments by means of Base Rate Loans and Eurodollar Loans and
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may Convert Loans of one Type into Loans of another Type (as
provided in Section 2.07 hereof) or Continue Loans of one Type as
Loans of the same Type (as provided in said Section 2.07);
provided that no more than three separate Interest Periods in
respect of Eurodollar Loans from each Lender may be outstanding at
any one time.
2.02 Borrowings. The Company shall give the
Administrative Agent (which shall promptly notify the Lenders)
notice of each borrowing hereunder as provided in Section 4.05
hereof. Not later than 1:00 p.m. New York time on the date
specified for each borrowing hereunder, each Lender shall make
available the amount of the Loan to be made by it on such date to
the Administrative Agent, at account number 323-5-06178 maintained
by the Administrative Agent with Chase at the Principal Office, in
immediately available funds, for account of the Company. The
amount so received by the Administrative Agent shall, subject to
the terms and conditions of this Agreement, be made available to
the Company by depositing the same, in immediately available
funds, in an account of the Company maintained with Chase at the
Principal Office designated by the Company.
2.03 Changes of Commitments.
(a) The aggregate amount of the Commitments shall be
automatically reduced to zero on the Commitment Termination Date.
(b) The Company shall have the right at any time or
from time to time (i) so long as no Loans are outstanding, to
terminate the Commitments and (ii) to reduce the aggregate unused
amount of the Commitments; provided that (x) the Company shall
give notice of each such termination or reduction as provided in
Section 4.05 hereof and (y) each partial reduction shall be in an
aggregate amount at least equal to $10,000,000 and in multiples of
$10,000,000 in excess thereof.
(c) The Commitments once terminated or reduced may not
be reinstated.
2.04 Lending Offices. The Loans of each Type made by
each Lender shall be made and maintained at such Lender's
Applicable Lending Office for Loans of such Type.
2.05 Several Obligations; Remedies Independent. The
failure of any Lender to make any Loan to be made by it on the
date specified therefor shall not relieve any other Lender of its
obligation to make its Loan on such date, but neither any Lender
nor the Administrative Agent shall be responsible for the failure
of any other Lender to make a Loan to be made by such other
Lender, and no Lender shall have any obligation to the
Administrative Agent or any other Lender for the failure by such
Lender to make any Loan required to be made by such Lender. The
amounts payable by the Company at any time hereunder and under the
Notes to each Lender shall be a separate and independent debt and
each Lender shall be entitled to protect and enforce its rights
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arising out of this Agreement and the Notes, and it shall not be
necessary for any other Lender or the Administrative Agent to
consent to, or be joined as an additional party in, any
proceedings for such purposes.
2.06 Notes.
(a) The Loans made by each Lender shall be evidenced by
a single promissory note of the Company substantially in the form
of Exhibit A hereto, dated the Closing Date, payable to such
Lender in a principal amount equal to the amount of its Commitment
as originally in effect and otherwise duly completed.
(b) The date, amount, Type, interest rate and duration
of Interest Period (if applicable) of each Loan made by each
Lender to the Company, and each payment made on account of the
principal thereof, shall be recorded by such Lender on its books
and, prior to any transfer of the Note held by it, endorsed by
such Lender on the schedule attached to such Note or any
continuation thereof; provided that the failure of such Lender to
make any such recordation or endorsement shall not affect the
obligations of the Company to make a payment when due of any
amount owing hereunder or under such Note in respect of such
Loans.
(c) No Lender shall be entitled to have its Note
subdivided, by exchange for promissory notes of lesser
denominations or otherwise, except in connection with a permitted
assignment of all or any portion of such Lender's Commitment,
Loans and Note pursuant to Section 11.06(b) hereof.
2.07 Optional Prepayments and Conversions or
Continuations of Loans. Subject to Section 4.04 hereof, the
Company shall have the right to prepay Loans, or to Convert Loans
of one Type into Loans of another Type or Continue Loans of one
Type as Loans of the same Type, at any time or from time to time,
provided that: (a) the Company shall give the Administrative
Agent notice of each such prepayment, Conversion or Continuation
as provided in Section 4.05 hereof (and, upon the date specified
in any such notice of prepayment, the amount to be prepaid shall
become due and payable hereunder); and (b) Eurodollar Loans may be
prepaid or Converted only on the last day of an Interest Period
for such Loans. Notwithstanding the foregoing, and without
limiting the rights and remedies of the Lenders under Section 9
hereof, in the event that any Event of Default shall have occurred
and be continuing, the right of the Company to Convert any Loan
into a Eurodollar Loan, or to Continue any Loan as a Eurodollar
Loan, shall be suspended, in which event all Loans shall be
Converted (on the last day(s) of the respective Interest Periods
therefor) into, or Continued as, as the case may be, Base Rate
Loans.
2.08 Facility Fee. The Company shall pay to the
Administrative Agent for account of each Lender a facility fee on
the daily average amount of such Lender's Commitments (used and
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unused) during each calendar quarter falling within the period
beginning on the date of this Agreement and ending on but not
including the earlier of the date the Commitments are terminated
and all of the Loans are paid in full or the Commitment
Termination Date, at a rate per annum as at any date of
determination, equal to the percentage per annum (expressed in
number of basis points) determined by reference to the S&P Rating
as at such date:
Category S&P Rating Facility Fee
(a) AA+ or higher 8 basis points
(b) Less than AA+ but 9 basis points
equal to or greater
than AA-
(c) Less than AA- but 10 basis points
equal to or greater
than A+
(d) Less than A+ but 11 basis points
equal to or greater
than A
(e) Less than A but 13.5 basis points
equal to or greater
than A-
(f) Less than A- or 16 basis points
no rating
provided that if a Default shall have occurred and be continuing,
category (f) shall be deemed applicable for as long as the same
shall continue. Each change in the percentage on the basis of
which the facility fee is calculated resulting from a change in
the S&P Rating shall take effect at the time of such change in the
S&P Rating. Accrued facility fees shall be payable on each
Quarterly Date and on the earlier of the date the Commitments are
terminated and all of the Loans are paid in full or the Commitment
Termination Date.
Section 3. Payments of Principal and Interest.
3.01 Repayment of Loans. The Company hereby promises
to pay to the Administrative Agent for account of each Lender the
entire outstanding principal amount of such Lender's Loans, and
each Loan shall mature, on the Commitment Termination Date.
3.02 Interest. The Company hereby promises to pay to
the Administrative Agent for account of each Lender interest on
the unpaid principal amount of each Loan made by such Lender for
the period from and including the date of such Loan to but
excluding the date such Loan shall be paid in full, at the
following rates per annum:
Credit Agreement
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(a) if such Loan is a Base Rate Loan, the Base Rate (as
in effect from time to time); and
(b) if such Loan is a Eurodollar Loan, for each
Interest Period relating thereto, the Eurodollar Rate for
such Loan for such Interest Period plus the Applicable
Margin.
Notwithstanding the foregoing, the Company hereby promises to pay
to the Administrative Agent for account of each Lender interest at
the applicable Post-Default Rate on any principal of any Loan made
by such Lender and on any other amount payable by the Company
hereunder or under the Note held by such Lender to or for account
of such Lender, which shall not be paid in full when due (whether
at stated maturity, by acceleration or otherwise), for the period
from and including the due date thereof to but excluding the date
the same is paid in full. Accrued interest on each Loan shall be
payable (i) in the case of a Base Rate Loan, quarterly on the
Quarterly Dates, (ii) in the case of a Eurodollar Loan, on the
last day of each Interest Period therefor and, if such Interest
Period is longer than three months, at three-month intervals
following the first day of such Interest Period and (iii) in the
case of any Loan, upon the payment or prepayment thereof or the
Conversion of such Loan to a Loan of another Type (but only on the
principal amount so paid, prepaid or Converted), except that
interest payable at the Post-Default Rate shall be payable from
time to time on demand. Promptly after the determination of any
interest rate provided for herein or any change therein, the
Administrative Agent shall give notice thereof to the Lenders and
to the Company.
Section 4. Payments; Pro Rata Treatment; Computations;
Etc.
4.01 Payments.
(a) Except to the extent otherwise provided herein, all
payments of principal, interest and other amounts to be made by
the Company under this Agreement and the Notes, shall be made in
Dollars, in immediately available funds, without deduction,
set-off or counterclaim, to the Administrative Agent at account
number 323-5-06178 maintained by the Administrative Agent with
Chase at the Principal Office, not later than 1:00 p.m. New York
time on the date on which such payment shall become due (each such
payment made after such time on such due date to be deemed to have
been made on the next succeeding Business Day).
(b) Any Lender for whose account any such payment is to
be made may (but shall not be obligated to) debit the amount of
any such payment which is not made by such time to any ordinary
deposit account of the Company with such Lender (with notice to
the Company and the Administrative Agent).
(c) The Company shall, at the time of making each
payment under this Agreement or any Note for account of any
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Lender, specify to the Administrative Agent (which shall so notify
the intended recipient(s) thereof) the Loans or other amounts
payable by the Company hereunder to which such payment is to be
applied (and in the event that the Company fails to so specify, or
if an Event of Default has occurred and is continuing, the
Administrative Agent may distribute such payment to the Lenders
for application in such manner as it or the Majority Lenders,
subject to Section 4.02 hereof, may determine to be appropriate).
(d) Each payment received by the Administrative Agent
under this Agreement or any Note for account of any Lender shall
be paid by the Administrative Agent promptly to such Lender, in
immediately available funds, for account of such Lender's
Applicable Lending Office for the Loan or other obligation in
respect of which such payment is made.
(e) If the due date of any payment under this Agreement
or any Note would otherwise fall on a day which is not a Business
Day, such date shall be extended to the next succeeding Business
Day, and interest shall be payable for any principal so extended
for the period of such extension.
4.02 Pro Rata Treatment. Except to the extent
otherwise provided herein: (a) each borrowing from the Lenders
under Section 2.01 hereof shall be made from the Lenders, and each
termination or reduction of the amount of the Commitments under
Section 2.03 hereof shall be applied to the respective Commitments
of the Lenders, pro rata according to the amounts of their
respective Commitments; (b) except as otherwise provided in
Section 5.04 hereof, Loans having the same Interest Period shall
be allocated pro rata among the Lenders according to the amounts
of their respective Commitments (in the case of making of Loans)
or their respective Loans (in the case of Conversions and
Continuations of Loans); (c) each payment or prepayment of
principal of Loans by the Company shall be made for account of the
Lenders pro rata in accordance with the respective unpaid
principal amounts of the Loans held by them, provided that if
immediately prior to giving effect to any such payment in respect
of any Loans the outstanding principal amount of the Loans shall
not be held by the Lenders pro rata in accordance with their
respective Commitments in effect at the time such Loans were made
(by reason of a failure of a Lender to make a Loan hereunder in
the circumstances described in the last paragraph of Section 11.04
hereof), then such payment shall be applied to the Loans in such
manner as shall result, as nearly as is practicable, in the
outstanding principal amount of the Loans being held by the
Lenders pro rata in accordance with their respective Commitments;
and (d) each payment of interest on Loans by the Company shall be
made for account of the Lenders pro rata in accordance with the
amounts of interest on such Loans then due and payable to the
respective Lenders.
4.03 Computations. Facility fees and interest on
Eurodollar Loans shall be computed on the basis of a year of 360
days and actual days elapsed (including the first day but
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excluding the last day) occurring in the period for which payable,
and interest on Base Rate Loans shall be computed on the basis of
a year of 365 or 366 days, as the case may be, and actual days
elapsed (including the first day but excluding the last day)
occurring in the period for which payable. Notwithstanding the
foregoing, for each day that the Base Rate is calculated by
reference to the Federal Funds Rate, interest on Base Rate Loans
shall be computed on the basis of a year of 360 days and actual
days elapsed.
4.04 Minimum Amounts. Except for Conversions or
prepayments made pursuant to Section 5.04 hereof, each borrowing,
Conversion and partial prepayment of principal of Loans shall be
in an aggregate amount at least equal to $5,000,000 (in the case
of Base Rate Loans) or $10,000,000 (in the case of Eurodollar
Loans) or in any integral multiple of $1,000,000 in excess thereof
(borrowings, Conversions or prepayments of or into Loans of
different Types or, in the case of Eurodollar Loans, having
different Interest Periods at the same time hereunder to be deemed
separate borrowings, Conversions and prepayments for purposes of
the foregoing, one for each Type or Interest Period). Anything in
this Agreement to the contrary notwithstanding, the aggregate
principal amount of Eurodollar Loans having the same Interest
Period shall be in an amount at least equal to $10,000,000 or any
integral multiple of $1,000,000 in excess thereof and, if any
Eurodollar Loans would otherwise be in a lesser principal amount
for any period, such Loans shall be Base Rate Loans during such
period.
4.05 Certain Notices. Notices by the Company to the
Administrative Agent of terminations or reductions of the
Commitments, of borrowings, Conversions, Continuations and
optional prepayments of Loans, of Types of Loans and of the
duration of Interest Periods shall be irrevocable and shall be
effective only if received by the Administrative Agent not later
than 10:00 a.m. New York time on the number of Business Days prior
to the date of the relevant termination, reduction, borrowing,
Conversion, Continuation or prepayment or the first day of such
Interest Period specified below:
Number of
Business
Notice Days Prior
Termination or reduction
of Commitments 2
Borrowing or prepayment of,
or Conversions into,
Base Rate Loans Same Day
Borrowing or prepayment of,
Conversions into, Continuations
as, or duration of Interest
Period for, Eurodollar Loans 3
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Each such notice of termination or reduction shall specify the
amount of the Commitments to be terminated or reduced. Each such
notice of borrowing, Conversion, Continuation or optional
prepayment shall specify the Loans to be borrowed, Converted,
Continued or prepaid and the amount (subject to Section 4.04
hereof) and Type of each Loan to be borrowed, Converted, Continued
or prepaid (and, in the case of (i) a Conversion, the Type of Loan
to result from such Conversion and (ii) a Eurodollar Loan, the
duration of the Interest Period therefor) and the date of
borrowing, Conversion, Continuation or optional prepayment (which
shall be a Business Day). Each such notice of the duration of an
Interest Period shall specify the Loans to which such Interest
Period is to relate. The Administrative Agent shall promptly
notify the Lenders of the contents of each such notice. In the
event that the Company fails to select the Type of Loan, or the
duration of any Interest Period for any Eurodollar Loan, within
the time period and otherwise as provided in this Section 4.05,
such Loan (if outstanding as a Eurodollar Loan) will be
automatically Converted into a Base Rate Loan on the last day of
the then current Interest Period for such Loan or (if outstanding
as a Base Rate Loan) will remain as, or (if not then outstanding)
will be made as, a Base Rate Loan.
4.06 Non-Receipt of Funds by the Administrative Agent.
Unless the Administrative Agent shall have been notified by a
Lender or the Company (the "Payor") prior to the date and time on
which the Payor is to make payment to the Administrative Agent of
(in the case of a Lender) the proceeds of a Loan to be made by
such Lender hereunder or (in the case of the Company) a payment to
the Administrative Agent for account of one or more of the Lenders
hereunder (such payment being herein called the "Required
Payment"), which notice shall be effective upon receipt, that the
Payor does not intend to make the Required Payment to the
Administrative Agent, the Administrative Agent may assume that the
Required Payment has been made and may, in reliance upon such
assumption (but shall not be required to), make the amount thereof
available to the intended recipient(s) on such date; and, if the
Payor has not in fact made the Required Payment to the
Administrative Agent, the recipient(s) of such payment shall, on
demand, repay to the Administrative 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 Administrative Agent until the date the
Administrative Agent recovers such amount at a rate per annum
equal to the Federal Funds Rate for such day and, if such
recipient(s) shall fail promptly to make such payment, the
Administrative Agent shall be entitled to recover such amount, on
demand, from the Payor, together with interest as aforesaid.
