Exhibit 4.11
Execution Copy
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FIVE-YEAR CREDIT AGREEMENT
dated as of
November 5, 2001
among
ANTHEM INSURANCE COMPANIES, INC.
ANTHEM, INC.
The Lenders Party Hereto
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
BANK OF AMERICA, N.A.,
as Syndication Agent
FLEET NATIONAL BANK,
as Documentation Agent
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J.P. MORGAN SECURITIES INC.,
as Lead Arranger and Sole Bookrunner
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.01. Defined Terms ............................................... 1
SECTION 1.02. Classification of Loans and Borrowings ...................... 14
SECTION 1.03. Terms Generally ............................................. 15
SECTION 1.04. Accounting Terms; GAAP ...................................... 15
ARTICLE II
The Credits
SECTION 2.01. Commitments ................................................. 15
SECTION 2.02. Loans and Borrowings ........................................ 15
SECTION 2.03. Requests for Revolving Borrowings ........................... 16
SECTION 2.04. Competitive Bid Procedure ................................... 16
SECTION 2.05. Funding of Borrowings ....................................... 18
SECTION 2.06. Interest Elections .......................................... 19
SECTION 2.07. Termination and Reduction of Commitments .................... 20
SECTION 2.08. Repayment of Loans; Evidence of Debt ........................ 20
SECTION 2.09. Prepayment of Loans ......................................... 21
SECTION 2.10. Fees ........................................................ 21
SECTION 2.11. Interest .................................................... 22
SECTION 2.12. Alternate Rate of Interest .................................. 23
SECTION 2.13. Increased Costs ............................................. 23
SECTION 2.14. Break Funding Payments ...................................... 24
SECTION 2.15. Taxes ....................................................... 24
SECTION 2.16. Payments Generally; Pro Rata Treatment; Sharing of Set-offs . 25
SECTION 2.17. Mitigation Obligations; Replacement of Lenders .............. 26
ARTICLE III
Representations and Warranties
SECTION 3.01. Corporate Existence and Standing ............................ 27
SECTION 3.02. Authorization and Validity .................................. 27
SECTION 3.03. Compliance with Laws and Contracts .......................... 28
SECTION 3.04. Governmental Consents ....................................... 28
SECTION 3.05. Financial Statements ........................................ 28
SECTION 3.06. Material Adverse Change ..................................... 28
SECTION 3.07. Properties .................................................. 28
SECTION 3.08. Litigation and Environmental Matters ........................ 29
SECTION 3.09. Taxes ....................................................... 29
SECTION 3.10. Subsidiaries ................................................ 29
SECTION 3.11. ERISA ....................................................... 29
SECTION 3.12. Defaults .................................................... 30
SECTION 3.13. Federal Reserve Regulations ................................. 30
SECTION 3.14. Investment Company .......................................... 30
SECTION 3.15. Insurance Licenses .......................................... 30
SECTION 3.16. Material Agreements ........................................ 30
SECTION 3.17. Insurance .................................................. 30
SECTION 3.18. Subordination Provisions ................................... 30
SECTION 3.19. Disclosure ................................................. 30
ARTICLE IV
Conditions
SECTION 4.01. Effective Date ............................................. 31
SECTION 4.02. Borrowings by AI ........................................... 32
SECTION 4.03. Each Borrowing ............................................. 32
ARTICLE V
Covenants
SECTION 5.01. Financial Reporting ........................................ 33
SECTION 5.02. Use of Proceeds ............................................ 34
SECTION 5.03. Notice of Material Events .................................. 34
SECTION 5.04. Conduct of Business ........................................ 35
SECTION 5.05. Taxes ...................................................... 35
SECTION 5.06. Insurance .................................................. 35
SECTION 5.07. Compliance with Laws ....................................... 35
SECTION 5.08. Maintenance of Properties .................................. 35
SECTION 5.09. Inspection ................................................. 36
SECTION 5.10. Fundamental Changes ........................................ 36
SECTION 5.11. Investments and Purchases .................................. 37
SECTION 5.12. Liens ...................................................... 37
SECTION 5.13. Affiliates ................................................. 37
SECTION 5.14. Financial Covenants ........................................ 37
SECTION 5.15. Change in Corporate Structure; Fiscal Year ................. 37
SECTION 5.16. Inconsistent Agreements .................................... 37
SECTION 5.17. ERISA Compliance ........................................... 37
SECTION 5.18. Subsidiary Indebtedness .................................... 38
ARTICLE VI
Events of Default
ARTICLE VII
The Administrative Agent
ARTICLE VIII
Miscellaneous
SECTION 8.01. Notices .................................................... 42
SECTION 8.02. Waivers; Amendments ........................................ 43
SECTION 8.03. Expenses; Indemnity; Damage Waiver ......................... 43
SECTION 8.04. Successors and Assigns ..................................... 44
SECTION 8.05. Survival ................................................... 46
SECTION 8.06. Counterparts; Integration; Effectiveness ................... 47
SECTION 8.07. Severability ............................................... 47
SECTION 8.08. Right of Setoff ............................................ 47
SECTION 8.09. Governing Law; Jurisdiction; Consent to Service of Process . 47
SECTION 8.10. WAIVER OF JURY TRIAL ....................................... 48
SECTION 8.11. Headings ................................................... 48
SECTION 8.12. Confidentiality ............................................ 48
SECTION 8.13. Interest Rate Limitation ................................... 49
SECTION 8.14. Obligations Joint and Several ................................49
SCHEDULES:
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Schedule 2.01 -- Commitments
Schedule 3.08 -- Disclosed Matters
Schedule 3.10 -- Subsidiaries
Schedule 3.11 -- ERISA
Schedule 3.15 -- Licenses
Schedule 3.16 -- Restrictions on Dividends
EXHIBITS:
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Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Opinion of Baker & Daniels, Counsel for the Borrowers
Exhibit C -- Form of Opinion of David R. Frick, Esq., Executive Vice President
and Chief Legal and Administrative Officer of Anthem, Inc.
FIVE-YEAR CREDIT AGREEMENT dated as of November 5,
2001, among ANTHEM INSURANCE COMPANIES, INC.; ANTHEM, INC.;
the LENDERS party hereto; THE CHASE MANHATTAN BANK, as
Administrative Agent; BANK OF AMERICA, N.A., as Syndication
Agent; and FLEET NATIONAL BANK, as Documentation Agent.
The Borrowers (such term, and each other capitalized term used
and not otherwise defined herein having the meaning assigned to it in Article I)
have requested the Lenders to extend credit to enable them to borrow on a
revolving credit basis on and after the date hereof and at any time and from
time to time prior to the Maturity Date a principal amount not in excess of
$400,000,000 at any time outstanding. The Borrowers have also requested the
Lenders to establish procedures pursuant to which the Borrowers may invite the
Lenders to bid on an uncommitted basis on short-term borrowings by the Borrowers
maturing on or prior to the Maturity Date. The proceeds of borrowings hereunder
are to be used for general corporate purposes, including stock repurchases, the
payment of maturing commercial paper and the funding of working capital
requirements. Borrowings hereunder will be made by AICI and, following the
satisfaction of certain conditions set forth herein, by AICI and AI. The
Obligations will constitute joint and several obligations of AICI and AI.
The Lenders are willing to extend such credit to the Borrowers
on the terms and subject to the conditions herein set forth.
Accordingly, the parties hereto agree as follows:
ARTICLE I
Definitions
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SECTION 1.01. Defined Terms. As used in this Agreement, the
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following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers
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to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"Administrative Agent" means The Chase Manhattan Bank, in its
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capacity as administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative
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Questionnaire in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another
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Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"AICI" means Anthem Insurance Companies, Inc., an Indiana
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stock insurance company and a wholly owned subsidiary of AI.
"Alternate Base Rate" means, for any day, a rate per annum
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equal to the greatest of (a) the Prime Rate in effect on such day and (b) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in
the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"Annual Statement" of AICI or an Insurance Subsidiary means
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the annual statutory financial statements of AICI or such Insurance Subsidiary
required to be filed with the insurance commissioner (or similar authority) of
its jurisdiction of incorporation, which statement shall be in the form required
by AICI's or such Insurance Subsidiary's jurisdiction of incorporation or, if no
specific form is so required, in the form of financial statements permitted by
such insurance commissioner (or such similar authority) to be used for filing
annual statutory financial statements and shall contain the type of information
permitted by such insurance commissioner (or such similar authority) to be
disclosed therein, together with all exhibits or schedules filed therewith.
"AI" means Anthem, Inc., an Indiana corporation.
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"AI Insurance Approval" has the meaning assigned to such term
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in Section 4.02.
"Applicable Percentage" means, with respect to any Lender, the
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percentage of the total Commitments represented by such Lender's Commitment. If
the Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments.
"Applicable Rate" means, for any day, with respect to any
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Eurodollar Revolving Loan, or with respect to the facility fees payable
hereunder, as the case may be, the applicable rate per annum set forth below
under the caption "Eurodollar Spread" or "Facility Fee Rate", as the case may
be, based upon the ratings by Moody's and S&P, respectively, applicable on such
date to the Index Debt:
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Index Debt Ratings Eurodollar Spread Facility Fee Rate
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S&P/Moody's (in bps) (in bps)
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Category 1: * A+/A1 22.0 8.0
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Category 2: A/A2 29.0 8.5
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Category 3: A-/A3 40.0 10.0
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Category 4: BBB+/Baa1 50.0 12.5
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Category 5: BBB/Baa2 59.5 15.5
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Category 6: **BBB/Baa2 80.0 20.0
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* means more than or equal to
** means less than
For purposes of the foregoing, (i) if either Moody's or S&P
shall not have in effect a rating for the Index Debt (other than by reason of
the circumstances referred to in the last
sentence of this definition), then such rating agency shall be deemed to have
established a rating in Category 6; (ii) if the ratings established or deemed to
have been established by Moody's and S&P for the Index Debt shall fall within
different Categories, the Applicable Rate shall be based on the higher of the
two ratings unless one of the ratings is two or more Categories lower than the
other, in which case the Applicable Rate shall be determined by reference to the
Category next below that of the higher of the two ratings; and (iii) if the
ratings established or deemed to have been established by Moody's and S&P for
the Index Debt shall be changed (other than as a result of a change in the
rating system of Moody's or S&P), such change shall be effective as of the date
on which it is first announced by the applicable rating agency. Each change in
the Applicable Rate shall apply during the period commencing on the effective
date of such change and ending on the date immediately preceding the effective
date of the next such change. If the rating system of Moody's or S&P shall
change, or if either such rating agency shall cease to be in the business of
rating corporate debt obligations, the Borrowers and the Lenders shall negotiate
in good faith to amend this definition to reflect such changed rating system or
the unavailability of ratings from such rating agency and, pending the
effectiveness of any such amendment, the Applicable Rate shall be determined by
reference to the rating most recently in effect prior to such change or
cessation. At all times when the ratings of the Index Debt are private ratings,
the Borrowers will arrange for such ratings to be continually monitored and
updated by Moody's and S&P as if such ratings were published ratings.
