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CREDIT AGREEMENT
among
THE CONTINENTAL CORPORATION,
The Several Lenders
from Time to Time Parties Hereto,
CHEMICAL BANK
and
CITIBANK, N.A.,
as Co-Agents
and
CHEMICAL BANK,
as Administrative Agent
Dated as of December 30, 1993
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS ........................................ 1
1.1 Defined Terms ............................. 1
1.2 Other Definitional Provisions .......... 12
SECTI0N 2. AMOUNT AND TERMS OF COMMITMENTS ................... 12
2.1 Revolving Credit Commitments ........... 12
2.2 Revolving Credit Notes .............. 13
2.3 Procedure for Revolving Credit Borrowing .. 13
2.4 Extension of Termination Date ......... 14
2.5 Termination or Reduction of Commitments ..... 16
2.6 The CAF Advances ................. 16
2.7 Procedure for CAF Advance Borrowing ....... 16
2.8 CAF Advance Payments ............... 19
2.9 CAF Advance Notes ................ 20
2.10 Optional Prepayments .............. 20
2.11 Conversion and Continuation Options ....... 21
2.12 Interest Rates and Payment Dates ......... 22
2.13 Facility Fee, Other Fees ............. 22
2.14 Computation of Interest and Fees ......... 22
2.15 Inability to Determine Interest Rate .... 23
2.16 Pro Rata Treatment and Payments ......... 24
2.17 Illegality .................... 25
2.18 Requirements of Law ............... 25
2.19 Taxes 26
2.20 Indemnity 29
2.21 Replacement of Lender .............. 29
SECTI0N 3. REPRESENTATIONS AND WARRANTIES ......... 30
3.1 Financial Condition .............. 30
3.2 Corporate Existence; Compliance with Law .. 31
3.3 Corporate Power; Authorization; Enforceable
Obligations ................... 31
3.4 No Legal Bar ................... 32
3.5 No Material Litigation .............. 32
3.6 No Default .................... 32
3.7 Ownership of Property; Liens ........... 32
3.8 Intellectual Property .............. 32
3.9 Taxes ............... 33
3.10 Federal Regulations ........ 33
3.11 ERISA ...................... 33
3.12 Investment Company Act; Other Regulations .. 34
3.13 Subsidiaries ................... 34
3.14 Purpose of Loans ................. 34
3.15 Accuracy and Completeness of Information .... 34
3.16 Regulatory Intervention .......... 34
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SECTION 4. CONDITIONS PRECEDENT ....................... 35
4.1 Conditions to Closing Date ............ 35
4.2 Conditions to Each Loan ............. 36
SECTION 5. AFFIRMATIVE COVENANTS .............. 37
5.1 GAAP Financial Statements ............ 37
5.2 SAP Financial Statements ............. 38
5.3 Certificates; Other Information ........ 38
5.4 Payment of Obligations .............. 39
5.5 Conduct of Business and Maintenance of Existence 39
5.6 Maintenance of Property; Insurance ........ 39
5.7 Inspection of Property; Books and Records;
Discussions ................... 39
5.8 Notices ..................... 40
SECTION 6. NEGATIVE COVENANTS ............... 41
6.1 Financial Condition Covenants ........ 41
6.2 Limitation on Liens ............ 41
6.3 Limitation on Fundamental Changes ........ 41
6.4 Limitation on Sale of Assets .......... 42
SECTION 7. EVENTS OF DEFAULT .................. 43
SECTION 8. THE ADMINISTRATIVE AGENT ..................... 46
8.1 Appointment ...................................... 46
8.2 Delegation of Duties ............... 46
46
8.3 Exculpatory Provisions .............. 46
8.4 Reliance by Administrative Agent ......... 47
8.5 Notice of Default .............. 47
8.6 Non-Reliance on Administrative Agent and Other
Lenders ..................... 48
8.7 Indemnification ................ 48
8.8 Administrative Agent in Its Individual Capacity 49
8.9 Successor Administrative Agent .......... 49
SECTION 9. MISCELLANEOUS ................... 50
9.1 Amendments and Waivers .............. 50
9.2 Notices ..................... 50
9.3 No Waiver; Cumulative Remedies .......... 51
9.4 Survival of Representations and Warranties .... 51
9.5 Payment of Expenses and Taxes ......... 51
9.6 Successors and Assigns; Participations and
Assignments ........... 52
9.7 Adjustments; Set-off .............. 55
9.8 Counterparts ................... 56
9.9 Severability ................... 56
9.10 Integration ................... 57
9.11 GOVERNING LAW ................. 57
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9.12 Submission To Jurisdiction: Waivers ..... 57
9.13 Acknowledgements 58
9.14 WAIVERS OF JURY TRIAL ..... 58
9.15 Confidentiality ................. 58
SCHEDULES
Schedule I Commitment Amounts and Lending Offices
Schedule II Significant Subsidiaries
Schedule 3.13 Subsidiaries
EXHIBITS
Exhibit A Form of Revolving Credit Note
Exhibit B Form of CAF Advance Note
Exhibit C Form of CAF Advance Confirmation
Exhibit D Form of CAF Advance Offer
Exhibit E Form of CAF Advance Request
Exhibit F Form of Borrowing Certificate
Exhibit G Form of Opinion of General Counsel
Exhibit H Form of Assignment and Acceptance
CREDIT AGREEMENT, dated as of December 30, 1993, among
THE CONTINENTAL CORPORATION, a New York corporation (the
"Borrower"), the several banks and other financial institutions
from time to time parties to this Agreement (the "Lenders"),
CHEMICAL BANK, a New York banking corporation ("Chemical") and
CITIBANK, N.A., a national banking association, as co-agents for
the Lenders hereunder (in such capacity, the "Co-Agents" and each
a "Co-Agent") and Chemical as administrative agent for the
Lenders hereunder (in such capacity, the "Administrative Agent").
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"ABR": for any day, a rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the Base CD
Rate in effect on such day plus 1% and (c) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. For
purposes hereof: "Prime Rate" shall mean the rate of
interest per annum publicly announced from time to time by
Chemical as its prime rate in effect at its principal office
in New York City (the Prime Rate not being intended to be
the lowest rate of interest charged by Chemical in
connection with extensions of credit to debtors); "Base CD
Rate" shall mean the sum of (a) the product of (i) the
Three-Month Secondary CD Rate and (ii) a fraction, the
numerator of which is one and the denominator of which is
one minus the C/D Reserve Percentage and (b) the C/D
Assessment Rate; "Three-Month Secondary CD Rate" shall mean,
for any day, the secondary market rate for three-month
certificates of deposit reported as being in effect on such
day (or, if such day shall not be a Business Day, the next
preceding Business Day) by the Board of Governors of the
Federal Reserve System (the "Board") through the public
information telephone line of the Federal Reserve Bank of
New York (which rate will, under the current practices of
the Board, be published in Federal Reserve Statistical
Release H.15(519) during the week following such day), or,
if such rate shall not be so reported on such day or such
next preceding Business Day, the average of the secondary
market quotations for three-month certificates of deposit of
major money center banks in New York City received at
approximately 10:00 A.M., New York City time, on such day
(or, if such day shall not be a Business Day, on the next
preceding Business Day) by the Administrative Agent from
three New York City negotiable certificate of deposit
dealers of recognized standing selected by it; and 'Federal
Funds Effective Rate" shall mean, for any day, the weighted
average of the rates on overnight federal funds transactions
with members of the Federal Reserve System arranged by
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federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is A
Business Day, the average of the quotations for the day of
such transactions received by the Administrative Agent from
three federal funds brokers of recognized standing selected
by it. If for any reason the Administrative Agent shall
have determined (which determination shall be conclusive
absent manifest error) that it is unable to ascertain the
Base CD Rate or the Federal Funds Effective Rate, or both,
for any reason, including the inability or failure of the
Administrative Agent to obtain sufficient quotations in
accordance with the terms thereof, the ABR shall be
determined without regard to clause (b) or (c), or both, of
the first sentence of this definition, as appropriate, until
the circumstances giving rise to such inability no longer
exist. Any change in the ABR due to a change in the Prime
Rate, the Three-Month Secondary CD Rate or the Federal Funds
Effective Rate shall be effective as of the opening of
business on the effective day of such change in the Prime
Rate, the Three-Month Secondary CD Rate or the Federal Funds
Effective Rate, respectively.
"ABR Loans": Revolving Credit Loans the rate of
interest applicable to which is based upon the ABR.
"Absolute Rate CAF Advance Request": any CAF Advance
Request requesting the Lenders to offer to make CAF Advances
at an absolute rate (as opposed to a rate composed of the
Eurodollar Rate plus or minus a margin).
"AFCQ": collectively, Afco Credit Corporation, a New
York corporation, and CAFO Inc., a Canadian corporation.
"Affiliate": as to any Person, any other Person (other
than a Subsidiary) which, directly or indirectly, is in
control of, is controlled by, or is under common control
with, such Person. For purposes of this definition,
"control" of a Person means the power, directly or
indirectly, either to (a) vote 10% or more of the securities
having ordinary voting power for the election of directors
of such Person or (b) direct or cause the direction of the
management and policies of such Person, whether by contract
or otherwise.
"Agreement": this Credit Agreement, as amended,
supplemented or otherwise modified from time to time.
Assignee: as defined in subsection 9.6(c).
"Borrowinq Date": any Business Day specified in a
notice pursuant to subsection 2.3 or 2.7 as a date on which
the Borrower requests the Lenders to make Loans hereunder.
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"Business Day": a day other than a Saturday, Sunday or
other day on which commercial banks in New York City are
authorized or required by law to close.
"CAF Advance": each loan made pursuant to subsection
2.6.
"CAF Advance Commitment Period": the period from and
including the Closing Date until the date which is 7 days
prior to the Termination Date.
"CAF Advance Confirmation": each confirmation by the
Borrower of its acceptance of CAF Advance Offers, which CAF
Advance Confirmation shall be substantially in the form of
Exhibit C and shall be delivered to the Administrative Agent
in writing or by facsimile transmission.
"CAF Advance Interest Payment Date": as to each CAF
Advance, the CAF Advance Maturity Date thereof and each
other interest payment date specified by the Borrower for
such CAF Advance in the related CAF Advance Request.
"CAF Advance Maturity Date": as to any CAF Advance,
the date specified by the Borrower pursuant to subsection
2.7(d)(2) in its acceptance of the related CAF Advance
Offer.
"CAF Advance Note": as defined in subsection 2.9;
collectively, the "CAF Advance Notes."
"CAF Advance Offer": each offer by a Lender to make
one or more CAF Advances pursuant to a CAF Advance Request,
which CAF Advance Offer shall contain the information
specified in Exhibit D and shall be delivered to the
Administrative Agent by telephone, immediately confirmed by
facsimile transmission.
"CAF Advance Request": each request by the Borrower
for Lenders to submit bids to make CAF Advances, which
request shall contain the information in respect of such
requested CAF Advances specified in Exhibit E and shall be
delivered to the Administrative Agent in writing or by
facsimile transmission, or by telephone, immediately
confirmed by facsimile transmission.
"Capital Stock": any and all shares, interests,
participations or other equivalents (however designated) of
capital stock of a corporation, any and all equivalent
ownership interests in a Person (other than a corporation)
and any and all warrants or options to purchase any of the
foregoing.
"C/D Assessment Rate": for any day as applied to any
ABR Loan, the annual assessment rate in effect on such day
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which is payable by a member of the Bank Insurance Fund
classified as well-capitalized and within supervisory
subgroup "B" (or a comparable successor assessment risk
classification) within the meaning of 12 C.F.R. S 327.3(d)
(or any successor provision) to the Federal Deposit
Insurance Corporation (or any successor) for such
Corporation's (or such successor's) insuring time deposits
at offices of such institution in the United States.
"C/D Reserve Percentage": for any day as applied to
any ABR Loan, that percentage (expressed as a decimal) which
is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor)
(the "_Board"), for determining the maximum reserve
requirement for a Depositary Institution (as defined in
Regulation D of the Board) in respect of new non-personal
time deposits in Dollars having a maturity of 30 days or
more.
"Chemical": Chemical Bank.
"CIC": The Continental Insurance Company, a New
Hampshire corporation.
"Citibank": Citibank, N.A., a national banking
association.
"Closing Date": the date on which the conditions
precedent set forth in subsection 4.1 shall be satisfied.
"Code": the Internal Revenue Code of 1986, as amended
from time to time.
"Commitment": as to any Lender, the obligation of such
Lender to make Revolving Credit Loans to the Borrower
hereunder in an aggregate principal amount at any one time
outstanding not to exceed the amount set forth opposite such
Lender's name on Schedule I, as such amount may be reduced
or increased from time to time in accordance with the
provisions of this Agreement.
"Commitment Percentage": as to any Lender at any time,
the percentage which such Lender's Commitment then
constitutes of the aggregate Commitments (or, at any time
after the Commitments shall have expired or terminated, the
percentage which the aggregate principal amount of such
Lender's Loans then outstanding constitutes of the aggregate
principal amount of the Loans then outstanding).
"Commitment Period": the period from and including the
date hereof to but not including the Termination Date or
such earlier date on which the Commitments shall terminate
as provided herein.
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"Commonly Controlled Entity": an entity, whether or
not incorporated, which is under common control with the
Borrower within the meaning of Section 4001 of ERISA or is
part of a group which includes the Borrower and which is
treated as a single employer under Section 414 of the Code.
"Consolidated Capital": as to any Person as of a
particular date, all amounts which would in conformity with
GAAP be included under shareholders' equity on a
consolidated balance sheet of such Person and its
Subsidiaries at such date.
"Consolidated Total Indebtedness": as to any Person as
of a particular date, the aggregate of all Indebtedness of
such Person and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP.
"Contractual Obligation": as to any Person, any
provision of any security issued by such Person or of any
agreement, instrument or other undertaking to which such
Person is a party or by which it or any of its property is
bound.
"Default": any of the events specified in Section 7,
whether or not any requirement for the giving of notice, the
lapse of time, or both, or any other condition, has been
satisfied.
"Dollars" and "$": dollars in lawful currency of the
United States of America.
"Environnmental Laws": any and all foreign, Federal,
state, local or municipal laws, rules, orders, regulations,
statutes, ordinances, codes, decrees, requirements of any
Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of
human health or the environment, as now or may at any time
hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act
of 1974, as amended from time to time.
"Eurocurrency Reserve Requirements": for any day as
applied to a Eurodollar Loan, the aggregate (without
duplication) of the rates (expressed as a decimal fraction)
of reserve requirements in effect on such day (including,
without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board of
Governors of the Federal Reserve System or other
Governmental Authority having jurisdiction with respect
thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency
6
Liabilities" in Regulation D of such Board) maintained by a
member bank of such System.
"Eurodollar Base Rate": with respect to each day
during each Interest Period pertaining to a Eurodollar Loan,
the rate per annum equal to the average (rounded upward to
the nearest 1/16th of 1%) of the respective rates notified
to the Administrative Agent by each of the Reference Lenders
as the rate at which such Reference Lender is offered Dollar
deposits at or about 10:00 A.M., New York City time, two
Business Days prior to the beginning of such Interest Period
in the interbank eurodollar market where the eurodollar and
foreign currency and exchange operations in respect of its
Eurodollar Loans are then being conducted for delivery on
the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount
of its Eurodollar Loan to be outstanding during such
Interest Period.
"Eurodollar Loans": Revolving Credit Loans the rate of
interest applicable to which is based upon the Eurodollar
Rate.
"Eurodollar Rate": with respect to each day during
each Interest Period pertaining to a Eurodollar Loan, a rate
per annum determined for such day in accordance with the
following formula (rounded upward to the nearest 1/100th
of 1%):
Eurodollar Base Rate
-----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Rate CAF Advance Request": any CAF Advance
Request requesting the Lenders to offer to make CAF Advances
at an interest rate equal to the Eurodollar Rate plus (or
minus) a margin.
"Event of Default": any of the events specified in
Section 7, provided that any requirement for the giving of
notice, the lapse of time, or both, or any other condition,
has been satisfied.
"Financing Lease": any lease of property, real or
personal, the obligations of the lessee in respect of which
are required in accordance with GAAP to be capitalized on a
balance sheet of the lessee.
"GAAP": generally accepted accounting principles in
the United States of America in effect from time to time.
"Governmental Authority": any nation or government,
any state or other political subdivision thereof and any
entity exercising executive, legislative, judicial,
7
requlatory or administrative functions of or pertaining to
government.
"Guarantee Obligation": as to any Person (the
"guaranteeing person"), any obligation of (a) the
quaranteeing person or (b) another Person (including,
without limitation, any bank under any letter of credit) to
induce the creation of which the guaranteeing person has
issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in effect
quaranteeing any Indebtedness, leases, dividends or other
obligations (the "primary obligations") of any other third
Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any
obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or
any property constituting direct or indirect security
therefor, (ii) to advance or supply funds (1) for the
purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency
of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the
owner of any such primary obligation against loss in respect
thereof; provided, however, that the term Guarantee
Obligation shall not include (x) endorsements of instruments
for deposit or collection in the ordinary course of business
or (y) guarantee obligations of the Borrower or its
Subsidiaries which are insurance products and are incurred
by such Person in the ordinary course of the insurance
business of such Person. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be
the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of
which such Guarantee Obligation is made and (b) the maximum
amount for which such guaranteeing person may be liable
pursuant to the terms of the instrument embodying such
Guarantee Obligation, unless such primary obligation and the
maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the
amount of such Guarantee Obligation shall be such
guaranteeing person's maximum reasonably anticipated
liability in respect thereof as determined by the Borrower
in good faith.
"Indebtedness": of any Person at any date, (a) all
indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services (other than
current trade liabilities incurred in the ordinary course of
business and payable in accordance with customary
practices), (b) any other indebtedness of such Person which
8
is evidenced by a note, bond, debenture or similar
instrument, (c) all financial obligations of such Person
under Financing Leases, (d) all obligations of such Person
in respect of acceptances issued or created for the account
of such Person and (e) all liabilities secured by any Lien
on any property owned by such Person even though such Person
has not assumed or otherwise become liable for the payment
thereof.
"Insolvency": with respect to any Multiemployer Plan,
the condition that such Plan is insolvent within the meaning
of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Insurance Subsidiary": any Subsidiary of the Borrower
which is principally engaged in the business of writing or
selling insurance.
"Interest Payment Date": (a) as to any ABR Loan, the
last day of each March, June, September and December to
occur while such Loan is outstanding, (b) as to any
Eurodollar Loan having an Interest Period of three months or
less, the last day of such Interest Period, and (c) as to
any Eurodollar Loan having an Interest Period longer than
three months, each day which is thr'ee months, or a whole
multiple thereof, after the first day of such Interest
Period and the last day of such Interest Period.