4.07 Sharing of Payments, Etc.
(a) The Company agrees that, in addition to (and
without limitation of) any right of set-off, banker's lien or
counterclaim a Lender may otherwise have, each Lender shall be
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entitled, at its option, to offset balances held by it for account
of the Company at any of its offices, in Dollars or in any other
currency, against any principal of or interest on any of such
Lender's Loans or any other amount payable to such Lender
hereunder, that is not paid when due (regardless of whether such
balances are then due to the Company), in which case it shall
promptly notify the Company and the Administrative Agent thereof,
provided that such Lender's failure to give such notice shall not
affect the validity thereof.
(b) If any Lender shall obtain from the Company payment
of any principal of or interest on any Loan owing to it or payment
of any other amount under this Agreement or any Note through the
exercise of any right of set-off, banker's lien or counterclaim or
similar right or otherwise (other than from the Administrative
Agent as provided herein), and, as a result of such payment, such
Lender shall have received a greater percentage of the principal
of or interest on the Loans or such other amounts then due
hereunder or thereunder by the Company to such Lender than the
percentage received by any other Lender, it shall promptly
purchase from such other Lenders participations in (or, if and to
the extent specified by such Lender, direct interests in) the
Loans or such other amounts, respectively, owing to such other
Lenders (or in interest due thereon, as the case may be) in such
amounts, and make such other adjustments from time to time as
shall be equitable, to the end that all the Lenders shall share
the benefit of such excess payment (net of any expenses which may
be incurred by such Lender in obtaining or preserving such excess
payment) pro rata in accordance with the unpaid principal of
and/or interest on the Loans or such other amounts, respectively,
owing to each of the Lenders, provided that if at the time of such
payment the outstanding principal amount of the Loans shall not be
held by the Lenders pro rata in accordance with their respective
Commitments in effect at the time such Loans were made (by reason
of a failure of a Lender to make a Loan hereunder in the
circumstances described in the last paragraph of Section 11.04
hereof), then such purchases of participations and/or direct
interests shall be made in such manner as will result, as nearly
as is practicable, in the outstanding principal amount of the
Loans being held by the Lenders pro rata according to the amounts
of such Commitments. To such end all the Lenders shall make
appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or
must otherwise be restored.
(c) The Company agrees that any Lender so purchasing
such a participation (or direct interest) may exercise all rights
of set-off, banker's lien, counterclaim or similar rights with
respect to such participation as fully as if such Lender were a
direct holder of Loans or other amounts (as the case may be) owing
to such Lender in the amount of such participation.
(d) Nothing contained herein shall require any Lender
to exercise any such right or shall affect the right of any Lender
to exercise, and retain the benefits of exercising, any such right
Credit Agreement
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with respect to any other indebtedness or obligation of the
Company. If, under any applicable bankruptcy, insolvency or other
similar law, any Lender receives a secured claim in lieu of a
set-off to which this Section 4.07 applies, such Lender shall, to
the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the
Lenders entitled under this Section 4.07 to share in the benefits
of any recovery on such secured claim.
Section 5. Yield Protection, Etc.
5.01 Additional Costs.
(a) The Company shall pay directly to each Lender from
time to time such amounts as such Lender may determine to be
necessary to compensate such Lender for any costs which such
Lender determines are attributable to its making or maintaining of
any Eurodollar Loans or its obligation to make any Eurodollar
Loans hereunder, or any reduction in any amount receivable by such
Lender hereunder in respect of any of such Loans or such
obligation (such increases in costs and reductions in amounts
receivable being herein called "Additional Costs"), resulting from
any Regulatory Change which:
(i) changes the basis of taxation of any amounts
payable to such Lender under this Agreement or its Note in
respect of any of such Loans (other than taxes imposed on or
measured by the overall net income of such Lender or of its
Applicable Lending Office for any of such Loans by the
jurisdiction in which such Lender has its principal office or
such Applicable Lending Office); or
(ii) imposes or modifies any reserve, special
deposit or similar requirements (other than the Reserve
Requirement utilized in the determination of the Eurodollar
Rate for such Loan) relating to any extensions of credit or
other assets of, or any deposits with or other liabilities
of, such Lender (including any of such Loans or any deposits
referred to in the definition of "Eurodollar Base Rate" in
Section 1.01 hereof), or any commitment of such Lender
(including the Commitment of such Lender hereunder); or
(iii) imposes any other condition affecting this
Agreement or its Note (or any of such extensions of credit or
liabilities) or its Commitment.
If any Lender requests compensation from the Company under this
Section 5.01(a), the Company may, by notice to such Lender (with a
copy to the Administrative Agent), suspend the obligation of such
Lender thereafter to make or Continue Eurodollar Loans, or to
Convert Loans of any other Type into Eurodollar Loans, until the
Regulatory Change giving rise to such request ceases to be in
effect (in which case the provisions of Section 5.04 hereof shall
be applicable), provided that such suspension shall not affect the
right of such Lender to receive the compensation so requested.
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(b) Without limiting the effect of the provisions of
paragraph (a) of this Section 5.01, in the event that, by reason
of any Regulatory Change, any Lender either (i) incurs Additional
Costs based on or measured by the excess above a specified level
of the amount of a category of deposits or other liabilities of
such Lender which includes deposits by reference to which the
interest rate on Eurodollar Loans is determined as provided in
this Agreement or a category of extensions of credit or other
assets of such Lender which includes Eurodollar Loans or
(ii) becomes subject to restrictions on the amount of such a
category of liabilities or assets which it may hold, then, if such
Lender so elects by notice to the Company (with a copy to the
Administrative Agent), the obligation of such Lender to make or
Continue, or to Convert Loans of any other Type into, Eurodollar
Loans, shall be suspended until such Regulatory Change ceases to
be in effect (in which case the provisions of Section 5.04 hereof
shall be applicable).
(c) Without limiting the effect of the foregoing
provisions of this Section 5.01 (but without duplication), the
Company shall pay directly to each Lender from time to time on
request such amounts as such Lender may determine to be necessary
to compensate such Lender (or, without duplication, the bank
holding company of which such Lender is a subsidiary) for any
costs which it determines are attributable to the maintenance by
such Lender (or any Applicable Lending Office or such bank holding
company), pursuant to any law or regulation or any interpretation,
directive or request (whether or not having the force of law) of
any court or governmental or monetary authority (i) following any
Regulatory Change or (ii) implementing any risk-based capital
guideline or requirement (whether or not having the force of law
and whether or not the failure to comply therewith would be
unlawful) heretofore or hereafter issued by any government or
governmental or supervisory authority implementing at the national
or supra-national level the Basle Accord (including, without
limitation, the Final Risk-Based Capital Guidelines of the Board
of Governors of the Federal Reserve System (12 CFR Part 208,
Appendix A; 12 CFR Part 225, Appendix A) and the Final Risk-Based
Capital Guidelines of the Office of the Comptroller of the
Currency (12 CFR Part 3, Appendix A)), of capital in respect of
its Commitment or Loans (such compensation to include, without
limitation, an amount equal to any reduction of the rate of return
on assets or equity of such Lender (or any Applicable Lending
Office or such bank holding company) to a level below that which
such Lender (or any Applicable Lending Office or such bank holding
company) could have achieved but for such law, regulation,
interpretation, directive or request).
(d) Each Lender shall notify the Company of any event
occurring after the date of this Agreement that will entitle such
Lender to compensation under paragraph (a) or (c) of this Section
5.01 as promptly as practicable, but in any event within 45 days,
after such Lender obtains actual knowledge thereof; provided, that
(i) if any Lender fails to give such notice within 45 days after
it obtains actual knowledge of such an event, such Lender shall,
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with respect to compensation payable pursuant to this Section 5.01
in respect of any costs resulting from such event, only be
entitled to payment under this Section 5.01 for costs incurred
from and after the date 45 days prior to the date that such Lender
does give such notice and (ii) each Lender will designate a
different Applicable Lending Office for the Loans of such Lender
affected by such event if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in
the sole opinion of such Lender, be disadvantageous to such
Lender, except that such Lender shall have no obligation to
designate an Applicable Lending Office located in the United
States of America. Each Lender will furnish to the Company a
certificate setting forth the basis and amount of each request by
such Lender for compensation under paragraph (a) or (c) of this
Section 5.01. Determinations and allocations by any Lender for
purposes of this Section 5.01 of the effect of any Regulatory
Change pursuant to paragraph (a) or (b) of this Section 5.01, or
of the effect of capital maintained pursuant to paragraph (c) of
this Section 5.01, on its costs or rate of return of maintaining
Loans or its obligation to make Loans, or on amounts receivable by
it in respect of Loans, and of the amounts required to compensate
such Lender under this Section 5.01, shall be conclusive, provided
that such determinations and allocations are made on a reasonable
basis.
5.02 Limitation on Types of Loans. Anything herein to
the contrary notwithstanding, if, on or prior to the determination
of the Eurodollar Base Rate for any Interest Period for any
Eurodollar Loan:
(a) the Administrative Agent determines, which
determination shall be conclusive, that quotations of
interest rates for the relevant deposits referred to in the
definition of "Eurodollar Base Rate" in Section 1.01 hereof
are not being provided in the relevant amounts or for the
relevant maturities for purposes of determining rates of
interest for Eurodollar Loans as provided herein; or
(b) the Majority Lenders determine, which determination
shall be conclusive, and notify the Administrative Agent that
the relevant rates of interest referred to in the definition
of "Eurodollar Base Rate" in Section 1.01 hereof upon the
basis of which the rate of interest for Eurodollar Loans for
such Interest Period is to be determined are not likely
adequately to cover the cost to such Lenders of making or
maintaining Eurodollar Loans for such Interest Period;
then the Administrative Agent shall give the Company and each
Lender prompt notice thereof and, so long as such condition
remains in effect, the Lenders shall be under no obligation to
make additional Eurodollar Loans, to Continue Eurodollar Loans or
to Convert Loans of any other Type into Eurodollar Loans, and the
Company shall, on the last day(s) of the then current Interest
Period(s) for the outstanding Eurodollar Loans, either prepay such
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Loans or Convert such Loans into another Type of Loan in
accordance with Section 2.07 hereof.
5.03 Illegality. Notwithstanding any other provision
of this Agreement, in the event that it becomes unlawful for any
Lender or its Applicable Lending Office to honor its obligation to
make or maintain Eurodollar Loans hereunder, then such Lender
shall promptly notify the Company thereof (with a copy to the
Administrative Agent) and such Lender's obligation to make or
Continue, or to Convert Loans of any other Type into, Eurodollar
Loans shall be suspended until such time as such Lender may again
make and maintain Eurodollar Loans (in which case the provisions
of Section 5.04 hereof shall be applicable).
5.04 Treatment of Affected Loans. If the obligation of
any Lender to make Eurodollar Loans or to Continue, or to Convert
Base Rate Loans into, Eurodollar Loans shall be suspended pursuant
to Section 5.01 or 5.03 hereof, such Lender's Eurodollar Loans
shall be automatically Converted into Base Rate Loans on the last
day(s) of the then current Interest Period(s) for Eurodollar Loans
(or, in the case of a Conversion required by Section 5.01(b)
or 5.03 hereof, on such earlier date as such Lender may specify to
the Company with a copy to the Administrative Agent) and, unless
and until such Lender gives notice as provided below that the
circumstances specified in Section 5.01 or 5.03 hereof which gave
rise to such Conversion no longer exist:
(a) to the extent that such Lender's Eurodollar Loans
have been so Converted, all payments and prepayments of
principal which would otherwise be applied to such Lender's
Eurodollar Loans shall be applied instead to its Base Rate
Loans; and
(b) all Loans which would otherwise be made or
Continued by such Lender as Eurodollar Loans shall be made or
Continued instead as Base Rate Loans, and all Loans of such
Lender that would otherwise be Converted into Eurodollar
Loans shall remain as Base Rate Loans.
If such Lender gives notice to the Company with a copy to the
Administrative Agent that the circumstances specified in Section
5.01 or 5.03 hereof that gave rise to the Conversion of such
Lender's Eurodollar Loans pursuant to this Section 5.04 no longer
exist (which such Lender agrees to do promptly upon such
circumstances ceasing to exist) at a time when Eurodollar Loans
made by other Lenders are outstanding, such Lender's Base Rate
Loans shall be automatically Converted, on the first day(s) of the
next succeeding Interest Period(s) for such outstanding Eurodollar
Loans, to the extent necessary so that, after giving effect
thereto, all Loans held by the Lenders holding Eurodollar Loans
and by such Lender are held pro rata (as to principal amounts,
Types and Interest Periods) in accordance with their respective
Commitments.
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5.05 Compensation. The Company shall pay to the
Administrative Agent for account of each Lender, upon the request
of such Lender through the Administrative Agent, such amount or
amounts as shall be sufficient (in the reasonable opinion of such
Lender) to compensate it for any loss, cost or expense which such
Lender determines is attributable to:
(a) any payment, prepayment or Conversion of a
Eurodollar Loan made by such Lender for any reason
(including, without limitation, the acceleration of the Loans
pursuant to Section 9 hereof) on a date other than the last
day of the Interest Period for such Loan; or
(b) any failure by the Company for any reason
(including, without limitation, the failure of any of the
conditions precedent specified in Section 6 hereof to be
satisfied) to borrow, Continue or Convert into a Eurodollar
Loan from such Lender on the date for such borrowing,
Continuation or Conversion specified in the relevant notice
of borrowing, Continuation or Conversion given pursuant to
Section 2.02 or 4.05 hereof.
Without limiting the effect of the preceding sentence, such
compensation shall include an amount equal to the excess, if any,
of (i) the amount of interest which otherwise would have accrued
on the principal amount so paid, prepaid, Converted or not
borrowed for the period from the date of such payment, prepayment,
Conversion or failure to borrow to the last day of the then
current Interest Period for such Loan (or, in the case of a
failure to borrow, the Interest Period for such Loan which would
have commenced on the date specified for such borrowing) at the
applicable rate of interest for such Loan provided for herein over
(ii) the amount of interest which otherwise would have accrued on
such principal amount at a rate per annum equal to the interest
component of the amount such Lender would have bid in the London
interbank market for Dollar deposits of leading banks in amounts
comparable to such principal amount and with maturities comparable
to such period (as reasonably determined by such Lender).
5.06 U.S. Taxes.
(a) The Company agrees to pay to each Lender that is
not a U.S. Person such additional amounts as are necessary in
order that the net payment of any amount due to such non-U.S.
Person hereunder or under its Note after deduction for or
withholding in respect of any U.S. Taxes imposed with respect to
such payment (or in lieu thereof, payment of such U.S. Taxes by
such non-U.S. Person), will not be less than the amount stated
herein to be then due and payable, provided that the foregoing
obligation to pay such additional amounts shall not apply:
(i) to any payment to a Lender hereunder if such Lender
is not, on the date hereof (or on the date it becomes a
Lender as provided in Section 11.06(b) hereof) and on the
date of any change in the Applicable Lending Office of such
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Lender, either entitled to submit a Form 1001 (relating to
such Lender and entitling it to a complete exemption from
withholding on all interest to be received by it hereunder in
respect of the Loans) or Form 4224 (relating to all interest
to be received by such Lender hereunder in respect of the
Loans), or
(ii) to any U.S. Taxes that would not have been imposed
but for the failure by such non-U.S. Person to comply with
applicable certification, information, documentation or other
reporting requirements concerning the nationality, residence,
identity or connections with the United States of America of
such non-U.S. Person if such compliance is required by
statute or regulation of the United States of America as a
precondition to relief or exemption from such U.S. Taxes.