"Approved Fund" means any Fund that is administered or managed
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by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate
of an entity that administers or manages a Lender.
"Assignment and Acceptance" means an assignment and acceptance
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entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 8.04), and accepted by the Administrative Agent,
in the form of Exhibit A or any other form approved by the Administrative Agent.
"Authorized Officer" of a Person means any of the president,
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chief financial officer or treasurer of such Person, acting singly.
"Availability Period" means with respect to each Borrower, the
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period from and including the Effective Date for such Borrower to but excluding
the earlier of the Maturity Date and the date of termination of the Commitments.
"Board" means the Board of Governors of the Federal Reserve
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System of the United States of America.
"Borrowers" means AICI and AI.
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"Borrowing" means (a) Revolving Loans of the same Type, made,
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converted or continued on the same date and, in the case of Eurodollar Loans, as
to which a single Interest Period is in effect, or (b) a Competitive Loan or
group of Competitive Loans of the same Type made on the same date and as to
which a single Interest Period is in effect.
"Borrowing Request" means a request by a Borrower for a
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Revolving Borrowing in accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or
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other day on which commercial banks in New York City are authorized or required
by law to remain closed; provided that, when used in connection with a
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Eurodollar Loan, the term "Business Day" shall also exclude any day on which
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banks are not open for dealings in dollar deposits in the London interbank
market.
"Capitalized Lease" of a Person means any lease of Property by
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such Person as lessee which would be capitalized on a balance sheet of such
Person prepared in accordance with GAAP.
"Capitalized Lease Obligations" of a Person means the amount
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of the obligations of such Person under Capitalized Leases which would be shown
as a liability on a balance sheet of such Person prepared in accordance with
GAAP.
"Change in Control" means (a) the acquisition of ownership,
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directly or indirectly, beneficially or of record, by any Person or group
(within the meaning of the Securities Exchange Act of 1934 and the rules of the
Securities and Exchange Commission thereunder as in effect on the date hereof),
of equity interests representing more than 25% of either the aggregate ordinary
voting power or the aggregate equity value represented by the issued and
outstanding equity interests in AI; (b) the occupation of a majority of the
seats (other than vacant seats) on the board of directors of AI by Persons who
were not (i) directors of AI on the date of this Agreement, (ii) nominated by
the board of directors of AI, or (iii) appointed by directors referred to in the
preceding clauses (i) and (ii); (c) the ownership by any Person other than AI or
a wholly owned subsidiary of AI of any equity interest in AICI; or (d) the
occurrence of a "Change of Control" (or other similar event or condition,
however denominated) under any other Indebtedness of either Borrower or any
Subsidiary for borrowed money.
"Change in Law" means (a) the adoption of any law, rule or
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regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender (or,
for purposes of Section 2.13(b), by any lending office of such Lender or by such
Lender's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"Class", when used in reference to any Loan or Borrowing,
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refers to whether such Loan, or the Loans comprising such Borrowing, are
Revolving Loans or Competitive Loans.
"Code" means the Internal Revenue Code of 1986, as amended
----
from time to time.
"Commitment" means, with respect to each Lender, the
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commitment of such Lender to make Revolving Loans hereunder, expressed as an
amount representing the maximum permitted amount of such Lender's Revolving
Credit Exposure hereunder, as such commitment may be (a) reduced from time to
time pursuant to Section 2.07 and (b) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to Section 8.04. The
initial amount of each Lender's Commitment is set forth on Schedule 2.01, or in
the Assignment and Acceptance pursuant to which such Lender shall have assumed
its Commitment, as applicable. The initial aggregate amount of the Lenders'
Commitments is $400,000,000.
"Competitive Bid" means an offer by a Lender to make a
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Competitive Loan in accordance with Section 2.04.
"Competitive Bid Rate" means, with respect to any Competitive
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Bid, the Margin or the Fixed Rate, as applicable, offered by the Lender making
such Competitive Bid.
"Competitive Bid Request" means a request by a Borrower for
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Competitive Bids in accordance with Section 2.04.
"Competitive Loan" means a Loan made pursuant to Section 2.04.
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"Condemnation" has the meaning set forth in Article VI.
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"Contingent Obligation" of a Person means any obligation
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arising under any agreement, undertaking or arrangement by which (a) such Person
assumes, guarantees, endorses, contingently agrees to purchase or provide funds
for the payment of, or otherwise becomes or is contingently liable upon, the
financial obligation or liability of any other Person, or (b) agrees to maintain
the net worth or working capital or other financial condition of any other
Person, or (c) otherwise assures any creditor of such other Person against loss,
including, without limitation, in each case, any comfort letter, operating
agreement or take-or-pay contract or application for a letter of credit, but
excluding in each case obligations incurred by either Borrower or any Insurance
Subsidiary under insurance policies or contracts entered into in the ordinary
course of business.
"Control" means the possession, directly or indirectly, of the
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power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
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"Controlled Group" means all members of a controlled group of
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corporations and all trades or businesses (whether or not incorporated) under
common control which, together with one or both of the Borrowers and/or one or
more of the Subsidiaries, are treated as a single employer under Section 414 of
the Code.
"Default" means any event or condition which constitutes an
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Event of Default or which upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.
"Demutualization" means the series of transactions described
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in the Plan of Conversion pursuant to which (a) AICI converted from a mutual
insurance company into a stock insurance company, (b) all membership interests
in AICI were extinguished, (c) AICI became a wholly-owned subsidiary of AI, (d)
AICI's eligible statutory members became entitled to receive shares of common
stock of AI or cash as consideration for the extinguishment of their membership
interests in AICI, (e) shares of AI common stock were sold to the public and AI
issued the equity security units described in the Registration Statement, and
(f) a portion of the net proceeds from the public offering of AI common stock
will be paid to eligible statutory members of AICI who receive cash instead of
shares of AI common stock.
"Disclosed Matters" means the actions, suits and proceedings
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and the environmental matters disclosed in Schedule 3.08.
"dollars" or "$" refers to lawful money of the United States
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of America.
"Effective Date" means (i) with respect to AICI, the date on
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which the conditions specified in Section 4.01 are satisfied (or waived in
accordance with Section 8.02) and (ii) with respect to AI, the date on which the
conditions specified in Sections 4.01 and 4.02 are satisfied (or, with respect
to the conditions specified in Section 4.01, waived in accordance with Section
8.02).
"Environmental Laws" means all laws, rules, regulations,
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codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or
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otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of either Borrower or any
Subsidiary directly or indirectly resulting from or based upon (a) violation of
any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure to any
Hazardous Materials, (d) the release or threatened release of any Hazardous
Materials into the environment or (e) any contract,
agreement or other consensual arrangement pursuant to which liability is assumed
or imposed with respect to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of
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1974, as amended from time to time.
"Eurodollar", when used in reference to any Loan or Borrowing,
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refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the LIBO Rate.
"Event of Default" has the meaning assigned to such term in
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Article VI.
"Excluded Taxes" means, with respect to the Administrative
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Agent, any Lender, or any other recipient of any payment to be made by or on
account of any obligation of the Borrowers hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction described in clause (a) above and (c) in the case of a
Foreign Lender (other than an assignee pursuant to a request by the Borrowers
under Section 2.17(b)), any withholding tax imposed by the United States of
America that (i) is in effect and would apply to amounts payable to such Foreign
Lender at the time such Foreign Lender becomes a party to this Agreement (or
designates a new lending office), except to the extent that such Foreign Lender
(or its assignor, if any) was entitled, at the time of designation of a new
lending office (or assignment), to receive additional amounts from the Borrowers
with respect to any withholding tax pursuant to Section 2.15(a), or (ii) is
attributable to such Foreign Lender's failure to comply with Section 2.15(e).
"Federal Funds Effective Rate" means, for any day, the
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weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by 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 that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"Financial Officer" of a Person means the chief financial
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officer, principal accounting officer, treasurer or controller of such Person.
"Financial Statements" has the meaning set forth in Section
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3.05.
"Fiscal Quarter" means one of the four three-month accounting
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periods comprising a Fiscal Year.
"Fiscal Year" means the twelve-month accounting period ending
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December 31 of each year.
"Fixed Rate" means, with respect to any Competitive Loan
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(other than a Eurodollar Competitive Loan), the fixed rate of interest per annum
specified by the Lender making such Competitive Loan in its related Competitive
Bid.
"Fixed Rate Loan" means a Competitive Loan bearing interest at
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a Fixed Rate.
"Foreign Lender" means any Lender that is organized under the
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laws of a jurisdiction other than that in which the Borrowers are located. For
purposes of this definition,
the United States of America, each State thereof and the District of Columbia
shall be deemed to constitute a single jurisdiction.
"Fund" means any Person (other than a natural Person) that is
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(or will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business.
"GAAP" means generally accepted accounting principles in the
----
United States of America.