"Interest Period": with respect to any Eurodollar Loan
or Eurodollar CAF Advance:
(i) initially, the period commencing on the
borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan or Eurodollar CAF
Advance and ending one, two, three or six months
thereafter, as selected by the Borrower in its notice
of borrowing or notice of conversion, as the case may
be, given with respect thereto (in the case of
Eurodollar Loans) or in its acceptance of a related CAF
Advance Offer (in the case of Eurodollar CAF Advances);
and
(ii) thereafter, with respect to Eurodollar
Loans only, each period commencing on the last day of
the next preceding Interest Period applicable to such
Eurodollar Loan and ending one, two, three or six
months thereafter, as selected by the Borrower by
irrevocable notice to the Administrative Agent not less
than three Business Days prior to the last day of the
then current Interest Period with respect thereto;
provided that, all of the foregoing provisions relating to
Interest Periods are subject to the following:
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(1) if any Interest Period pertaining to a
Eurodollar Loan or Eurodollar CAF Advance would
otherwise end on a day that is not a Business Day, such
Interest Period shall be extended to the next
succeeding Business Day unless the result of such
extension would be to carry such Interest Period into
another calendar month in which event such Interest
Period shall end on the immediately preceding Business
Day;
(2) any Interest Period that would otherwise
extend beyond the Termination Date shall end on the
Termination Date;
(3) any Interest Period pertaining to a Eurodollar
Loan or Eurodollar CAF Advance that begins on the last
Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the
calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month;
and
(4) the Borrower shall select Interest Periods so
as not to require a payment or prepayment of any
Eurodollar Loan during an Interest Period for such
Loan.
"Lendinq Qffice": as to each Lender, its office as set
forth opposite its name on the signature page hereto or
Schedule I hereto or such other office as such Lender my
hereafter designate as its Lending Office by notice to the
Administrative Agent, Co-Agent and Borrower.
"Lien": any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien
(statutory or other), charge or other security interest or
any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or
other title retention agreement and any Financing Lease
having substantially the same economic effect as any of the
foregoing).
"Loan": any loan made by any Lender pursuant to this
Agreement.
"Loan Documents": this Agreement and the Notes.
"Majority Lenders": at any time, Lenders the
Commitment Percentages of which aggregate more than 50%.
"Material Adverse Effect": a material adverse effect
on (a) the business, operations, property or condition
(financial or otherwise) of the Borrower and its
10
Subsidiaries taken as a whole or (b) the validity or
enforceability of this Agreement, any of the Notes or any of
the other Loan Documents.
"Multiemployer Plan": a Plan which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.
"Non-Excluded Taxes": as defined in subsection 2.19.
"Notes": the collective reference to the Revolving
Credit Notes and the CAF Advance Notes.
"Participant": as defined in subsection 9.6(b) .
"PBGC": the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA or
any successor thereto.
"Person": an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other
entity of whatever nature.
"Plan": at a particular time, any employee benefit
plan which is covered by ERISA and in respect of which the
Borrower or a Commonly Controlled Entity is (or, if such
plan were terminated at such time, would under Section 4069
of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Reference Lenders": Chemical and Citibank.
"Register": as defined in subsection 9.6(d).
"Regulation U": Regulation U of the Board of Governors
of the Federal Reserve System as in effect from time to
time.
"Reorganization": with respect to any Multiemployer
Plan, the condition that such plan is in reorganization
within the meaning of Section 4241 of ERISA.
"Reportable Event": any of the events set forth in
Section 4043(b) of ERISA, other than those events as to
which the thirty day notice period is waived under
subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg.
Sec. 2615.
"Reporting Insurance Subsidiary": each of the
following Insurance Subsidiaries: CIC, The Buckeye Union
Insurance Company, an Ohio corporation, The Fidelity and
Casualty Company of New York, a New Hampshire corporation,
Firemen's Insurance Company of Newark, New Jersey, a New
11
Jersey corporation, and National-Ben Franklin Insurance
Company of Illinois, an Illinois corporation.
"Required Lenders": at any time, Lenders the
Commitment Percentages of which aggregate at least 66-2/3%.
"Requirement of Law": as to any Person, the
Certificate of Incorporation and By-Laws or other
organizational or governing documents of such Person, and
any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any
of its property or to which such Person or any of its
property is subject.
"Responsible Officer": the chief executive officer and
the president of the Borrower or, with respect to financial
matters, the chief financial officer or Treasurer of the
Borrower.
"Revolving Credit Loans": as defined in subsection
2.1.
"Revolving Credit Note": as defined in subsection 2.2.
"SAP": as to any insurance company incorporated in any
jurisdiction of the United States, the statutory accounting
principles prescribed or permitted by the insurance
commissioner (or other similar authority) in the
jurisdiction of domicile of such insurance company for the
preparation of annual statements and other financial reports
by insurance companies of the same type as such insurance
company.
"Significant Subsidiaries": collectively, the
Subsidiaries listed in Schedule II.
"Single Employer Plan": any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan.
"Statutory Statement": for any Subsidiary of the
Borrower which is an insurance company, for each fiscal year
of such Subsidiary, the most recent annual statement,
prepared in accordance with SAP, as required to be filed
with the appropriate regulatory authority and, for each
fiscal quarter of such Subsidiary, the quarterly statement,
as required to be filed with the appropriate regulatory
authority, which quarterly statement shall be prepared in
accordance with SAP.
"Subsidiary": as to any Person, a corporation,
partnership or other entity of which shares of stock or
other ownership interests having ordinary voting power
(other than stock or such other ownership interests having
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such power only by reason of the happening of a contingency)
to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity
are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or
more intermediaries, or both, by such Person. Unless
otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary
or Subsidiaries of the Borrower.
"Surplus": as to CIC and its affiliated fire and
casualty insurers on a consolidated basis under SAP, the
amount remaining after all liabilities, including loss
reserves, are subtracted from all admitted assets, where
admitted assets are assets of an insurer permitted by the
relevant state of domicile to be taken into account under
SAP.
"Termination Date": the day which is 364 days after
the Closing Date, as extended as provided herein.
"Transferee": as defined in subsection 9.6(f).
"Type": as to any Revolving Credit Loan, its nature as
an ABR Loan or a Eurodollar Loan.
1.2 Other Definitional Provisions. (a) Unless
otherwise specified therein, all terms defined in this Agreement
shall have the defined meanings when used in the Notes or any
certificate or other document made or delivered pursuant hereto.
(b) As used herein and in the Notes, and any
certificate or other document made or delivered pursuant hereto,
accounting terms relating to the Borrower and its Subsidiaries
not defined in subsection 1.1 and accounting terms partly defined
in subsection 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision
of this Agreement, and Section, subsection, Schedule and Exhibit
references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall
be equally applicable to both the singular and plural forms of
such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Revolving Credit Commitments. (a) Subject to the
terms and conditions hereof, each Lender severally agrees to make
revolving credit loans ("Revolving Credit Loans") to the Borrower
13
from time to time during the Commitment Period in an aggregate
principal amount at any one time outstanding not to exceed the
amount of such Lender's Commitment, provided that no Lender shall
make any Revolving Credit Loan if, after giving effect to such
Revolving Credit Loan, the aggregate outstanding principal amount
of all Revolving Credit Loans plus the aggregate outstanding
principal amount of all CAF Advances would exceed the aggregate
Commitments of all the Lenders. During the Commitment Period the
Borrower may use the Commitments by borrowing, prepaying the
Revolving Credit Loans in whole or in part, and reborrowing, all
in accordance with the terms and conditions hereof.
(b) The Revolving Credit Loans may from time to time
be (i) Eurodollar Loans, (ii) ABR Loans, or (iii) a combination
thereof, as determined by the Borrower and notified to the
Administrative Agent in accordance with subsections 2.3 and 2.11,
provided that no Revolving Credit Loan shall be made as a
Eurodollar Loan after the day that is one month prior to the
Termination Date.
2.2 Revolving Credit Notes. The Revolving Credit
Loans made by each Lender shall be evidenced by a promissory note
of the Borrower, substantially in the form of Exhibit A, with
appropriate insertions as to payee, date and principal amount (a
"Revolving Credit Note"), payable to the order of such Lender and
in a principal amount equal to the lesser of (a) the amount of
the initial Commitment of such Lender and (b) the aggregate
unpaid principal amount of all Revolving Credit Loans made by
such Lender. Each Lender is hereby authorized to record the
date, Type and amount of each Revolving Credit Loan made by such
Lender, each continuation thereof, each conversion of all or a
portion thereof to another Type, the date and amount of each
payment or prepayment of principal thereof and, in the case of
Eurodollar Loans, the length of each Interest Period with respect
thereto, on the schedule annexed to and constituting a part of
its Revolving Credit Note; provided, however, that the failure to
make any such recordation shall not affect the obligations of the
Borrower hereunder or under any Revolving Credit Note. Each
Revolving Credit Note shall (x) be dated the Closing Date, (y) be
stated to mature on the Termination Date and (z) provide for the
payment of interest in accordance with subsection 2.12.
2.3 Procedure for Revolving Credit Borrowing. The
Borrower may borrow Revolving Credit Loans under the Commitments
during the Commitment Period on any Business Day, provided that
the Borrower shall give the Administrative Agent irrevocable
notice (which notice must be received by the Administrative Agent
prior to 10:00 A.M., New York City time, (a) three Business Days
prior to the requested Borrowing Date, if all or any part of the
requested Revolving Credit Loans are to be initially Eurodollar
Loans, or (b) on the requested Borrowing Date, otherwise),
specifying (i) the amount to be borrowed, (ii) the requested
Borrowing Date, (iii) whether the borrowing is to be of
Eurodollar Loans, ABR Loans or a combination thereof and (iv) if
14
the borrowing is to be entirely or partly of Eurodollar Loans,
the amounts of such Type of Revolving Credit Loan and the lengths
of the initial Interest Periods therefor. Each such borrowing
under the Commitments shall be in an amount equal to $10,000,000
or a whole multiple of $1,000,000 in excess thereof. Upon
receipt of any such notice from the Borrower, the Administrative
Agent shall promptly notify each Lender thereof. Each Lender
will make the amount of its pro rata share of each borrowing
available to the Administrative Agent for the account of the
Borrower at the office of the Administrative Agent specified in
subsection 9.2 prior to 11:00 A.M., New York City time, on the
Borrowing Date requested by the Borrower in funds immediately
available to the Administrative Agent. Such borrowing will then
be made available to the Borrower by the Administrative Agent
crediting the account of the Borrower on the books of such office
with the aggregate of the amounts made available to the
Administrative Agent by the Lenders and in like funds as received
by the Administrative Agent, and to the extent such funds are
received by the Administrative Agent from the Lenders prior to
11:00 A.M., New York City time, on such Borrowing Date, the
Administrative Agent will credit such account of the Borrower at
or before 1:00 P.M., New York City time, on such Borrowing Date.
2.4 Extension of Termination Date. (a) The Borrower
may request, in a notice given as herein provided to the
Administrative Agent and each of the Lenders not less than 90
days and not more than 120 days prior to the Termination Date
then in effect ("Existing Termination Date"), that the
Termination Date be extended, which notice shall specify a date
(which shall be the Existing Termination Date) as of which the
requested extension is to be effective (the "Effective Date"),
and the new Termination Date to be in effect following such
extension (the "Requested Termination Date"), which date shall be
no more than 364 days after the effectiveness of such extension
(with the Effective Date being counted as the first day). Each
Lender shall, not later than a date 60 days prior to the
Effective Date, notify the Borrower and the Administrative Agent
of its election to extend or not to extend the Termination Date
with respect to its Commitment. Upon receipt of such notices
from each Lender, the Administrative Agent shall promptly notify
each Lender of the election so made by each other Lender.
Notwithstanding any provision of this Agreement to the contrary,
any notice by any Lender of its willingness to extend the
Termination Date with respect to its Commitment shall be
revocable by such Lender in its sole and absolute discretion at
any time prior to the Effective Date. Any Lender which shall not
timely notify the Borrower and the Administrative Agent of its
election to extend the Termination Date shall be deemed to have
elected not to extend the Termination Date with respect to its
Commitment. If Lenders constituting Required Lenders shall not
have notified the Administrative Agent of their election to
extend the Termination Date with respect to their Commitments on
or prior to a date 30 days prior to the Existing Termination
15
Date, then all of the Lenders shall be deemed to have elected not
to extend the Termination Date with respect to their Commitments.
(b) If any one or more Lenders shall timely notify the
Borrower and the Administrative Agent pursuant to paragraph (a)
of this subsection 2.4 of their election not to extend their
Commitments or their revocation of any extension, or shall be
deemed to have elected not to extend their Commitments (such
Lenders being called "Terminating Lenders"), then the Borrower
may (i) designate from the Lenders other than Terminating
Lenders, if any (the "Continuing Lenders"), one or more such
Continuing Lenders to increase their Commitments, which
Continuing Lenders shall have given notice to the Borrower and
the Administrative Agent of their willingness to so increase
their Commitments, (ii) with notice to the Administrative Agent,
designate one or more other banking institutions willing to
extend Commitments until the Requested Termination Date (any such
banking institution, an "Additional Lender"), or (iii) any
combination thereof, the aggregate amount of the increases of
such Continuing Lenders' Commitments and the amount of such
Additional Lenders' Commitments not to exceed the aggregate of
the Commitments of the Terminating Lenders. Any such increase in
the Commitment of a Continuing Lender shall be evidenced by a
written instrument executed by such Continuing Lender, the
Borrower and the Administrative Agent, and shall take effect on
the Existing Termination Date. Any Additional Lender shall, on
the Existing Termination Date, execute and deliver to the
Borrower and the Administrative Agent an "Assignment and
Acceptance", satisfactory to the Borrower and the Administrative
Agent, setting forth the amount of such Additional Lender's
Commitment and containing its agreement to become, and to perform
all the obligations of, a Lender hereunder, and the Commitment of
such Additional Lender shall become effective on the Existing
Termination Date. Notwithstanding any provision of this
Agreement to the contrary, any notice by any Continuing Lender of
its willingness to increase its Commitment as provided herein, or
by any Additional Lender of its willingness to become a Lender
hereunder, shall be revocable by such Continuing Lender or such
Additional Lender, as the case may be, in its sole and absolute
discretion at any time prior to the Effective Date.
(c) On the Existing Termination Date, the Borrower
shall deliver to each Continuing Lender the Commitment of which
is to be increased a new Revolving Credit Note in exchange for
the Revolving Credit Note held by such Lender, and the Borrower
shall deliver to each Additional Lender a new Revolving Credit
Note and new CAF Advance Note. Each of such Notes shall be
stated to mature on the Termination Date and each of such
Revolving Credit Notes shall be in the principal amount of such
Lender's Commitment after giving effect to the adjustments made
pursuant to this subsection 2.4.
(d) If some of or all the Lenders shall have elected
to extend their Commitments as provided in this subsection 2.4,
16
then (i) the Commitments of the Continuing Lenders and any
Additional Lenders shall continue until the Requested Termination
Date specified in the notice from the Borrower, and as to such
Lenders the term "Termination Date", as used herein shall on and
after the Effective Date shall mean such Requested Termination
Date; (ii) the Commitments of the Terminating Lenders shall
continue until the Termination Date in effect prior to such
extension, and shall then terminate, and as to the Terminating
Lenders, the term "Termination Date", as used herein, shall
continue to mean such Existing Termination Date; and (iii) from
and after the Termination Date in effect prior to such extension,
the term "Lenders" shall be deemed to include the Additional
Lenders.
2.5 Termination or Reduction of Commitments. The
Borrower shall have the right, upon not less than five Business
Days' notice to the Administrative Agent, to terminate the
Commitments or, from time to time, to reduce the amount of the
unused portion of the Commitments, provided that the amount of
the Commitments may not be reduced to an amount less than
$25,000,000 except in connection with a termination of the
Commitments. Upon receipt of any such notice from the Borrower,
the Administrative Agent shall notify each Lender thereof. Any
such reduction shall be in an amount equal to $10,000,000 or a
whole multiple thereof and shall reduce permanently the
Commitments then in effect.
2.6 The CAF Advances. Subject to the terms and
conditions of this Agreement, the Borrower may borrow CAF
Advances from time to time during the CAF Advance Commitment
period on any Business Day. CAF Advances shall be borrowed in
amounts such that the aggregate amount of Loans outstanding at
any time shall not exceed the aggregate amount of the Commitments
at such time. Within the limits and on the conditions
hereinafter set forth with respect to CAF Advances, the Borrower
from time to time may borrow, repay and reborrow CAF Advances.
2.7 Procedure for CAF Advance Borrowing. (a) The
Borrower shall request CAF Advances by delivering a CAF Advance
Request to the Administrative Agent, not later than 12:00 Noon
(New York City time) four Business Days prior to the proposed
Borrowing Date (in the case of a Eurodollar Rate CAF Advance
Request), and not later than 10:00 A.M. (New York City time) one
Business Day prior to the proposed Borrowing Date (in the case of
an Absolute Rate CAF Advance Request). Each CAF Advance Request
may solicit bids for CAF Advances in an aggregate principal
amount of $5,000,000 or a whole multiple of $1,000,000 in excess
thereof and having not more than three alternative maturity
dates. The maturity date for each CAP Advance shall be not less
than 7 days nor more than 180 days after the Borrowing Date
therefor, in the case of Absolute Rate CAF Advances, and shall be
1, 2, 3 or 6 months after the Borrowing Date therefor, in the
case of Eurodollar Rate CAF Advances (and in any event shall be
not later than the Termination Date). The Administrative Agent
17
shall notify each Lender promptly by telex or facsimile
transmission of the contents of each CAF Advance Request received
by the Administrative Agent.
(b) In the case of a Eurodollar Rate CAF Advance
Request, upon receipt of notice from the Administrative Agent of
the contents of such CAF Advance Request, each Lender may elect,
in its sole discretion, to offer irrevocably to make one or more
CAF Advances at the Eurodollar Rate plus or minus a margin
determined by such Lender in its sole discretion for each such
CAF Advance. Any such irrevocable offer shall be made by
delivering a CAF Advance Offer to the Administrative Agent,
before 10:30 A.M. (New York City time) on the day that is three
Business Days before the proposed Borrowing Date, setting forth:
(1) the maximum amount of CAF Advances for each
maturity date and the aggregate maximum amount of CAF
Advances for all maturity dates which such Lender would be
willing to make (which amounts may, subject to subsection
2.6, exceed such Lender's Commitment); and
(2) the margin above or below the Eurodollar Rate at
which such Lender is willing to make each such CAF Advance.
The Administrative Agent shall advise the Borrower before 11:15
A.M. (New York City time) on the date which is three Business
Days before the proposed Borrowing Date of the contents of each
such CAF Advance Offer received by it. If the Administrative
Agent, in its capacity as a Lender, shall elect, in its sole
discretion, to make any such CAF Advance Offer, it shall advise
the Borrower of the contents of its CAF Advance Offer before
10:15 A.M. (New York City time) on the date which is three
Business Days before the proposed Borrowing Date.