For the purposes of this Section 5.06(a), (A) "U.S. Person" shall
mean a citizen, national or resident of the United States of
America, a corporation, partnership or other entity created or
organized in or under any laws of the United States of America or
any State thereof, or any estate or trust that is subject to
United States Federal income taxation regardless of the source of
its income, (B) "U.S. Taxes" shall mean any present or future tax,
assessment or other charge or levy imposed by or on behalf of the
United States of America or any taxing authority thereof or
therein, (C) "Form 1001" shall mean Form 1001 (Ownership,
Exemption, or Reduced Rate Certificate) of the Department of the
Treasury of the United States of America and (D) "Form 4224" shall
mean Form 4224 (Exemption from Withholding of Tax on Income
Effectively Connected with the Conduct of a Trade or Business in
the United States) of the Department of the Treasury of the United
States of America. Each of the Forms referred to in the foregoing
clauses (C) and (D) shall include such successor and related forms
as may from time to time be adopted by the relevant taxing
authorities of the United States of America to document a claim to
which such Form relates.
(b) Within 30 days after paying any amount to the
Administrative Agent or any Lender from which it is required by
law to make any deduction or withholding, and within 30 days after
it is required by law to remit such deduction or withholding to
any relevant taxing or other authority, the Company shall deliver
to the Administrative Agent for delivery to such non-U.S. Person
evidence satisfactory to such Person of such deduction,
withholding or payment (as the case may be).
Credit Agreement
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Section 6. Conditions Precedent.
6.01 Initial Loan. The obligation of any Lender to make
its initial Loan hereunder is subject to the Administrative
Agent's receipt by October 27, 1997 of the following items, each
of which shall be satisfactory to the Administrative Agent in form
and substance:
(a) Corporate Documents. The following documents, each
certified as indicated below:
(i) a copy of the charter, as amended, of the
Company certified by the Secretary of State of Ohio, and
a certificate as to the good standing of and charter
documents filed by the Company from such Secretary of
State, dated as of a recent date;
(ii) a certificate of the Secretary or an
Assistant Secretary of the Company, dated the date
hereof and certifying (A) that attached thereto is a
true and complete copy of the Regulations of the Company
as in effect on the date of such certificate, (B) that
attached thereto is a true and complete copy of
resolutions duly adopted by the board of directors of
the Company authorizing the execution, delivery and
performance of the Basic Documents and the extensions of
credit hereunder, and that such resolutions have not
been modified, rescinded or amended and are in full
force and effect, (C) that the charter of the Company
has not been amended since the date of the certification
thereto furnished pursuant to clause (i) above, and (D)
as to the incumbency and specimen signature of each
officer of the Company executing the Basic Documents and
each other document to be delivered by the Company from
time to time in connection therewith (and the
Administrative Agent and each Lender may conclusively
rely on such certificate until it receives notice in
writing from such Person); and
(iii) a certificate of another officer of the
Company as to the incumbency and specimen signature of
the Secretary or Assistant Secretary, as the case may
be, of the Company.
(b) Officer's Certificate. A certificate of a senior
officer of the Company to the effect set forth in the first
sentence of Section 6.02 hereof.
(c) Opinion of Counsel to the Company. An opinion of
Vorys, Sater, Seymour and Pease, counsel to the Company,
substantially in the form of Exhibit B hereto.
(d) Opinion of Counsel to the Lenders. An opinion of
Vedder, Price, Kaufman, Kammholz & Day, special New York
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counsel to the Lenders, substantially in the form of Exhibit
C hereto.
(e) Notes. The Notes, duly completed and executed.
(f) Termination of Existing Agreement. Evidence of the
termination of the "Revolving Credit Commitments" and "Term
Loan Commitments" under the Existing Credit Agreement, the
repayment of all loans thereunder and the payment of all
other amounts due thereunder.
(g) Payment of Fees and Expenses. Evidence of the
payment by the Company of such fees as the Company shall have
separately agreed to pay to Chase and amounts owing under
Section 11.03 hereof to the extent it has received invoices
therefor on or before the date of the initial borrowing
hereunder.
(h) Self-Insurance. A certificate of a senior officer
of the Company describing in reasonable detail the types and
amounts of self-insurance maintained by the Company and its
Subsidiaries, which types and amounts are satisfactory to the
Lenders.
(i) Other Documents. Such other documents as the
Administrative Agent or any Lender or special New York
counsel to the Lenders may reasonably request.
6.02 Initial and Subsequent Loans. The obligation of
the Lenders to make any Loan to the Company upon the occasion of
each borrowing hereunder (including the initial borrowing) is
subject to the further conditions precedent that, both immediately
prior to the making of such Loan and also after giving effect
thereto and to the intended use thereof: (a) no Default shall
have occurred and be continuing; and (b) the representations and
warranties made by the Company in Section 7 hereof shall be true
and complete on and as of the date of the making of such Loan with
the same force and effect as if made on and as of such date (or,
if any such representation or warranty is expressly stated to have
been made as of a specific date, as of such specific date). Each
notice of borrowing by the Company hereunder shall constitute a
certification by the Company to the effect set forth in the
preceding sentence (both as of the date of such notice and, unless
the Company otherwise notifies the Administrative Agent prior to
the date of such borrowing, as of the date of such borrowing).
Section 7. Representations and Warranties. The Company
represents and warrants to the Lenders that:
7.01 Corporate Existence. Each of the Company and its
Consolidated Subsidiaries: (a) is a corporation, partnership or
other entity duly organized and validly existing under the laws of
the jurisdiction of its organization; (b) has all requisite
corporate or other power, and has all material governmental
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licenses, authorizations, consents and approvals necessary to own
its assets and carry on its business as now being or as proposed
to be conducted; and (c) is qualified to do business in all
jurisdictions in which the nature of the business conducted by it
makes such qualification necessary and where failure so to qualify
would have a Material Adverse Effect.
7.02 Financial Condition.
(a) The consolidated and consolidating balance sheets of
the Company and its Consolidated Subsidiaries as at December 31,
1996 and the related consolidated and consolidating statements of
income, retained earnings and changes in financial position (or of
cash flow, as the case may be) of the Company and its Consolidated
Subsidiaries for the fiscal year ended on said date, with the
opinion thereon (in the case of said consolidated balance sheet
and statements) of Coopers & Lybrand, and the unaudited
consolidated and consolidating balance sheets of the Company and
its Consolidated Subsidiaries as at June 30, 1997 and the related
consolidated and consolidating statements of income, retained
earnings and changes in financial position (or of cash flow, as
the case may be) of the Company and its Consolidated Subsidiaries
for the six-month period ended on such date, heretofore furnished
to each of the Lenders, are complete and correct and fairly
present the consolidated financial condition of the Company and
its Consolidated Subsidiaries, and the unconsolidated financial
condition of the Company and of each of its Consolidated
Subsidiaries, as at said dates and the consolidated and
unconsolidated results of their operations for the fiscal year and
six-month period ended on said dates (subject, in the case of such
financial statements as at June 30, 1997, to normal year-end audit
adjustments), all in accordance with generally accepted accounting
principles and practices applied on a consistent basis. Neither
the Company nor any of its Subsidiaries had on said dates any
material contingent liabilities, liabilities for taxes, unusual
forward or long-term commitments or unrealized or anticipated
losses from any unfavorable commitments, except as referred to or
reflected or provided for in said balance sheets as at said dates.
Since December 31, 1996, there has been no material adverse change
in the consolidated financial condition, operations, business or
prospects taken as a whole of the Company and its Consolidated
Subsidiaries from that set forth in said financial statements as
at said date.
(b) With respect to each Insurance Subsidiary, the
statutory financial statements of such Insurance Subsidiary as at
December 31, 1996, as filed with its Applicable Insurance
Regulatory Authority, and the quarterly statement for the six-month
period ended on June 30, 1997, heretofore furnished to each
of the Lenders, fairly present the financial condition of such
Insurance Subsidiary as at said dates and its results of
operations for its fiscal year and six-month period ended on said
dates, in each case, in accordance with statutory reporting
practices prescribed or permitted by its Applicable Insurance
Regulatory Authority for the preparation of financial statements
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and other financial reports by insurance corporations of the type
of such Insurance Subsidiary.
7.03 Litigation. Except as disclosed to the Lenders in
writing prior to the date of this Agreement, there are no legal or
arbitral proceedings, or any proceedings by or before any
governmental or regulatory authority or agency, now pending or (to
the knowledge of the Company) threatened against the Company or
any of its Subsidiaries in which there is a reasonable possibility
of an adverse determination that could have a Material Adverse
Effect.
7.04 No Breach. None of the execution and delivery of
this Agreement and the Notes, the consummation of the transactions
herein contemplated and compliance with the terms and provisions
hereof will conflict with or result in a breach of, or require any
consent under, the charter or Regulations of the Company, or any
applicable law or regulation, or any order, writ, injunction or
decree of any court or governmental authority or agency, or any
agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which any of them is bound or to
which any of them is subject, or constitute a default under any
such agreement or instrument.
7.05 Action. The Company has all necessary corporate
power and authority to execute, deliver and perform its
obligations under this Agreement and the Notes; the execution,
delivery and performance by the Company of this Agreement and the
Notes have been duly authorized by all necessary corporate action
on its part; and this Agreement has been duly and validly executed
and delivered by the Company and constitutes, and each of the
Notes when executed and delivered for value will constitute, its
legal, valid and binding obligation, enforceable in accordance
with its terms, except as such enforceability may be limited by
(a) bankruptcy, insolvency, reorganization, moratorium or similar
laws of general applicability affecting the enforcement of
creditors' rights and (b) the application of general principles of
equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
7.06 Approvals. No authorizations, approvals or
consents of, and no filings or registrations with, any
governmental or regulatory authority or agency are necessary for
the execution, delivery or performance by the Company of this
Agreement or the Notes or for the validity or enforceability
thereof.
7.07 Use of Loans. Not more than 25% of the value of
the Properties of the Company (individually) and the Company and
its Subsidiaries (determined on a consolidated basis) that are
subject to the restrictions in Sections 8.05 and 8.07 hereof is
attributable to Margin Stock.
7.08 ERISA. The Company and the ERISA Affiliates have
fulfilled their respective obligations under the minimum funding
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standards of ERISA and the Code with respect to each Plan and are
in compliance in all material respects with the presently
applicable provisions of ERISA and the Code, and have not incurred
any liability to the PBGC or any Plan or Multiemployer Plan (other
than to make contributions in the ordinary course of business).
7.09 Taxes. United States Federal income tax returns
of the Company and its Subsidiaries have been examined and closed
through the fiscal year of the Company ended December 31, 1985.
The Company and its Subsidiaries have filed all United States
Federal income tax returns and all other material tax returns
which are required to be filed by them and have paid all taxes due
pursuant to such returns or pursuant to any assessment received by
the Company or any of its Subsidiaries. The charges, accruals and
reserves on the books of the Company and its Subsidiaries in
respect of taxes and other governmental charges are, in the
opinion of the Company, adequate. If the Company is a member of
an affiliated group of corporations filing consolidated returns
for United States Federal income tax purposes, it is the "common
parent" of such group.
7.10 Investment Company Act. The Company is not an
"investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of
1940, as amended.
7.11 Public Utility Holding Company Act. The Company
is not a "holding company", or an "affiliate" of a "holding
company" or a "subsidiary company" of a "holding company", within
the meaning of the Public Utility Holding Company Act of 1935, as
amended.
7.12 Credit Agreements. Schedule I hereto is a
complete and correct list, as of the date of this Agreement, of
each credit agreement, loan agreement, indenture, purchase
agreement, Guarantee or other arrangement providing for or
otherwise relating to any Indebtedness or any extension of credit
(or commitment for any extension of credit) to, or Guarantee by,
the Company or any of its Consolidated Subsidiaries the aggregate
principal or face amount of which equals or exceeds (or may equal
or exceed) $1,000,000 and the aggregate principal or face amount
outstanding or which may become outstanding under each such
arrangement is correctly described in said Schedule I.
7.13 Hazardous Materials. The Company and each of its
Subsidiaries have obtained all permits, licenses and other
authorizations which are required under all Environmental Laws,
except to the extent failure to have any such permit, license or
authorization would not have a Material Adverse Effect. The
Company and each of its Subsidiaries are in compliance with the
terms and conditions of all such permits, licenses and
authorizations, and are also in compliance with all other
limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in
any applicable Environmental Law or in any regulation, code, plan,
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order, decree, judgment, injunction, notice or demand letter
issued, entered, promulgated or approved thereunder, except to the
extent failure to comply would not have a Material Adverse Effect.
7.14 Subsidiaries, Etc. Set forth in Schedule II
hereto is a complete and correct list, as of the date of this
Agreement, of all Subsidiaries of the Company (and the respective
jurisdiction of organization of each such Subsidiary) and of all
Investments held by the Company or any of its Subsidiaries in any
joint venture. Except as disclosed in Schedule II hereto the
Company owns, free and clear of Liens, all outstanding shares of
such Subsidiaries (and each such Subsidiary owns, free and clear
of Liens, all outstanding equity interests of its Subsidiaries)
and all such shares are validly issued, fully paid and
non-assessable and the Company (or the respective Subsidiary) also
owns, free and clear of Liens, all such Investments.