"Governmental Authority" means any government (foreign or
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domestic) or any state or other political subdivision thereof or any
governmental body, agency, authority, department or commission (including any
board of insurance, insurance department or insurance commission and any taxing
authority or political subdivision) or any instrumentality or officer thereof
(including any court or tribunal) exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government and any
corporation, partnership or other entity directly or indirectly owned or
controlled by or subject to the control of any of the foregoing.
"Hazardous Materials" means all explosive or radioactive
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substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or asbestos
containing materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.
"Indebtedness" of a Person means such Person's (a) obligations
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for borrowed money, (b) obligations representing the deferred purchase price of
Property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (c)
obligations, whether or not assumed, secured by Liens or payable out of the
proceeds or production from Property now or hereafter owned or acquired by such
Person, (d) obligations which are evidenced by notes, acceptances, or similar
instruments, (e) Capitalized Lease Obligations, (f) Rate Hedging Obligations,
(g) Contingent Obligations, (h) obligations for which such Person is obligated
pursuant to or in respect of a letter of credit and (i) repurchase obligations
or liabilities of such Person with respect to accounts or notes receivable sold
by such Person.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
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"Index Debt" means (a) AICI's senior, unsecured indebtedness
----------
for borrowed money under bank credit facilities that is not guaranteed by any
other Person or subject to any other credit enhancement or (b) if neither
Moody's nor S&P shall have in effect a rating for indebtedness of the type
referred to in clause (a), any other senior, unsecured, long-term indebtedness
for borrowed money of AICI that is not guaranteed by any other Person or subject
to any other credit enhancement.
"Indiana Insurance Law" means the Indiana Insurance Law (Title
---------------------
27 of the Indiana Code), as the same may be amended or supplemented from time to
time.
"Insurance Subsidiary" means any Subsidiary which is engaged
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in the insurance business.
"Interest Election Request" means a request by a Borrower to
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convert or continue a Revolving Borrowing in accordance with Section 2.06.
"Interest Payment Date" means (a) with respect to any ABR
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Loan, the last day of each March, June, September and December, (b) with respect
to any Eurodollar Loan, the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part and, in the case of
a Eurodollar Borrowing with an Interest Period of more than three months'
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months' duration after the first day of such Interest Period
and (c) with respect to any Fixed Rate Loan, the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of a
Fixed Rate Borrowing with an Interest Period of more than 90 days' duration
(unless otherwise specified in the applicable Competitive Bid Request), each day
prior to the last day of such Interest Period that occurs at intervals of 90
days' duration after the first day of such Interest Period, and any other dates
that are specified in the applicable Competitive Bid Request as Interest Payment
Dates with respect to such Borrowing.
"Interest Period" means (a) with respect to any Eurodollar
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Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the applicable Borrower may elect, and (b) with
respect to any Fixed Rate Borrowing, the period (which shall not be less than 7
days or more than 360 days) commencing on the date of such Borrowing and ending
on the date specified in the applicable Competitive Bid Request; provided, that
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(i) if any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless, in
the case of a Eurodollar Borrowing only, such next succeeding Business Day would
fall in the next calendar month, in which case such Interest Period shall end on
the next preceding Business Day and (ii) any Interest Period pertaining to a
Eurodollar Borrowing that commences on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and,
in the case of a Revolving Borrowing, thereafter shall be the effective date of
the most recent conversion or continuation of such Borrowing.
"Investment" of a Person means any loan, advance (other than
----------
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in the
trade), deposit account or contribution of capital by such Person to any other
Person or any investment in, or purchase or other acquisition of, the stock,
partnership interests, notes, debentures or other securities of any other Person
made by such Person.
"Lenders" means the Persons listed on Schedule 2.01 and any
-------
other Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance.
"LIBO Rate" means, with respect to any Eurodollar Borrowing
---------
for any Interest Period, the rate appearing on Page 3750 of the Telerate Service
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
---------
Eurodollar Borrowing for such Interest Period shall be the rate (rounded
upwards, if necessary, to the next 1/16 of 1%) at which dollar deposits of
$5,000,000 and for a maturity comparable to such Interest Period are offered by
the principal London office of the Administrative Agent in immediately available
funds in the London interbank market at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period.
"License" means any license, certificate of authority, permit
-------
or other authorization which is required to be obtained from any Governmental
Authority in connection with the operation, ownership or transaction of
insurance business.
"Lien" means any security interest, lien (statutory or other),
----
mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance or
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including, without limitation, the interest of a
vendor or lessor under any conditional sale, Capitalized Lease or other title
retention agreement).
"Loans" means the loans made by the Lenders to either of the
-----
Borrowers under this Agreement.
"Margin" means, with respect to any Competitive Loan bearing
------
interest at a rate based on the LIBO Rate, the marginal rate of interest, if
any, to be added to or subtracted from the LIBO Rate to determine the rate of
interest applicable to such Loan, as specified by the Lender making such Loan in
its related Competitive Bid.
"Margin Stock" has the meaning assigned to such term under
------------
Regulation U of the Board.
"Material Adverse Effect" means a material adverse effect on
-----------------------
(a) the business, Property, condition (financial or otherwise) or operations of
the Parent and its subsidiaries, taken as a whole, (b) the ability of either
Borrower to perform any of the Obligations or (c) the rights of or remedies
available to the Lenders under this Agreement.
"Material Insurance Subsidiary" means any Insurance Subsidiary
-----------------------------
which, together with its subsidiaries, has a net worth in excess of 10% of the
consolidated Net Worth of AI and the Subsidiaries taken as a whole.
"Material Subsidiary" means, at any time, any Subsidiary which
-------------------
is a Borrower or which, together with its subsidiaries, has either assets or
revenues from operations that exceed 10% of the combined assets or combined
revenues from operations, respectively, of the Parent and its subsidiaries taken
as a whole.
"Maturity Date" means the fifth anniversary of the date of
-------------
this Agreement.
"Moody's" means Moody's Investors Service, Inc.
-------
"Multiemployer Plan" means a Plan maintained pursuant to a
------------------
collective bargaining agreement or any other arrangement to which either
Borrower or any member of the Controlled Group is a party to which more than one
employer is obligated to make contributions.
"NAIC" means the National Association of Insurance
----
Commissioners or any successor thereto, or in lieu thereof, any other
association, agency or other organization performing advisory, coordination or
other like functions among insurance departments, insurance commissioners and
similar Governmental Authorities of the various states of the United States
toward the promotion of uniformity in the practices of such Governmental
Authorities.
"Net Income" means, for any computation period, with respect
----------
to AI on a consolidated basis with the Subsidiaries, cumulative net income
earned during such period as determined in accordance with GAAP.
"Net Worth" means, (a) at any date prior to the completion of
---------
the Demutualization, the consolidated policyholders' surplus of AICI determined
in accordance with GAAP and (b) at any date after the completion of the
Demutualization, the consolidated shareholders' equity of AI determined in
accordance with GAAP. For the purposes of Section 5.14, the effect of any
unrealized gain or loss reported under Statement of Financial Accounting
Standards No. 115 shall be excluded from the computation of Net Worth.
"Obligations" means all the obligations of the Borrowers under
-----------
this Agreement and under any promissory notes delivered pursuant to Section
2.08(e).
"Other Taxes" means any and all present or future recording,
-----------
stamp, documentary, excise, transfer, sales, property or similar taxes, charges
or levies arising from any payment made hereunder or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement.
"Parent" means (a) prior to the completion of the
------
Demutualization, AICI and (b) from and after the completion of the
Demutualization, AI.
"PBGC" means the Pension Benefit Guaranty Corporation or any
----
successor thereto.