(c) In the case of an Absolute Rate CAF Advance
Request, upon receipt of notice from the Administrative Agent of
the contents of such CAF Advance Request, each Lender may elect,
in its sole discretion, to offer irrevocably to make one or more
CAF Advances at a rate of interest determined by such Lender in
its sole discretion for each such CAF Advance. Any such
irrevocable offer shall be made by delivering a CAF Advance Offer
to the Administrative Agent before 9:30 A.M. (New York City time)
on the proposed Borrowing Date, setting forth:
(1) the maximum amount of CAF Advances for each
maturity date, and the aggregate maximum amount for all
maturity dates, which such Lender would be willing to make
(which amounts may, subject to subsection 2.6, exceed such
Lender's Commitment); and
(2) the rate of interest at which such Lender is
willing to make each such CAF Advance.
18
The Administrative Agent shall advise the Borrower before 10:15
A.M. (New York City time) on the proposed Borrowing Date of the
contents of each such CAF Advance Offer received by it. If the
Administrative Agent, in its capacity as a Lender, shall elect,
in its sole discretion, to make any such CAF Advance Offer, it
shall advise the Borrower of the contents of its CAF Advance
Offer before 9:15 A.M. (New York City time) on the proposed
Borrowing Date.
(d) Before 11:30 A.M. (New York City time) three
Business Days before the proposed Borrowing Date (in the case of
CAF Advances requested by a Eurodollar Rate CAF Advance Request)
and before 10:30 A.M. (New York City time) on the proposed
Borrowing Date (in the case of CAF Advances requested by an
Absolute Rate CAF Advance Request), the Borrower, in its absolute
discretion, shall:
(1) cancel such CAF Advance Request by giving the
Administrative Agent telephone notice to that effect,
or
(2) by giving telephone notice to the
Administrative Agent (immediately confirmed by delivery
to the Administrative Agent of a CAF Advance
Confirmation in writing or by fax transmission) (A)
subject to the provisions of subsection 2.7(e), accept
one or more of the offers made by any Lender or Lenders
pursuant tO subsection 2.7(b) or subsection 2.7(c), as
the case may be, of the amount of CAF Advances for each
relevant maturity date and (B) reject any remaining
offers made by Lenders pursuant to subsection 2.7(b) or
subsection 2.7(c), as the case may be.
(e) The Borrower': acceptance of CAF Advances in
response to any CAF Advance Request shall be subject to the
following limitations:
(1) The amount of CAF Advances accepted for each
maturity date specified by any Lender in its CAF Advance
Offer shall not exceed the maximum amount for such maturity
date specified in such CAF Advance Offer;
(2) the aggregate amount of CAF Advances accepted for
all maturity dates specified by any Lender in its CAF
Advance Offer shall not exceed the aggregate maximum amount
specified in such CAF Advance Offer for all such maturity
dates;
(3) the Borrower may not accept offers for CAF
Advances for any maturity date in an aggregate principal
amount in excess of the maximum principal amount requested
in the related CAF Advance Request; and
19
(4) if the Borrower accepts any of such offers, it
must accept offers based solely upon pricing for such
relevant maturity date and upon no other criteria whatsoever
and if two or more Lenders submit offers for any maturity
date at identical pricing and the Borrower accepts any of
such offers but does not wish to (or by reason of the
limitations set forth in subsection 2.6 or in clause (3) of
this subsection 2.7(e), cannot) borrow the total amount
offered by such Lenders with such identical pricing, the
Borrower shall accept offers from all of such Lenders in
amounts allocated among them pro rata according to the
amounts offered by such Lenders (or as nearly pro rata as
shall be practicable after giving effect to the requirement
that CAF Advances made by a Lender on a Borrowing Date for
each relevant maturity date shall be in a principal amount
of $5,000,000 or an integral multiple of $1,000,000 in
excess thereof).
(f) If the Borrower notifies the Administrative Agent
that a CAF Advance Request is cancelled pursuant to subsection
2.7(d)(1), the Administrative Agent shall give prompt telephone
notice thereof to the Lenders.
(g) If the Borrower accepts pursuant to subsection
2.7(d) (2) one or more of the offers made by any Lender or
Lenders, the Administrative Agent promptly shall notify each
Lender which has made such a CAF Advance Offer of (1) the
aggregate amount of such CAF Advances to be made on such
Borrowing Date for each maturity date and (2) the acceptance or
rejection of any offers to make such CAF Advances made by such
Lender. Before 12:00 Noon (New York City time) on the Borrowing
Date specified in the applicable CAF Advance Request, each Lender
whose CAF Advance Offer has been accepted shall make available to
the Administrative Agent at its office set forth in subsection
9.2 the amount of CAF Advances to be made by such Lender, in
immediately available funds. The Administrative Agent will make
such funds available to the Borrower as soon as practicable on
such date at the Administrative Agent's aforesaid address, and to
the extent that such funds are received by the Administrative
Agent from the Lenders prior to 12:00 Noon, New York City time,
on such Borrowing Date, the Administrative Agent will make such
funds available to the Borrower at or before 1:00 P.M., New York
City time, on such Borrowing Date. As soon as practicable after
each Borrowing Date, the Administrative Agent shall notify each
Lender of the aggregate amount of CAF Advances advanced on such
Borrowing Date and the respective maturity dates thereof.
2.8 CAF Advance Payments. (a) The Borrower shall
repay to the Administrative Agent for the account of each Lender
which has made a CAF Advance on the applicable CAF Advance
Maturity Date the then unpaid principal amount of such CAF
Advance. The Borrower shall not have the right to prepay any
principal amount of any CAF Advance, except that the Borrower may
prepay the principal amount of all outstanding CAF Advances if
20
any event or condition described in Section 7(j)(i) shall have
occurred and be continuing and in the event of any such
prepayment the Borrower shall indemnify each Lender and hold each
Lender harmless from any loss or reasonable expense which such
Lender may sustain or incur as a consequence of such prepayment
(which covenant shall survive the termination of this Agreement
and the payment of the Notes and all other amounts payable
hereunder).
(b) The Borrower shall pay interest on the unpaid
principal amount of each CAF Advance from the Borrowing Date
thereof to the applicable CAF Advance Maturity Date at the rate
of interest specified in the CAF Advance Offer accepted by the
Borrower in connection with such CAF Advance (calculated on the
basis of a 360-day year for actual days elapsed), payable on each
applicable CAF Advance Interest Payment Date.
(c) If all or a portion of the principal amount of any
CAF Advance shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue principal
amount shall, without limiting any rights of any Lender under
this Agreement, bear interest from the date on which such payment
was due at a rate per annum which is 2% above the rate which
would otherwise be applicable pursuant to the CAF Advance Note
evidencing such CAF Advance until the stated maturity date of
such CAF Advance, and for each day thereafter at a rate per annum
which is 2% above the ABR, in each case until paid in full (as
well after as before judgment).
2.9 CAF Advance Notes. The CAF Advances made by each
Lender shall be evidenced by a promissory note of the Borrower,
substantially in the form of Exhibit B with appropriate
insertions (a "CAF Advance Note"), payable to the order of such
Lender and representing the obligation of the Borrower to pay the
unpaid principal amount of all CAF Advances made by such Lender,
with interest on the unpaid principal amount from time to time
outstanding of each CAF Advance evidenced thereby as prescribed
in subsection 2.8(b). Each Lender is hereby authorized to record
the date and amount of each CAF Advance made by such Lender, the
maturity date thereof, the date and amount of each payment of
principal thereof and the interest rate with respect thereto on
the schedule annexed to and constituting part of its CAF Advance
Note; provided, however, that the failure to make any such
recordation shall not affect the obligations of the Borrower
hereunder or under any CAF Advance Note. Each CAF Advance Note
shall be dated the Closing Date and each CAF Advance evidenced
thereby shall bear interest for the period from and including the
Borrowing Date of such CAF Advance on the unpaid principal amount
thereof from time to time outstanding at the applicable rate per
annum determined as provided in, and such interest shall be
payable as specified in, subsection 2.8(b).
2.10 Optional Prepayments. The Borrower may at any
time and from time to time prepay the Revolving Credit Loans, in
21
whole or in part, without premium or penalty, upon at least four
Business Days' irrevocable notice to the Administrative Agent,
specifying the date and amount of prepayment and whether the
prepayment is of Eurodollar Loans, ABR Loans or a combination
thereof, and, if of a combination thereof, the amount allocable
to each. Upon receipt of any such notice the Administrative
Agent shall promptly notify each Lender thereof. If any such
notice is given, the amount specified in such notice shall be due
and payable on the date specified therein, together with any
amounts payable pursuant to subsection 2.20 and accrued interest
to such date on the amount prepaid. Partial prepayments shall be
in an aggregate principal amount of $10,000,000 or a whole
multiple of $1,000,000 in excess thereof.
2.11 Conversion and Continuation Options. (a) The
Borrower may elect from time to time to convert Eurodollar Loans
to ABR Loans by giving the Administrative Agent prior irrevocable
notice of such election no later than 10:00 A.M., New York City
time, on the date of such conversion, provided that any such
--------
conversion of Eurodollar Loans may only be made on the last day
of an Interest Period with respect thereto. The Borrower may
elect from time to time to convert ABR Loans tO Eurodollar Loans
by giving the Administrative Agent at least three Business Days'
prior irrevocable notice of such election. Any such notice of
conversion to Eurodollar Loans shall specify the length of the
initial Interest Period or Interest Periods therefor. Upon
receipt of any such notice the Administrative Agent shall
promptly notify each Lender thereof. All or any part of
outstanding Eurodollar Loans and ABR Loans may be converted as
provided herein, provided that (i) no Loan may be converted into
a Eurodollar Loan when any Event of Default has occurred and is
continuing and the Administrative Agent has or the Required
Lenders have determined that such a conversion is not appropriate
and (ii) no Loan may be converted into a Eurodollar Loan after
the date that is one month prior to the Termination Date.
(b) Any Eurodollar Loans may be continued as such upon
the expiration of the then current Interest Period with respect
thereto by the Borrower giving notice to the Administrative
Agent, in accordance with the applicable provisions of the term
"Interest Period" set forth in subsection 1.1, of the length of
the next Interest Period to be applicable to such Loans, provided
that no Eurodollar Loan may be continued as such (i) when any
Event of Default has occurred and is continuing and the
Administrative Agent has or the Required Lenders have determined
that such a continuation is not appropriate or (ii) after the
date that is one month prior to the Termination Date and
provided, further, that if the Borrower shall fail to give any
required notice as described above in this paragraph or if such
continuation is not permitted pursuant to the preceding proviso
such Revolving Credit Loans shall be automatically converted to
ABR Loans on the last day of such then expiring Interest Period.
Upon receipt of any such notice from the Borrower, the
Administrative Agent shall notify each Lender thereof.
22
2.12 Interest Rates and Payment Dates. (a) Each
Eurodollar Loan shall bear interest for each day during each
Interest Period with respect thereto at a rate per annum equal to
the Eurodollar Rate determined for such day plus 0.4375%.
(b) Each ABR Loan shall bear interest at a rate per
annum equal to the ABR.
(c) If all or a portion of (i) the principal amount of
any Revolving Credit Loan, (ii) any interest payable thereon or
(iii) any commitment fee or other amount payable hereunder shall
not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear
interest at a rate per annum which is (x) in the case of overdue
principal, the rate that would otherwise be applicable thereto
pursuant to the foregoing provisions of this subsection plus 2%
or (y) in the case of overdue interest, facility fee or other
amount, the rate described in paragraph (b) of this subsection
plus 2%, in each case from the date of such non-payment until
such amount is paid in full (as well after as before judgment).
(d) Interest shall be payable in arrears on each
Interest Payment Date, provided that interest accruing pursuant
to paragraph (c) of this subsection shall be payable from time to
time on demand.
2.13 Facility Fee, Other Fees. (a) The Borrower
agrees to pay to the Administrative Agent for the account of each
Lender a facility fee for the period from and including the first
day of the Commitment Period to the Termination Date, computed at
the rate of 0.1875% per annum on the average daily amount of the
Commitment of such Lender during the period for which payment is
made, payable quarterly in arrears on the last day of each March,
June, September and December and on the Termination Date or such
earlier date on which the Commitments shall terminate as provided
herein, commencing on the first of such dates to occur after the
date hereof.
(b) The Borrower agrees to pay an administrative
agency fee in the amounts, and on the dates, as from time to time
agreed in writing with the Administrative Agent.
2.14 Computation of Interest and Fees. (a) Facility
fees and, whenever it is calculated on the basis of the Prime
Rate, interest shall be calculated on the basis of a 365- (or
366-, as the case may be) day year for the actual days elapsed;
and, otherwise, interest shall be calculated on the basis of a
360-day year for the actual days elapsed. The Administrative
Agent shall as soon as practicable notify the Borrower and the
Lenders of each determination of a Eurodollar Rate. Any change
in the interest rate on a Loan resulting from a change in the
ABR, the Eurocurrency Reserve Requirements, the C/D Assessment
Rate or the C/D Reserve Percentage shall become effective as of
the opening of business on the day on which such change becomes
23
effective. The Administrative Agent shall as soon as practicable
notify the Borrower and the Lenders of the effective date and the
amount of each such change in interest rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement
shall be conclusive and binding on the Borrower and the Lenders
in the absence of manifest error. The Administrative Agent
shall, at the request of the Borrower, deliver to the Borrower a
statement showing the quotations used by the Administrative Agent
in determining any interest rate pursuant to subsection 2.12(a).
(c) If any Reference Lender shall for any reason no
longer have a Commitment or any Revolving Credit Loans, such
Reference Lender shall thereupon cease to be a Reference Lender,
and if, as a result, there shall only be one Reference Lender
remaining, the Administrative Agent (after consultation with the
Borrower and the Lenders) shall, by notice to the Borrower and
the Lenders, designate another Lender as a Reference Lender so
that there shall at all times be at least two Reference Lenders.
(d) Each Reference Lender shall use its best efforts
to furnish quotations of rates to the Administrative Agent as
contemplated hereby. If any of the Reference Lenders shall be
unable or shall otherwise fail to supply such rates to the
Administrative Agent upon its request, the rate of interest
shall, subject to the provisions of subsection 2.15, be
determined on the basis of the quotations of the remaining
Reference Lenders or Reference Lender.
2.15 Inability to Determine Interest Rate.
If prior to the first day of any Interest Period:
(a) the Administrative Agent shall have determined
(which determination shall be conclusive and binding upon
the Borrower) that, by reason of circumstances affecting the
relevant market, adequate and reasonable means do not exist
for ascertaining the Eurodollar Rate for such Interest
Period, or
(b) the Administrative Agent shall have received
notice from the Majority Lenders that the Eurodollar Rate
determined or to be determined for such Interest Period will
not adequately and fairly reflect the cost to such Lenders
(as conclusively certified by such Lenders) of making or
maintaining their affected Loans during such Interest
Period,
the Administrative Agent shall give telecopy or telephonic notice
thereof to the Borrower and the Lenders as soon as practicable
thereafter. If such notice is given (x) any Eurodollar Loans
requested to be made on the first day of such Interest Period
shall be made as ABR Loans, (y) any Loans that were to have been
converted on the first day of such Interest Period to Eurodollar
24
Loans shall be continued as ABR Loans and (z) any outstanding
Eurodollar Loans shall be converted, on the first day of such
Interest Period, to ABR Loans. Until such notice has been
withdrawn by the Administrative Agent, no further Eurodollar
Loans shall be made or continued as such, nor shall the Borrower
have the right to convert ABR Loans to Eurodollar Loans.
2.16 Pro Rata Treatment and Payments. (a) Each
borrowing of Revolving Credit Loans by the Borrower from the
Lenders hereunder, each payment by the Borrower on account of any
facility fee hereunder and any reduction of the Commitments of
the Lenders shall be made pro rata according to the respective
Commitment Percentages of the Lenders. Each payment (including
each prepayment) by the Borrower on account of principal of and
interest on the Loans shall be made pro rata according to the
respective amounts of principal and interest then due and owing
to the Lenders. All payments (including prepayments) to be made
by the Borrower hereunder and under the Notes, whether on account
of principal, interest, fees or otherwise, shall be made without
set off or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Administrative
Agent, for the account of the Lenders, at the Administrative
Agent's office specified in subsection 9.2, in Dollars and in
immediately available funds, and if any payment hereunder or
under the Notes is made after 12:00 Noon on such date, such
payment shall be deemed to have been made on the next succeeding
Business Day. The Administrative Agent shall distribute such
payments to the Lenders promptly upon receipt in like funds as
received. If any payment hereunder (other than payments on the
Eurodollar Loans and Eurodollar CAF Advances) becomes due and
payable on a day other than a Business Day, such payment shall be
extended to the next succeeding Business Day, and, with respect
to payments of principal, interest thereon shall be payable at
the then applicable rate during such extension. If any payment
on a Eurodollar Loan or Eurodollar CAF Advance becomes due and
payable on a day other than a Business Day, the maturity thereof
shall be extended to the next succeeding Business Day unless the
result of such extension would be to extend such payment into
another calendar month, in which event such payment shall be made
on the immediately preceding Business Day.
(b) Unless the Administrative Agent shall have been
notified in writing by any Lender prior to a borrowing that such
Lender will not make the amount that would constitute its
Commitment Percentage of such borrowing (or, in the case of a CAF
Advance, the amount of the CAF Advance to be made by it)
available to the Administrative Agent, the Administrative Agent
may assume that such Lender is making such amount available to
the Administrative Agent, and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to
the Administrative Agent by the required time on the Borrowing
Date therefor, such Lender shall pay to the Administrative Agent,
on demand, such amount with interest thereon at a rate equal to
25
the daily average Federal Funds Effective Rate for the period
until such Lender makes such amount immediately available to the
Administrative Agent. A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts owing under
this subsection shall be conclusive in the absence of manifest
error. If such Lender's Commitment Percentage of such borrowing
(or, in the case of a CAF Advance, the amount of the CAF Advance
to be made by it) is not made available to the Administrative
Agent by such Lender within three Business Days of such Borrowing
Date, the Administrative Agent shall also be entitled to recover
such amount with interest thereon at the rate per annum
applicable to ABR Loans hereunder, on demand, from the Borrower.
2.17 Illegality. Notwithstanding any other provision
herein, if the adoption of or any change in any Requirement of
Law or in the interpretation or application thereof shall make it
unlawful for any Lender to make or maintain Eurodollar Loans or
Eurodollar CAF Advances as contemplated by this Agreement, (a)
the commitment of such Lender hereunder to make Eurodollar Loans,
continue Eurodollar Loans as such and convert ABR Loans to
Eurodollar Loans shall forthwith be cancelled and (b) such
Lender's Loans then outstanding as Eurodollar Loans or Eurodollar
CAF Advances, if any, shall be converted automatically to ABR
Loans on the respective last days of the then current Interest
Periods with respect to such Loans or within such earlier period
as required by law. If any such conversion of a Eurodollar Loan
or Eurodollar CAF Advance occurs on a day which is not the last
day of the then current Interest Period with respect thereto, the
Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to subsection 2.20.