Section 8. Covenants of the Company. The Company
covenants and agrees with the Lenders and the Administrative Agent
that, so long as any Commitment or Loan is outstanding and until
payment in full of all amounts payable by the Company hereunder:
8.01 Financial Statements. The Company shall deliver
to each of the Lenders:
(a) as soon as available and in any event within 60
days after the end of each quarterly fiscal period of each
fiscal year of the Company, consolidated and consolidating
statements of income, retained earnings and cash flow of the
Company and its Consolidated Subsidiaries for such period and
for the period from the beginning of the respective fiscal
year to the end of such period, and the related consolidated
and consolidating balance sheets as at the end of such
period, setting forth in each case in comparative form the
corresponding consolidated and consolidating figures for the
corresponding period in the preceding fiscal year,
accompanied by a certificate of a senior financial officer of
the Company, which certificate shall state that said
financial statements fairly present the consolidated
financial condition and results of operations of the Company
and its Consolidated Subsidiaries, and the unconsolidated
financial condition and results of operations of the Company
and of each of its Consolidated Subsidiaries, in accordance
with generally accepted accounting principles, consistently
applied, as at the end of, and for, such period (subject to
normal year-end audit adjustments);
(b) as soon as available and in any event within 105
days after the end of each fiscal year of the Company,
consolidated and consolidating statements of income, retained
earnings and cash flow of the Company and its Consolidated
Subsidiaries for such year and the related consolidated and
consolidating balance sheets as at the end of such year,
setting forth in each case in comparative form the
corresponding consolidated and consolidating figures for the
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preceding fiscal year, and accompanied (i) in the case of
said consolidated statements and balance sheet, by an opinion
thereon of independent certified public accountants of
recognized national standing, which opinion shall state that
said consolidated financial statements fairly present the
consolidated financial condition and results of operations of
the Company and its Consolidated Subsidiaries as at the end
of, and for, such fiscal year in accordance with generally
accepted accounting principles, and a certificate of such
accountants stating that, in making the examination necessary
for their opinion, they obtained no knowledge, except as
specifically stated, of any Default arising from the breach
of any of Sections 8.09, 8.10 or 8.11 hereof, and (ii) in the
case of said consolidating statements and balance sheets, by
a certificate of a senior financial officer of the Company,
which certificate shall state that said consolidating
financial statements fairly present the unconsolidated
financial condition and results of operations of the Company
and of each of its Consolidated Subsidiaries in accordance
with generally accepted accounting principles, consistently -
applied, as at the end of, and for, such fiscal year;
(c) as soon as available and in any event not later
than 75 days after the end of each fiscal year of each
Insurance Subsidiary, (i) the Annual Statements of such
Insurance Subsidiary (prepared in accordance with the
statutory accounting practices required or permitted by its
Applicable Insurance Regulatory Authority) for such fiscal
year as filed with such Applicable Insurance Regulatory
Authority, together with the opinion thereon of a senior
financial officer of such Insurance Subsidiary stating that
such Annual Statements present the statutory financial
condition of such Insurance Subsidiary in accordance with
statutory accounting practices required or permitted by such
Applicable Insurance Regulatory Authority and (ii) a
certificate of the Chief Actuary of the Company or
independent certified public accountants of recognized
national standing affirming the adequacy of the insurance
reserves of such Insurance Subsidiary;
(d) as soon as available and in any event not later
than 75 days after the end of each fiscal year of OCIC, the
combined Annual Statement of all of the Insurance
Subsidiaries (prepared in accordance with the statutory
accounting practices required or permitted by the Applicable
Insurance Regulatory Authority for OCIC) for such fiscal year
as filed with such Applicable Insurance Regulatory Authority,
together with the opinion thereon of a senior financial
officer of OCIC stating that such Annual Statement presents
the statutory combined financial condition of the Insurance
Subsidiaries in accordance with statutory accounting
practices required or permitted by such Applicable Insurance
Regulatory Authority and (ii) a certificate of the Chief
Actuary of OCIC affirming the adequacy of the combined
insurance reserves of the Insurance Subsidiaries;
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(e) as soon as available and in any event within 60
days after the end of each fiscal quarter of each Insurance
Subsidiary, (i) quarterly statutory financial statements of
such Insurance Subsidiary (prepared in accordance with
statutory accounting practices required or permitted by its
Applicable Insurance Regulatory Authority) for such fiscal
quarter as filed with such Applicable Insurance Regulatory
Authority, together with the opinion thereon of a senior
financial officer of such Insurance Subsidiary stating that
such statutory financial statements present the statutory
financial condition of such Insurance Subsidiary in
accordance with statutory accounting practices required or
permitted by such Applicable Insurance Regulatory Authority;
(f) Promptly after their becoming available:
(i) copies of all financial statements, reports
and proxy statements that the Company shall have sent to
its stockholders generally;
(ii) copies of all registration statements that
the Company shall file, other than employee benefit
plans, and copies of all regular and periodic reports,
if any, that the Company shall file with the Securities
and Exchange Commission, or any governmental agency or
agencies substituted therefor, or with any national
securities exchange, or shall furnish to its
shareholders, and copies of statutory financial
statements that the Company or any Insurance Subsidiary
periodically files with the Applicable Insurance
Regulatory Authority or any governmental agency or
agencies substituted therefor; and
(iii) copies of all regular and periodic reports
of reviews or examinations of the Company and its
Consolidated Subsidiaries, or any of them, delivered to
such Person by any Applicable Insurance Regulatory
Authority, insurance commission or similar regulatory
authority;
(g) as soon as possible, and in any event within ten
days after the Company knows or has reason to believe that
any of the events or conditions specified below with respect
to any Plan or Multiemployer Plan have occurred or exist, a
statement signed by a senior financial officer of the Company
setting forth details respecting such event or condition and
the action, if any, which the Company or its ERISA Affiliate
proposes to take with respect thereto (and a copy of any
report or notice required to be filed with or given to PBGC
by the Company or an ERISA Affiliate with respect to such
event or condition):
(i) any reportable event, as defined in Section
4043(b) of ERISA and the regulations issued thereunder,
with respect to a Plan, as to which PBGC has not by
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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 or Section 302 of ERISA shall be a reportable event
regardless of the issuance of any waivers in accordance
with Section 412(d) of the Code);
(ii) the filing under Section 4041 of ERISA of a
notice of intent to terminate any Plan or the
termination of any Plan;
(iii) the institution by PBGC of proceedings under
Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a
notice from a Multiemployer Plan that such action has
been taken by PBGC with respect to such Multiemployer
Plan;
(iv) the complete or partial withdrawal by the
Company or any ERISA Affiliate under Section 4201 or
4204 of ERISA from a Multiemployer Plan, or the receipt
by the Company or any ERISA Affiliate of notice from a
Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA or
that it intends to terminate or has terminated under
Section 4041A of ERISA; and
(v) the institution of a proceeding by a fiduciary
of any Multiemployer Plan against the Company or any
ERISA Affiliate to enforce Section 515 of ERISA, which
proceeding is not dismissed within 30 days;
(h) promptly after the Company knows or has reason to
believe that any Default has occurred, a notice of such
Default describing the same in reasonable detail and,
together with such notice or as soon thereafter as possible,
a description of the action that the Company has taken and
proposes to take with respect thereto;
(i) from time to time such other information regarding
the financial condition, operations, business or prospects of
the Company or any of its Subsidiaries (including, without
limitation, any Plan or Multiemployer Plan and any reports or
other information required to be filed under ERISA) as any
Lender or the Administrative Agent may reasonably request;
and
(j) notice of any change in the S&P Rating promptly
after the same shall have occurred.
The Company will furnish to each Lender, at the time it furnishes
each set of financial statements pursuant to paragraph (a), (b),
(c), (d) or (e) above, a certificate of a senior financial officer
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of the Company (i) to the effect that no Default has occurred and
is continuing (or, if any Default has occurred and is continuing,
describing the same in reasonable detail and describing the action
that the Company has taken and proposes to take with respect
thereto) and (ii) setting forth in reasonable detail the
computations necessary to determine whether the Company is in
compliance with Sections 8.07, 8.08, 8.09, 8.10 and 8.11 hereof as
of the end of the respective quarterly fiscal period or fiscal
year.
8.02 Litigation. The Company will promptly give to
each Lender notice of all legal or arbitral proceedings, and of
all proceedings by or before any governmental or regulatory
authority or agency, and any material development in respect of
such legal or other proceedings, affecting the Company or any of
its Subsidiaries, except proceedings in which there is no
reasonable possibility of an adverse determination that could have
a Material Adverse Effect.
8.03 Existence, Etc. The Company will, and will cause
each of its Consolidated Subsidiaries to: preserve and maintain
its legal existence and all of its material rights, privileges and
franchises (provided that nothing in this Section 8.03 shall
prohibit any transaction expressly permitted under Section 8.05
hereof); comply with the requirements of all applicable law,
rules, regulations and orders of governmental or regulatory
authorities if failure to comply with such requirements would have
a Material Adverse Effect; pay and discharge all taxes,
assessments and governmental charges or levies imposed on it or on
its income or profits or on any of its Property prior to the date
on which penalties attach thereto, except for any such tax,
assessment, charge or levy the payment of which is being contested
in good faith and by proper proceedings and against which adequate
reserves are being maintained; maintain all of its Properties used
or useful in its business in good working order and condition,
ordinary wear and tear excepted; and permit representatives of any
Lender or the Administrative Agent, during normal business hours,
to examine, copy and make extracts from its books and records, to
inspect its Properties, and to discuss its business and affairs
with its officers, all to the extent reasonably requested by such
Lender or the Administrative Agent (as the case may be).
8.04 Insurance. The Company shall, and shall cause
each of its Subsidiaries to, maintain worker's compensation
insurance, liability insurance and insurance on its properties,
assets and business, now owned or hereafter acquired, against such
casualties, risks and contingencies, and in such types and
amounts, as are consistent with customary practices and standards
of companies engaged in similar businesses. The Company shall not
permit the types or amounts of self-insurance maintained by it and
its Subsidiaries to be materially increased beyond the types and
amounts thereof set forth in the certificate referred to in
Section 6.01(h) hereof.
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8.05 Prohibition of Fundamental Changes. The Company
will not, nor will it permit any of its Subsidiaries to, enter
into any transaction of merger or consolidation or amalgamation,
or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution). The Company will not, and will not
permit any of its Subsidiaries to, acquire any business or assets
from, or capital stock of, or be a party to any acquisition of,
any Person except for purchases of inventory and other assets to
be sold or used in the ordinary course of business, capital
expenditures made in the ordinary course of business and
Investments permitted under Section 8.08 hereof. The Company will
not, and will not permit any of its Subsidiaries to, convey, sell,
lease, transfer or otherwise dispose of, in one transaction or a
series of transactions, all or a substantial part of its business
or assets, whether now owned or hereafter acquired (including,
without limitation, shares of stock and indebtedness of
Subsidiaries, receivables and leasehold interests) if such
conveyance, sale, lease, transfer or other disposition would have
a Material Adverse Effect (and any conveyance, sale, lease,
transfer or other disposition permitted by this sentence shall be
for cash consideration at fair market value). Notwithstanding the
foregoing provisions of this Section 8.05: (a) the Subsidiaries
of the Company may enter into reinsurance transactions in the
ordinary course of business and (b) if no Default exists or would
result therefrom:
(i) any Subsidiary of the Company may be merged or
consolidated with or into: (i) the Company if the Company
shall be the continuing or surviving corporation or (ii) any
other such Subsidiary; provided that if any such transaction
shall be between a Subsidiary and a Wholly-Owned Subsidiary,
the Wholly-Owned Subsidiary shall be the continuing or
surviving corporation;
(ii) any such Subsidiary may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to the Company or a Wholly-Owned
Subsidiary of the Company;
(iii) the Company may merge or consolidate with any
other Person if (i) the Company is the surviving corporation
or (ii) the successor corporation is organized under the laws
of the United States or a state thereof, and expressly
assumes the obligations of the Company hereunder and such
Person into which the Company is merged has a senior long
term unsecured debt rating assigned by Standard & Poor's
Ratings Service or Moody's Investors Service (if any) of not
less than "A" (or its equivalent) and whose insurance
operations (if any) are rated "A" or better by A.M. Best; and
(iv) any Subsidiary of the Company may change its
domicile from one state in the United States of America to
another state in the United States of America.
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8.06 Certain Obligations Respecting Subsidiaries. The
Company will, and will cause each of its Subsidiaries to, take
such action from time to time as shall be necessary to ensure that
it at all times owns at least the same percentage of the issued
and outstanding shares of each class of stock of each of its
Subsidiaries as is owned on the date of the initial Loans
hereunder. Without limiting the generality of the foregoing, the
Company will not, nor will it permit any of its Subsidiaries to,
sell, transfer or otherwise dispose of any shares of stock in any
Subsidiary owned by them (except for a sale, transfer or other
disposition permitted under Section 8.05 hereof or the sale of all
the capital stock of a Consolidated Subsidiary as an entirety for
cash consideration at fair market value) and the Company will not,
nor will it permit any of its Subsidiaries to, issue any shares of
stock of any class whatsoever to any Person (except directors'
qualifying shares).
8.07 Limitation on Liens. (a) The Company will not,
nor will it permit any of its Subsidiaries to, create, incur,
assume or suffer to exist any Lien upon any of its Property,
whether now owned or hereafter acquired, except (subject to
paragraph (b) of this Section 8.07):
(i) Liens imposed by any governmental authority for
taxes, assessments or charges not yet due or which are being
contested in good faith and by appropriate proceedings if
adequate reserves with respect thereto are maintained on the
books of the Company or any of its Subsidiaries, as the case
may be, in accordance with GAAP;
(ii) carriers', warehousemen's, mechanics',
materialmen's, repairmen's or other like Liens arising in the
ordinary course of business which are not overdue for a
period of more than 30 days or which are being contested in
good faith and by appropriate proceedings and Liens securing
judgments but only to the extent for an amount and for a
period not resulting in an Event of Default under Section
9(h) hereof;
(iii) pledges or deposits under worker's compensation,
unemployment insurance and other social security legislation;
(iv) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations (including those in respect of insurance company
qualification requirements), surety and appeal bonds,
performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(v) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of
business and encumbrances consisting of zoning restrictions,
easements, licenses, restrictions on the use of Property or
minor imperfections in title thereto which, in the aggregate,
are not material in amount, and which do not in any case
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materially detract from the value of the Property subject
thereto or interfere with the ordinary conduct of the
business of the Company or any of its Subsidiaries;
(vi) Liens on Property of any corporation which becomes
a Subsidiary of the Company after the date of this Agreement,
provided that such Liens are in existence at the time such
corporation becomes a Subsidiary of the Company and were not
created in anticipation thereof;
(vii) Liens upon real and/or tangible personal Property
acquired after the date hereof (by purchase, construction or
otherwise) by the Company or any of its Subsidiaries, each of
which Liens either (A) existed on such Property before the
time of its acquisition and was not created in anticipation
thereof or (B) was created solely for the purpose of securing
Indebtedness representing, or incurred to finance, refinance
or refund, the cost (including the cost of construction) of
such Property; provided that no such Lien shall extend to or
cover any Property of the Company or such Subsidiary other
than the Property so acquired and improvements thereon; and
provided, further, that the principal amount of Indebtedness
secured by any such Lien shall at no time exceed 70% of the
fair market value (as determined in good faith by a senior
financial officer of the Company) of such Property at the
time it was acquired (by purchase, construction or
otherwise);
(viii) additional Liens upon real and/or personal
Property (x) contemplated by the agreements described on
Schedule I hereto and (y) created after the date hereof,
provided that, in the case of this clause (y), the aggregate
Indebtedness secured thereby and incurred on and after the
date hereof shall not exceed $25,000,000 in the aggregate at
any one time outstanding;
(ix) Liens on marketable direct obligations issued or
unconditionally guaranteed or insured by the United States of
America or any agency or instrumentality thereof and backed
by the full faith and credit of the United States of America
sold by the Company or any of its Subsidiaries under a
repurchase agreement with a bank or a primary dealer of
United States government securities maturing within 30 days
from the date of sale, provided that the terms of such
agreement complies with the guidelines set forth in the
Federal Financial Institutions Examination Council
Supervisory Policy -- Repurchase Agreements of Depositary
Institutions With Securities Dealers and Others, as adopted
by the Comptroller of the Currency on October 31, 1985 (or
any successor guidelines); and
(x) any extension, renewal or replacement of the
foregoing, provided, however, that the Liens permitted
hereunder shall not be spread to cover any additional
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Indebtedness or Property (other than a substitution of like
Property).
(b) Notwithstanding subparagraphs (a)(i) through (a)(x)
of this Section 8.07, the Company will not, nor will it permit any
of its Subsidiaries to, create, incur, assume or suffer to exist
any Lien upon any stock issued by any Insurance Subsidiary.
8.08 Investments. The Company will not, and will not
permit any of its Subsidiaries to, make or permit to remain
outstanding:
(a) any Investments that consist of capital stock,
partnership or other ownership interests or other equity
securities in any Person (other than a Consolidated
Subsidiary of the Company) in an aggregate amount (for all
such Investments) in excess of 30% of the total investments
of the Company and its Subsidiaries (determined on
consolidated basis in accordance with GAAP);
(b) any Investments that are Non-Investment Grade
Securities (as defined below, but excluding loans to
Subsidiaries of the Company constituting Funded Debt of such
Subsidiaries permitted by Section 8.12 hereof) in an
aggregate amount (for all such Investments) in excess of
12.5% of the total investments of the Company and its
Subsidiaries (determined on a consolidated basis in
accordance with GAAP); and
(c) assets constituting real estate (determined in
accordance with SAP) in an aggregate amount (for all such
assets) in excess of 5% of the total investments of the
Company and its Subsidiaries (determined on a consolidated
basis in accordance with GAAP);
provided that the Company may, and may permit its Subsidiaries to,
make and maintain Investments in Wholly-Owned Subsidiaries of the
Company. For purposes of this Section 8.08, "Non-Investment Grade
Securities" shall mean bonds, debentures, notes or other evidence
of, or other obligations to repay, Indebtedness that (i) have a
rating from a nationally recognized statistical rating
organization (as that term is used in Rule 15c3-1(c)(2)(vi)(F)
under the Securities Exchange Act of 1934) below the four highest
generic categories of such nationally recognized statistical
rating organization, (ii) have been designated by the Securities
Valuation Office of the National Association of Insurance
Commissioners as having a lower quality than '2' or (iii) do not
have a rating from any such nationally recognized statistical
rating organization and do not have a quality designation by said
Securities Valuation Office.