"Permitted Liens" means, as applied to the Borrowers and the
---------------
Subsidiaries:
(a) any Lien in favor of the Administrative Agent or the
Lenders given to secure the payment and performance of the Obligations;
(b) Liens securing Indebtedness in an aggregate amount not in
excess of $75,000,000 (for the Borrowers and the Subsidiaries taken as
a whole) at any one time outstanding; provided, however, that no more
-------- -------
than $35,000,000 of such Indebtedness shall be Indebtedness of AI;
(c) (i) Liens on real estate for real estate taxes not yet
delinquent and (ii) Liens for taxes, assessments, judgments,
governmental charges or levies, or claims the non-payment of which is
being diligently contested in good faith by appropriate proceedings and
for which adequate reserves have been set aside, but only so long as no
foreclosure, distraint, sale, or similar proceedings have been
commenced with respect thereto and remain unstayed for a period of more
than 30 days after their commencement;
(d) Liens of carriers, warehousemen, mechanics, laborers, and
materialmen incurred in the ordinary course of business for sums not
yet due or being diligently contested in good faith, if such reserve or
appropriate provision, if any, as shall be required by GAAP or SAP, as
applicable, shall have been made therefor;
(e) Liens incurred in the ordinary course of business in
connection with worker's compensation and unemployment insurance;
(f) restrictions on the transfer of assets imposed by any
applicable federal, state or local statute, regulation or ordinance;
(g) easements, rights-of-way, restrictions and other similar
encumbrances on the use of real property which do not interfere with
the ordinary conduct of the business of such Borrower or Subsidiary, or
Liens incidental to the conduct of the business of such Borrower or
Subsidiary or to the ownership of its properties which were not
incurred in connection with Indebtedness or other extensions of credit
and which do not in the aggregate materially detract from the value of
such properties or materially impair their use in the operation of the
business of such Borrower or Subsidiary;
(h) purchase money mortgages or security interests,
conditional sale arrangements and other similar security interests on
equipment and motor vehicles acquired by such Borrower or Subsidiary
(hereinafter referred to individually as a "Purchase Money Security
-----------------------
Interest"); provided, however, that:
-------- -------- -------
(i) the transaction in which any Purchase Money
Security Interest is proposed to be created is not otherwise
prohibited by this Agreement;
(ii) any Purchase Money Security Interest shall
attach only to the property or assets acquired in such
transaction and shall not extend to or cover any other assets
or properties of such Borrower or Subsidiary;
(iii) the Indebtedness secured or covered by any
Purchase Money Security Interest shall not exceed the lesser
of the cost or fair market value of the property or asset
acquired and shall not be renewed or extended by such Borrower
or Subsidiary; and
(iv) the aggregate outstanding amount of all
Indebtedness secured by Purchase Money Security Interests
shall not at any time exceed an amount equal to $20,000,000
(for the Borrowers and the Subsidiaries taken as a whole);
(i) judgment Liens arising in connection with court
proceedings which do not exceed $20,000,000 in the aggregate, provided
--------
that the execution or other enforcement of such Liens is effectively
stayed, the claims secured thereby are being diligently contested in
good faith by appropriate proceedings, and the Borrower or Subsidiary
in question has set aside adequate reserves with respect thereto in
accordance with GAAP or SAP, as applicable;
(j) Liens consisting of deposits made by a Borrower or any
Insurance Subsidiary with the insurance authority in its jurisdiction
of domicile or other statutory Liens or Liens or claims imposed or
required by applicable insurance law or regulation against the assets
of such Borrower or Insurance Subsidiary, in each case in favor of
policyholders of such Borrower or Insurance Subsidiary and in the
ordinary course of the business of such Borrower or Insurance
Subsidiary;
(k) Purchase Money Security Interests in equipment
constituting inventory of a Borrower or any of its subsidiaries which
is leased (or held for lease) by such Borrower or subsidiaries to its
customers in the ordinary course of business and other Liens on lease
receivables, equipment and cash collateral accounts established in
connection therewith;
(l) Liens on specific items of equipment leased by a Borrower
or any of its subsidiaries in the ordinary course of business and on
the leases (and proceeds therefrom) for such equipment granted by such
Borrower or any of its subsidiaries in connection with investor lease
transactions, so long as the Indebtedness secured by such Liens is
without recourse to such Borrower or any of its subsidiaries or any of
their assets other than such equipment and leases and proceeds
therefrom;
(m) Liens securing reimbursement obligations in respect of
letters of credit or similar instruments issued for the account of a
Borrower or any of its subsidiaries in the ordinary course of their
respective businesses in an aggregate outstanding face amount not to
exceed $30,000,000 at any time;
(n) Liens securing obligations to share with the Health Care
Financing Administration potential gains from the sale or other
disposition of depreciable assets used in the administration of the
Medicare program; and
(o) Liens not exceeding $75,000,000 in the aggregate on the
property or assets of a corporation which becomes a Subsidiary after
the date of this Agreement securing Indebtedness which is not
prohibited by this Agreement (after giving effect to the acquisition of
such Subsidiary), provided that (i) such Liens existed at the time such
--------
corporation became a Subsidiary and were not created in anticipation
thereof, (ii) any such Lien is not spread to cover any additional
property or assets of such corporation after the time such corporation
becomes a Subsidiary, and (iii) no additional amount of Indebtedness
shall be secured by such Liens in reliance upon the provisions of this
clause.
"Person" means any natural person, corporation, limited
------
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
"Plan" means an employee pension benefit plan, as defined in
----
Section 3(2) of ERISA, as to which either Borrower or any member of the
Controlled Group may have any liability.
"Plan of Conversion" means the plan of conversion relating to
------------------
the Demutualization, as approved by AICI's board of directors on June 18, 2001,
and filed as an exhibit to the Registration Statement.
"Prime Rate" means the rate of interest per annum publicly
----------
announced from time to time by The Chase Manhattan Bank as its prime rate in
effect at its principal office in New York City; each change in the Prime Rate
shall be effective from and including the date such change is publicly announced
as being effective.
"Property" of a Person means any and all property, whether
--------
real, personal, tangible, intangible, or mixed of such Person, or other assets
owned, leased or operated by such Person.
"Purchase" means any transaction, or any series of related
--------
transactions, consummated on or after the date of this Agreement, by which
either Borrower or any of its subsidiaries (a) acquires any going business or
all or substantially all of the assets of any firm, corporation or division or
line of business thereof, whether through purchase of assets, merger or
otherwise, or (b) directly or indirectly acquires (in one transaction or as the
most recent transaction in a series of transactions) at least a majority (in
number of votes) of the securities of a corporation which have ordinary voting
power for the election of directors (other than securities having such power
only by reason of the happening of a contingency) or a majority (by percentage
or voting power) of the outstanding partnership interests of a partnership.
"Purchase Money Security Interest" is defined in clause (h) of
--------------------------------
the definition of "Permitted Liens" set forth above.
"Quarterly Statement" of AICI or an Insurance Subsidiary means
-------------------
the quarterly statutory financial statements of AICI or such Insurance
Subsidiary required to be filed with the insurance commissioner (or similar
authority) of its jurisdiction of incorporation or, if no specific form is so
required, in the form of financial statements permitted by such insurance
commissioner (or such similar authority) to be used for filing quarterly
statutory financial statements and shall contain the type of financial
information permitted by such insurance commissioner (or such similar authority)
to be disclosed therein, together with all exhibits or schedules filed
therewith.
"Rate Hedging Obligations" of a Person means any and all net
------------------------
obligations of such Person, whether absolute or contingent and howsoever and
whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor), under (a) any
and all agreements, devices or arrangements designed to protect at least one of
the parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, and (b) any and all
cancellations, buybacks, reversals, terminations or assignments of any of the
foregoing.
"Register" has the meaning set forth in Section 8.04.
--------
"Registration Statement" means the registration statement
----------------------
(Registration No. 333-67714) on Form S-1 under the Securities Act filed with the
Securities and Exchange Commission on August 16, 2001, as subsequently amended
or supplemented.
"Related Parties" means, with respect to any specified Person,
---------------
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"Reportable Event" means a reportable event as defined in
----------------
Section 4043 of ERISA and the regulations issued under such section, with
respect to a Plan, excluding, however, such events as to which the PBGC has by
regulation waived the requirement of Section 4043(a) of ERISA that it be
notified within 30 days of the occurrence of such event; provided, that a
--------
failure to meet the minimum funding standard of Section 412 of the Code and of
Section 302 of ERISA shall be a Reportable Event regardless of the issuance of
any such waiver of the notice requirement in accordance with either Section
4043(a) of ERISA or Section 412(d) of the Code.
"Required Lenders" means, at any time, Lenders having
----------------
Revolving Credit Exposures and unused Commitments representing more than 50% of
the sum of the total Revolving Credit Exposures and unused Commitments at such
time; provided that, for purposes of declaring the Loans to be due and payable
--------
pursuant to Article VI, and for all purposes after the Loans become due and
payable pursuant to Article VI or the Commitments expire or terminate, the
outstanding Competitive Loans of the Lenders shall be included in their
respective Revolving Credit Exposures in determining the Required Lenders.
"Revolving Credit Exposure" means, with respect to any Lender
-------------------------
at any time, the sum of the outstanding principal amount of such Lender's
Revolving Loans at such time.
"Revolving Loan" means a Loan made pursuant to Sections 2.01
--------------
and 2.03.
"SAP" means, with respect to AICI or any Insurance Subsidiary,
---
the statutory accounting practices prescribed or permitted by the insurance
commissioner (or other similar authority) in the jurisdiction of AICI or such
Insurance Subsidiary for the preparation of annual statements and other
financial reports by insurance companies of the same type as AICI or such
Insurance Subsidiary in effect from time to time, applied in a manner consistent
with those used in preparing the Financial Statements referred to in Section
3.05(c) and (d).
"S&P" means Standard & Poor's Ratings Services, a division of
---
The McGraw-Hill Companies, Inc.
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"Single Employer Plan" means a Plan subject to Title IV of
--------------------
ERISA maintained by either Borrower or any member of the Controlled Group for
employees of such Borrower or member of the Controlled Group, other than a
Multiemployer Plan.
"subsidiary" means, with respect to any Person (the "parent")
---------- ------
at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership,
association or other entity of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or, in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held by the parent or one
or more subsidiaries of the parent or by the parent and one or more subsidiaries
of the parent.
"Subsidiary" means any subsidiary of AI.
----------
"Substantial Portion" means Property which (a) represents more
-------------------
than 10% of the consolidated assets of the Parent and the Subsidiaries, as would
be shown in the consolidated financial statements of the Parent and the
Subsidiaries as at the end of the Fiscal Quarter next preceding the date on
which such determination is made, or (b) is responsible for more than 10% of the
consolidated revenues from operations of the Parent and the Subsidiaries for the
12-month period ending as of the end of the Fiscal Quarter next preceding the
date of determination.
"Surplus Notes" of AICI means all notes evidencing obligations
-------------
of AICI which may from time to time be issued by AICI and which under SAP in
effect on the date of this Agreement would be included in the amount specified
on page 3, line 26A of the "Liabilities, Surplus and Other Funds" statement of
AICI's Annual Statement.
"Taxes" means any and all present or future taxes, levies,
-----
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Termination Event" means, with respect to a Plan which is
-----------------
subject to Title IV of ERISA, (a) a Reportable Event, (b) the withdrawal of a
Borrower or any other member of the Controlled Group from such Plan during a
plan year in which such Borrower or member of the Controlled Group was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA or was deemed
such under Section 4068(f) of ERISA, (c) the termination of such Plan, the
filing of a notice of intent to terminate such Plan or the treatment of an
amendment of such Plan as a termination under Section 4041 of ERISA, (d) the
institution by the PBGC of proceedings to terminate such Plan or (e) any event
or condition which could reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or appointment of a trustee to
administer, such Plan.
"Total Debt" means, at any time, all Indebtedness that would
-----------
be required to appear as liabilities on the consolidated balance sheet of AI and
its Subsidiaries prepared in accordance with GAAP (including, in any event,
Surplus Notes of AICI and surplus notes issued by any other Insurance
Subsidiary) plus all guarantee obligations (or obligations having the economic
effect of guarantee obligations) of AI or any Subsidiary in respect of
Indebtedness of Persons other than AI or any Subsidiary.