2.18 Requirements of Law. (a) If the adoption of or
any change in any Requirement of Law or in the interpretation or
application thereof by any Governmental Authority charged with
the interpretation or administration thereof or compliance by any
Lender with any request or directive (whether or not having the
force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Note or any
Eurodollar Loan made by it, or change the basis of taxation
of payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by subsection 2.19 and changes in
the rate of tax on tile overall net income of such Lender or
Lending Office);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar
requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of
funds by, any office of such Lender which is not otherwise
26
included in the determination of the Eurodollar Rate
hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to
such Lender, by an amount which such Lender deems to be material,
of making, converting into, continuing or maintaining Eurodollar
Loans or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay
such Lender, upon its demand, any additional amounts necessary to
compensate such Lender for such increased cost or reduced amount
receivable. If any Lender becomes entitled to claim any
additional amounts pursuant to this subsection, it shall promptly
notify the Borrower, through the Administrative Agent, of the
event by reason of which it has become so entitled. A
certificate as to any additional amounts payable pursuant to this
subsection submitted by such Lender, through the Administrative
Agent, to the Borrower shall be conclusive in the absence of
manifest error. This covenant shall survive the termination of
this Agreement and the payment of the Notes and all other amounts
payable hereunder.
(b) If any Lender shall have determined that the
adoption of or any change in any Requirement of Law regarding
capital adequacy or in the interpretation or application thereof
or compliance by such Lender or any corporation controlling such
Lender with any request or directive regarding capital adequacy
(whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof does or shall have
the effect of reducing the rate of return on such Lender's or
such corporation's capital as a consequence of its obligations
hereunder to a level below that which such Lender or such
corporation could have achieved but for such change or compliance
(taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by
such Lender to be material, then from time to time, after
submission by such Lender to the Borrower (with a copy to the
Agent) of a written request therefor, the Borrower shall pay to
such Lender such additional amount or amounts as will compensate
such Lender for such reduction. This covenant shall survive the
termination of this Agreement and the payment of the Notes and
all other amounts payable hereunder for a period of 30 days.
2.19 Taxes. (a) All payments made by the Borrower
under this Agreement and the Notes shall be made free and clear
of, and without deduction or withholding for or on account of,
any present or future income, stamp or other taxes, levies,
imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by
any Governmental Authority, excluding such taxes, levies,
imposts, duties, charges, fees, deductions or withholdings on or
measured by overall net income, and all franchise taxes, taxes on
doing business or taxes measured by capital or net worth that are
27
imposed in lieu of net income taxes, imposed on the
Administrative Agent, any Co-Agent or any Lender as a result of a
present or former connection between the Administrative Agent,
any Co-Agent or such Lender and the jurisdiction of the
Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than
any such connection arising solely from the Administrative Agent,
any Co-Agent or such Lender having executed. delivered or
performed its obligations or received a payment under, or
enforced, this Agreement or the Notes). If any such non-excluded
taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld
from any amounts payable to the Administrative Agent, any Co-
Agent or any Lender hereunder or under the Notes, the amounts so
payable to the Administrative Agent, such Co-Agent or such Lender
shall be increased to the extent necessary to yield to the
Administrative Agent, such Co-Agent or such Lender (after payment
of all Non-Excluded Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in
this Agreement and the Notes, provided, however, that the
Borrower shall not be required to increase any such amounts
payable to any Lender that is not organized under the laws of the
United States of America or a state thereof if such Lender fails
to comply with the requirements of paragraph (b) of this
subsection. Whenever any Non-Excluded Taxes are payable by the
Borrower, as promptly as possible thereafter the Borrower shall
send to the Administrative Agent for its own account or for the
account of such Co-Agent or Lender, as the case may be, an
original official receipt (or a copy thereof certified by the
appropriate taxing authority) received by the Borrower showing
payment thereof. If the Borrower (i) fails to pay any Non-
Excluded Taxes when due to the appropriate taxing authority or
(ii) fails to remit to the Administrative Agent the required
receipts or other required documentary evidence, the Borrower
shall indemnify the Administrative Agent, the Co-Agents and the
Lenders for any incremental taxes, interest or penalties that may
become payable by the Administrative Agent, any Co-Agent or any
Lender as a result of any such failure, provided, that in the
case of a failure pursuant to clause (ii) of this sentence the
amount of incremental taxes payable by the Borrower shall be
limited to the taxes imposed on a Lender as a result of its being
required to include in income any Non-Excluded Taxes. The
agreements in this subsection shall survive the termination of
this Agreement and the payment of the Notes and all other amounts
payable hereunder.
(b) Each Lender that is not incorporated under the
laws of the United States of America or a state thereof shall:
(i) deliver to the Borrower and the Administrative
Agent (A) two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224, or successor
applicable form, as the case may be, and (B) an Internal
28
Revenue Service Form W-8 or W-9, or successor applicable
form, as the case may be;
(ii) deliver to the Borrower and the Administrative
Agent two further copies of any such form or certification
on or before the date that any such form or certification
expires or becomes obsolete and after the occurrence of any
event requiring a change in the most recent form previously
delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing and
complete such forms or certifications as may reasonably be
requested by the Borrower or the Administrative Agent;
unless in any such case a change in treaty, law or regulation)
has occurred after the Closing Date (or, if later, the date on
which any Lender first became a Lender) and prior to the date on
which any such delivery would otherwise be required which renders
all such forms inapplicable or which would prevent such Lender
from duly completing and delivering any such form with respect to
it and such Lender so advises the Borrower and the Administrative
Agent. Such Lender shall certify (i) in the case of a Form 1001
or 4224, that it is entitled to receive payments under this
Agreement without deduction or withholding of any United States
federal income taxes and (ii) in the case of a Form W-8 or W-9,
that it is entitled to an exemption from United States backup
withholding tax. Each Person that shall become a Lender or a
Participant pursuant to subsection 9.6 shall, upon the
effectiveness of the related transfer, be required to provide all
of the forms and statements required pursuant to this subsection,
provided that in the case of a Participant such Participant shall
furnish all such required forms and statements to the Lender from
which the related participation shall have been purchased.
(c) If a Lender shall become aware that it is eligible
for a refund in respect of Non-Excluded Taxes paid by the
Borrower pursuant to this subsection 2.19, it shall promptly
notify the Borrower of the availability of such refund and shall,
within 30 days after receipt of a request from the Borrower,
apply at the Borrower's expense for such refund or furnish to the
Borrower such duly completed forms as will enable the Borrower to
claim such refund on its own behalf. If such Lender receives all
or part of such refund, it shall repay the net after tax amount
of such refund to the Borrower without interest (other than
interest received from the relevant Governmental Authority with
respect to such refund) within 30 days of its receipt of such
refund. In addition, the Administrative Agent, each Co-Agent and
each Lender shall reasonably cooperate with the Borrower, at the
Borrower's expense, in contesting any Non-Excluded Taxes that the
Borrower is required to bear under this subsection 2.19 and shall
pay to the Borrower the net after-tax amount of refunds obtained
as a result of such contest, together with any interest thereon,
within 30 days after receipt.
29
2.20 Indemnity. The Borrower agrees to indemnify each
Lender and to hold each Lender harmless from any loss or expense
which such Lender may sustain or incur as a consequence of
(a) default by the Borrower in making a borrowing of, conversion
into or continuation of Eurodollar Loans after the Borrower has
given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in
making any prepayment after the Borrower has given a notice
thereof in accordance with the provisions of this Agreement or
(c) the making of a prepayment or conversion of Eurodollar Loans
on a day which is not the last day of an Interest Period with
respect thereto. Such indemnification may include an amount
equal to the excess, if any, of (i) the amount of interest which
would have accrued on the amount so prepaid or converted, or not
so borrowed, converted or continued, for the period from the date
of such prepayment or conversion or of such failure to borrow,
convert or continue to the last day of such Interest Period (or,
in the case of a failure to borrow, convert or continue, the
Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such
Loans provided for herein (excluding, however, the margin above
the Eurodollar Rate provided for by subsection 2.14(a) included
therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) which would have accrued to such Bank
on such amount by placing such amount on deposit for a comparable
period with leading banks in the interbank eurodollar market.
This covenant shall survive the termination of this Agreement and
the payment of the Notes and all other amounts payable hereunder.
2.21 Replacement of Lender. (a) If (i) the Borrower
becomes obligated to pay any additional amounts described in
subsections 2.18 or 2.19 as a result of any condition described
in such subsections and (ii) payment of such amount is demanded
by any Lender or the Borrower pays such amount, then the Borrower
may, on ten Business Days' prior written notice to the
Administrative Agent and such Lender, cause such Lender to (and
such Lender shall) assign pursuant to subsection 9.6 all of its
rights and obligations under this Agreement and the other Loan
Documents, for a purchase price not less than the aggregate
outstanding principal amount of its Loans, to a Lender or other
entity selected by the Borrower, provided that in no event shall
the assigning Lender be required to pay or surrender to such
purchasing Lender or other entity any of the fees theretofore
received by such assigning Lender pursuant to this Agreement or
the registration and processing fee referred to on subsection
9.6(e), and provided, further, that such assignment shall not
affect such assigning Lender's right to receive interest, fees
referred to under subsection 2.13 or any compensation under such
subsections 2.18 and 2.19 in respect of periods prior to such
assignment.
(b) If the Borrower becomes obligated to pay any
additional amounts described in subsections 2.18 or 2.19 as a
result of any condition described in such subsections and payment
30
of such amounts is demanded by any Lender, such Lender shall
exercise reasonable efforts to assign its rights and delegate and
transfer its obligations hereunder to another of its offices,
branches or affiliates, if such assignment would reduce such
additional amounts required to be paid by the Borrower and would
not cause the imposition on such Lender of additional costs or
expenses (unless such expenses are fully reimbursed by the
Borrower on an after-tax basis) or of other requirements or
conditions deemed by such Lender to be burdensome or to be
inconsistent with its corporate policies.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent, the Co-Agents and
the Lenders to enter into this Agreement and to make the Loans,
the Borrower hereby represents and warrants to the Administrative
Agent, the Co-Agents and each Lender that:
3.1 Financial Condition. (a) The consolidated
balance sheet of the Borrower and its consolidated Subsidiaries
as at December 31, 1992 and the related consolidated statements
of income and of cash flows for the fiscal year ended on such
date, reported on by KPMG Peat Marwick, copies of which have
heretofore been furnished to each Lender, present fairly the
consolidated financial condition of the Borrower and its
consolidated Subsidiaries as at such date, and the consolidated
results of their operations and their consolidated cash flows for
the fiscal year then ended. The unaudited consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at
September 30, 1993 and the related unaudited consolidated
statements of income and of cash flows for the nine-month period
ended on such date, certified by a Responsible Officer, copies of
which have heretofore been furnished to each Lender, present
fairly the consolidated financial condition of the Borrower and
its consolidated Subsidiaries as at such date, and the
consolidated results of their operations and their consolidated
cash flows for the nine-month period then ended (subject to
normal year-end audit adjustments). All such financial
statements, including the related schedules and notes thereto,
have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as approved by such
accountants or Responsible Officer, as the case may be, and as
disclosed therein). Since December 31, 1992 there has been no
development or event which has had or would reasonably be
expected to have a Material Adverse Effect.
(b) The consolidated Statutory Statement of CIC and
its affiliated fire and casualty insurers, as filed with the
appropriate Governmental Authority of the jurisdiction of CIC's
domicile, as of and for the fiscal year ended December 31, 1992,
and the Statutory Statements of each of the Reporting Insurance
Subsidiaries, as filed with the appropriate Governmental
Authority of the jurisdiction of such Reporting Insurance
31
Subsidiary's domicile, as of and for the fiscal year ended
December 31, 1992, copies of which have been heretofore delivered
to each Lender, have been prepared in accordance with SAP applied
on a consistent basis. The Statutory Statement of each of the
Reporting Insurance Subsidiaries, as filed with the appropriate
Governmental Authority of the jurisdiction of such Reporting
Insurance Subsidiary's domicile, as of and for the fiscal
quarters ended March 31, 1993, June 30, 1993 and September 30,
1993, copies of which have been heretofore delivered to each
Lender, have been prepared in accordance with SAP applied on a
consistent basis. Such Statutory Statements fairly present the
financial condition, results of operations, changes in surplus
and cash flow of CIC and its affiliated fire and casualty
insurers or such Reporting Insurance Subsidiaries, as the case
may be, as of and for the respective dates and periods indicated
therein in accordance with SAP applied on a consistent basis.
Since December 31, 1992 there has been no development or event
which has had or would reasonably be expected to have a Material
Adverse Effect.
3.2 Corporate Existence; Compliance with Law. (a) The
Borrower is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization; and (b)
each of the Borrower and its Subsidiaries (i) is duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its organization, (ii) has the corporate power
and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to
conduct the business in which it is currently engaged, (iii) is
duly qualified as a foreign corporation and in good standing
under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires
such qualification and (iv) is in compliance with all
Requirements of Law, except, in each of clauses (i) through (iv)
of this subsection 3.2 (b) , to the extent that the failure to
comply therewith would not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
3.3 Corporate Power: Authorization; Enforceable
Obligations. The Borrower has the corporate power and authority,
and the legal right, to make, deliver and perform the Loan
Documents to which it is a party and to borrow hereunder and has
taken all necessary corporate action to authorize the borrowings
on the terms and conditions of this Agreement and the Notes and
to authorize the execution, delivery and performance of the Loan
Documents to which it is a party. No consent or authorization
of, filing with, notice to or other act by or in respect of any
Governmental Authority or any other Person is required in
connection with the borrowings hereunder or with the execution,
delivery, performance, validity or enforceability of the Loan
Documents to which the Borrower is a party. This Agreement has
been, and each other Loan Document to which it is a party will
be, duly executed and delivered on behalf of the Borrower. This
Agreement constitutes, and each other Loan Document to which it
32
is a party when executed and delivered will constitute, a legal,
valid and binding obligation of the Borrower enforceable against
the Borrower in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by
proceedings in equity or at law).
3.4 No Legal Bar. The execution, delivery and
performance of the Loan Documents to which the Borrower is a
party, the borrowings hereunder and the use of the proceeds
thereof will not violate any Requirement of Law or Contractual
Obligation of the Borrower or of any of its Subsidiaries and will
not result in, or require, the creation or imposition of any Lien
on any of its or their respective properties or revenues pursuant
to any such Requirement of Law or Contractual Obligation which
would reasonably be expected to have a Material Adverse Effect.
3.5 No Material Litigation. No litigation,
investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the
Borrower, threatened by or against the Borrower or any of its
Subsidiaries or against any of its or their respective properties
or revenues (a) with respect to any of the Loan Documents or any
of the transactions contemplated hereby or thereby, or (b) which
would reasonably be expected to have a Material Adverse Effect.
3.6 No Default. Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its
Contractual Obligations in any respect which would reasonably be
expected to have a Material Adverse Effect. No Default or Event
of Default has occurred and is continuing.
3.7 Ownership of Property; Liens. Each of the
Borrower and its Subsidiaries has title to, or a leasehold
interest in, all its property, and none of such property is
subject to any Lien except as permitted by subsection 6.2 and
except for such deficiencies in title or leasehold interests or
for Liens which, in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.
3.8 Intellectual Property. The Borrower and each of
its Subsidiaries owns, or is licensed to use, all trademarks,
tradenames, copyrights, technology, know-how and processes
necessary for the conduct of its business as currently conducted
except for those the failure to own or license which would not
reasonably be expected to have a Material Adverse Effect (the
"Intellectual Property"). No claim has been asserted and is
pending by any Person challenging or questioning the use of any
such Intellectual Property or the validity or effectiveness of
any such Intellectual Property, nor does the Borrower know of any
valid basis for any such claim, except for such claims which
would not reasonably be expected to have a Material Adverse
33
Effect. The use of such Intellectual Property by the Borrower
and its Subsidiaries does not infringe on the rights of any
Person, except for such claims and infringements that, in the
aggregate, would not reasonably be expected to have a Material
Adverse Effect.
3.9 Taxes. Each of the Borrower and its Subsidiaries
has filed or caused to be filed all material tax returns which,
to the knowledge of the Borrower, are required to be filed and
has paid all taxes shown to be due and payable on said returns or
on any assessments made against it or any of its property and all
other taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority (other than any the amount
or validity of which are currently being contested in good faith
by appropriate proceedings and with respect to which reserves in
conformity with GAAP (and SAP, if applicable) have been provided
on the books of the Borrower or its Subsidiaries, as the case may
be); no material tax Lien has been filed, and, to the knowledge
of the Borrower, no material claim is being asserted, with
respect to any such tax, fee or other charge.
3.10 Federal Regulations. No part of the proceeds of
any Loans will be used for "purchasing" or "carrying" any "margin
stock" within the respective meanings of each of the quoted terms
under Regulation U of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect
or for any purpose which violates the provisions of the
Regulations of such Board of Governors. If requested by any
Lender or the Administrative Agent, the Borrower will furnish to
the Administrative Agent and each Lender a statement to the
foregoing effect in conformity with the requirements of FR Form
U-1 referred to in Regulation U.
3.11 ERISA. Neither a Reportable Event nor an
"accumulated funding deficiency" (within the meaning of
Section 412 of the Code or Section 302 of ERISA) has occurred
during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan,
and each Plan has complied in all material respects with the
applicable provisions of ERISA and the Code. No termination of a
Single Employer Plan has occurred, and no Lien in favor of the
PBGC or a Plan has arisen, during such five-year period. The
present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did
not, as of the last annual valuation date prior to the date on
which this representation is made or deemed made, exceed the
value of the assets of such Plan allocable to such accrued
benefits. Neither the Borrower nor any Commonly Controlled
Entity has had a complete or partial withdrawal from any
Multiemployer Plan, and neither the Borrower nor any Commonly
Controlled Entity would become subject to any liability under
ERISA if the Borrower or any such Commonly Controlled Entity were
to withdraw completely from all Multiemployer Plans as of the
valuation date most closely preceding the date on which this
34
representation is made or deemed made. No such Multiemployer
Plan is in Reorganization or Insolvent.
3.12 Investment Company Act; Other Regulations. The
Borrower 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, or a "holding
company" as defined in, or otherwise subject to regulation under,
the Public Utility Holding Company Act of 1935, as amended.
3.13 Subsidiaries. The Persons listed on Schedule
3.13 constitute all the Subsidiaries of the Borrower at the date
hereof.
3.14 Purpose of Loans. The proceeds of the Loans
shall be used by the Borrower for general corporate purposes.