8.09 Minimum Statutory Surplus. The Company will not
permit at any time Statutory Surplus to be less than $750,000,000.
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8.10 Consolidated Funded Debt. The Company will not
permit at any time Consolidated Funded Debt to exceed 30.00% of
Consolidated Tangible Net Worth (calculated without giving effect
to unrealized gain or loss on non-equity investments).
8.11 Funded Debt of Consolidated Subsidiaries. The
Company will not permit at any time the aggregate amount of Funded
Debt of all Subsidiaries of the Company (excluding Funded Debt
owing to the Company or any Subsidiary of the Company) to exceed
the greater of (a) 10% of Consolidated Tangible Net Worth or (b)
$80,000,000.
8.12 Lines of Business. The Company will continue, and
cause each of its Consolidated Subsidiaries to continue, to engage
in a business of the same general type as conducted by it on the
date of this Agreement.
8.13 Transactions with Affiliates. Except as expressly
permitted by this Agreement, the Company will not, nor will it
permit any of its Subsidiaries to, directly or indirectly: (a)
make any Investment in an Affiliate; (b) transfer, sell, lease,
assign or otherwise dispose of any Property to an Affiliate; (c)
merge into or consolidate with or purchase or acquire Property
from an Affiliate; or (d) enter into any other transaction
directly or indirectly with or for the benefit of an Affiliate
(including, without limitation, guarantees and assumptions of
obligations of an Affiliate); provided that (x) any Affiliate who
is an individual may serve as a director, officer or employee of
the Company or any of its Subsidiaries and receive reasonable
compensation for his or her services in such capacity and (y) the
Company and its Subsidiaries may enter into transactions (other
than extensions of credit by the Company or any of its
Subsidiaries to an Affiliate) providing for the leasing of
Property, the rendering or receipt of services or the purchase or
sale of inventory and other Property in the ordinary course of
business if the monetary or business consideration arising
therefrom would be substantially as advantageous to the Company
and its Subsidiaries as the monetary or business consideration
which would obtain in a comparable transaction with a Person not
an Affiliate.
8.14 Use of Proceeds. The Company will use the
proceeds of the Loans hereunder to pay the principal of and
interest on the loans made under, and all other amounts owing
under, the Existing Agreement and for general corporate purposes;
provided that neither the Administrative Agent nor any Lender
shall have any responsibility as to the use of any of such
proceeds. None of such proceeds will be used, directly or
indirectly, in any manner which would cause any Lender to violate
Regulation U, and the Company will not permit more than 25% of the
value of the Properties of the Company (individually) and the
Company and its Subsidiaries (determined on a consolidated basis)
that are subject to the restrictions in Sections 8.05 and 8.07
hereof to be attributable to Margin Stock.
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Section 9. Events of Default. If one or more of the
following events (herein called "Events of Default") shall occur
and be continuing:
(a) The Company shall default in the payment when due
of any principal of or interest on any Loan, any fee or any other
amount payable by it hereunder or under any Note; or
(b) The Company or any of its Consolidated Subsidiaries
shall default in the payment when due of (I) any amount of
principal of any of its other Indebtedness the aggregate amount of
which other Indebtedness is $1,000,000 or more or (II) any
interest on any such Indebtedness and such default in the payment
of interest shall remain unremedied for three or more Business
Days or (III) any amount under any Derivatives Obligation the
Settlement Amount of which individually or in the aggregate is
$1,000,000 or more and such default shall remain unremedied for
three or more Business Days; or any event specified in any note,
agreement, indenture or other document evidencing or relating to
any such Indebtedness shall occur if the effect of such event is
to cause, or (with the giving of any notice or the lapse of time
or both) to permit the holder or holders of such Indebtedness (or
a trustee or Administrative Agent on behalf of such holder or
holders) to cause, such Indebtedness to become due, or to be
prepaid in full (whether by redemption, purchase, offer to
purchase or otherwise), prior to its stated maturity or to have
the interest rate thereon reset to a level so that securities
evidencing such Indebtedness trade at level specified in relation
to the par value thereof; or
(c) Any representation, warranty or certification made
or deemed made herein (or in any modification, amendment or
supplement hereto) by the Company, or any certificate furnished to
any Lender or the Administrative Agent pursuant to the provisions
hereof (or thereof), shall prove to have been false or
intentionally misleading as of the time made or furnished in any
material respect; or
(d) The Company shall default in the performance of any
of its obligations under any of Sections 8.01(h), 8.05, 8.06,
8.07, 8.08, 8.09, 8.10, 8.11, 8.12, 8.13 and 8.14 hereof; or the
Company shall default in the performance of any of its other
obligations in this Agreement and such default shall continue
unremedied for a period of fifteen days after notice thereof to
the Company by the Administrative Agent or any Lender (through the
Administrative Agent); or
(e) The Company or any of its Consolidated Subsidiaries
shall admit in writing its inability to, or be generally unable
to, pay its debts as such debts become due; or
(f) The Company or any of its Consolidated Subsidiaries
shall (i) apply for or consent to the appointment of, or the
taking of possession by, a receiver, custodian, trustee or
liquidator of itself or of all or a substantial part of its
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Property, (ii) make a general assignment for the benefit of its
creditors, (iii) commence a voluntary case under the United States
Bankruptcy Code (as now or hereafter in effect), (iv) file a
petition seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, rehabilitation,
supervision, conservatorship, winding-up, or composition or
readjustment of debts, (v) fail to controvert in a timely and
appropriate manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under the Bankruptcy Code or
(vi) take any corporate action for the purpose of effecting any of
the foregoing; or
(g) A proceeding, order or case shall be commenced,
without the application or consent of the Company or any of its
Consolidated Subsidiaries, in any court of competent jurisdiction,
or by any applicable insurance regulatory authority seeking (i)
its liquidation, reorganization, rehabilitation, supervision,
conservatorship, dissolution or winding-up, or the composition or
readjustment of its debts, (ii) the appointment of a trustee,
receiver, custodian, liquidator or the like of the Company or such
Subsidiary or of all or any substantial part of its assets or
(iii) similar relief in respect of the Company or such Subsidiary
under any law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts, and such
proceeding or case shall continue undismissed, or an order,
judgment or decree approving or ordering any of the foregoing
shall be entered and continue unstayed and in effect, for a period
of 60 or more days; or an order for relief against the Company or
such Subsidiary shall be entered in an involuntary case under the
Bankruptcy Code; or
(h) A final judgment or judgments for the payment of
money in excess of $25,000,000 in the aggregate shall be rendered
by one or more courts, administrative tribunals or other bodies
having jurisdiction against the Company and/or any of its
Consolidated Subsidiaries and the same shall not be discharged (or
provision shall not be made for such discharge), or a stay of
execution thereof shall not be procured, within 30 days from the
date of entry thereof or execution thereof shall not otherwise be
prohibited by applicable law and the Company or the relevant
Subsidiary shall not, within said period of 30 days, or such
longer period during which execution of the same shall have been
stayed (or so prohibited), appeal therefrom and cause the
execution thereof to be stayed during such appeal; or
(i) An event or condition specified in Section 8.01(g)
hereof shall occur or exist with respect to any Plan or
Multiemployer Plan and, as a result of such event or condition,
together with all other such events or conditions, the Company or
any ERISA Affiliate shall incur or in the opinion of the Majority
Lenders shall be reasonably likely to incur a liability to a Plan,
a Multiemployer Plan or PBGC (or any combination of the foregoing)
which would have, in the determination of the Majority Lenders, a
Material Adverse Effect; or
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(j) (i) any Person or two or more Persons acting in
concert shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission
under the Securities Exchange Act of 1934) of 30% or more of the
outstanding shares of voting stock of the Company; or (ii) during
any period of 25 consecutive calendar months, individuals who were
directors of the Company on the first day of such period shall no
longer constitute a majority of the board of directors (excluding
any directors that replaced individuals who ceased to be directors
during such period by reason of death or voluntary retirement and
any directors who were appointed or whose election was approved by
a majority of the board of directors holding office at the time of
such election) of the Company;
THEREUPON: (1) in the case of an Event of Default other than one
referred to in clause (f) or (g) of this Section 9 with respect to
the Company, the Administrative Agent may (or, upon the
instructions of the Majority Lenders, shall), by notice to the
Company, terminate the Commitments and/or declare the principal
amount then outstanding of, and the accrued interest on, the Loans
and all other amounts payable by the Company hereunder and under
the Notes (including, without limitation, any amounts payable
under Section 5.05 hereof) to be forthwith due and payable,
whereupon such amounts shall be immediately due and payable
without presentment, demand, protest or other formalities of any
kind, all of which are hereby expressly waived by the Company; and
(2) in the case of the occurrence of an Event of Default referred
to in clause (f) or (g) of this Section 9 with respect to the
Company, the Commitments shall automatically be terminated and the
principal amount then outstanding of, and the accrued interest on,
the Loans and all other amounts payable by the Company hereunder
and under the Notes (including, without limitation, any amounts
payable under Section 5.05 hereof) shall automatically become
immediately due and payable without presentment, demand, protest
or other formalities of any kind, all of which are hereby
expressly waived by the Company.
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Section 10. The Administrative Agent.
10.01 Appointment, Powers and Immunities. Subject to
Section 10.08 hereof, each Lender hereby irrevocably appoints and
authorizes Chase to act as its agent hereunder with such powers as
are specifically delegated to the Administrative Agent by the
terms of this Agreement, together with such other powers as are
reasonably incidental thereto. The Administrative Agent (which
term as used in this sentence and in Section 10.05 and the first
sentence of Section 10.06 hereof shall include reference to its
affiliates and its own and its affiliates' officers, directors,
employees and agents): (a) shall have no duties or
responsibilities except those expressly set forth in this
Agreement, and shall not by reason of this Agreement be a trustee
for any Lender; (b) shall not be responsible to the Lenders for
any recitals, statements, representations or warranties contained
in this Agreement, or in any certificate or other document
referred to or provided for in, or received by any of them under,
this Agreement, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement, any
Note or any other document referred to or provided for herein or
for any failure by the Company or any other Person to perform any
of its obligations hereunder or thereunder; (c) shall not be
required to initiate or conduct any litigation or collection
proceedings hereunder; and (d) shall not be responsible for any
action taken or omitted to be taken by it hereunder or under any
other document or instrument referred to or provided for herein or
in connection herewith, except for its own gross negligence or
willful misconduct. The Administrative Agent may employ agents
and attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact
selected by it in good faith. The Administrative Agent may deem
and treat the payee of any Note as the holder thereof for all
purposes hereof unless and until a notice of the assignment or
transfer thereof shall have been filed with the Administrative
Agent, together with the consent of the Company to such assignment
or transfer.
10.02 Reliance by Administrative Agent. The
Administrative Agent shall be entitled to rely upon any
certification, notice or other communication (including any
thereof by telephone, telex or telecopy) believed by it to be
genuine and correct and to have been signed or sent by or on
behalf of the proper Person or Persons, and upon advice and
statements of legal counsel, independent accountants and other
experts selected by the Administrative Agent. As to any matters
not expressly provided for by this Agreement, the Administrative
Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder in accordance with instructions
given by the Majority Lenders or, if provided herein, in
accordance with the instructions given by the Majority Lenders or
all of the Lenders as is required in such circumstance, and such
instructions of such Lenders and any action taken or failure to
act pursuant thereto shall be binding on all of the Lenders.
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10.03 Defaults. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of a Default
(other than the non-payment of principal of or interest on Loans
or of commitment fees) unless the Administrative Agent has
received notice from a Lender or the Company specifying such
Default and stating that such notice is a "Notice of Default". In
the event that the Administrative Agent receives such a notice of
the occurrence of a Default, the Administrative Agent shall give
prompt notice thereof to the Lenders (and shall give each Lender
prompt notice of each such non-payment). The Administrative Agent
shall (subject to Section 10.07 hereof) take such action with
respect to such Default as shall be directed by the Majority
Lenders, provided that, unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may
(but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default as it shall deem
advisable in the best interest of the Lenders except to the extent
that this Agreement expressly requires that such action be taken,
or not be taken, only with the consent or upon the authorization
of the Majority Lenders, or all of the Lenders.
10.04 Rights as a Lender. With respect to its
Commitments and the Loans made by it, Chase (and any successor
acting as Administrative Agent) in its capacity as a Lender
hereunder shall have the same rights and powers hereunder as any
other Lender and may exercise the same as though it were not
acting as the Administrative Agent, and the term "Lender" or
"Lenders" shall, unless the context otherwise indicates, include
the Administrative Agent in its individual capacity. Chase (and
any successor acting as Administrative Agent) and its affiliates
may (without having to account therefor to any Lender) accept
deposits from, lend money to and generally engage in any kind of
banking, trust or other business with the Company (and any of its
Subsidiaries or Affiliates) as if it were not acting as the
Administrative Agent, and Chase and its affiliates may accept fees
and other consideration from the Company for services in
connection with this Agreement or otherwise without having to
account for the same to the Lenders.
10.05 Indemnification. The Lenders agree to indemnify
the Administrative Agent (to the extent not reimbursed under
Section 11.03 hereof, but without limiting the obligations of the
Company under said Section 11.03) ratably in accordance with the
aggregate principal amount of the Loans held by the Lenders (or,
if no Loans are as the time outstanding, ratably in accordance
with their respective Commitments), for any and all 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 Administrative Agent (including by any Lender) arising
out of or by reason of any investigation or any way relating to or
arising out of this Agreement or any other documents contemplated
by or referred to herein or the transactions contemplated hereby
(including, without limitation, the costs and expenses which the
Company is obligated to pay under Section 11.03 hereof but
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excluding, unless a Default has occurred and is continuing, normal
administrative costs and expenses incident to the performance of
its agency duties hereunder) or the enforcement of any of the
terms hereof 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 party
to be indemnified.
10.06 Non-Reliance on Administrative Agent and Other
Lenders. Each Lender agrees that it has, independently and
without reliance on the Administrative Agent or any other Lender,
and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Company and its
Subsidiaries and decision to enter into this Agreement and that it
will, independently and without reliance upon the Administrative
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 analysis and decisions in taking or not taking action
under this Agreement. The Administrative Agent shall not be
required to keep itself informed as to the performance or
observance by the Company of this Agreement or any other document
referred to or provided for herein or to inspect the Properties or
books of the Company or any of its Subsidiaries. Except for
notices, reports and other documents and information expressly
required to be furnished to the Lenders by the Administrative
Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition or
business of the Company or any of its Subsidiaries (or any of
their affiliates) which may come into the possession of the
Administrative Agent or any of its affiliates.
10.07 Failure to Act. Except for action expressly
required of the Administrative Agent hereunder, the Administrative
Agent shall in all cases be fully justified in failing or refusing
to act hereunder unless it shall receive further assurances to its
satisfaction from the Lenders of their indemnification obligations
under Section 10.05 hereof against any and all liability and
expense which may be incurred by it by reason of taking or
continuing to take any such action.
10.08 Resignation or Removal of Administrative Agent.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided below, the Administrative Agent
may resign at any time by giving notice thereof to the Lenders and
the Company, and the Administrative Agent may be removed at any
time with or without cause by the Majority Lenders. Upon any such
resignation or removal, the Majority Lenders shall have the right
to appoint a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by the Majority
Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent's giving of notice of
resignation or the Majority Lenders' removal of the retiring
Administrative Agent, then the retiring Administrative Agent may,
on behalf of the Lenders, appoint a successor Administrative
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Agent, which shall be a bank with a combined capital and surplus
of at least $500,000,000. Upon the acceptance of any appointment
as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed
to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and
obligations hereunder. After any retiring Administrative Agent's
resignation or removal hereunder as Administrative Agent, the
provisions of this Section 10 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by
it while it was acting as the Administrative Agent.