"Total Debt to Capital Ratio" means, at any time, the ratio of
---------------------------
(a) the Total Debt at such time to (b) the sum of Total Debt plus AI's Net Worth
----
at such time.
"Transactions" means the execution, delivery and performance
------------
by the Borrowers of this Agreement, the borrowing of Loans, the use of the
proceeds thereof, the completion of the Demutualization and the other
transactions contemplated hereby.
"Type", when used in reference to any Loan or Borrowing,
----
refers to whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the LIBO Rate, the Alternate Base
Rate or, in the case of a Competitive Loan or Borrowing, a Fixed Rate.
"Unfunded Liability" means the amount (if any) by which the
------------------
present value of all vested and unvested accrued benefits under a Single
Employer Plan exceeds the fair market value of assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
SECTION 1.02. Classification of Loans and Borrowings. For
--------------------------------------
purposes of this Agreement, Loans may be classified and referred to by Class
(e.g., a "Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class
---- ----
and Type (e.g., a "Eurodollar Revolving Loan"). Borrowings also may be
----
classified and referred to by Class (e.g., a "Revolving Borrowing") or by Type
----
(e.g., a "Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar
---- ----
Revolving Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein
---------------
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise
----------------------
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; provided
--------
that, if the Borrowers notify the Administrative Agent that the Borrowers
request an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrowers that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
The Credits
-----------
SECTION 2.01. Commitments. Subject to the terms and conditions
-----------
set forth herein, each Lender agrees to make Revolving Loans to each Borrower
from time to time during the Availability Period for such Borrower in an
aggregate principal amount for both Borrowers that will not result in (a) such
Lender's Revolving Credit Exposure exceeding such Lender's Commitment or (b) the
sum of the total Revolving Credit Exposures plus the aggregate principal amount
of outstanding Competitive Loans exceeding the total Commitments. Within the
foregoing limits and subject to the terms and conditions set forth herein, each
Borrower may borrow, prepay and reborrow Revolving Loans.
SECTION 2.02. Loans and Borrowings. (a) Each Revolving Loan
--------------------
shall be made as part of a Borrowing consisting of Revolving Loans made by the
Lenders ratably in accordance with their respective Commitments. Each
Competitive Loan shall be made in accordance with the procedures set forth in
Section 2.04. The failure of any Lender to make any Loan required to be made by
it shall not relieve any other Lender of its obligations hereunder; provided
--------
that the Commitments and Competitive Bids of the Lenders are several and no
Lender shall be responsible for any other Lender's failure to make Loans as
required.
(b) Subject to Section 2.12, (i) each Revolving Borrowing
shall be comprised entirely of ABR Loans or Eurodollar Loans as the applicable
Borrower may request in accordance herewith, and (ii) each Competitive Borrowing
shall be comprised entirely of Eurodollar Loans or Fixed Rate Loans as the
applicable Borrower may request in accordance herewith. Each Lender at its
option may make any Eurodollar Loan by causing any domestic or
foreign branch or Affiliate of such Lender to make such Loan; provided that any
--------
exercise of such option shall not affect the obligation of the Borrowers to
repay such Loan in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any
Eurodollar Revolving Borrowing, such Borrowing shall be in an aggregate amount
that is an integral multiple of $1,000,000 and not less than $5,000,000. At the
time that each ABR Revolving Borrowing is made, such Borrowing shall be in an
aggregate amount that is an integral multiple of $1,000,000 and not less than
$5,000,000; provided that an ABR Revolving Borrowing may be in an aggregate
--------
amount that is equal to the entire unused balance of the total Commitments. Each
Competitive Borrowing shall be in an aggregate amount that is an integral
multiple of $1,000,000 and not less than $25,000,000. Borrowings of more than
one Type and Class may be outstanding at the same time; provided that there
--------
shall not at any time be more than a total of five Eurodollar Revolving
Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, no
Borrower shall be entitled to request, or to elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end after
the Maturity Date.
SECTION 2.03. Requests for Revolving Borrowings. To request a
---------------------------------
Revolving Borrowing, the applicable Borrower shall notify the Administrative
Agent of such request by telephone (a) in the case of a Eurodollar Borrowing,
not later than 11:00 a.m., New York City time, three Business Days before the
date of the proposed Borrowing (b) in the case of an ABR Borrowing, not later
than 11:00 a.m., New York City time, on the Business Day of the proposed
Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall
be confirmed promptly by hand delivery or telecopy to the Administrative Agent
of a written Borrowing Request in a form approved by the Administrative Agent
and signed by the applicable Borrower. Each such telephonic and written
Borrowing Request shall specify the following information in compliance with
Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business
Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period"; and
(v) the location and number of the Borrower's account to
which funds are to be disbursed, which shall comply with the
requirements of Section 2.05.
If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Borrowing. If no Interest Period
is specified with respect to any requested Eurodollar Revolving Borrowing, then
the applicable Borrower shall be deemed to have selected an Interest Period of
one month's duration. Promptly following receipt of a Borrowing Request in
accordance with this Section, the Administrative Agent shall advise each Lender
of the details thereof and of the amount of such Lender's Loan to be made as
part of the requested Borrowing.
SECTION 2.04. Competitive Bid Procedure. (a) Subject to the
-------------------------
terms and conditions set forth herein, from time to time during the Availability
Period for a Borrower, such Borrower may request Competitive Bids and may (but
shall not have any obligation to) accept Competitive Bids and borrow Competitive
Loans; provided that the sum of the total Revolving Credit Exposures plus the
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aggregate principal amount of outstanding Competitive Loans at any
time shall not exceed the total Commitments. To request Competitive Bids, a
Borrower shall notify the Administrative Agent of such request by telephone, in
the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, four Business Days before the date of the proposed Borrowing and, in the
case of a Fixed Rate Borrowing, not later than 10:00 a.m., New York City time,
one Business Day before the date of the proposed Borrowing; provided that the
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Borrowers may submit up to (but not more than) three Competitive Bid Requests on
the same day, but a Competitive Bid Request shall not be made within five
Business Days after the date of any previous Competitive Bid Request, unless any
and all such previous Competitive Bid Requests shall have been withdrawn or all
Competitive Bids received in response thereto rejected. Each such telephonic
Competitive Bid Request shall be confirmed promptly by hand delivery or telecopy
to the Administrative Agent of a written Competitive Bid Request in a form
approved by the Administrative Agent and signed by the applicable Borrower. Each
such telephonic and written Competitive Bid Request shall specify the following
information in compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business
Day;
(iii) whether such Borrowing is to be a Eurodollar Borrowing
or a Fixed Rate Borrowing;
(iv) the Interest Period to be applicable to such Borrowing,
which shall be a period contemplated by the definition of the term
"Interest Period"; and
(v) the location and number of the Borrower's account to
which funds are to be disbursed, which shall comply with the
requirements of Section 2.05.
Promptly following receipt of a Competitive Bid Request in accordance with this
Section, the Administrative Agent shall notify the Lenders of the details
thereof by telecopy, inviting the Lenders to submit Competitive Bids.
(b) Each Lender may (but shall not have any obligation to)
make one or more Competitive Bids in response to a Competitive Bid Request. Each
Competitive Bid by a Lender must be in a form approved by the Administrative
Agent and must be received by the Administrative Agent by telecopy, in the case
of a Eurodollar Competitive Borrowing, not later than 9:30 a.m., New York City
time, three Business Days before the proposed date of such Competitive
Borrowing, and in the case of a Fixed Rate Borrowing, not later than 9:30 a.m.,
New York City time, on the proposed date of such Competitive Borrowing.
Competitive Bids that do not conform substantially to the form approved by the
Administrative Agent may be rejected by the Administrative Agent, and the
Administrative Agent shall notify the applicable Lender as promptly as
practicable. Each Competitive Bid shall specify (i) the principal amount (which
shall be a minimum of $5,000,000 and an integral multiple of $1,000,000 and
which may equal the entire principal amount of the Competitive Borrowing
requested) of the Competitive Loan or Loans that the Lender is willing to make,
(ii) the Competitive Bid Rate or Rates at which the Lender is prepared to make
such Loan or Loans (expressed as a percentage rate per annum in the form of a
decimal to no more than four decimal places) and (iii) the Interest Period
applicable to each such Loan and the last day thereof.
(c) The Administrative Agent shall promptly notify the
applicable Borrower by telecopy of the Competitive Bid Rate and the principal
amount specified in each Competitive Bid and the identity of the Lender that
shall have made such Competitive Bid.
(d) Subject only to the provisions of this paragraph, a
Borrower may accept or reject any Competitive Bid. The applicable Borrower shall
notify the Administrative Agent by telephone, confirmed by telecopy in a form
approved by the Administrative Agent, whether and to what extent it has decided
to accept or reject each Competitive Bid, in the case of a Eurodollar
Competitive Borrowing, not later than 10:30 a.m., New York City time, three
Business Days before the date of the proposed Competitive Borrowing, and in the
case of a Fixed Rate Borrowing, not later than 10:30 a.m., New York City time,
on the proposed date of the Competitive Borrowing; provided that (i) the failure
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of the Borrower to give such notice shall be deemed to be a rejection of each
Competitive Bid, (ii) the Borrower shall not accept a Competitive Bid made at a
particular Competitive Bid Rate if the Borrower rejects a Competitive Bid made
at a lower Competitive Bid Rate, (iii) the aggregate amount of the Competitive
Bids accepted by the Borrower shall not exceed the aggregate amount of the
requested Competitive Borrowing specified in the related Competitive Bid
Request, (iv) to the extent necessary to comply with clause (iii) above, the
Borrower may accept Competitive Bids at the same Competitive Bid Rate in part,
which acceptance, in the case of multiple Competitive Bids at such Competitive
Bid Rate, shall be made pro rata in accordance with the amount of each such
Competitive Bid, and (v) except pursuant to clause (iv) above, no Competitive
Bid shall be accepted for a Competitive Loan unless such Competitive Loan is in
a minimum principal amount of $5,000,000 and an integral multiple of $1,000,000;
provided further that if a Competitive Loan must be in an amount less than
- ----------------
$5,000,000 because of the provisions of clause (iv) above, such Competitive Loan
may be for a minimum of $1,000,000 or any integral multiple thereof, and in
calculating the pro rata allocation of acceptances of portions of multiple
Competitive Bids at a particular Competitive Bid Rate pursuant to clause (iv)
the amounts shall be rounded to integral multiples of $1,000,000 in a manner
determined by the Borrower. A notice given by a Borrower pursuant to this
paragraph shall be irrevocable.