3.15 Accuracy and Completeness of Information. All
information, reports and other papers and data (including,
without limitation, copies of all filings made with any
Governmental Authority) with respect to the Borrower or any of
its Subsidiaries furnished to the Lenders by the Borrower, or on
behalf of the Borrower, were, at the time the same were so
furnished, correct as to the subject matter covered therein in
all material respects, or have been subsequently supplemented by
other information, reports or other papers or data. No fact is
known to the Borrower which has or in the future may (so far as
the Borrower can reasonably foresee) reasonably be expected to
have a Material Adverse Effect. No statement made in writing to
the Lenders by the Borrower and, to the best of the Borrower's
knowledge, no document furnished by the Borrower to the
Administrative Agent, any Co-Agent or the Lenders in connection
with the negotiation, preparation or execution of or pursuant to
this Agreement contains any untrue statement of a material fact
or omits to state any material fact necessary in order to make
the statements contained therein not materially misleading in
light of the circumstances under which, and as of the date, such
statements were made, in either case which has not been
corrected, supplemented or remedied by subsequent documents or
statements made to the Lenders in writing.
3.16 Regulatory Intervention. No Governmental
Authority having jurisdiction over the business of any Insurance
Subsidiary domiciled in the United States or Canada has taken any
action or commenced any proceeding to exercise control over the
business or operations of such Insurance Subsidiary, or to cause
such Insurance Subsidiary to take any action which would
reasonably be expected to have a Material Adverse Effect, and to
the best knowledge of the Borrower no such action or proceeding
has been threatened by any Governmental Authority.
35
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Closing Date. The Closing Date
shall occur on the date of satisfaction of the following
conditions precedent:
(a) Loan Documents. The Administrative Agent shall
have received (i) this Agreement, executed and delivered by
a duly authorized officer of the Borrower, with a
counterpart for each Lender, (ii) for the account of each
Lender, a Revolving Credit Note conforming to the
requirements hereof and executed by a duly authorized
officer of the Borrower, and (iii) for the account of each
Lender, a CAF Advance Note conforming to the requirements
hereof and executed by a duly authorized officer of the
Borrower.
(b) Schedule of Guarantee Obligations. The
Administrative Agent shall have received, with a copy for
each Lender, a schedule (i) listing all outstanding
Guarantee Obligations of the Borrower in respect of
Indebtedness and similar obligations of others in the amount
of $10,000,000 or more and (ii) disclosing, to the best of
the Borrower's knowledge, the aggregate amount of all such
Guarantee Obligations of the Borrower which individually are
in an amount of less than $10,000,000, which schedule shall
be in form and substance satisfactory to the Lenders.
(c) Borrowing Certificate. The Administrative Agent
shall have received with a counterpart for each Lender, a
certificate of the Borrower, dated the Closing Date,
substantially in the form of Exhibit F, with appropriate
insertions and attachments, satisfactory in form and
substance to the Administrative Agent, executed by the
President or any Vice President and the Secretary or any
Assistant Secretary of the Borrower.
(d) Corporate Proceedings of the Borrower. The
Administrative Agent shall have received, with a counterpart
for each Lender, a copy of the resolutions of the Board of
Directors of the Borrower authorizing the borrowings
contemplated hereunder, certified by the Secretary or an
Assistant Secretary of the Borrower as of the Closing Date,
which certificate shall be in form and substance
satisfactory to the Administrative Agent and shall state
that the resolutions thereby certified have not been
amended, modified, revoked or rescinded.
(e) Borrower Incumbency Certificate. The
Administrative Agent shall have received, with a counterpart
for each Lender, a certificate of the Borrower, dated the
Closing Date, as to the incumbency and signature of the
officers of the Borrower executing any Loan Document
satisfactory in form and substance to the Administrative
36
Agent, executed by the President or any Vice President and
the Secretary or any Assistant Secretary of the Borrower.
(f) Corporate Documents. The Administrative Agent
shall have received, with a counterpart for each Lender,
true and complete copies of the certificate of incorporation
and by-laws of the Borrower, certified as of the Closing
Date as complete and correct copies thereof by the Secretary
or an Assistant Secretary of the Borrower.
(g) Fees, Expenses. The Co-Agents shall have received
the fees and other consideration to be received on the
Closing Date as agreed in writing between the Borrower and
the Co-Agents, and the Borrower shall have paid all
reasonable out-of-pocket expenses (including, without
limitation, reasonable fees and disbursement charges of a
single legal counsel for all of the Administrative Agent,
the Co-Agents, and the Lenders) of the Administrative Agent,
the Co-Agents and the Lenders required to be paid by the
Borrower pursuant to the Loan Documents which shall have
been invoiced on or prior to the Closing Date.
(h) Legal Opinions. The Administrative Agent shall
have received, with a counterpart for each Lender, the
executed legal opinion of William F. Gleason, Jr., general
counsel of the Borrower, substantially in the form of
Exhibit G.
(i) Additional Matters. All corporate and other
proceedings, and all documents, instruments and other legal
matters in connection with the transactions contemplated by
this Agreement and the other Loan Documents shall be
satisfactory in form and substance to the Administrative
Agent, and the Administrative Agent shall have received such
other documents in respect of any aspect or consequence of
the transactions contemplated hereby or thereby as it shall
reasonably request.
4.2 Conditions to Each Loan. The agreement of each
Lender to make any Loan requested to be made by it on any date
(including, without limitation, its initial Loan) is subject to
the satisfaction of the following conditions precedent:
(a) Closing Date. The Closing Date shall have occurred.
(b) Representations and warranties. Each of the
representations and warranties made by the Borrower in or
pursuant to the Loan Documents shall be true and correct in
all material respects on and as of such date as if made on
and as of such date.
37
(c) No Default. No Default or Event of Default shall
have occurred and be continuing on such date or after giving
effect to the Loans requested to be made on such date.
Each borrowing by the Borrower hereunder shall constitute a
representation and warranty by the Borrower as of the date of
such Loan that the conditions contained in this subsection 4.2
have been satisfied.
SECTION 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the
Commitments remain in effect, any Note reins outstanding and
unpaid or any other amount is owing to any Lender, the
Administrative Agent or any Co-Agent hereunder, the Borrower
shall and (except in the case of delivery of financial
information, reports and notices) shall cause each of its
Subsidiaries to:
5.1 GAAP Financial Statements. Furnish to the
Administrative Agent, with a copy for each Lender:
(a) as soon as available, but in any event within
120 days after the end of each fiscal year of the Borrower,
a copy of the consolidated balance sheet of the Borrower and
its consolidated Subsidiaries as at the end of such year and
the related consolidated statements of income and retained
earnings and of cash flows for such year, setting forth in
each case in comparative form the figures as of the end of
and for the previous year, reported on by KPMG Peat Marwick
or other independent certified public accountants of
nationally recognized standing; and
(b) as soon as available, but in any event not later
than 60 days after the end of each of the first three
quarterly periods of each fiscal year of the Borrower, the
unaudited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such quarter and
the related unaudited consolidated statements of income and
retained earnings and of cash flows of the Borrower and its
consolidated Subsidiaries for such quarter and the portion
of the fiscal year through the end of such quarter, setting
forth in each case in comparative form the figures for the
corresponding date or period in the previous year, certified
by a Responsible Officer as being fairly stated in all
material respects (subject to normal year-end audit
adjustments);
all such financial statements to be prepared in reasonable detail
and in accordance with GAAP applied consistently throughout the
periods reflected therein and with prior periods (except as
approved by such accountants or officer, as the case may be, and
disclosed therein).
38
5.2 SAP Financial Statements. Furnish to the
Administrative Agent, with a copy for each Lender:
(a) as soon as possible, but in any event within 120
days after the end of each fiscal year of CIC and each other
Reporting Insurance Subsidiary, a copy of (i) the
consolidated Statutory Statement of CIC and its affiliated
fire and casualty insurers for such fiscal year, and (ii)
the Statutory Statement of each such Reporting Insurance
Subsidiary for such fiscal year, in each case subscribed and
sworn to and certified by officers of CIC or such other
Reporting Insurance Subsidiary as required by applicable
law; and
(b) as soon as possible, but in any event within 60
days after the end of each of the first three fiscal
quarters of each fiscal year of each Reporting Insurance
Subsidiary, a copy of the Statutory Statement of each such
Reporting Insurance Subsidiary for such fiscal quarter,
certified by a Responsible Officer of such Subsidiary as
required by applicable law;
all such financial statements to be prepared in accordance with
SAP applied consistently throughout the periods reflected therein
(except as approved by such officers or Responsible Officer, as
the case may be, and disclosed therein).
5.3 Certificates; Other Information. Furnish to the
Administrative Agent, with a copy for each Lender:
(a) concurrently with the delivery of the financial
statements referred to in subsection 5.1(a), a certificate
of the independent certified public accountants reporting on
such financial statements stating that in making the
examination necessary therefor no knowledge was obtained of
any Default or Event of Default, except as specified in such
certificate;
(b) concurrently with the delivery of the financial
statements referred to in subsections 5.1(a) and 5.1(b), a
certificate of a Responsible Officer stating that, to the
best of such Officer's knowledge, the Borrower during such
period has observed, performed or satisfied all covenants,
agreements and conditions contained in this Agreement and in
the Notes to be observed, performed or satisfied by it and
that such Officer has obtained no knowledge of any Default
or Event of Default except as specified in such certificate,
and showing in detail the calculations supporting such
statement in respect of subsection 6.1(a) and (b);
(c) within twenty days after the same are sent, copies
of all financial statements and reports which the Borrower
sends to its stockholders, and within twenty days after the
same are filed, copies of all financial statements and
39
reports which the Borrower or any Subsidiary may make to, or
file with, the Securities and Exchange Commission or any
successor or with any analogous Governmental Authority; and
(d) promptly, such additional financial and other
information as any Lender may from time to time reasonably
request.
5.4 Payment of Obligations. Pay, discharge or
otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all its obligations of whatever
nature, except (a) where the amount or validity thereof is
currently being contested in good faith by appropriate
proceedings or (b) where the failure to do so would not
reasonably be expected to have a Material Adverse Effect.
5.5 Conduct of Business and Maintenance of Existence.
Continue to engage primarily in the property and casualty
insurance business and related insurance or financial service
activities, and preserve, renew and keep in full force and effect
its corporate existence and take all reasonable action to
maintain all rights, privileges, licenses and franchises
necessary or desirable in the normal conduct of its business
except as otherwise permitted pursuant to subsection 6.3; comply
with all Contractual Obligations and Requirements of Law except
to the extent that failure to comply therewith would not, in the
aggregate, be reasonably expected to have a Material Adverse
Effect.
5.6 Maintenance Of Property Insurance. Keep all
property useful and necessary in its business in good working
order and condition except to the extent that the failure to do
so would not reasonably be expected to have a Material Adverse
Effect; and furnish to the Administrative Agent, with a copy for
each Lender, upon written request, insurance certificates as to
the insurance carried.
5.7 Inspection of Property; Books and Records;
Discussions. Keep proper books of records and account in which
true and correct entries in conformity with GAAP or SAP, as the
case may be, and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and
activities except to the extent that the failure to do so would
not reasonably be expected to have a Material Adverse Effect; and
permit representatives of any Lender, upon reasonable notice and
during normal business hours, to visit and inspect any of its
properties and examine any of its books and records and to
discuss the business, operations, properties and financial and
other condition of the Borrower and its Subsidiaries with
officers and employees of the Borrower and its Subsidiaries and
with its independent certified public accountants, all as may be
reasonably requested by such Lender, provided that the
Administrative Agent and each Lender agree to use reasonable
efforts to coordinate such visits and inspections to minimize the
40
inconvenience to or burden upon the Borrower, its Subsidiaries
and such accountants.
5.8 Notices. Promptly give notice to the
Administrative Agent and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any
Contractual Obligation of the Borrower or any of its
Subsidiaries or (ii) litigation, investigation or proceeding
which my exist at any time between the Borrower or any of
its Subsidiaries and any Governmental Authority including,
without limitation, the issuance of any order, the taking of
any action or any request for an extraordinary audit for
cause by any Governmental Authority, which in case of either
clause (i) or (ii) of this subsection 5.8(b), if not cured
or if adversely determined, as the case may be, would
reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the
Borrower or any of its Subsidiaries which would be
disclosable by the Borrower pursuant to Item 103 of
Regulation S-K promulgated under the Securities Exchange Act
of 1934, as amended; ,
(d) the following events, as soon as possible and in
any event within 30 days after the Borrower knows or has
reason to know thereof: (i) the occurrence or expected
occurrence of any Reportable Event with respect to any Plan,
a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC or a Plan or any
withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action
by the PBGC or the Borrower or any Commonly Controlled
Entity or any Multiemployer Plan with respect to the
withdrawal from, or the terminating, Reorganization or
Insolvency of, any Plan, in the case of either of clauses
(i) or (ii) to the extent that such event would reasonably
be expected to have a Material Adverse Effect; and
(e) any development or event which has had or would
reasonably be expected to have a Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a
statement of a Responsible Officer setting forth details of the
occurrence referred to therein and stating what action the
Borrower proposes to take with respect thereto.
41
SECTION 6. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the
Commitments remain in effect, any Note remains outstanding and
unpaid or any other amount is owing to any Lender, the
Administrative Agent or any Co-Agent hereunder, the Borrower
shall not, shall not permit CIC to, and (except with respect to
subsection 6.1) shall not permit any of its Subsidiaries (other
than CIC) to, directly or indirectly:
6.1 Financial Condition Covenants.
(a) Maintenance of Surplus. Permit Surplus at any
time to be less than $1,465,000,000.
(b) Debt to Capital Ratio. Permit the ratio
(expressed as a percentage) of (i) Consolidated Total
Indebtedness of the Borrower to (ii) the sum of Consolidated
Capital of the Borrower and Consolidated Total Indebtedness
of the Borrower, to exceed, at any time (A) prior to the
sale or other disposition of all of the Capital Stock of
AFCO or all or substantially all of the assets of AFCO by
the Borrower and its Subsidiaries, 52%, and (B) from and
after the sale or other disposition of all of the Capital
Stock of AFCO or all or substantially all of the assets of
AFCO by the Borrower and its Subsidiaries, 37%.
6.2 Limitation on Liens. Create, incur, assume or
suffer to exist any Lien upon any shares of Capital Stock of any
Subsidiary of the Borrower, whether now owned or hereafter
acquired, except for pledges of shares of Capital Stock of a
Subsidiary of the Borrower to a wholly-owned Subsidiary of the
Borrower (the "Pledgee") to secure Indebtedness owing from the
Borrower or another Subsidiary of the Borrower to the Pledgee.
6.3 Limitation on Fundamental Changes. Enter into any
merger, consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), or
convey, sell, lease, assign, transfer or otherwise dispose of all
or substantially all of its property, business or assets, except:
(a) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the
Borrower shall be the continuing or surviving corporation)
or with or into any one or more wholly owned Subsidiaries of
the Borrower (provided that the wholly owned Subsidiary or
Subsidiaries shall be the continuing or surviving
corporation);
(b) any wholly owned Subsidiary may sell, lease,
transfer or otherwise dispose of any or all of its assets
(upon voluntary liquidation or otherwise) to the Borrower or
any other wholly owned Subsidiary of the Borrower; and
42
(c) the Borrower may merge with any other Person so
long as (i) the Borrower is the surviving corporation of
such merger and (ii) immediately after giving effect to such
merger, no Default or Event of Default shall have occurred
and be continuing; and
(d) as may be permitted pursuant to subsection 6.4.
6.4 Limitation on Sale of Assets. Convey, sell.
lease, assign, transfer or otherwise dispose of any of its
property, business or assets (including, without limitation,
receivables and leasehold interests), whether now owned or
hereafter acquired, or, in the case of any Subsidiary, issue or
sell any shares of such Subsidiary's Capital Stock to any Person
other than the Borrower or any wholly owned Subsidiary, except:
(a) the sale or other disposition of all of the
Capital Stock of, or all or substantially all of the assets
of, AFCO and Insurnet, Incorporated, and other discontinued
operations publicly disclosed prior to the date hereof;
(b) sales or dispositions Permitted pursuant to
subsection 6.3;
(c) the sale or other disposition of any property
provided that either (i) the aggregate book value of all
assets so sold or disposed of shall not constitute more than
10% in book value of the consolidated total assets of the
Borrower and its Subsidiaries as at December 31, 1992 or, if
later, the end of the most recent fiscal year of the
Borrower for which financial statements have been (or we
required to be) delivered pursuant to subsection 5.1(a), or
(ii) such assets so sold or disposed of shall not have
contributed, in the aggregate, 10% or more of the average
consolidated income from continuing operations of the
Borrower and its Subsidiaries for the fiscal years ended
December 31, 1988, 1989, 1990, 1991 and 1992; and
(d) sales or other dispositions of premium
receivables, statutory overdues, agent and circle agent
loans, leasebacks or similar transactions.
Notwithstanding the foregoing, the Provisions of this subsection
6.4 shall not prevent the Borrower and its Subsidiaries from
engaging in transactions in the ordinary course of business or
for the Purpose of managing their investment portfolios,
including the sale of assets in such investment portfolios, the
retaining of the proceeds of such sales in cash or the
reinvestment of such proceeds in other assets to be held in such
investment portfolios.