10.09 Agency Fee. The Company shall pay to Chase, as
Administrative Agent, the agency fee separately agreed by Chase
and the Company as and when due.
Section 11. Miscellaneous.
11.01 Waiver. No failure on the part of the
Administrative Agent or any Lender to exercise and no delay in
exercising, and no course of dealing with respect to, any right,
power or privilege under this Agreement or any Note shall operate
as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege under this Agreement or any Note
preclude any other or further exercise thereof or the exercise of
any other right, power or privilege. The remedies provided herein
are cumulative and not exclusive of any remedies provided by law.
11.02 Notices. All notices and other communications
provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement)
shall be given or made in writing (including, without limitation,
by telex or telecopy) delivered to the intended recipient at the
"Address for Notices" specified below its name on Annex 1; or, as
to any party, at such other address as shall be designated by such
party in a notice to each other party. Except as otherwise
provided in this Agreement, all such communications shall be
deemed to have been duly given when transmitted by telecopier or
personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.
11.03 Expenses, Etc. The Company agrees to pay or
reimburse (a) the Administrative Agent for paying all reasonable
out-of-pocket costs and expenses of the Administrative Agent
(including, without limitation, the reasonable fees and expenses
of Vedder, Price, Kaufman, Kammholz & Day, special New York
counsel to the Lenders), in connection with (i) the negotiation,
preparation, execution and delivery of this Agreement and the
Notes and the making of the Loans hereunder and (ii) any
amendment, modification or waiver of any of the terms of this
Agreement or any of the Notes; (b) each of the Lenders and the
Administrative Agent for all reasonable costs and expenses of the
Lenders and the Administrative Agent (including reasonable
counsels' fees) in connection with (i) any Default and any
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enforcement or collection proceedings resulting therefrom and (ii)
the enforcement of this Section 11.03; and (c) each of the Lenders
and the Administrative Agent for all transfer, stamp, documentary
or other similar taxes, assessments or charges levied by any
governmental or revenue authority in respect of this Agreement or
any of the Notes or any other document referred to herein.
The Company hereby agrees to indemnify the
Administrative Agent and each Lender and their respective
directors, officers, employees and agents for, and hold each of
them harmless against, any and all losses, liabilities, claims,
damages or expenses incurred by any of them (including any and all
losses, liabilities, claims, damages or expenses incurred by the
Administrative Agent to any Lender) arising out of or by reason of
any investigation or litigation or other proceedings (including
any threatened investigation or litigation or other proceedings)
relating to the extensions of credit hereunder or any actual or
proposed use by the Company or any of its Subsidiaries of the
proceeds of any of the extensions of credit hereunder, including,
without limitation, the reasonable fees and disbursements of
counsel incurred in connection with any such investigation or
litigation or other proceedings (but excluding any such losses,
liabilities, claims, damages or expenses incurred by reason of the
gross negligence or willful misconduct of the Person to be
indemnified).
11.04 Amendments, Etc. Except as otherwise expressly
provided in this Agreement, any provision of this Agreement may be
amended or modified only by an instrument in writing signed by the
Company, the Administrative Agent and the Majority Lenders, or by
the Company and the Administrative Agent acting with the consent
of the Majority Lenders, and any provision of this Agreement may
be waived by the Majority Lenders or by the Administrative Agent
acting with the consent of the Majority Lenders; provided that no
amendment, modification or waiver shall, unless by an instrument
signed by all of the Lenders or by the Administrative Agent acting
with the consent of all of the Lenders (i) increase or extend the
term or any Commitment, or extend the time or waive any
requirement for the reduction or termination, of any of the
Commitments, (ii) extend the date fixed for the payment of
principal of or interest on any Loan or any fee hereunder, (iii)
reduce the amount of any such payment of principal, (iv) reduce
the rate at which interest is payable thereon or any fee is
payable hereunder, (v) alter the rights or obligations of the
Company to prepay Loans, (vi) alter the terms of this Section
11.04 or of Section 11.06(a) hereof, (vii) amend the definition of
the term "Majority Lenders" or (viii) waive any of the conditions
precedent set forth in Section 6 hereof; and provided, further,
that any amendment of Section 10 hereof shall require the consent
of the Administrative Agent.
Anything in this Agreement to the contrary
notwithstanding, if at a time when the conditions precedent set
forth in Section 6 hereof to any Loan hereunder are, in the
opinion of the Majority Lenders, satisfied, any Lender shall fail
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to fulfill its obligations to make such Loan then, for so long as
such failure shall continue, such Lender shall (unless the
Majority Lenders, determined as if such Lender were not a "Lender"
hereunder, shall otherwise consent in writing) be deemed for all
purposes relating to amendments, modifications, waivers or
consents under this Agreement or any of the other Basic Documents
(including, without limitation, under this Section 11.04) to have
no Loans or Commitment, shall not be treated as a "Lender"
hereunder when performing the computation of Majority Lenders, and
shall have no rights under the preceding paragraph of this
Section 11.04; provided that any action taken by the other Lenders
with respect to the matters referred to in the proviso to the
preceding paragraph shall not be effective as against such Lender.
11.05 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
11.06 Assignments and Participation.
(a) The Company may not assign its rights or
obligations hereunder or under the Notes without the prior consent
of all of the Lenders and the Administrative Agent.
(b) Each Lender may assign any of its Loans, its Note
and its Commitment (but only with the consent of the Company and
the Administrative Agent, which consent of the Company and the
Administrative Agent will not be unreasonably withheld, it being
understood among the parties hereto that it will not be
unreasonable for the Company to withhold its consent in any
instance in which the granting of such consent could reasonably be
expected to increase the Company's obligations under Section 5.06
hereof); provided that (i) no such consent by the Company or the
Administrative Agent shall be required in the case of any
assignment to another Lender or to an affiliate of the assigning
Lender; (ii) any such partial assignment shall be in an amount at
least equal to $10,000,000; and (iii) each such assignment by a
Lender of its Loans, Note or Commitment shall be made in such
manner so that the same portion of its Loans, Note and Commitment
is assigned to the respective assignee. Upon execution and
delivery by the assignee to the Company and the Administrative
Agent of an instrument in writing pursuant to which such assignee
agrees to become a "Lender" hereunder (if not already a Lender)
having the Commitment and Loans specified in such instrument, and
upon consent thereto by the Company and the Administrative Agent,
to the extent required above, the assignee shall have, to the
extent of such assignment (unless otherwise provided in such
assignment with the consent of the Company and the Administrative
Agent, the obligations, rights and benefits of a Lender hereunder
holding the Commitment and Loans (or portions thereof) assigned to
it (in addition to the Commitment and Loans, if any, theretofore
held by such assignee) and the assigning Lender shall, to the
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extent of such assignment, be released from the Commitment (or
portion thereof) so assigned. Upon each such assignment the
assigning Lender shall pay the Administrative Agent an assignment
fee of $3,500.
(c) A Lender may sell or agree to sell to one or more
other Persons a participation in all or any part of any Loans held
by it, or in its Commitment, in which event each purchaser of a
participation (a "Participant") shall be entitled to the rights
and benefits of the provisions of Section 8.01(i) hereof with
respect to its participation in such Loans and Commitment as if
(and the Company shall be directly obligated to such Participant
under such provisions as if) such Participant were a "Lender" for
purposes of said Section, but, except as otherwise provided in
Section 4.07(c) hereof, shall not have any other rights or
benefits under this Agreement or any Note (the Participant's
rights against such Lender in respect of such participation to be
those set forth in the agreements executed by such Lender in favor
of the Participant). All amounts payable by the Company to any
Lender under Section 5 hereof in respect of such Loans and
Commitment shall be determined as if such Lender had not sold or
agreed to sell any participations in such Loans and Commitment,
and as if such Lender were funding each of such Loans and
Commitment in the same way that it is funding the portion of such
Loans and Commitment in which no participations have been sold.
In no event shall a Lender that sells a participation agree with
the Participant to take or refrain from taking any action
hereunder or under any other Basic Document except that such
Lender may agree with the Participant that it will not, without
the consent of the Participant, agree to (i) increase or extend
the term, or extend the time or waive any requirement for the
reduction or termination, of such Lender's Commitment, (ii) extend
the date fixed for the payment of principal of or interest on the
related Loan or Loans or any portion of any fee hereunder payable
to the Participant, (iii) reduce the amount of any such payment of
principal, (iv) reduce the rate at which interest is payable
thereon, or any fee hereunder payable to the Participant, to a
level below the rate at which the Participant is entitled to
receive such interest or fee, (v) alter the rights or obligations
of the Company to prepay the related Loans or (vi) consent to any
modification, supplement or waiver hereof or of any of the other
Basic Documents to the extent that the same, under Section 11.04
hereof, requires the consent of each Lender.
(d) Anything in this Section 11.06 to the contrary
notwithstanding, any Lender may assign and pledge all or any
portion of its Loans and its Notes to any Federal Reserve Bank as
collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any Operating Circular
issued by such Federal Reserve Bank. No such assignment shall
release the assigning Lender from its obligations hereunder.
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(e) A Lender may furnish any information concerning the
Company or any of its Subsidiaries in the possession of such
Lender from time to time to assignees and participants (including
prospective assignees and participants), subject, however, to the
provisions of Section 11.12(b) hereof.
11.07 Survival. The obligations of the Company under
Sections 5.01, 5.05, 5.06, 11.03 and 11.12 hereof and the
obligations of the Lenders under Section 10.05 hereof shall
survive the repayment of the Loans and the termination of the
Commitments. In addition, each representation and warranty made,
or deemed to be made by a notice of any extension of credit or
reborrowing herein or pursuant hereto, shall survive the making of
such representation and warranty, and no Lender shall be deemed to
have waived, by reason of making any extension of credit
hereunder, any Default which may arise by reason of such
representation or warranty proving to have been false or
misleading, notwithstanding that such Lender or the Administrative
Agent may have had notice or knowledge or reason to believe that
such representation or warranty was false or misleading at the
time such extension of credit was made.
11.08 Captions. The table of contents and captions and
section headings appearing herein are included solely for
convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
11.09 Counterparts. This Agreement may be executed in
any number of counterparts, all of which taken together shall
constitute one and the same instrument and any of the parties
hereto may execute this Agreement by signing any such counterpart.
11.10 Governing Law; Submission to Jurisdiction. This
Agreement and the Notes shall be governed by, and construed in
accordance with, the law of the State of New York. The Company
hereby submits to the nonexclusive jurisdiction of the United
States District Court for the Southern District of New York and of
any New York state court sitting in New York City for the purposes
of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. The Company
irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the
venue of any such proceeding brought in such a court and any claim
that any such proceeding brought in such a court has been brought
in an inconvenient forum.
11.11 Waiver of Jury Trial. EACH OF THE COMPANY, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
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11.12 Treatment of Certain Information; Confidentiality.
(a) The Company acknowledges that (i) services may be
offered or provided to it (in connection with this Agreement or
otherwise) by each Lender or by one or more subsidiaries or
affiliates of such Lender and (ii) information delivered to each
Lender by the Company and its Subsidiaries may be provided to each
such subsidiary and affiliate, it being understood that any such
subsidiary or affiliate receiving such information shall be bound
by the provisions of clause (b) below as if it were a Lender
hereunder.
(b) Each Lender and the Administrative Agent agrees (on
behalf of itself and each of its affiliates, directors, officers,
employees and representatives) to use reasonable precautions to
keep confidential, in accordance with their customary procedures
for handling confidential information of this nature and in
accordance with safe and sound banking practices, any non-public
information supplied to it by the Company pursuant to this
Agreement which is identified by the Company as being confidential
at the time the same is delivered to the Lenders or the
Administrative Agent, provided that nothing herein shall limit the
disclosure of any such information (i) to the extent required by
statute, rule, regulation or judicial process, (ii) to counsel for
any of the Lenders or the Administrative Agent in connection with
the transactions or any matter arising in connection herewith,
(iii) to bank examiners, auditors or accountants, (iv) to the
Administrative Agent or any other Lender (or to Chase Securities
Inc.), (v) in connection with any litigation to which any one or
more of the Lenders or the Administrative Agent is a party that
relates to this Agreement or any transaction contemplated hereby,
(vi) to a subsidiary or affiliate of such Lender as provided in
clause (a) above or (vii) to any assignee or participant (or
prospective assignee or participant) so long as such assignee or
participant (or prospective assignee or participant) first
executes and delivers to the respective Lender a Confidentiality
Agreement substantially in the form of Exhibit D hereto; provided,
further, that, in no event shall any Lender or the Administrative
Agent be obligated or required to return any materials furnished
by the Company. The obligations of each Lender under this Section
11.12 shall supersede and replace the obligations of such Lender
under the confidentiality letter in respect of this financing
signed and delivered by such Lender to the Company prior to the
date hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
OHIO CASUALTY CORPORATION
By /s/ Barry S. Porter
Title: CFO & Treasurer
Credit Agreement
----------------
59
Commitment Lender
$35,000,000 THE CHASE MANHATTAN BANK
By /s/ Heather A. Lindstrom
Title: Vice President
$27,500,000 THE FIRST NATIONAL BANK OF CHICAGO
By /s/ Joseph M. Manzella
Title: Assistant Vice President
$27,500,000 FIRST UNION NATIONAL BANK
By /s/ Gail M. Golightly
Title: Senior Vice President
$23,000,000 CORESTATES BANK, N.A.
By /s/ Kimberly Shaffer
Title: Vice President
$23,000,000 KEYBANK NATIONAL ASSOCIATION
By /s/ Sharon F. Weinstein
Title: Vice President
$14,000,000 BANK OF MONTREAL
By /s/ Bruce E. Cox
Title: Director
Credit Agreement
----------------
60
Commitment Lender
$14,000,000 FIFTH THIRD BANK
By /s/ Adrian O. Breen
Title: Assistant Vice President
$14,000,000 FLEET NATIONAL BANK
By /s/ Carla Balesano
Title: Vice President
(for Michael Sinisgalli)
$14,000,000 MELLON BANK, N.A.
By /s/ Robert E. Brandenstein
Title: Vice President
$14,000,000 NATIONAL CITY BANK OF COLUMBUS
By /s/ William J. Whitley
Title: Senior Vice President
$14,000,000 PNC BANK, OHIO, NATIONAL ASSOCIATION
By /s/ Stephen C. Brown
Title: Assistant Vice President
$14,000,000 ROYAL BANK OF CANADA
By /s/ Yvonne J. Bernard
Title: Manager
Credit Agreement
----------------
61
Commitment Lender
$14,000,000 STAR BANK, NATIONAL ASSOCIATION
By /s/ Derek S. Roudebush
Title: Assistant Vice President
$14,000,000 STATE STREET BANK AND TRUST COMPANY
By /s/ Edward M. Anderson
Title: Vice President
$14,000,000 SUNTRUST BANK, CENTRAL FLORIDA,
NATIONAL ASSOCIATION
By /s/ Harold Bitler
Title: First Vice President
$14,000,000 UNION BANK OF CALIFORNIA, N.A.
By /s/ Kristine A. Kasselman
Title: Vice President
$10,000,000 FIRST NATIONAL BANK OF SOUTHWESTERN
OHIO
By /s/ Donald C. Beer
Title: Senior Vice President and
Chief Lending Officer
Credit Agreement
----------------
62
Administrative Agent
THE CHASE MANHATTAN BANK,
as Administrative Agent
By /s/ Heather A. Lindstrom
Title: Vice President
Credit Agreement
----------------
63
SCHEDULE I
Material Amounts
Principal Amount
1. Security Fund Agreement in
support of First Layer N/A
Liability Excess
Reinsurance Contract
between Ohio Casualty
Insurance Group and The
Subscribing Reinsurers
with The Chase Manhattan
Bank as custodian.