(e) The Administrative Agent shall promptly notify each
bidding Lender by telecopy whether or not its Competitive Bid has been accepted
(and, if so, the amount and Competitive Bid Rate so accepted), and each
successful bidder will thereupon become bound, subject to the terms and
conditions hereof, to make the Competitive Loan in respect of which its
Competitive Bid has been accepted.
(f) If the Administrative Agent shall elect to submit a
Competitive Bid in its capacity as a Lender, it shall submit such Competitive
Bid directly to the applicable Borrower at least one quarter of an hour earlier
than the time by which the other Lenders are required to submit their
Competitive Bids to the Administrative Agent pursuant to paragraph (b) of this
Section.
SECTION 2.05. Funding of Borrowings. (a) Each Lender shall
---------------------
make each Loan to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds by 1:00 p.m., New York City time, to the
account of the Administrative Agent most recently designated by it for such
purpose by notice to the Lenders. The Administrative Agent will make such Loans
available to the applicable Borrower by promptly crediting the amounts so
received, in like funds, to accounts of such Borrower maintained with the
Administrative Agent in New York City and designated by such Borrower in the
applicable Borrowing Request or Competitive Bid Request.
(b) Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the applicable
Borrower a corresponding amount. In such event, if a Lender has not in fact made
its share of the applicable Borrowing available to the Administrative Agent,
then the applicable Lender and the applicable Borrower agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such amount is made available
to the applicable Borrower to but excluding the date of payment to the
Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation or (ii) in
the case of the applicable Borrower, the interest rate applicable to ABR Loans.
If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender's Loan
included in such Borrowing.
SECTION 2.06. Interest Elections. (a) Each Revolving Borrowing
------------------
initially shall be of the Type specified in the applicable Borrowing Request
and, in the case of a Eurodollar Revolving Borrowing, shall have an initial
Interest Period as specified in such Borrowing Request. Thereafter, the
applicable Borrower may elect to convert such Borrowing to a different Type or
to continue such Borrowing and, in the case of a Eurodollar Revolving Borrowing,
may elect Interest Periods therefor, all as provided in this Section. A Borrower
may elect different options with respect to different portions of an affected
Borrowing, in which case each such portion shall be allocated ratably among the
Lenders holding the Loans comprising such Borrowing, and the Loans comprising
each such portion shall be considered a separate Borrowing. This Section shall
not apply to Competitive Borrowings, which may not be converted or continued.
(b) To make an election pursuant to this Section, a Borrower
shall notify the Administrative Agent of such election by telephone by the time
that a Borrowing Request would be required under Section 2.03 if such Borrower
were requesting a Revolving Borrowing of the Type resulting from such election
to be made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the
applicable Borrower.
(c) Each telephonic and written Interest Election Request
shall specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to
each resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing,
the Interest Period to be applicable thereto after giving effect to
such election, which shall be a period contemplated by the definition
of the term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the applicable Borrower shall be deemed to
have selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election
Request, the Administrative Agent shall advise each Lender of the details
thereof and of such Lender's portion of each resulting Borrowing.
(e) If a Borrower shall fail to deliver a timely Interest
Election Request with respect to a Eurodollar Revolving Borrowing prior to the
end of the Interest Period applicable thereto, then, unless such Borrowing is
repaid as provided herein, at the end of such Interest Period such Borrowing
shall be converted to an ABR Borrowing. Notwithstanding any contrary provision
hereof, if an Event of Default has occurred and is continuing and the
Administrative Agent, at the request of the Required Lenders, so notifies the
Borrowers, then, so long as an Event of Default is continuing (i) no outstanding
Revolving Borrowing may be converted to or continued as a Eurodollar Borrowing
and (ii) unless repaid, each Eurodollar Revolving
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.
SECTION 2.07. Termination and Reduction of Commitments. (a)
----------------------------------------
Unless previously terminated, the Commitments shall terminate on the Maturity
Date.
(b) The Borrowers may at any time terminate, or from time to
time reduce, the Commitments; provided that (i) each reduction of the
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Commitments shall be in an amount that is an integral multiple of $1,000,000 and
not less than $5,000,000 and (ii) the Borrowers shall not terminate or reduce
the Commitments if, after giving effect to any concurrent prepayment of the
Loans in accordance with Section 2.09, the sum of the Revolving Credit Exposures
plus the aggregate principal amount of outstanding Competitive Loans would
exceed the total Commitments.
(c) The Borrowers shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) of this
Section at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrowers pursuant to this Section shall be irrevocable; provided that a notice
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of termination of the Commitments delivered by the Borrowers may state that such
notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the Borrowers (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments
shall be permanent. Each reduction of the Commitments shall be made ratably
among the Lenders in accordance with their respective Commitments.
SECTION 2.08. Repayment of Loans; Evidence of Debt. (a) The
------------------------------------
Borrowers hereby unconditionally agree, jointly and severally, to pay (i) to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Revolving Loan on the Maturity Date and (ii) to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Competitive Loan on the last day of the Interest Period
applicable to such Loan.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrowers to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which
it shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrowers to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
-----------
existence and amounts of the obligations recorded therein; provided that the
--------
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrowers
to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced
by a promissory note. In such event, each Borrower shall prepare, execute and
deliver to such Lender a promissory note payable to the order of such Lender
(or, if requested by such Lender, to such Lender and its registered assigns) and
in a form approved by the Administrative Agent. Thereafter, the Loans evidenced
by such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 8.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.09. Prepayment of Loans. (a) Each Borrower shall
-------------------
have the right at any time and from time to time to prepay any Borrowing in
whole or in part, subject to prior notice in accordance with paragraph (b) of
this Section; provided that a Borrower shall not have the right to prepay any
Competitive Loan without the prior consent of the Lender thereof.
(b) The applicable Borrower shall notify the Administrative Agent by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Revolving Borrowing, not later than 11:00 a.m., New
York City time, three Business Days before the date of prepayment or (ii) in the
case of prepayment of an ABR Revolving Borrowing, not later than 11:00 a.m., New
York City time, one Business Day before the date of prepayment. Each such notice
shall be irrevocable and shall specify the prepayment date and the principal
amount of each Borrowing or portion thereof to be prepaid; provided that, if a
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notice of prepayment is given in connection with a conditional notice of
termination of the Commitments as contemplated by Section 2.07, then such notice
of prepayment may be revoked if such notice of termination is revoked in
accordance with Section 2.07. Promptly following receipt of any such notice
relating to a Revolving Borrowing, the Administrative Agent shall advise the
Lenders of the contents thereof. Each partial prepayment of any Revolving
Borrowing shall be in an amount that would be permitted in the case of an
advance of a Revolving Borrowing of the same Type as provided in Section 2.02.
Each prepayment of a Revolving Borrowing shall be applied ratably to the Loans
included in the prepaid Borrowing. Prepayments shall be accompanied by accrued
interest to the extent required by Section 2.11 and shall be subject to break
funding payments to the extent required by Section 2.14.
SECTION 2.10. Fees. (a) The Borrowers agree, jointly and
----
severally, to pay to the Administrative Agent for the account of each Lender a
facility fee, which shall accrue at the Applicable Rate on the daily amount of
the Commitment of such Lender (whether used or unused) during the period from
and including the date of this Agreement to but excluding the date on which such
Commitment terminates; provided that, if such Lender continues to have any
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Revolving Credit Exposure after its Commitment terminates, then such facility
fee shall continue to accrue on the daily amount of such Lender's Revolving
Credit Exposure from and including the date on which its Commitment terminates
to but excluding the date on which such Lender ceases to have any Revolving
Credit Exposure. Accrued facility fees shall be payable in arrears on the last
day of March, June, September and December of each year and on the date on which
the Commitments terminate, commencing on the first such date to occur after the
date hereof; provided that any facility fees accruing after the date on which
--------
the Commitments terminate shall be payable on demand. All facility fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).
(b) The Borrowers agree, jointly and severally, to pay to the
Administrative Agent for the account of each Lender a utilization fee for each
day during the preceding quarter (or shorter period commencing on the Effective
Date or ending with the date on which the Commitments shall have been terminated
and the Loans repaid in full) on which the aggregate amount of all Loans
outstanding exceeded 50% of the aggregate amount of the Lenders' Commitments, at
a rate of .125% per annum, on the aggregate amount of Loans of such Lender
outstanding on such day; provided that if such Lender shall continue to have any
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Revolving Credit Exposure after its Commitment shall have terminated, then such
utilization fee shall continue to accrue on the daily aggregate amount of the
Loans of such Lender for each day on which such Loans are outstanding. Accrued
utilization fees shall be payable in arrears on the last day of March, June,
September and December of each year, on the date on which the Commitments
terminate and on any subsequent date on which the outstanding Loans shall be
repaid in full, commencing on the first such date to occur after the Effective
Date; provided that any utilization fees accruing after the date on which the
--------
Commitments terminate shall also be
payable on demand. All utilization fees shall be computed on the basis of the
actual number of days elapsed in a year of 360 days.
(c) The Borrowers agree, jointly and severally, to pay to the
Administrative Agent, for its own account, fees payable in the amounts and at
the times separately agreed upon between the Borrowers and the Administrative
Agent.
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent for distribution, in
the case of facility fees and utilization fees, to the Lenders. Fees paid shall
not be refundable.