43
SECTION 7. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of
any Note when due in accordance with the terms thereof or
hereof; or the Borrower shall fail to pay any interest on
any Note, or any other amount payable hereunder, within five
Business Days after any such interest or other amount
becomes due in accordance with the terms thereof or hereof;
or
(b) Any representation or warranty made or deemed made
by the Borrower herein or which is contained in any
certificate, document or financial or other statement
furnished by it at any time under or in connection with this
Agreement shall prove to have been incorrect in any material
respect on or as of the date made or deemed made or
furnished; or
(c) The Borrower shall default in the observance or
performance of any agreement contained in Section 6 and such
default shall not have been waived in accordance with
subsection 9.1; or
(d) The Borrower shall default in the observance or
performance of any other agreement contained in this
Agreement (other than as provided in paragraphs (a) through
(c) of this Section), and such default shall continue
unremedied for a period of 30 days; or
(e) The Borrower or any of its Subsidiaries shall
(i) default in any payment of principal of or interest on
any Indebtedness (other than the Notes) or in the payment of
any Guarantee Obligation, beyond the period of grace, if
any, provided in the instrument or agreement under which
such Indebtedness or Guarantee Obligation was created, if
the amount of such Indebtedness or Guarantee Obligation,
together with all other such defaulted Indebtedness and
Guarantee Obligations, is at least $25,000,000 in the
aggregate; or (ii) default in the observance or performance
of any other agreement or condition relating to any such
Indebtedness or Guarantee Obligation or contained in any
instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist,
if (A) the effect of such default or other event or
condition is to cause, or to permit the holder or holders of
such Indebtedness or beneficiary or beneficiaries of such
Guarantee Obligation (or a trustee or agent on behalf of
such holder or holders or beneficiary or beneficiaries) to
cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or
such Guarantee Obligation to become payable, and (B) the
44
amount of such Indebtedness or Guarantee Obligation,
together with all other such defaulted Indebtedness and
Guarantee Obligations, is at least $25,000,000 in the
aggregate; or
(f) (i) The Borrower or any of its Significant
Subsidiaries shall commence any case, proceeding or other
action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to
have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with
respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar
official for it or for all or any substantial part of its
assets, or the Borrower or any of its Significant
Subsidiaries shall make a general assignment for the benefit
of its creditors; or (ii) there shall be commenced against
the Borrower or any of its Significant Subsidiaries any
case, Proceeding or other action of a nature referred to in
clause (i) above which (A) results in the entry of an order
for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period
of 60 days; or (iii) there shall be commenced against the
Borrower or any of its Significant Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against
all or any substantial part of its assets which results in
the entry of an order for any such relief which shall not
have been vacated, discharged, or stayed or bonded pending
appeal within 60 days from the entry thereof; or (iv) the
Borrower or any of its Significant Subsidiaries shall take
any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth
in clause (i), (ii), or (iii) above; or (v) the Borrower or
any of its Significant Subsidiaries shall generally not, or
shall be unable to, or shall admit in writing its inability
to, pay its debts as they become due, provided that none of
the events set forth in clauses (i) through (v) of this
Section 7(f) shall constitute an Event of Default so long as
the Significant Subsidiaries affected did not contribute in
the aggregate more than 2% in Surplus as of December 31,
1992; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or
Section 4975" of the Code) involving any Plan, (ii) any
"accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect
to any Plan or any Lien in favor of the PBGC or a Plan shall
arise on the assets of the Borrower or any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with
45
respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or
to terminate, any Single Employer Plan, which Reportable
Event or commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Required
Lenders, likely to result in the termination of such Plan
for purposes of Title IV of ERISA, (iv) any Single Employer
Plan shall terminate for purposes of Title IV of ERISA,
(v) the Borrower or any Commonly Controlled Entity shall, or
in the reasonable opinion of the Required Lenders is likely
to, incur any liability in connection with a withdrawal
from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other event or condition
shall occur or exist with respect to a Plan; and in each
case in clauses (i) through (vi) above, such event or
condition, together with all other such events or
conditions, if any, could reasonably be expected to have a
Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered
against the Borrower or any of its Subsidiaries involving in
the aggregate a liability (not paid or fully covered by
insurance or reinsurance) of $25,000,000 or more, and all
such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 60 days
from the entry thereof; or
(i) Any of the Loan Documents shall cease, for any
reason, to be in full force and effect, or the Borrower
shall so assert; or
(j) (i) Any Person or "group" (within the meaning of
Section 13(d) or 14(d) of the Securities Exchange Act of
1934, as amended) (A) shall have acquired beneficial
ownership of 20% or more of any outstanding class of Capital
Stock having ordinary voting power in the election of
directors of the Borrower or (B) shall obtain the power
(whether or not exercised) to elect a majority of the
Borrower's directors, and in the case of any such condition
described in subclauses (A) or (B) of this Section 7(j)(i),
such condition shall have continued for a period of ten
Business Days and no other Default or Event of Default shall
have occurred and be continuing during such period, or (ii)
the Board of Directors of the Borrower shall not consist of
a majority of Continuing Directors; as used in this
paragraph "Continuing Directors" shall mean the directors of
the Borrower on the Closing Date and each other director, if
such other director's nomination for election to the Board
of Directors of the Borrower is recommended by a majority of
the then Continuing Directors;
then, and in any such event, (A) if such event is an Event of
Default specified in clause (i) or (ii) of paragraph (f) above
with respect to the Borrower, automatically the Commitments shall
46
immediately terminate and the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this
Agreement and the Notes shall immediately become due and payable,
and (B) if such event is any other Event of Default, either or
both of the following actions may be taken: (i) with the consent
of the Required Lenders, the Administrative Agent may, or upon
the request of the Required Lenders, the Administrative Agent
shall, by notice to the Borrower declare the Commitments to be
terminated forthwith, whereupon the Commitments shall immediately
terminate; and (ii) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required
Lenders, the Administrative Agent shall, by notice to the
Borrower, declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement and the
Notes to be due and payable forthwith, whereupon the same shall
immediately become due and payable. Except as expressly provided
above in this Section, presentment, demand, protest and all other
notices of any kind are hereby expressly waived.
SECTION 8. THE ADMINISTRATIVE AGENT
8.1 Appointment. Each Lender hereby irrevocably
designates and appoints Chemical as the Administrative Agent of
such Lender under this Agreement and the other Loan Documents,
and each such Lender irrevocably authorizes Chemical, as the
Administrative Agent for such Lender, to take such action on its
behalf under the provisions of this Agreement and the other Loan
Documents and to exercise such powers and perform such duties as
are expressly delegated to the Administrative Agent by the terms
of this Agreement and the other Loan Documents, together with
such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.
8.2 Delegation Of Duties. The Administrative Agent
may execute any of its duties under this Agreement and the other
Loan Documents by or through agents or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters
pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or
attorneys in-fact selected by it with reasonable care.
8.3 Exculpatory Provisions. Neither the
Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or any
other Loan Document (except for its or such Person's own gross
47
negligence or willful misconduct) or (ii) responsible in any
manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrower or any officer
thereof contained in this Agreement or any other Loan Document or
in any certificate, report, statement or other document referred
to or provided for in, or received by the Administrative Agent
under or in connection with, this Agreement or any other Loan
Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or the Notes or
any other Loan Document or for any failure of the Borrower to
perform its obligations hereunder or thereunder. The
Administrative Agent shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of the Borrower.
8.4 Reliance by Administrative Agent. The
Administrative Agent shall be entitled to rely and shall be
fully protected in relying, upon any Note, writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex
or teletype message, statement, order or other document or
conversation reasonably believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower),
independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and
treat the payee of any Note as the owner thereof for all purposes
unless a written notice of assignment, negotiation or transfer
thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other
Loan Document unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate or it
shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action.
The Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and
the Notes and the other Loan Documents in accordance with a
request of the Required Lenders, and such request and any action
taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Notes.
8.5 Notice of Default. The Administrative Agent shall
not be deemed to have knowledge or notice of the occurrence of
any Default or Event of Default unless the Administrative Agent
has received notice from a Lender or the Borrower referring to
this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event
that the Administrative Agent receives such a notice, the
Administrative Agent shall give notice thereof to the Lenders.
The Administrative Agent shall take such action with respect to
48
such Default or Event of Default as shall be reasonably directed
by the Required 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 or Event of Default as it shall deem advisable in
the best interests of the Lenders.
8.6 Non-Reliance on Administrative Agent and Other
Lenders. Each Lender expressly acknowledges that neither the
Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the
Administrative Agent hereafter taken, including any review of the
affairs of the Borrower, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any
Lender. Each Lender represents to the Administrative Agent that
it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such
documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations,
property, financial and other condition and credit worthiness of
the Borrower and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also
represents 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 credit analysis, appraisals and
decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigation as it
deems necessary to inform itself as to the business, operations,
property, financial and other condition and credit worthiness of
the Borrower. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, or provided to the Administrative
Agent for the account of, or with sufficient copies for each
Lender hereunder, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or
other information concerning the business, operations, property,
condition (financial or otherwise), prospects or credit worthiness
of the Borrower which may come into the possession of the
Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
8.7 Indemnification. The Lenders agree to indemnify
the Administrative Agent in its capacity as such (to the extent
not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to their
respective Commitment Percentages in effect on the date on which
indemnification is sought under this subsection (or, if
indemnification is sought after the date upon which the
Commitments shall have terminated and the Loans shall have been
paid in full, ratably in accordance with their Commitment
Percentages immediately prior to such date), from and against any
49
and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of
any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Notes) be
imposed on, incurred by or asserted against the Administrative
Agent in any way relating to or arising out of this Agreement,
any of the other Loan Documents or any documents contemplated by
or referred to herein or therein or the transactions contemplated
hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the
foregoing; provided that no Lender shall be liable for the
payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from the Administrative Agent's
gross negligence or willful misconduct. The agreements in this
subsection shall survive the payment of the Notes and all other
amounts payable hereunder.
8.8 Administrative Agent in Its Individual Capacity.
The Administrative Agent and its Affiliates may make loans to,
accept deposits from and generally engage in any kind of business
with the Borrower as though the Administrative Agent were not the
Administrative Agent hereunder and under the other Loan
Documents. With respect to its Loans made or renewed by it and
any Note issued to it, the Administrative Agent shall have the
same rights and powers under this Agreement and the other Loan
Documents as any Lender and may exercise the same as though it
were not the Administrative Agent, and the terms "Lender" and
"Lenders" shall include the Administrative Agent in its
individual capacity.
8.9 Successor Administrative Agent. The
Administrative Agent may resign as Administrative Agent upon 10
days' notice to the Lenders. If the Administrative Agent shall
resign as Administrative Agent under this Agreement and the other
Loan Documents, then the Required Lenders shall appoint from
among the Lenders a successor agent for the Lenders, which
successor agent shall be approved by the Borrower, whereupon such
successor agent shall succeed to the rights, powers and duties of
the Administrative Agent, and the term "Administrative Agent"
shall mean such successor agent effective upon such appointment
and approval, and the former Administrative Agent's rights,
powers and duties as Administrative Agent shall be terminated,
without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this
Agreement or any holders of the Notes. After any retiring
Administrative Agent's resignation as Administrative Agent, the
provisions of this subsection shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Loan
Documents.
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SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. Neither this Agreement,
any Note or any other Loan Document, nor any terms hereof or
thereof may be amended, supplemented or modified except in
accordance with the provisions of this subsection. The Required
Lenders may, or, with the written consent of the Required
Lenders, the Administrative Agent may, from time to time, (a)
enter into with the Borrower written amendments, supplements or
modifications hereto and to the Notes and the other Loan
Documents for the purpose of adding any provisions to this
Agreement, the Notes or the other Loan Documents or changing in
any manner the rights of the Lenders or of the Borrower hereunder
or thereunder or (b) waive, on such terms and conditions as the
Required Lenders or the Administrative Agent, as the case may be,
may specify in such instrument, any of the requirements of this
Agreement, the Notes or the other Loan Documents or any Default
or Event of Default and its consequences; provided, however, that
no such waiver and no such amendment, supplement or modification
shall (i) reduce the amount or extend the scheduled date of
maturity of any Note or of any installment thereof, or reduce the
stated rate of any interest or fee payable hereunder or extend
the scheduled date of any payment thereof or increase the amount
or extend the expiration date of any Lender's Commitment, in each
case without the consent of each Lender affected thereby, or
(ii) amend, modify or waive any provision of this subsection or
reduce the percentage specified in the definition of Required
Lenders or Majority Lenders, or consent to the assignment or
transfer by the Borrower of any of its rights and obligations
under this Agreement and the other Loan Documents, in each case
without the written consent of all the Lenders, or (iii) amend,
modify or waive any provision of Section 8 without the written
consent of the then Administrative Agent. Any such waiver and
any such amendment, supplement: or modification shall apply
equally to each of the Lenders and shall be binding upon the
Borrower, the Lenders, the Administrative Agent, the Co-Agents
and all future holders of the Notes. In the case of any waiver,
the Borrower, the Lenders, the Co-Agents and the Administrative
Agent shall be restored to their former position and rights
hereunder and under the outstanding Notes and any other Loan
Documents, and any Default or Event of Default waived shall be
deemed to be cured and not continuing; but no such waiver shall
extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.
9.2 Notices. All notices, requests and demands to or
upon the respective parties hereto to be effective shall be in
writing (including by telecopy), and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made
when delivered by hand, or five days after being deposited in the
mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Borrower and
the Administrative Agent, and as set forth in Schedule I in the
case of the other parties hereto, or to such other address as may
51
be hereafter notified by the respective parties hereto and any
future holders of the Notes:
The Borrower: The Continental Corporation
180 Maiden Lane
New York, New York 10038
Attention: Treasurer
with a copy to: William F. Gleason, Jr.
Senior Vice President,
General Counsel &
Secretary
Telecopy: (212) 440-3323
The Administrative Chemical Bank
Agent: 270 Park Avenue
New York, New York 10017
Attention: M. Luisa Hunnewell
Telecopy: (212) 370-0429
provided that any notice, request or demand to or upon the
Administrative Agent or the Lenders pursuant to subsection 2.3,
2.4, 2.5, 2.7, 2.10, 2.11 or 2 16 shall not be effective until
received. '
9.3 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or
privilege hereunder or under the other Loan Documents shall
operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative
and not exclusive of any rights, remedies, powers and privileges
provided by law.
9.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan
Documents and in any document, certificate or statement delivered
pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery of this Agreement and
the Notes and the making of the Loans hereunder.
9.5 Payment of Expenses and Taxes. The Borrower
agrees (a) to pay or reimburse each of the Administrative Agent
and each Co-Agent for all its reasonable out-of-pocket costs and
expenses incurred in connection with the development, preparation
and execution of, and any amendment, supplement or modification
to, this Agreement, the Notes and the other Loan Documents and
any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions
contemplated hereby and thereby, including, without limitation,
the fees and disbursements of a single legal counsel for all of
52
the Administrative Agent. the Co-Agents and the Lenders, (b) to
pay or reimburse each Lender, the Administrative Agent and each
Co-Agent for all its costs and expenses incurred in connection
with the enforcement or preservation of any rights under this
Agreement, the Notes, the other Loan Documents and any such other
documents, including, without limitation, the fees and
disbursements of counsel to the Administrative Agent, to each Co-
Agent and to the several Lenders, and (c) to pay, and indemnify
and hold harmless each Lender, the Administrative Agent and each
Co-Agent from, any and all recording and filing fees and any and
all liabilities with respect to, or resulting from any delay in
paying, stamp, excise and other taxes, if any, which may be
payable or determined to be Payable in connection with the
execution and delivery of, or consummation or administration of
any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, the Notes, the other Loan
Documents and any such other documents, and (d) to pay, and
indemnify and hold harmless each Lender, the Administrative Agent
and each Co-Agent from and against, any and all other
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, reasonable costs, expenses or disbursements of
any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this
Agreement, the Notes, the other Loan Documents and any such other
documents, including, without limitation, any of the foregoing
relating to the violation of, noncompliance with or liability
under any Environmental Law applicable to the operations of the
Borrower, any of its Subsidiaries or any of their respective
properties (all the foregoing in this clause (d), collectively,
the "indemnified liabilities"), provided, that the Borrower shall
have no obligation hereunder to the Administrative Agent, any Co-
Agent or any Lender with respect to indemnified liabilities
arising from (i) the gross negligence or willful misconduct of
the Administrative Agent, such Co-Agent or such Lender or (ii)
legal proceedings commenced against the Administrative Agent, any
Co-Agent or such Lender by any security holder or creditor
thereof arising out of and based upon rights afforded any such
security holder or creditor solely in its capacity as such. The
agreements in this subsection shall survive repayment of the
Notes and all other amounts payable hereunder for a period of 18
months.
9.6 Successors and Assigns; Participations and
Assignments. (a) This Agreement shall be binding upon and inure
to the benefit of the Borrower, the Lenders, the Administrative
Agent, the Co-Agents, all future holders of the Notes and their
respective successors and assigns, except that the Borrower may
not assign or transfer any of its rights or obligations under
this Agreement without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its
commercial banking business and in accordance with applicable
law, at any time sell to one or more banks or other entities
53
("Participants") participating interests in any Loan owing to
such Lender, any Note held by such Lender, any Commitment of such
Lender or any other interest of such Lender hereunder and under
the other Loan Documents. In the event of any such sale by a
Lender of a participating interest to a participant, such
Lender's obligations under this Agreement to the other Parties to
this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the Performance thereof, such Lender shall
remain the holder of any such Note for all purposes under this
Agreement and the other Loan Documents, and the Borrower and the
Agent shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under
this Agreement and the other Loan Documents. The Borrower agrees
that if amounts outstanding under this Agreement and the Notes
are due or unpaid, or shall have been declared or shall have
become due and payable upon the occurrence of an Event of
Default, each Participant shall be deemed to have the right of
setoff in respect of its participating interest in amounts owing
under this Agreement and any Note to the same extent as if the
amount of its participating interest were owing directly to it as
a Lender under this Agreement or any Note, provided that, in
purchasing such participating interest, such Participant shall be
deemed to have agreed to share with the Lenders the proceeds
thereof as provided in subsection 9.7(a) as fully as if it were a
Lender hereunder. Each Participant shall be entitled to the
benefits, and subject to the obligations, of subsections 2.18,
2.19, 2.20 and 2.21 with respect to its participation in the
Commitments and the Loans outstanding from time to time as if it
were a Lender; provided that, in the case of subsection 2.19,
such Participant shall have complied with the requirements of
said subsection and provided, further that no Participant shall
be entitled to receive any greater amount Pursuant to any such
subsection than the transferor Lender would have been entitled to
receive in respect of the amount of the participation transferred
by such transferor Lender to such Participant had no such
transfer occurred. Each Lender agrees that the participation
agreement pursuant to which any Participant acquires its
participating interest (or any other document) may afford voting
rights to such Participant, or any right to instruct such Lender
with respect to voting hereunder, only with respect to reductions
or extensions of payments of principal, interest or facility fees
payable pursuant to the Loan Documents.
(c) Any Lender may, in the ordinary course of its
commercial banking business and in accordance with applicable
law, at any time and from time to time assign to any Lender or
any affiliate thereof or, with the prior written consent of the
Borrower and the Administrative Agent (which in each case shall
not be unreasonably withheld, it being understood that increased
costs imposed with respect to an Assignee will be deemed to be
reasonable cause for withholding consent), to an additional bank
or financial institutions (an "Assignee") all or any part of its
rights and obligations under this Agreement and the Notes
provided that, in the event of a sale by any Lender of less than
54
all of such rights and obligations, such Lender shall retain a
Commitment of not less than $5,000,000 after giving effect to
such sale, each of which assignments shall be in an amount not
less than $5,000,000 unless the assigning Lender is assigning
thereby all or the remaining portion of its rights and
obligations under the Loan Documents, pursuant to an Assignment
and Acceptance, substantially in the form of Exhibit H, executed
by such Assignee, such assigning Lender (and, in the case of an
Assignee that is not then a Lender or an affiliate thereof, by
the Borrower and the Administrative Agent) and delivered to the
Administrative Agent for its acceptance and recording in the
Register. Upon such execution, delivery, acceptance and
recording, from and after the effective date determined pursuant
to such Assignment and Acceptance, (x) the Assignee thereunder
shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a
Lender hereunder with a Commitment as set forth therein, and (y)
the assigning Lender thereunder shall, to the extent provided in
such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining Portion of an assigning
Lender's rights and obligations under this Agreement, such
assigning Lender shall cease to be a party hereto).