2. Agreement dated as of
October 2, 1995 by and $163.6 Million
between Employers'
Reassurance Corporation,
Americo Life Insurance
Company, Ohio Casualty
Insurance Company and
Commerce Bank of Kansas
City, Missouri relating to
assets managed and
guaranteed by Ohio
Casualty Insurance
Company.
Inclusion of any documents on this Schedule does not constitute
acknowledgement that the related transaction constitutes
Indebtedness as defined in the Credit Agreement to which this
Schedule is attached.
Credit Agreement
----------------
64
SCHEDULE II
Subsidiaries and Investments
Subsidiaries of Ohio Casualty Corporation
State of Domicile Percentage Owned
Ohio Casualty Corporation Ohio 100%
Ocasco Securities Corporation Indiana 100%
Ohio City Holding Company Ohio 100%
Ohio City Insurance Agency Ohio 100%
Ohio City Life Insurance Agency Ohio 100%
Hamilton Graphics, Inc. Ohio 100%
Ohio Casualty Insurance Company Ohio 100%
American Fire & Casualty Co. Ohio 100%
Ohio Security Insurance Co. Ohio 99.99%
West American Insurance Co. Indiana 100%
Ocasco Budget, Inc. Ohio 100%
Marion Insurance Company Indiana 100%
Ohio Life Insurance Company Ohio 100%
Ohio Life Brokerage Kentucky 100%
Services, Inc.
Investments in joint ventures held by Ohio Casualty Corporation
or its subsidiaries.
None
Credit Agreement
----------------
65
EXHIBIT A
[Form of Note]
PROMISSORY NOTE
$_______________ October 27, 1997
New York, New York
FOR VALUE RECEIVED, OHIO CASUALTY CORPORATION, an Ohio
corporation (the "Company"), hereby promises to pay to
__________________ (the "Lender"), for account of its respective
Applicable Lending Offices provided for by the Credit Agreement
referred to below, at the principal office of The Chase Manhattan
Bank at 270 Park Avenue, New York, New York 10017, the principal
sum of _______________ Dollars (or such lesser amount as shall
equal the aggregate unpaid principal amount of the Loans made by
the Lender to the Company under the Credit Agreement), in lawful
money of the United States of America and in immediately
available funds, on the dates and in the principal amounts
provided in the Credit Agreement, and to pay interest on the
unpaid principal amount of each such Loan, at such office, in
like money and funds, for the period commencing on the date of
such Loan until such Loan shall be paid in full, at the rates per
annum and on the dates provided in the Credit Agreement.
The date, amount, Type, interest rate and duration of
Interest Period (if applicable) of each Loan made by the Lender
to the Company, and each payment made on account of the principal
thereof, shall be recorded by the Lender on its books and, prior
to any transfer of this Note, endorsed by the Lender on the
schedule attached hereto or any continuation thereof, provided
that the failure of the Lender to make any such recordation or
endorsement shall not affect the obligations of the Company to
make a payment when due of any amount owing under the Credit
Agreement or hereunder in respect of the Loans made by the
Lender.
This Note is one of the Notes referred to in the Credit
Agreement dated as of October 27, 1997 (as modified and
supplemented and in effect from time to time, the "Credit
Agreement") between the Company, the lenders named therein and
The Chase Manhattan Bank, as Administrative Agent, and evidences
Loans made by the Lender thereunder. Terms used but not defined
in this Note have the respective meanings assigned to them in the
Credit Agreement.
Credit Agreement
----------------
66
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The Credit Agreement provides for the acceleration of
the maturity of this Note upon the occurrence of certain events
and for prepayments of Loans upon the terms and conditions
specified therein.
Except as permitted by Section 11.06(b) of the Credit
Agreement, this Note may not be assigned by the Lender to any
other Person.
This Note shall be governed by, and construed in
accordance with, the law of the State of New York.
OHIO CASUALTY CORPORATION
By_________________________
Title:
Credit Agreement
----------------
67
-3-
SCHEDULE OF LOANS
This Note evidences Loans made, Continued or Converted
under the within-described Credit Agreement to the Company, on
the dates, in the principal amounts, of the Types, bearing
interest at the rates and having Interest Periods (if applicable)
of the durations set forth below, subject to the payments,
Continuations, Conversions and prepayments of principal set forth
below:
Amount
Date Prin- Paid,
Made, cipal Duration Prepaid, Unpaid
Continued Amount Type of Continued Prin-
or of of Interest Interest or cipal Notation
Converted Loan Loan Rate Period Converted Amount Made by
- --------- ------ ---- -------- -------- --------- ------ --------
Credit Agreement
----------------
68
EXHIBIT B
[Form of Opinion of Counsel to the Company]
October 27, 1997
The Chase Manhattan Bank, as Administrative Agent
and
The Lenders Party to the Credit
Agreement Referenced Below
Re: Credit Agreement dated as of October 27, 1997,
among Ohio Casualty Corporation, the Lenders
named therein and The Chase Manhattan Bank, as
Administrative Agent
Ladies and Gentlemen:
We have acted as counsel to Ohio Casualty Corporation, an
Ohio corporation (the "Company"), in connection with the Credit
Agreement (the "Credit Agreement") dated as of October 27, 1997,
among the Company, the financial institutions that are
signatories thereto (the "Lenders") and The Chase Manhattan
Bank, as Administrative Agent for the Lenders (the
"Administrative Agent"), providing for loans to be made by the
Lenders to the Company in an aggregate principal amount not
exceeding $300,000,000. This opinion is rendered to the
Administrative Agent and the Lenders pursuant to Section 6.01(c)
of the Credit Agreement. All capitalized terms which are used
but not defined herein and which are defined in the Credit
Agreement have the meanings assigned to them in the Credit
Agreement. As used herein, the term "Loan Documents" refers,
collectively, to the Credit Agreement and the Notes.
In connection with this opinion, we have examined the
following:
(a) The Credit Agreement;
(b) The Notes;
(c) The Amended Articles of Incorporation of the
Company, as amended through [ ,
1996, as certified by the Secretary of State
of Ohio on , 1997 (the "Articles");
Opinion of Counsel to the Company
---------------------------------
69
-2-
(d) The Regulations of the Company, as amended
through [November 20, 1986] (the
"Regulations"), in the form certified by the
Secretary of the Company; and
(e) Resolutions certified by the Secretary of
the Company as having been duly adopted by
the Company's Board of Directors authorizing
the transactions contemplated by the Loan
Documents.
In connection with this opinion, we have investigated such
questions of law, and we have also examined, and have relied
upon, originals or copies, certified or otherwise, identified to
our satisfaction, of such corporate documents and records of the
Company, certificates of public officials and other documents
and such information and statements of officers and
representatives of the Company, as we have deemed necessary or
appropriate for the purposes of this opinion, including, without
limitation, certificates of certain officers of the Company in
respect of delivery of the Loan Documents and other factual
matters that form the basis for our opinions rendered in the
second sentence of paragraph 1, clauses (i), (ii)(b) and (c) of
paragraph 2 and paragraph 5. In stating our opinion, we have
assumed the genuineness of all signatures (except as to the
Company), the authenticity of all documents submitted to us as
originals, the conformity to original documents of documents
submitted to us as certified or photostatic copies or drafts,
and the authenticity of such originals of such latter documents.
Whenever our opinion with respect to the existence or
absence of facts is indicated to be based on our knowledge, we
are referring to the actual knowledge of Vorys, Sater, Seymour
and Pease attorneys who have represented the Company in
connection with the transactions contemplated in the Credit
Agreement. We have relied solely upon the examinations and
inquiries recited herein and we have not undertaken any
independent investigation to determine the existence or absence
of any facts, and no inference as to our knowledge concerning
such facts should be drawn. Without limiting the generality of
the foregoing, we have neither examined, nor do we opine upon,
any provision or matter to the extent that the examination or
opinion would require a financial, mathematical or accounting
calculation or determination. In rendering the opinion that the
execution, delivery and performance of the Loan Documents will
not constitute a violation by the Company of any federal law of
the United States of America, we have assumed the accuracy of
the Company's representations and warranties set forth in
Section 7.07 of the Credit Agreement at all times. Also, we
express no opinion herein with respect to federal or state
securities laws (other than Regulation U).
Based upon and subject to the foregoing and the further
qualifications and limitations set forth below, as of the date
hereof, we are of the opinion that:
Opinion of Counsel to the Company
---------------------------------
70
-3-
1. Each of the Company and OCIC is a corporation validly
existing and in good standing under the laws of the State of
Ohio, and the Company has the corporate power to make and
perform the Credit Agreement and the Notes and to borrow under
the Credit Agreement. To our knowledge, no governmental
authority has asserted that the Company or any Subsidiary is
required to be licensed or qualified in any foreign jurisdiction
in which the Company or such Subsidiary is not now licensed or
qualified.
2. The execution, delivery and performance by the Company
of the Credit Agreement and the borrowings thereunder (i) have
been duly authorized by all necessary corporate action on the
part of the Company and (ii) do not and will not (a) constitute
a violation by the Company of any provision of any law or
regulation of the State of Ohio or any federal law or regulation
of the United States of America in effect on the date hereof,
(b) result in the breach of, or constitute a default or require
any consent under, or result in the creation of any Lien upon
any of the Properties of the Company or any Subsidiary pursuant
to, any indenture or other agreement or instrument to which the
Company or any Subsidiary is a party or by which the Company or
any Subsidiary or any of their respective Properties may be
bound and of which we have knowledge, or (c) conflict with any
order or decree of any court or governmental authority binding
upon the Company or any Subsidiary and in effect on the date
hereof of which we have knowledge.
3. The Loan Documents have been duly executed and
delivered by the Company. In general, an Ohio court would give
effect to the choice of law provisions in the Loan Documents
which specify New York law as the applicable law. The Supreme
Court of Ohio has validated contractual choice of law
provisions, Jarvis v. Ashland Oil, Inc., 17 Ohio St. 3d 189
(1985); Schulke Radio Productions, Ltd. v. Midwestern
Broadcasting Co., 6 Ohio St. 3d 436 (1983). In the latter case,
the Supreme Court held that the parties may choose the law
applicable to their contract unless (i) the state whose law is
chosen has no substantial relationship to the parties or to the
transaction and there is no other reasonable basis for the
parties' choice or (ii) application of the chosen law would be
contrary to a fundamental policy of a state having a materially
greater interest in the issue than the chosen state and such
other state would be the state of applicable law in the absence
of a choice by the parties. Under the present circumstances, it
would appear that the parties' stipulation that the law of New
York control should be given effect. This conclusion is based
upon our understanding that the Loan Documents were delivered in
New York, that the transactions which are the subject thereof
are to be performed, in whole or in part, in New York, and that
the Administrative Agent has its chief place of business and the
Principal Office is located in New York.
4. Assuming the Loan Documents were governed by the law
of the State of Ohio, we are of the opinion that the Loan
Opinion of Counsel to the Company
---------------------------------
71
-4-
Documents would constitute valid and binding obligations of the
Company enforceable accordance with their respective terms.
5. To our knowledge, there are no pending actions, suits
or proceedings against the Company or any of its Subsidiaries
before any court, governmental agency or arbitrator, which
would, if decided adversely to the Company or any such
Subsidiary, have a Material Adverse Effect.
6. No authorizations, consents, approvals, licenses,
filings or registrations with any governmental or regulatory
authority or agency of the State of Ohio or the federal
government of the United States of America are required to be
obtained or made by the Company in connection with the
execution, delivery or performance by the Company of the Credit
Agreement.
To the extent that the obligations of the Company may be
dependent upon such matters, we have assumed for purposes of our
opinion in paragraph 4 above that each party to the Credit
Agreement, other than the Company, is duly incorporated, validly
existing and in good standing under the laws of its jurisdiction
of incorporation; that each such other party has the requisite
corporate or other organizational power and authority to perform
its obligations under the Credit Agreement; and that the Credit
Agreement has been duly authorized, executed and delivered by,
and consistutes the legal, valid and binding obligation of, each
such other party, enforceable against each such other party in
accordance with its terms.
In addition, our opinion in paragraph 4 above is subject to
the following exceptions and qualifications:
A. Such opinion is subject to the limitations, if any, of
Title 11, U.S.C., as amended, and of any applicable insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement or creditors' rights generally and by principles of
equity -- including, without limitation, those which may be
expressed in terms of the public policies of the State of Ohio
-- regardless of whether such enforceability is considered in a
proceeding in equity or at law. In addition, certain remedial
and other provisions of the Loan Documents may be limited by (i)
implied covenants of good faith, fair dealing and commercially
reasonable conduct and (ii) judicial discretion, in the instance
of multiple or equitable remedies.
B. In addition, we express no opinion as to (i) the
enforceability of any provisions of the Loan Documents to the
extent held to (a) require the payment of compounded interest,
(b) compensate any party for loss or expense in excess of actual
loss or reasonable expenses or constitute a penalty, (c) require
reimbursement for or indemnify against actions taken in
violation of applicable law or public policy, (d) call for the
payment of prepayment penalties, premiums or similar amounts
with respect to and as a result of accelerated indebtedness or
Opinion of Counsel to the Company
---------------------------------
72
-5-
(e) require the payment of attorneys' fees by any party to any
opposing party; (ii) Section 4.07(c) of the Credit Agreement,
(iii) the effect of the law of any jurisdiction (other than the
State of Ohio) wherein any Lender (including any of its
Applicable Lending Offices) may be located which limits rates of
interest which may be charged or collected by such Lender, or
(iv) except as otherwise expressly stated in paragraph 3 above,
Sections 11.10 or 11.11 of the Credit Agreement.
This opinion is limited to the federal laws of the United
States and to the laws of the State of Ohio in existence at the
date hereof (including those having future effect).
The opinion is rendered only to the Administrative Agent
and the Lenders and is solely for their benefit in connection
with the Loan Documents. This opinion may not be relied upon by
the Administrative Agent or the Lenders for any other purpose,
or relied upon by any other person, firm or corporation for any
purpose without our prior written consent.
Very truly yours,
Opinion of Counsel to the Company
---------------------------------
73
EXHIBIT C
[Form of Opinion of Special New York Counsel to the Lenders]
October 27, 1997
To: The Lenders party to the Credit Agreement referred to below
and The Chase Manhattan Bank, as Administrative Agent
Ladies and Gentlemen:
We have acted as special New York counsel to the Lenders in
connection with the Credit Agreement (the "Credit Agreement")
dated as of October 27, 1997, between Ohio Casualty Corporation
(the "Company"), the financial institutions named therein and
The Chase Manhattan Bank, as Administrative Agent, providing for
loans to be made by said banks to the Company in an aggregate
principal amount not exceeding $300,000,000 at any one time
outstanding. Terms defined in the Credit Agreement are used
herein as defined therein.
We have assumed for purposes of our opinion hereinafter set
forth that the Credit Agreement has been duly authorized,
executed and delivered by the Company, each Lender and the
Administrative Agent, and that the Company is duly incorporated
and validly existing under the laws of Ohio and has full power,
authority and legal right to make and perform the Credit
Agreement and the Notes.
We have examined originals or copies authenticated to our
satisfaction of all such corporate records of the Company,
agreements and other instruments, certificates of public
officials and of officers and representatives of the Company and
other documents, as we have deemed necessary in connection with
the opinions hereinafter expressed. In such examination we have
assumed the genuineness of all signatures, the authenticity of
documents submitted to us as originals, the conformity with the
originals of all documents submitted to us as certified or
photostatic copies, and the authenticity of the originals of
such latter documents. As to questions of fact material to such
opinions we have, when relevant facts were not independently
established, relied upon representations and certificates of the
Company and its officers.