SECTION 2.11. Interest. (a) The Loans comprising each ABR
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Borrowing shall bear interest at the Alternate Base Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest (i) in the case of a Eurodollar Revolving Loan, at the LIBO Rate for
the Interest Period in effect for such Borrowing plus the Applicable Rate, or
(ii) in the case of a Eurodollar Competitive Loan, at the LIBO Rate for the
Interest Period in effect for such Borrowing plus (or minus, as applicable) the
Margin applicable to such Loan.
(c) Each Fixed Rate Loan shall bear interest at the Fixed Rate
applicable to such Loan.
(d) Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee or other amount payable by the Borrowers
hereunder is not paid when due, whether at stated maturity, upon acceleration or
otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal of
any Loan, 2% per annum plus the rate otherwise applicable to such Loan as
provided in the preceding paragraphs of this Section or (ii) in the case of any
other amount, 2% per annum plus the rate applicable to ABR Loans as provided in
paragraph (a) of this Section.
(e) Accrued interest on each Loan shall constitute a joint and
several obligation of the Borrowers and shall be payable in arrears on each
Interest Payment Date for such Loan and, in the case of Revolving Loans, upon
termination of the Commitments; provided that (i) interest accrued pursuant to
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paragraph (d) of this Section shall be payable on demand, (ii) in the event of
any repayment or prepayment of any Loan (other than a prepayment of an ABR
Revolving Loan prior to the end of the Availability Period), accrued interest on
the principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Revolving Loan prior to the end of the current Interest Period
therefor, accrued interest on such Loan shall be payable on the effective date
of such conversion.
(f) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable Alternate Base Rate or
LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.12. Alternate Rate of Interest. If prior to the
--------------------------
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and
reasonable means do not exist for ascertaining the LIBO Rate for such
Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders
(or, in the case of a Eurodollar Competitive Loan, the Lender that is
required to make such Loan) that the LIBO Rate for such Interest
Period will not adequately and fairly reflect the cost to such Lenders
(or Lender) of making or maintaining their Loans (or its Loan)
included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrowers and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrowers and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Borrowing to, or
continuation of any Revolving Borrowing as, a Eurodollar Borrowing shall be
ineffective, (ii) if any Borrowing Request requests a Eurodollar Revolving
Borrowing, such Borrowing shall be made as an ABR Borrowing and (iii) any
request by the Borrowers for a Eurodollar Competitive Borrowing shall be
ineffective; provided that (A) if the circumstances giving rise to such notice
--------
do not affect all the Lenders, then requests by the Borrowers for Eurodollar
Competitive Borrowings may be made to Lenders that are not affected thereby and
(B) if the circumstances giving rise to such notice affect only one Type of
Borrowings, then the other Type of Borrowings shall be permitted.
SECTION 2.13. Increased Costs. (a) If any Change in Law shall:
---------------
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender; or
(ii) impose on any Lender or the London interbank market any
other condition affecting this Agreement or Eurodollar Loans or Fixed
Rate Loans made by such Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan or Fixed Rate Loan (or of
maintaining its obligation to make any such Loan) or to reduce the amount of any
sum received or receivable by such Lender hereunder (whether of principal,
interest or otherwise), then the Borrowers will pay to such Lender such
additional amount or amounts as will compensate such Lender for such additional
costs incurred or reduction suffered.
(b) If any Lender determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of return
on such Lender's capital or on the capital of such Lender's holding company, if
any, as a consequence of this Agreement or the Loans made by such Lender to a
level below that which such Lender or such Lender's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy), then from time to time the Borrowers will pay to such Lender
such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.
(c) A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section shall be delivered to the
Borrowers and shall be conclusive absent manifest error. The Borrowers shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.
(d) Failure or delay on the part of any Lender to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender's right to demand such compensation; provided that the Borrowers shall
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not be required to compensate a Lender pursuant to this Section for any
increased costs or reductions incurred more than 180 days prior to the date that
such
Lender notifies the Borrowers of the Change in Law giving rise to such increased
costs or reductions and of such Lender's intention to claim compensation
therefor; provided further that, if the Change in Law giving rise to such
-------- -------
increased costs or reductions is retroactive, then the 180-day period referred
to above shall be extended to include the period of retroactive effect thereof.
(e) Notwithstanding the foregoing provisions of this Section, a
Lender shall not be entitled to compensation pursuant to this Section in respect
of any Competitive Loan if the Change in Law that would otherwise entitle it to
such compensation shall have been publicly announced prior to submission of the
Competitive Bid pursuant to which such Loan was made.
SECTION 2.14. Break Funding Payments. In the event of (a) the
----------------------
payment of any principal of any Eurodollar Loan or Fixed Rate Loan other than on
the last day of an Interest Period applicable thereto (including as a result of
an Event of Default), (b) the conversion of any Eurodollar Loan other than on
the last day of the Interest Period applicable thereto, (c) the failure to
borrow, convert, continue or prepay any Loan on the date or in the amount
specified in any notice delivered pursuant hereto (regardless of whether such
notice may be revoked under Section 2.09(b) and is revoked in accordance
therewith), (d) the failure to borrow any Competitive Loan after accepting the
Competitive Bid to make such Loan, or (e) the assignment of any Eurodollar Loan
or Fixed Rate Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by the Borrowers pursuant to Section 2.17,
then, in any such event, the Borrowers shall compensate each Lender for the
loss, cost and expense attributable to such event. In the case of a Eurodollar
Loan, such loss, cost or expense to any Lender shall be deemed to include an
amount determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan had such
event not occurred, at the LIBO Rate that would have been applicable to such
Loan, for the period from the date of such event to the last day of the then
current Interest Period therefor (or, in the case of a failure to borrow,
convert or continue, for the period that would have been the Interest Period for
such Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which such Lender would
bid were it to bid, at the commencement of such period, for dollar deposits of a
comparable amount and period from other banks in the eurodollar market. A
certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section shall be delivered to the
Borrowers and shall be conclusive absent manifest error. The Borrowers shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.
SECTION 2.15. Taxes. (a) Any and all payments by or on account of
-----
any obligation of the Borrowers hereunder shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; provided that if the
--------
Borrowers shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent or Lender
(as the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrowers shall make such deductions
and (iii) the Borrowers shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
(b) In addition, the Borrowers shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrowers shall indemnify the Administrative Agent and
each Lender, within 10 days after written demand therefor, for the full amount
of any Indemnified Taxes or Other Taxes paid by the Administrative Agent or such
Lender, as the case may be, on or with respect to any payment by or on account
of any obligation of the Borrowers hereunder (including Indemnified Taxes or
Other Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of
such payment or liability delivered to the Borrowers by a Lender, or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes
or Other Taxes by the Borrowers to a Governmental Authority, the Borrowers shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which a
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrowers (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable
law or reasonably requested by the Borrowers as will permit such payments to be
made without withholding or at a reduced rate, provided that such Foreign Lender
has received written notice from the Borrowers advising it of the availability
of such exemption or reduction and containing all applicable documentation.
(f) If the Administrative Agent or a Lender determines, in its
sole discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by the Borrowers or with respect to which the
Borrowers have paid additional amounts pursuant to this Section 2.15, it shall
pay over such refund to the Borrowers (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrowers under this Section
2.15 with respect to the Taxes or Other Taxes giving rise to such refund), net
of all out-of-pocket expenses of the Administrative Agent or such Lender and
without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund); provided, that the Borrowers, upon the
--------
request of the Administrative Agent or such Lender, agree to repay the amount
paid over to the Borrowers (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to the Administrative Agent or
such Lender in the event the Administrative Agent or such Lender is required to
repay such refund to such Governmental Authority. This Section shall not be
construed to require the Administrative Agent or any Lender to make available
its tax returns (or any other information relating to its taxes which it deems
confidential) to the Borrowers or any other Person.
SECTION 2.16. Payments Generally; Pro Rata Treatment; Sharing of
--------------------------------------------------
Set-offs. (a) The Borrowers shall make each payment required to be made by them
- --------
hereunder (whether of principal, interest or fees, or of amounts payable under
Section 2.13, 2.14 or 2.15, or otherwise) prior to 12:00 noon, New York City
time, on the date when due, in immediately available funds, without set-off or
counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made to the Administrative Agent at its offices at 270
Park Avenue, New York, New York, except that payments pursuant to Sections 2.13,
2.14, 2.15 and 8.03 shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension. All payments
hereunder shall be made in dollars.
(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
interest and fees then due hereunder, such funds shall be applied (i) first,
towards payment of interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (ii) second, towards payment of principal then due
hereunder, ratably
among the parties entitled thereto in accordance with the amounts of principal
then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans resulting in such Lender receiving
payment of a greater proportion of the aggregate amount of its Revolving Loans
and accrued interest thereon than the proportion received by any other Lender,
then the Lender receiving such greater proportion shall purchase (for cash at
face value) participations in the Revolving Loans of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Revolving Loans; provided that (i) if any
such participations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by the Borrowers pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans to any assignee
or participant, other than to the Borrowers or any Subsidiary or Affiliate
thereof (as to which the provisions of this paragraph shall apply). The
Borrowers consent to the foregoing and agree, to the extent they may effectively
do so under applicable law, that any Lender acquiring a participation pursuant
to the foregoing arrangements may exercise against the Borrowers rights of
set-off and counterclaim with respect to such participation as fully as if such
Lender were a direct creditor of the Borrowers in the amount of such
participation.
(d) Unless the Administrative Agent shall have received notice
from the applicable Borrower prior to the date on which any payment is due to
the Administrative Agent for the account of the Lenders hereunder that such
Borrower will not make such payment, the Administrative Agent may assume that
such Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders the amount due. In
such event, if the applicable Borrower has not in fact made such payment, then
each of the Lenders severally agrees to repay to the Administrative Agent
forthwith on demand the amount so distributed to such Lender with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at the
greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation.
(e) If any Lender shall fail to make any payment required to be
made by it pursuant to Section 2.05(c), 2.06(d) or (e), 2.05(b) or 2.16(d), then
the Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender's obligations under
such Sections until all such unsatisfied obligations are fully paid.