(d) The Administrative Agent shall maintain at its
address referred to in subsection 9.2 a copy of each Assignment
and Acceptance delivered to it and a register (the "Register")
for the recordation of the names and addresses of the Lenders and
the Commitment of, and Principal amount of the Loans owing to,
each Lender from time to time. The entries in the Register shall
be conclusive, in the absence of manifest error, and the
Borrower, the Administrative Agent and the Lenders may treat each
Person whose name is recorded in the Register as the owner of the
Loans recorded therein for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an Assignee (and, in the case
of an Assignee that is not then a Lender or an affiliate thereof,
by the Borrower and the Administrative Agent) together with
payment to the Agent of a registration and Processing fee of
$2,000, the Administrative Agent shall (i) promptly accept such
Assignment and Acceptance and (ii) on the effective date
determined pursuant thereto record the information contained
therein in the Register and give notice of such acceptance and
recordation to the Lenders and the Borrower. On or prior to such
effective date, the Borrower at its own expense, shall execute
and deliver to the Administrltive Agent (in exchange for the
Revolving Credit Note and if applicable, the CAF Advance Note of
the assigning lender) a new Revolving Credit Note and CAF Advance
Note, as the case may be, to the order of such Assignee in an
amount equal to the Commitment assumed by it pursuant to such
55
Assignment and Acceptance (or, in the case of a CAF Advance Note,
the aggregate Commitments) and, if the assigning Lender has
retained a Commitment hereunder, a new Revolving Credit Note to
the order of the assigning Lender in an amount equal to the
Commitment retained by it hereunder. Such new Notes shall be
dated the Closing Date and shall otherwise be in the form of the
Note replaced thereby.
(f) The Borrower authorizes each Lender to disclose to
any Participant or Assignee (each, a "Transferee") and any
prospective Transferee any and all financial information in such
Lender's possession concerning the Borrower and its Affiliates
which has been delivered to such Lender by or on behalf of the
Borrower pursuant to this Agreement or which has been delivered
to such Lender by or on behalf of the Borrower in connection with
such Lender's credit evaluation of the Borrower and its
Affiliates prior to becoming a party to this Agreement.
(g) Nothing herein shall prohibit any Lender from
pledging or assigning any Note to any Federal Reserve Bank in
accordance with applicable law.
9.7 Adjustments; Set-off. (a) (i) If any Lender
(a "benefitted Lender") shall, at any time prior to an acceleration
of the maturity of the Loans Pursuant to Section 7, receive any
Payment of all or part of its Revolving Credit Loans, or interest
thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or
Proceedings of the nature referred to in Section 7(f), or
otherwise), in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of
such other Lender's Revolving Credit Loans, or interest thereon,
such benefitted Lender shall purchase for cash from the other
Lenders a participating interest in such portion of each such
other Lender's Revolving Credit Loans, or shall provide such
other Lenders with the benefits of any such collateral, or the
proceeds thereof, as shall be necessary to cause such benefitted
Lender to share the excess payment or benefits of such collateral
or proceeds ratably with each of the Lenders; provided, however,
that if all or any portion of such excess payment or benefits is
thereafter recovered from such benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned.
to the extent of such recovery, but without interest. The
Borrower agrees that each Lender so purchasing a portion of
another Lender's Loans may exercise all rights of Payment
(including, without limitation, rights of set-off) with respect
to such portion as if such Lender were the direct holder of such
portion.
(ii) If any Lender (a "benefitted Lender") shall, at
any time on or following an acceleration of the maturity of the
Loans pursuant to Section 7, receive any Payment of all or part
of its Loans, or interest thereon, or receive any collateral in
respect thereof (whether voluntarily or involuntarily, by
56
set-off, pursuant to events or Proceedings of the nature referred
to in Section 7(f). or otherwise}, in a greater proportion than
any such payment to or collateral received by any other Lender.
if any, in respect of such other Lender's Loans, or interest
thereon, such benefitted Lender shall purchase for cash from the
other Lenders a participating interest in such portion of each
such other Lender's Loans, or shall Provide such other Lenders
with the benefits of any such collateral, or the proceeds
thereof, as shall be necessary to cause such benefitted Lender to
share the excess Payment or benefits of such collateral or
proceeds ratably with each of the Lenders; provided, however,
that if all or any Portion of such excess payment or benefits is
thereafter recovered from such benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest. The
Borrower agrees that each Lender so purchasing a portion of
another Lender's Loans may exercise all rights of payment
(including, without limitation, rights of set-off) with respect
to such portion as if such Lender were the direct holder of such
portion.
(b) In addition to any rights and remedies of the Lenders
Provided by law, each Lender shall have the right, without prior
notice to the Borrower, any such notice being expressly waived by
the Borrower to the extent permitted by, applicable law, upon any
amount becoming due and payable by the Borrower hereunder or
under the Notes (whether at the stated maturity, by acceleration
or otherwise) to set off and appropriate and apply against such
amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured,
at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower.
Each Lender agrees promptly to notify the Borrower and the
administrative Agent after any such set-off and application made
by such Lender, provided that the failure to give such notice
shall not affect the validity of such set-off and application.
9.8 Counterparts. This Agreement may be executed by
one or more of the Parties to this Agreement on any number of
separate counterparts (including by telecopy), and all of said
counterparts taken together shall be deemed to constitute one and
the same instrument. A set of the copies of this Agreement
signed by all the Parties shall be lodged with the Borrower and
the Administrative Agent.
9.9 Severability. Any Provision of this Agreement
which is Prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such Provision in any other jurisdiction.
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9.10 Integration. This Agreement, the other Loan Documents and the
writings referred to in subsection 2.13(b) represent the entire agreement of
the Borrower, the Administrative Agent, the Co-Agents and the Lenders with
respect to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent, any
Co-Agent or any Lender relative to the subject matter hereof or thereof not
expressly set forth or referred to herein or in the other Loan Documents and
the writings referred to in subsection 2.13(b).
9.11 GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE RIGHTS
-------------
AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK.
9.12 Submission To Jurisdiction; Waivers. Borrower hereby
-----------------------------------
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction
of the Courts of the State of New York, the courts of the United
States of America for the Southern District of New York, and appellate
courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have
to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court
and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower at its address set forth in subsection 9.2 or
at such other address of which the Administrative Agent shall have
been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or
proceeding referred to in this subsection any special, exemplary,
punitive or consequential damages.
58
9.13 Acknowledgements. The Borrower hereby acknowledges that:
----------------
(a) it has been advised by counsel in the negotiation, execution
and delivery of this Agreement and the Notes and the other Loan
Documents;
(b) neither the Administrative Agent, any Co-Agent nor any Lender
has any fiduciary relationship with or duty to the Borrower arising
out of or in connection with this Agreement or any of the other Loan
Documents, and the relationship between the Administrative Agent, the
Co-Agents and the Lenders, on the one hand, and the Borrower, on the
other hand, in connection herewith or therewith is solely that of
debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrower and the
Lenders.
9.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE
---------------------
AGENT, THE CO-AGENTS AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR THE NOTES OR THE NOTES OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
9.15 Confidentiality. Each Lender agrees to keep confidential any
---------------
information, including without limitation the Confidential Information
Memorandum dated November 1993, provided to it by or on behalf of the
--------
Borrower or any of its Subsidiaries pursuant to or in connection with this
Agreement and the transactions contemplated hereby; provided that nothing
--------
herein shall prevent any Lender from disclosing any such information (i) to
the Administrative Agent, any Co-Agent or any other Lender, (ii) to any
Transferee which agrees to comply with the provisions of this subsection,
(iii) to its employees, directors, agents, attorneys, accountants and other
professional advisors, (iv) upon the request or demand of any Governmental
Authority having jurisdiction over such Lender, provided, that such Lender
--------
shall resist disclosing such information to any such Governmental
Authority to the extent that (A) such Lender determines that such
Governmental Authority has no legal right to request or demand such
information and (B) such Lender determines, in its sole discretion, that
resisting such request or demand would not be contrary to such Lender's
policy and would not result in any legal, economic or regulatory
disadvantage to such Lender, (v) in response to any order of any court or
other Governmental Authority or as may otherwise be required pursuant to
any Requirement of Law, provided that, prior to making such response, to
--------
the extent possible and to the extent permitted by the terms of such order
or Requirement of Law, such Lender agrees to use best efforts (which shall
not however require such Lender to make any material expenditure of money)
to notify the Borrower of the
59
fact that such order or other Requirement of Law requires response within
the contemplation of this subsection 9.15 in sufficient time to allow the
Borrower to seek relief from such order or Requirement of Law, (vi) which
has been publicly disclosed other than in breach of this Agreement or (vii)
pursuant to the exercise of any remedy hereunder.
60
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly
authorized officers as of the day and year first above written.
THE CONTINENTAL CORPORATION
By: /s/ J. Heath Fitzsimmons
--------------------------------
Title: Senior Vice President and
CF0
CHEMICAL BANK,
as Administrative Agent,
as a Co-Agent and as a Lender
By: /s/ Thomas D. Prangley
--------------------------------
Title: Vice President
CITIBANK, N.A.,
as a Co-Agent and as a Lender
By: /s/ Ann Miles
--------------------------------
Title: Vice President
SHAWMUT BANK CONNECTICUT, N.A.
By: /s/ Thomas Heaton
--------------------------------
Title: Vice President
THE BANK OF NOVA SCOTIA
By: /s/ Stephen Lockhart
--------------------------------
Title: Vice President
61
FIRST INTERSTATE BANK OF CALIFORNIA
By: /s/-Marqot Anderson
--------------------------------
Title: Vice President
By: /s/ Garrett Bell
--------------------------------
Title: Vice President
MELLON BANK, N. A.
By: /s/ Timothy J. Somers
--------------------------------
Title: Vice President
THE BANK OF NEW YORK
By: /s/ Joyce Sharaf
--------------------------------
Title: Vice President
Commitments; SCHEDULE I
Lending Offices and Addresses ----------
A.Commitment Amounts and Percentages
Lender Commitment Commitment Percentage
--------------------------------------------------------------------------------
Chemical Bank $25,000,000.00 16.666666666666667%
--------------------------------------------------------------------------------
Citibank, N.A. $25,000,000.00 16.666666666666667%
--------------------------------------------------------------------------------
Shawmut Bank Connecticut, N.A. $25,000,000.00 16.666666666666667%
--------------------------------------------------------------------------------
The Bank of Nova Scotia $20,000,000.00 13.333333333333333%
--------------------------------------------------------------------------------
First Interstate Bank of California $20,000,000.00 13.333333333333333%
--------------------------------------------------------------------------------
Mellon Bank, N.A. $20,000,000.00 13.333333333333333%
--------------------------------------------------------------------------------
The Bank of New York $15,000,000.00 10.000000000000000%
--------------------------------------------------------------------------------
Total $150,000,000.00 100.000000000000000%
--------------------------------------------------------------------------------
B. Lending Office: Addresses for Notice
CHEMICAL BANK
-------------
Domestic Lending Office: Chemical Bank
270 Park Avenue
New York, New York 10017
Attention: M. Luisa Hunnewell
Telecopy: (212) 370-0429
Eurodollar Lending Office Chemical Bank
270 Park Avenue
New York, New York 10017
Attention: M. Luisa Hunnewell
Telecopy: (212) 370-0429
Address for Notices: Chemical Bank
270 Park Avenue
New York, New York 10017
Attention: M. Luisa Hunnewell
Telecopy: (212) 370-0429
CITIBANK, N.A
-------------
Domestic Lending Office: Citibank, N.A.
399 Park Avenue
New York, New York 10043
Attention: Ann Miles
Telecopy: (212) 935-4285
Eurodollar Lending Office: Citibank, N,A.
399 Park Avenue
New York, New York 10043
Attention: Ann Miles
Telecopy: (212) 935-4285
Address for Notices: Citibank, N.A.
399 Park Avenue
New York, New York 10043
Attention: Ann Miles
Telecopy: (212) 935-4285
SHAWMUT BANK CONNECTICUT, N.A.
-------------------------------
Domestic Lending Office:
Eurodollar Lending Office:
SCHEDULE II
SIGNIFICANT SUBSIDIARIES
------------------------
Boston Old Colony Insurance Company
The Buckeye.Union Insurance Company
Casualty Insurance Company
Commercial Insurance Company of Newark, New Jersey
Continental Lloyd's Insurance Company
The Continental Insurance Company of New Jersey
The Continental Insurance Company of Puerto Rico
The Fidelity and Casualty Company of New York
Firemen's Insurance Company of Newark, New Jersey
First Insurance Company of Hawaii Ltd.
The Glens Falls Insurance Company
Kansas City Fire and Marine Insurance Company
The Mayflower Insurance Company, Ltd.
National-Ben Franklin Insurance Company of Illinois
Niagara Fire Insurance Company
Pacific Insurance Company
The Continental Insurance Company of Canada
EXHIBIT A
---------
REVOLVING CREDIT NOTE
$____________
New York, New York
_______________ ____, 199__
FOR VALUE RECEIVED, the undersigned, THE CONTINENTAL CORPORATION, a New
York corporation (the "Borrower"), hereby unconditionally promises to pay
--------
to the order of__________________ (the "Lender") at the office of Chemical
------
Bank, located at 270 Park Avenue, New York, New York 10017, in lawful money
of the United States of America and in immediately available funds, on the
Termination Date the principal amount of (a) DOLLARS
($ ), or, if less, (b) the aggregate unpaid principal
amount of all Revolving Credit Loans made by the Lender to the Borrower pursuant
to subsection 2.1 of the Credit Agreement, as hereinafter defined. The Borrower
further agrees to pay interest in like money at such office on the unpaid
principal amount hereof from time to time outstanding at the rates and on the
dates specified in subsections 2.11 and 2.12 of such Credit Agreement.
The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which
shall be attached hereto and made a part hereof the date, Type and amount
of each Revolving Credit Loan made pursuant to the Credit Agreement and the
date and amount of each payment or prepayment of principal thereof, each
continuation thereof, each conversion of all or a portion thereof to
another Type and, in the case of Eurodollar Loans, the length of each
Interest Period with respect thereto. The failure to make any such
endorsement shall not affect the obligations of the Borrower in respect of
such Revolving Credit Loan.
This Note (a) is one of the Revolving Credit Notes referred to in the
Credit Agreement dated as of December 30, 1993 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among the
----------------
Borrower, the Lender, the other banks and financial institutions from time
to time parties thereto, Chemical Bank and Citibank, N.A., as co-agents and
Chemical Bank, as administrative agent, (b) is subject to the provisions of
the Credit Agreement and (c) is subject to optional and mandatory
prepayment in whole or in part as provided in the Credit Agreement.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared
to be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby
waive presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
THE CONTINENTAL CORPORATION
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
Address for Notices:
THE BANK OF NOVA SCOTIA
-----------------------
Domestic Lending Office The Bank of Nova Scotia
One Liberty Plaza, 26th Floor
New York, New York 10006
Attention: Alan Reiter,
Corporate Banking
Telecopy: (212) 225-5090/5091
Eurodollar Lending Office: The Bank of Nova Scotia
One Liberty Plaza, 26th Floor
New York, New York 10006
Attention: Alan Reiter,
Corporate Banking
Telecopy: (212) 225-5090/5091
Address for Notices: The Bank of Nova Scotia
One Liberty Plaza, 26th Roor
New York, New York 10006
Attention: Alan Reiter,
Corporate Banking
Telecopy: (212) 225-5090/5091
FIRST INTERSTATE BANK OF CALIFORNIA
-----------------------------------
Domestic Lending Office: First Interstate Bank of California
707 Wilshire Blvd., W16-14
Los Angeles, California 90017
Attention: Charles W.Reed
Telecopy: (213) 614-2569
Eurodollar Lending Office: First Interstate Bank of California
707 Wilshire Blvd., W16-14
Los Angeles, California 90017
Attention: Charles W.Reed
Telecopy: (213) 614-2569
Address for Notices: First Interstate Bank of California
707 Wilshire Blvd., W16-14
Los Angeles, California 90017
Attention: Charles W.Reed
Telecopy: (213) 614-2569
MELLON BANK N.A.
----------------
Domestic Lending Office: Mellon Bank, N.A.
One Mellon Center
Pittsburgh, Pennsylvania 15258-0001
Attention: Timothy J. Somers
Telecopy: (412) 234-8687
Eurodollar Lending Office: Mellon Bank, N.A.
One Mellon Center
Pittsburgh, Pennsylvania 15258-0001
Attention: Timothy J. Somers
Telecopy: (412) 234-8687
Address for Notices: Mellon Bank, N.A.
One Mellon Center
Pittsburgh, Pennsylvania 15258-0001
Attention: Timothy J. Somers
Telecopy: (412) 234-8687
THE BANK OF NEW YORK
--------------------
Domestic Lending Office: The Bank of New York
One Wall Street
New York, New York 10286
Attention:Joyce Sharaf
Telecopy: (212) 809-9520
Eurodollar Lending Office: The Bank of New York
One Wall Street
New York, New York 10286
Attention:Joyce Sharaf
Telecopy: (212) 809-9520
Address for Notices: The Bank of New York
One Wall Street
New York, New York 10286
Attention:Joyce Sharaf
Telecopy: (212) 809-9520
[FORM OF CAF ADVANCE NOTE] EXHIBIT B
PROMISSORY NOTE
---------------
$150,000,000
New York, New York
____________, 199__
FOR VALUE RECEIVED, the undersigned, THE CONTINENTAL CORPORATION,
a New York corporation (the "Borrower"), hereby unconditionally promises to
pay to the order of_________________ ______________________ (the "Lender")
at the office of Chemical Bank located at 270 Park Avenue, New York, New
York 10017, in lawful money of the United States of America and in
immediately available funds, the principal amount of (a) ONE HUNDRED FIFTY
MILLION DOLLARS ($150,000,000), or, if less, (b) the aggregate unpaid
principal amount of all CAF Advances made by the Lender to the Borrower
pursuant to subsection 2.6 of the Credit Agreement, as hereinafter defined.
The principal amount of each CAF Advance evidenced hereby shall be payable
on the maturity date therefor set forth on the schedule annexed hereto and
made a part hereof or on a continuation of such schedule which shall be
attached hereto and made a part hereof (the "Grid"). The Borrower further
agrees to pay interest in like money at such office on the unpaid principal
amount of each CAF Advance evidenced hereby, at the rate per annum set
forth in respect of such CAF Advance on the Grid, calculated on the basis
of a year of 360 days and actual days elapsed from the date of such CAF
Advance until the due date thereof (whether at the stated maturity, by
acceleration or otherwise) and thereafter at the rates determined in
accordance with subsection 2.8(c) of the Credit Agreement. Interest on each
CAF Advance evidenced hereby shall be payable on the date or dates set
forth in respect of such CAF Advance on the Grid. CAF Advances evidenced by
this Note may not be prepaid.
The holder of this Note is authorized to endorse on the Grid the
date, amount, interest rate, interest payment dates and maturity date in
respect of each CAF Advance made pursuant to subsection 2.6 of the Credit
Agreement and each payment of principal with respect thereto. The failure
to make any such endorsement shall not affect the obligations of the
Borrower in respect of such CAF Advance.