Based upon the foregoing and subject to the comments and
qualifications set forth below, we are of the opinion that the
Credit Agreement constitutes, and the Notes when executed and
delivered for value will constitute, valid and binding obligations
of the Company enforceable in accordance with their respective
terms, except as such enforceability may be limited by (a)
bankruptcy, insolvency, reorganization, moratorium or other
similar laws of general applicability affecting the enforcement of
Opinion of Counsel to the Company
---------------------------------
74
-2-
creditors' rights and (b) the application of general principles of
equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law), and except that we express no
opinion as to (i) Section 4.07(c) of the Credit Agreement, (ii)
the effect of the law of any jurisdiction (other than the State of
New York) wherein any Lender (including any of its Applicable
Lending Offices) may be located which limits rates of interest
which may be charged or collected by such Lender, (iii) whether a
Federal or state court outside of the State of New York would give
effect to the choice of New York law provided for in the Credit
Agreement and the Notes, (iv) the second sentence of Section 11.10
of the Credit Agreement, insofar as such sentence relates to the
subject matter jurisdiction of the United States District Court
for the Southern District of New York to adjudicate any
controversy related to the Credit Agreement or the Notes, (v) the
waiver of inconvenient forum set forth in Section 11.10 of the
Credit Agreement with respect to proceedings in the United States
District Court for the Southern District of New York or (vi)
Section 11.11 of the Credit Agreement.
In connection with the above, we wish to point out that
provisions of the Credit Agreement which permit the Administrative
Agent or any Lender to take action or make determinations, or to
benefit from indemnities and similar undertakings of the Company,
may be subject to a requirement that such action be taken or such
determinations be made, and that any action or inaction by the
Administrative Agent or a Lender which may give rise to a request
for payment under such an undertaking be taken or not taken, on a
reasonable basis and in good faith.
We are members of the bar of the State of New York and we do
not herein intend to express any opinion as to any matters
governed by any laws other than the law of the State of New York
and the Federal law of the United States of America.
Very truly yours,
Opinion of Counsel to the Company
---------------------------------
75
EXHIBIT D
[Form of Confidentiality Agreement]
CONFIDENTIALITY AGREEMENT
[Date]
[Insert Name and
Address of Prospective
Participant or Assignee]
Re: Credit Agreement dated as of October 27, 1997,
between Ohio Casualty Corporation (the
"Company"), the financial institutions named
therein and The Chase Manhattan Bank, as
Administrative Agent.
Dear :
As a Lender party to the above-referenced Credit Agreement
(the "Credit Agreement"), we have agreed with Ohio Casualty
Corporation (the "Company") pursuant to Section 11.12 of the
Credit Agreement to use reasonable precautions to keep
confidential, except as otherwise provided therein, all non-public
information identified by the Company as being confidential at the
time the same is delivered to us pursuant to the Credit Agreement.
As provided in said Section 11.12, we are permitted to provide
you, as a prospective [holder of a participation in the Loans (as
defined in the Credit Agreement)][assignee Lender], with certain
of such non-public information subject to the execution and
delivery by you, prior to receiving such non-public information,
of a Confidentiality Agreement in this form. Such information
will not be made available to you until your execution and return
to us of this Confidentiality Agreement.
Accordingly, in consideration of the foregoing, you agree (on
behalf of yourself and each of your affiliates, directors,
officers, employees and representatives) that (A) such information
will not be used by you except in connection with the proposed
[participation] [assignment] mentioned above and (B) you shall use
reasonable precautions, in accordance with your customary
procedures for handling confidential information and in accordance
with safe and sound banking practices, to keep such information
confidential, provided that nothing herein shall limit the
disclosure of any such information (i) to the extent required by
statute, rule, regulation or judicial process, (ii) to your
counsel or to counsel for any of the Lenders or the Administrative
Agent, (iii) to bank examiners, auditors or accountants, (iv) to
the Administrative Agent or any other Lender (or to Chase
Securities Inc.), (v) in connection with any litigation to which
you or any one or more of the Lenders or the Administrative Agent
76
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are a party, (vi) to a subsidiary or affiliate of yours as
provided in Section 11.12(a) of the Credit Agreement or (vii) to
any assignee or participant (or prospective assignee or
participant) so long as such assignee or participant (or
prospective assignee or participant) first executes and delivers
to you a Confidentiality Agreement substantially in the form
hereof, and provided further that in no event shall you be
obligated to return any materials furnished to you pursuant to
this Confidentiality Agreement.
Would you please indicate your agreement to the foregoing by
signing at the place provided below the enclosed copy of this
Confidentiality Agreement.
Very truly yours,
[Insert Name of Lender]
By
The foregoing is agreed to as of the date of this letter
[Insert name of prospective participant or assignee]
By
77
Annex 1
Applicable Lending Office and Notice Information
THE COMPANY
Ohio Casualty Corporation
Address for Notices:
136 North Third Street
Hamilton, Ohio 45025
Telecopier No.: (513) 867-3964
Telephone No.: (513) 867-3903
Attention: Barry S. Porter
78
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THE LENDERS
1. The Chase Manhattan Bank
Lending Office for all Loans:
The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Address for Notices:
The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Telecopier No.: (212) 270-0670
Telephone No.: (212) 270-7965
Attention: Dennis Cogan
79
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2. The First National Bank of Chicago
Lending Office for all Loans:
The First National Bank of Chicago
One First National Plaza, Mail Suite 0085
Chicago, Illinois 60670-0085
Address for Notices:
A. General
The First National Bank of Chicago
One First National Plaza, Mail Suite 0085
Chicago, Illinois 60670-0085
Telecopier No.: (312) 732-4033
Telephone No.: (312) 732-9565
Attention: Cynthia W. Priest
B. Administrative/Operational
The First National Bank of Chicago
One First National Plaza, Mail Suite 0085
Chicago, Illinois 60670-0085
Telecopier No.: (312) 732-2279
Telephone No.: (312) 732-3537
Attention: Lillian A. Arroyo
80
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3. First Union National Bank
Lending Office for all Loans:
First Union National Bank
301 South College Street, DC-5
Charlotte, North Carolina 28288-0735
Address for Notices:
A. General
First Union National Bank
301 South College Street, DC-5
Charlotte, North Carolina 28288-0735
Telecopier No.: (704) 383-7611
Telephone No.: (704) 383-3789
Attention: Jay Bullock
B. Administrative/Operational
First Union National Bank
301 South College Street, DC-5
Charlotte, North Carolina 28288-0735
Telecopier No.: (704) 383-7611
Telephone No.: (704) 383-9326
Attention: Callie Moses
81
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4. CoreStates Bank, N.A.
Lending Office for all Loans:
CoreStates Bank, N.A.
F.C. 1-8-8-4
P.O. Box 7618
Philadelphia, Pennsylvania 19101
Address for Notices:
A. General
CoreStates Bank, N.A.
F.C. 1-8-8-4
P.O. Box 7618
Philadelphia, Pennsylvania 19101
Telecopier No.: (215) 786-4114
Telephone No.: (215) 973-2084
Attention: James Peppelman
B. Administrative/Operational
CoreStates Bank, N.A.
F.C. 1-3-17-70
P.O. Box 7618
Philadelphia, Pennsylvania 19101
Telecopier No.: (215) 973-2045
Telephone No.: (215) 973-5905
Attention: Joy Ditre
82
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5. KeyBank National Association
Lending Office for all Loans:
KeyBank National Association
127 Public Square
Cleveland, Ohio 44114
Address for Notices:
A. General
KeyBank National Association
127 Public Square
Cleveland, Ohio 44114
Telecopier No.: (216) 689-4981
Telephone No.: (216) 689-3443
Attention: Sharon Weinstein
B. Administrative/Operational
KeyBank National Association
127 Public Square
Cleveland, Ohio 44114
Telecopier No.: (216) 689-4981
Telephone No.: (216) 689-0206
Attention: Loree Kuttler
83
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6. Bank of Montreal
Lending Office for all Loans:
Bank of Montreal
115 South LaSalle, 12th Floor West
Chicago, Illinois 60603
Address for Notices:
A. General
Bank of Montreal
115 South LaSalle, 12th Floor West
Chicago, Illinois 60603
Telecopier No.: (312) 845-2199
Telephone No.: (312) 750-3458
Attention: Robert Meyer
B. Administrative/Operational
Bank of Montreal
115 South LaSalle, 12th Floor West
Chicago, Illinois 60603
Telecopier No.: (312) 750-4345
Telephone No.: (312) 750-5907
Attention: Sonya Taitt
84
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7. Fifth Third Bank
Lending Office for all Loans:
Fifth Third Bank
38 Fountain Square Boulevard
Cincinnati, Ohio 45263
Address for Notices:
A. General
Fifth Third Bank
Third & High Street
Hamilton, Ohio 45011
Telecopier No.: (513) 785-3724
Telephone No.: (513) 785-3714
Attention: Adrian Breen
B. Administrative/Operational
Fifth Third Bank
Third & High Street
Hamilton, Ohio 45011
Telecopier No.: (513) 785-3724
Telephone No.: (513) 785-3713
Attention: Marge Shepherd
85
-9-
8. Fleet National Bank
Lending Office for all Loans:
Fleet National Bank
777 Main Street CT/MO/0250 Ins. Ind.
Hartford, Connecticut 06115
Address for Notices:
A. General
Fleet National Bank
777 Main Street CT/MO/0250 Ins. Ind.
Hartford, Connecticut 06115
Telecopier No.: (860) 986-1264
Telephone No.: (860) 986-2645
Attention: Michael Sinisgalli
B. Administrative/Operational
Fleet National Bank
777 Main Street CT/MO/0250 Ins. Ind.
Hartford, Connecticut 06115
Telecopier No.: (860) 986-1094
Telephone No.: (860) 986-4616/4098
Attention: Icy L. Mounds/Emilie Jones
86
-10-
9. Mellon Bank, N.A.
Lending Office for all Loans:
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
Address for Notices:
A. General
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
Telecopier No.: (412) 234-8087
Telephone No.: (412) 234-7112
Attention: Susan Whitewood
B. Administrative/Operational
Mellon Bank, N.A.
Three Mellon Bank Center, Room 3305
Pittsburgh, Pennsylvania 15258
Telecopier No.: (412) 234-5049
Telephone No.: (412) 234-1869
Attention: Charlotte Adams
87
-11-
10. National City Bank of Columbus
Lending Office for all Loans:
National City Bank of Columbus
155 E. Broad Street
Colombus, Ohio 43251-0033
Address for Notices:
A. General
National City Bank of Columbus
155 E. Broad Street
Colombus, Ohio 43251-0033
Telecopier No.: (614) 463-6770
Telephone No.: (614) 463-8247
Attention: Teresa M. Halsell
B. Administrative/Operational
National City Bank of Columbus
P.O. Box 94528N
Cleveland, Ohio 44114
Telecopier No.: (216) 575-9600
Telephone No.: (216) 575-9389
Attention: Commercial Loan Operations
88
-12-
11. PNC Bank, Ohio, National Association
Lending Office for all Loans:
PNC Bank, Ohio, N.A.
201 East Fifth Street, 3rd Floor
Cincinnati, Ohio 45201
Address for Notices:
A. General
PNC Bank, Ohio, N.A.
1600 Market Street, 21st Floor
Philadelphia, Pennsylvania 19103
Telecopier No.: (215) 585-7615
Telephone No.: (215) 585-5383
Attention: Howard Jonas
B. Administrative/Operation
PNC Bank, Ohio, N.A.
201 East Fifth Street, 3rd Floor
Cincinnati, Ohio 45201
Telecopier No.: (513) 651-8952
Telephone No.: (513) 651-8683
Attention: Susie Richardson
89
-13-
12. Royal Bank of Canada
Lending Office for all Loans:
Royal Bank of Canada,
Grand Cayman (North America No. 1) Branch
c/o New York Branch
Financial Square, 23rd Floor
32 Old Slip
New York, New York 10005-3531
Address for Notices:
Royal Bank of Canada
Financial Square, 23rd Floor
32 Old Slip
New York, New York 10005-3531
Telecopier No.: (212) 428-2372
Telephone No.: (212) 428-6321
Attention: Assistant Manager
Credit Administration
90
-14-
13. Star Bank, National Association
Lending Office for all Loans:
Star Bank, National Association
425 Walnut Street, 8th Floor
Cincinnati, Ohio 45201-1038
Address for Notices:
Star Bank, National Association
425 Walnut Street, 8th Floor
Cincinnati, Ohio 45201-1038
Telecopier No.: (513) 632-2068
Telephone No.: (513) 762-8313
Attention: Thomas D. Gibbons
91
-15-
14. State Street Bank and Trust Company
Lending Office for all Loans:
State Street Bank and Trust Company
108 Myrtle Street
North Quincy, Massachusetts 02171
Address for Notices:
A. General
State Street Bank and Trust Company
108 Myrtle Street
North Quincy, Massachusetts 02171
Telecopier No.: (617) 537-2580
Telephone No.: (617) 985-5301
Attention: Edward M. Anderson
B. Administrative/Operational
State Street Bank and Trust Company
108 Myrtle Street
North Quincy, Massachusetts 02171
Telecopier No.: (617) 537-2580
Telephone No.: (617) 985-4685
Attention: Toni Pace
92
-16-
15. SunTrust Bank, Central Florida, National Association
Lending Office for all Loans:
SunTrust Bank, Central Florida, National Association
200 S. Orange Avenue
Orlando, Florida 32801
Address for Notices:
A. General
SunTrust Bank, Central Florida, National Association
200 S. Orange Avenue
Orlando, Florida 32801
Telecopier No.: (407) 237-6894
Telephone No.: (407) 237-4890
Attention: Darryl J. Weaver
B. Administrative/Operational
SunTrust Bank, Central Florida, National Association
200 S. Orange Avenue
Orlando, Florida 32801
Telecopier No.: (407) 237-6894
Telephone No.: (407) 237-4359
Attention: Sharon Kalish
93
-17-
16. Union Bank of California, N.A.
Lending Office for all Loans:
Union Bank of California, N.A.
550 S. Hope Street, 3rd Floor
Los Angeles, California 90071
Address for Notices:
Union Bank of California, N.A.
550 S. Hope Street, 3rd Floor
Los Angeles, California 90071
A. General
Union Bank of California, N.A.
550 S. Hope Street, 3rd Floor
Los Angeles, California 90071
Telecopier No.: (213) 243-3552
Telephone No.: (213) 243-3546
Attention: Kristine A. Kasselman
B. Administrative/Operational
Union Bank of California, N.A.
1980 Saturn Street
Monterey Park, California 91754
Telecopier No.: (213) 724-6198
Telephone No.: (213) 720-7050
Attention: Maria Suncin
94
-18-
17. First National Bank of Southwestern Ohio
Lending Office for all Loans:
First National Bank of Southwestern Ohio
300 High Street
P.O. Box 476
Hamilton, Ohio 45012
Address for Notices:
A. General
First National Bank of Southwestern Ohio
300 High Street
P.O. Box 476
Hamilton, Ohio 45012
Telecopier No.: (513) 867-4515
Telephone No.: (513) 867-4984
Attention: Donald C. Beer, Senior Vice President
and Chief Lending Officer
B. Administrative/Operational
First National Bank of Southwestern Ohio
300 High Street
P.O. Box 476
Hamilton, Ohio 45012
Telecopier No.: (513) 867-4515
Telephone No.: (513) 867-4737
Attention: Alisa H. Miller
95
-19-
ADMINISTRATIVE AGENT
Address for Notices to Chase as
Administrative Agent:
One Chase Manhattan Plaza, 8th Floor
New York, New York 10081
Attention: Laura Rebecca
Telephone No.: (212) 552-7253
Facsimile No.: (212) 552-7490