This Note is one of the CAF Advance Notes referred to in the
Credit Agreement dated as of December 30, 1993 (as amended, supplemented or
otherwise modified from time to time, the "Credit Aqreement"), among the
Borrower, the Lender, the other banks and financial institutions from time
to time parties thereto, Chemical Bank and Citibank, N.A., as co-agents and
Chemical Bank, as administrative agent, and is subject to the provisions of
the Credit Agreement.
Upon the occurrence of any one or more of the Events of Default,
all amounts then remaining unpaid on this Note shall become, or may be
declared to be, immediately due and payable, all as provided in the Credit
Agreement.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby
waive presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the
Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
THE CONTINENTAL CORPORATION
By:
-------------------------
Name:
-----------------------
Title:
----------------------
EXHIBIT C
---------
[FORM OF CAF ADVANCE CONFIRMATION]
_____________, 19__
Chemical Bank, as Administrative Agent
270 Park Avenue
New York, New York 10017
Reference is made to the Credit Agreement, dated as of December
30, 1993, among the undersigned, the Lenders named therein, Chemical Bank
and Citibank, N.A., as Co-Agents, and Chemical Bank, as Administrative
Agent (as the same may be amended, supplemented or otherwise modified from
time to time, the "Credit Agreement"). Terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the
Credit Agreement.
In accordance with subsection 2.7(d) of the Credit Agreement, the
undersigned accepts and confirms the offers by Lender(s) to make CAF
Advances to the undersigned on 19__ [CAF Advance Date] under
subsection [2.7 (b) ] [2.7 (c) ] in the (respective) amount(s) set
forth on the attached list of CAF Advances offered.
Very truly yours,
THE CONTINENTAL CORPORATION
By___________________________
Title:_______________________
[Company must attach CAF Advance offer list prepared by Administrative
Agent with accepted amount entered by the Borrower to right of each CAF
Advance offer].
EXHIBIT D
---------
[FORM OF CAF ADVANCE OFFER]
___________________, 199__
Chemical Bank, as Administrative Agent
270 Park Avenue
New York, New York 10017
Reference is made to the Credit Agreement, dated as of December
30, 1993, among the undersigned, the Lenders named therein, Chemical Bank
and Citibank, N.A., as Co-Agents, and Chemical Bank, as Administrative
Agent (as the same may be amended, supplemented or otherwise modified from
time to time, the "Credit Agreement"). Terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the
Credit Agreement.
In accordance with subsection 2.7(a) of the Credit Agreement, the
undersigned Lender offers to make CAF Advances thereunder in the following
amounts with the following maturity dates:
CAF Advance Date: Aggregate Maximum Amount:
____________, 199_ $__________
Maturity Date 1: Maximum Amount: $__________
____________, 199_ $________ offered at ________*
$________ offered at ________*
Maturity Date 2: Maximum Amount: $__________
____________, 199_ $________ offered at ________*
$________ offered at ________*
Maturity Date 3: Maximum Amount: $__________
____________, 199_ $________ offered at ________*
$________ offered at ________*
Very truly Yours,
[NAME OF BIDDING LENDER]
By ___________________________
Name _________________________
Title ________________________
Telephone No. ________________
Fax No. ______________________
___________________
* Insert the interest rate offered for the specified loan
amount. In the case of Eurodollar Rate CAF Advances, insert a margin
bid. In the case of Absolute Rate Advances, insert a fixed rate
bid.
EXHIBIT E
---------
[FORM OF CAF ADVANCE REQUEST]
_____________, 199__
Chemical Bank, as Administrative Agent
270 Park Avenue
New York, New York 10017
Reference is made to the Credit Agreement, dated as of December
30, 1993, among the undersigned, the Lenders named therein, Chemical Bank
and Citibank, N.A., as Co-Agents, and Chemical Bank, as Administrative
Agent (as the same may be amended, supplemented or otherwise modified from
time to time, the "Credit Agreement"). Terms defined in the Credit
----------------
Agreement and used herein shall have the meanings given to them in the
Credit Agreement.
This is a [Eurodollar Rate] [Absolute Rate] CAF Advance Request
pursuant to subsection 2.7 of the Credit Agreement requesting quotes for
the following CAF Advances:
Loan 1 Loan 2 Loan 3
----------------------------------------------------------------------------
Aggregate Principal $___________ $____________ $___________
Amount
----------------------------------------------------------------------------
CAF Advance Date
----------------------------------------------------------------------------
Interest Period1
----------------------------------------------------------------------------
Maturity Date2
----------------------------------------------------------------------------
Interest Payment Dates
----------------------------------------------------------------------------
Very truly yours,
THE CONTINENTAL CORPORATION
By: ______________________________
Title: ___________________________
____________________
1. Insert only in a Eurodollar Rate Bid Request.
2. In a Eurodollar Rate Bid Request, insert last day of
Interest Period.
EXHIBIT F
---------
FORM OF BORROWING CERTIFICATE
Pursuant to subsection 4.1 of the Credit Agreement dated as of December
30, 1993 among The Continental Corporation, a New York corporation (the
"Borrower"), the several banks and other financial institutions from time
--------
to time parties thereto, Chemical Bank, a New York banking corporation
("Chemical") and Citibank, N.A., a national banking association, as
--------
co-agents, and Chemical, as administrative agent (the "Credit Agreement";
----------------
terms defined therein being used herein as therein defined), the
undersigned ___________ of the Borrower hereby certifies as follows:
1. The representations and warranties of the Borrower (i)
set forth in the Credit Agreement or (ii) which are contained in
any other Loan Document to which the Borrower is a party, are
true and correct in all material respects on and as of the date
hereof with the same effect as if made on the date hereof;
2. No Default or Event of Default has occurred and is
continuing as of the date hereof;
3. ____________________ is and at all times since
____________ ___, _____, has been, the duly elected and qualified
[Assistant] Secretary of the Borrower and the signature set forth
on the signature line for such officer below is such officer's
true and genuine signature;
and the undersigned [Assistant] Secretary of the Borrower hereby
certifies as follows:
4. Attached hereto as Exhibit I is a true and complete copy
of resolutions duly adopted by the Board of Directors of the
Borrower on ____________ __, ____; such resolutions have not in
any way been amended, supplemented, modified, revoked or
rescinded and have been in full force and effect since their
adoption to and including the date hereof and are now in full
force and effect; and such resolutions are the only corporate
proceedings of the Borrower now in force relating to or affecting
the matters referred to therein; attached hereto as Exhibit II is
a true and complete copy of the By-Laws of the Borrower as in
effect at all times since ___________ __, ____ to and including
the date hereof; and attached hereto as Exhibit III is a true and
complete copy of the Certificate of Incorporation of the Borrower
as in effect at all times since ____________ to and including the
date hereof;
5. _______________ is now a duly elected and qualified
officer of the Borrower holding the office
indicated next to his name below, and he has held such office
with the Borrower at all times since ________ __, ___, to and
including the date hereof, and the signature appearing opposite
his name below is his true and genuine signature, and he is duly
authorized to execute and deliver on behalf of the Borrower the
Loan Documents to which the Borrower is a party and any
certificate or other document to be delivered by the Borrower
pursuant to the Loan Documents:
Name Office Signature
---- ------ ---------
------------ ------------ ------------
IN WITNESS WHEREOF, the undersigned have hereunto set
their names.
----------------------------- -----------------------------
Name: Name:
Title: Title: [Assistant] Secretary
Date:_______________, 199_
EXHIBIT G
FORM OF OPINION OF COUNSEL TO BORROWER
______________, 199_
Chemical Bank, as Administrative Agent
270 Park Avenue
New York, New York 10017
And each of the Lenders
parties to the Credit Agreement
referred to below
I am Senior Vice President, General Counsel and Secretary of The
Continental Corporation, a New York corporation (the "Borrower"), and have
acted as counsel to the Borrower in connection with (a) the Credit
Agreement, dated as of December 30, 1993 (the "Credit Agreement"), among
----------------
the Borrower, the lenders parties thereto (the "Lenders"), Chemical Bank and
Citibank, N.A., as co-agents, and Chemical Bank, as administrative agent
for the Lenders (in such capacity, the "Administrative Agent"), and (b) the
--------------------
Notes and the other Loan Documents referred to in the Credit Agreement.
The opinions expressed below are furnished to you pursuant to
subsection 4.1(i)(h) of the Credit Agreement. Unless otherwise defined
herein, terms defined in the Credit Agreement and used herein shall have
the meanings given to them in the Credit Agreement.
In arriving at the opinions expressed below,
(a) I have examined and relied on the originals, or copies certified
or otherwise identified to my satisfaction, of each of (1) the Credit
Agreement, (2) the Revolving Credit Notes dated the date hereof and (3)
the CAF Advance Notes dated the date hereof (the Credit Agreement, the
Revolving Credit Notes and the CAF Advance Notes being hereinafter
referred to collectively as the "Transaction Documents"); and
---------------------
(b) I have examined such corporate documents and records of the
Borrower and such other instruments and certificates of public officials,
officers and representatives of the Borrower and other Persons as I have
deemed reasonably necessary or appropriate for the purposes of this
opinion.
Chemical Bank, as
Administrative Agent -2- ___________ ___, 199__
In arriving at the opinions expressed below, I have made such
investigations of law, in each case as I have deemed reasonably appropriate
as a basis for such opinions.
In rendering the opinions expressed below, I have assumed, with your
permission, without independent investigation or inquiry, (a) the
authenticity of all documents submitted to me as originals, (b) the
genuineness of all signatures on all documents that I examined (other than
those of the Borrower and officers of the Borrower) and (c) the conformity
to authentic originals of documents submitted to me as certified, conformed
or photostatic copies.
When my opinions expressed below are stated "to the best of my
knowledge," I have made reasonable investigation of the subject matters of
such opinions and have no reason to believe that there exist any facts or
other information that would render such opinions incorrect.
Based upon and subject to the foregoing, I am of the opinion that:
1. The Borrower (a) is duly organized, validly existing and in good
standing under the laws of the State of New York, (b) has the corporate
power and authority and the legal right to own and operate its property, to
lease the property it operates as lessee and to conduct the business in
which it is currently engaged and (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where
its ownership, lease or operation of property or the conduct of its
business requires such qualification, except, in the case of clauses (b)
and (c) of this paragraph, to the extent that the failure to have such
power, authority and legal right or to be so qualified would not, in the
aggregate, be reasonably expected to have a Material
Adverse Effect.
2. The Borrower has the corporate power and authority, and the legal
right, to make, deliver and perform its obligations under the Credit
Agreement and each of the other Transaction Documents to which it is a
party and to borrow under the Credit Agreement. The Borrower has taken all
necessary corporate action to authorize the borrowings on the terms and
conditions of the Credit Agreement and the other Transaction Documents and
to authorize the execution, delivery and performance of the Credit
Agreement and the other Transaction Documents to which it is a party. No
consent or authorization of, approval by, notice to, filing with or other
act by or in respect of any Governmental Authority or any other Person is
required in connection with the borrowings under the Credit Agreement or
with the execution,
Chemical Bank, as
Administrative Agent -3- ___________ ___, 199__
delivery, Performance, validity or enforceability of the Credit Agreement and
the other Transaction Documents.
3. Each of the Credit Agreement and the other Transaction Documents to
which the Borrower is a party has been duly executed and delivered on
behalf of the Borrower and constitutes a legal, valid and binding
obligation of the Borrower, enforceable against the Borrower in accordance
with its terms.
4. The execution and delivery of the Credit Agreement and the other
Transaction Documents to which the Borrower is a party, the performance by
the Borrower of its obligations thereunder, the consummation of the
transactions contemplated thereby, the compliance by the Borrower with any
of the provisions thereof, the borrowings under the Credit Agreement and
the use of proceeds thereof, all as provided therein, (a) will not violate,
or constitute a default under, any Requirement of Law or, to the best of my
knowledge, any Contractual Obligations of the Borrower or of any of its
Subsidiaries and (b) will not result in, or require, the creation or
imposition of any Lien on any of its or their respective properties or
revenues which, in the case of clauses (a) and (b) of this paragraph, would
reasonably be expected to have a Material Adverse Effect.
5. To the best of my knowledge, no litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending
or threatened by or against the Borrower or any of its Subsidiaries or
against any of its or their respective properties or revenues (a) with
respect to the Credit Agreement or any of the other Transaction Documents,
or
(b) which could have a Material Adverse Effect. To the best of my
knowledge, no Governmental Authority having jurisdiction over the business
of any Insurance Subsidiary has taken any action or commenced any
proceeding to exercise control over the business or operations of such
Insurance Subsidiary, or to cause such Insurance Subsidiary to take any
action which would reasonably be expected to have a Material Adverse
Effect, and to the best of my knowledge no such action or proceeding has
been threatened by any Governmental Authority.
6. To the best of my knowledge, neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any Requirements of Law
or Contractual Obligations in any respect which would be reasonably
expected to have a Material Adverse Effect.
7. The Borrower is not (1) an "investment company," or a company
"controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended, or
Chemical Bank, as
Administrative Agent -4- ___________ ___, 199__
(2) a "holding company" as defined in, or otherwise subject to regulation
under, the Public Utility Holding Company Act of 1935.
My opinion set forth in paragraph 3 above is subject to the effects
of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good faith and
fair dealing.
I am a member of the bar of the State of New York and I express no
opinion as to the laws of any jurisdiction other than the Federal laws of
the United States of America.
Very truly yours,
William F. Gleason, Jr.
Senior Vice President, General
Counsel and Secretary
EXHIBIT H
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ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement, dated as of December 30,
1993, (as amended, supplemented or otherwise modified from time to time,
the "Credit Agreement"), among The Continental Corporation (the "Borrower"),
---------------- --------
the Lenders named therein, Chemical Bank and Citibank, N.A., as co-agents and
Chemical Bank, as administrative agent for the Lenders (in such capacity, the
"Administrative Agent"). Unless otherwise defined herein, terms defined in
--------------------
the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement. ______________________ (the "Assignor") and
--------
______________________ (the "Assignee") agree as follows:
--------
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably
purchases and assumes from the Assignor without recourse to the Assignor,
as of the Effective Date (as defined below), a % interest (the
"Assigned Interest") in and to the Assignor's rights and obligations
-----------------
under the Credit Agreement with respect to those credit facilities
contained in the Credit Agreement as are set forth on SCHEDULE 1
(individually, an "Assigned Facility"; collectively, the "Assigned
----------------- --------
Facilities"), in a principal amount for each Assigned Facility as set forth
----------
on SCHEDULE 1.
2. The Assignor (a) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or any
other Loan Document or any other document or instrument furnished pursuant
thereto or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement, any other Loan Document or
any other instrument or document furnished pursuant thereto, other than
that it has not created any adverse claim upon the interest being assigned
by it hereunder and that such interest is free and clear of any such
adverse claim; (b) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower, any
of its Subsidiaries or any other obligor or the performance or observance
by the Borrower, any of its Subsidiaries or any other obligor of any of
their respective obligations under the Credit Agreement or any other Loan
Document or any other instrument or document furnished pursuant thereto;
and (c) attaches the Revolving Credit Note and, if such Assignor is
assigning all of its interest in the Loans and the Loan Documents, the CAF
Advance Note, held by it
evidencing the Assigned Facilities and requests that the Administrative
Agent exchange such Note(s) for a new Revolving Credit Note and CAF Advance
Note payable to the Assignee and (if the Assignor has retained any interest
in any Assigned Facility) a new Revolving Credit Note payable to the
Assignor in the respective amounts which reflect the assignment being made
hereby (and after giving effect to any other assignments which have become
effective on the Effective Date).
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that
it has received a copy of the Credit Agreement, together with copies of the
financial statements referred to in subsection 3.1 thereof and such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Acceptance;
(c) agrees that it will, independently and without reliance upon the
Assignor, the Administrative Agent, the Co-Agents or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement, the other Loan Documents or any other
instrument or document furnished pursuant thereto; (d) appoints and
authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers and discretion under the Credit
Agreement, the other Loan Documents or any other instrument or document
furnished pursuant thereto as are delegated to the Administrative Agent by
the terms thereof, together with such powers as are incidental thereto; and
(e) agrees that it will be bound by the provisions of the Credit Agreement
and will perform in accordance with its terms all the obligations which by
the terms of the Credit Agreement are required to be performed by it as a
Lender including, if it is organized under the laws of a jurisdiction
outside the United States, its obligation pursuant to subsection 2.19 (b)
of the Credit Agreement.
4. The effective date of this Assignment and Acceptance shall be
________ ___, 19__ (the "Effective Date"). Following the execution of this
--------------
Assignment and Acceptance, it will be delivered to the Administrative Agent
for acceptance by it and recording by the Administrative Agent pursuant to
subsection 9.6 of the Credit Agreement, effective as of the Effective Date
(which shall not, unless otherwise agreed to by the Administrative Agent,
be earlier than five Business Days after the date of such acceptance and
recording by the Administrative Agent).
5. Upon such acceptance and recording, from and after the Effective
Date, the Administrative Agent shall make all payments in respect of the
Assigned Interest (including payments of principal, interest, fees and
other amounts) to the Assignee whether such amounts have accrued prior to
the Effective Date or accrue subsequent to the Effective Date. The Assignor
and the
3
Assignee shall make all appropriate adjustments in payments by the
Administrative Agent for periods prior to the Effective Date or with
respect to the making of this assignment directly between themselves.
6. From and after the Effective Date, (a) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and under the other Loan Documents and shall be bound by the
provisions thereof and (b) the Assignor shall, to the extent provided in
this Assignment and Acceptance, relinquish its rights and be released from
its obligations under the Credit Agreement.
7. This Assignment and Acceptance shall be governed by and construed
in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their
respective duly authorized officers on Schedule 1 hereto.
SCHEDULE 1
TO ASSIGNMENT AND ACCEPTANCE
RELATING TO THE CREDIT AGREEMENT, DATED AS OF DECEMBER 30, 1993,
AMONG
THE CONTINENTAL CORPORATION,
THE LENDERS NAMED THEREIN,
CHEMICAL BANK AND CITIBANK, N.A., AS CO-AGENTS
AND
CHEMICAL BANK, AS ADMINISTRATIVE AGENT FOR THE LENDERS (IN SUCH
CAPACITY, THE
"ADMINISTRATIVE AGENT" )
,
Name of Assignor:
Name of Assignee:
Effective Date of Assignment:
Credit Principal Commitment Percentage
Facility Assigned Amount Assigned Assigned1
----------------- ---------------- ---------------------
$______________ ___.____________%
[Name of Assignee] [Name of Assignor]
By___________________________________ By_____________________________
Name: Name:
Title: Title:
Accepted: Consented To:
CHEMICAL BANK, as THE CONTINENTAL CORPORATION
Administrative Agent
By_____________________________
By___________________________________ Name:
Name: Title:
Title:
___________________
1 Calculate the Commitment Percentage that is assigned to at least 15
decimal places and show as a percentage of the aggregate commitments
of all Lenders.