SECTION 2.17. Mitigation Obligations; Replacement of Lenders. (a)
----------------------------------------------
If any Lender requests compensation under Section 2.13, or if the Borrowers are
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.15, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.13 or 2.15, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrowers
hereby agree to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.13, or if
the Borrowers are required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.15,
or if any Lender defaults in its obligation to fund
Loans hereunder, then the Borrowers may, at their sole expense and effort, upon
notice to such Lender and the Administrative Agent, require such Lender to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in Section 8.04), all its interests, rights and
obligations under this Agreement (other than any outstanding Competitive Loans
held by it) to an assignee that shall assume such obligations (which assignee
may be another Lender, if a Lender accepts such assignment); provided that (i)
--------
the Borrowers shall have received the prior written consent of the
Administrative Agent, which consent shall not unreasonably be withheld, (ii)
such Lender shall have received payment of an amount equal to the outstanding
principal of its Loans (other than Competitive Loans), accrued interest thereon,
accrued fees and all other amounts payable to it hereunder, from the assignee
(to the extent of such outstanding principal and accrued interest and fees) or
the Borrowers (in the case of all other amounts) and (iii) in the case of any
such assignment resulting from a claim for compensation under Section 2.13 or
payments required to be made pursuant to Section 2.15, such assignment will
result in a material reduction in such compensation or payments. A Lender shall
not be required to make any such assignment and delegation if, prior thereto, as
a result of a waiver by such Lender or otherwise, the circumstances entitling
the Borrowers to require such assignment and delegation cease to apply.
ARTICLE III
Representations and Warranties
------------------------------
Each Borrower represents and warrants to the Lenders that:
SECTION 3.01. Corporate Existence and Standing. Each Borrower and
--------------------------------
(a) each Subsidiary is a corporation, limited liability company or other entity
duly organized and validly existing under the laws of the jurisdiction of its
incorporation; (b) each Material Subsidiary has all requisite corporate power,
and has all material governmental licenses, authorizations, consents and
approvals, necessary to own its assets and carry on its business as now being or
as proposed to be conducted; and (c) each Subsidiary is duly qualified to do
business in all jurisdictions in which the nature of the business conducted by
it makes such qualification necessary except where the failure so to qualify
could not reasonably be expected to have a Material Adverse Effect.
SECTION 3.02. Authorization and Validity. Each Borrower has all
--------------------------
requisite corporate power and authority and legal right to execute and deliver
this Agreement and to perform its obligations hereunder. The execution and
delivery by each Borrower of this Agreement and the performance of its
obligations hereunder have been duly authorized by proper corporate proceedings
and this Agreement constitutes the legal, valid and binding obligations of each
Borrower enforceable against such Borrower in accordance with its terms, except
as enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally which may be in effect
and to general principles of equity.
SECTION 3.03. Compliance with Laws and Contracts. Neither
----------------------------------
Borrower, and no Subsidiary, is in default under or in violation of any foreign,
federal, state or local law, rule, regulation, order, writ, judgment,
injunction, decree or award binding upon or applicable to such Borrower or such
Subsidiary, in each case the consequence of which default or violation could
reasonably be expected to have a Material Adverse Effect. None of the execution
and delivery by either Borrower of this Agreement, the application of the
proceeds of the Loans, or compliance with the provisions of this Agreement will,
or at the relevant time did, (a) violate any law, rule, regulation (including
Regulations U and X of the Board), order, writ, judgment, injunction, decree or
award binding on either Borrower or any Subsidiary or either Borrower's or any
Subsidiary's charter, articles or certificate of incorporation, by-laws or code
of regulations, (b) violate the provisions of or require the approval or consent
of any party to any indenture, instrument or agreement to which either Borrower
or any Subsidiary is a party or is subject, or by which it, or its Property, is
bound, or conflict with or constitute a default thereunder, or result in
the creation or imposition of any Lien (other than Permitted Liens) in, of or on
the Property of a Borrower or any Subsidiary pursuant to the terms of any such
indenture, instrument or agreement, or (c) require the consent or approval of
any Person, except for any violation of, or failure to obtain an approval or
consent required under, any such indenture, instrument or agreement that could
not reasonably be expected to have a Material Adverse Effect.
SECTION 3.04. Governmental Consents. Except as contemplated by
---------------------
Section 4.02, no order, consent, approval, qualification, license or
authorization of, or filing, recording or registration with, or exemption by, or
other action in respect of, any Governmental Authority or self-regulatory
organization is or at the relevant time was necessary or required to authorize,
or is or at the relevant time was required in connection with, the execution,
delivery, consummation or performance or the legality, validity, binding effect
or enforceability of this Agreement and the Transactions (other than those which
the failure to obtain could not reasonably be expected to result in a Material
Adverse Effect).
SECTION 3.05. Financial Statements. The Borrowers have heretofore
--------------------
furnished to the Lenders (a) the December 31, 2000, audited consolidated
financial statements of AICI and its subsidiaries, (b) the unaudited
consolidated financial statements of AICI and its subsidiaries through June 30,
2001, (c) the December 31, 2000, Annual Statement of AICI and (d) the June 30,
2001, Quarterly Statement of AICI (collectively, the "Financial Statements").
--------------------
Each of the Financial Statements was prepared in accordance with GAAP or SAP, as
applicable, and such Financial Statements fairly present the consolidated
financial condition and operations of the Borrowers and the Subsidiaries at such
dates and the consolidated results of their operations for the respective
periods then ended (except, in the case of such unaudited statements, for normal
year-end audit adjustments). The pro forma financial statements contained in the
Registration Statement have been properly applied to the historical amounts,
comply in form with the applicable accounting requirements of the Securities
Act, and fairly present the effects of the Demutualization.
SECTION 3.06. Material Adverse Change. No material adverse change
-----------------------
in the business, Property, condition (financial or otherwise) or operations of
the Parent, or of the Parent and its subsidiaries taken as a whole, has occurred
since December 31, 2000.
SECTION 3.07. Properties. (a) Each Borrower and each Subsidiary
----------
has good title to, or valid leasehold interests in, all its real and personal
property material to its business, except for minor defects in title that do not
interfere with its ability to conduct its business as currently conducted or to
utilize such properties for their intended purposes.
(b) Each Borrower and each Subsidiary owns, or is licensed to
use, all trademarks, tradenames, copyrights, patents and other intellectual
property material to its business, and the use thereof by such Borrower or
Subsidiary, as applicable, does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 3.08. Litigation and Environmental Matters. (a) There are
------------------------------------
no actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of either Borrower, threatened
against or affecting a Borrower or any Subsidiary (i) as to which there is a
reasonable possibility of an adverse determination and that, if adversely
determined, could reasonably be expected, individually or in the aggregate
(excluding from such aggregate any Disclosed Matters), to result in a Material
Adverse Effect (other than the Disclosed Matters) or (ii) that involve this
Agreement.
(b) Except for the Disclosed Matters and except with respect to
any other matters that, individually or in the aggregate (excluding from such
aggregate any Disclosed Matters), could not reasonably be expected to result in
a Material Adverse Effect, neither Borrower and no Subsidiary (i) has failed to
comply with any Environmental Law or to obtain, maintain or comply with any
permit, license or other approval required under any Environmental Law, (ii) has
become subject to any Environmental Liability, (iii) has received notice of any
claim with respect to any Environmental Liability or (iv) knows of any basis for
any Environmental Liability.
SECTION 3.09. Taxes. Each Borrower and each Subsidiary has filed
-----
or caused to be filed on a timely basis and in correct form all United States
federal and applicable material foreign, state and local Tax returns and all
other material Tax returns which are required to be filed and have paid all
Taxes due pursuant to said Tax returns or pursuant to any assessment received by
such Borrower or Subsidiary, except such Taxes, if any, as are being contested
in good faith by appropriate proceedings and as to which adequate reserves have
been provided in accordance with GAAP and as to which no Lien exists. No Liens
have been filed and no claims are being asserted with respect to any Taxes owed
by either Borrower or any Subsidiary which could reasonably be expected to have
a Material Adverse Effect. The charges, accruals and reserves on the books of
each Borrower and its subsidiaries in respect of any Taxes or other governmental
charges are in accordance with GAAP or SAP, as applicable.
SECTION 3.10. Subsidiaries. Schedule 3.10 hereto contains (a) an
------------
accurate list of all of each Borrower's existing subsidiaries as of September
30, 2001, setting forth their respective jurisdictions of incorporation and the
percentages of their capital stock owned by such Borrower or other Subsidiaries
and (b) an accurate list of each Material Subsidiary as of June 30, 2001,
setting forth the percentages of its capital stock owned by each Borrower or
other Subsidiaries. As of the date of this Agreement, neither Borrower owns or
holds, directly or indirectly, any capital stock or equity security of, or any
equity or partnership interest in, any Person other than such subsidiaries
except (a) for holdings in its general investment portfolio and (b) as otherwise
set forth on Schedule 3.10.
SECTION 3.11. ERISA. Except as disclosed on Schedule 3.11,
-----
neither Borrower nor any other member of the Controlled Group maintains, or is
obligated to contribute to, any Multiemployer Plan or has incurred, or is
reasonably expected to incur, any withdrawal liability to any Multiemployer
Plan. Each Plan complies in all material respects with all applicable
requirements of law and regulations. Neither Borrower nor any member of the
Controlled Group has, with respect to any Plan, failed to make any contribution
or pay any amount required under Section 412 of the Code or Section 302 of ERISA
or the terms of such Plan. No Single Employer Plan has any material Unfunded
Liability. There are no pending or, to the knowledge of either Borrower,
threatened claims, actions, investigations or lawsuits against any Plan, any
fiduciary thereof, or either Borrower or any member of the Controlled Group with
respect to a Plan which could reasonably be expected to have a Material Adverse
Effect. Neither Borrower nor any member of the Controlled Group has engaged in
any prohibited transaction (as defined in Section 4975 of the Code or Section
406 of ERISA) in connection with any Plan which would subject such Person to any
material liability. Within the last five years neither Borrower nor any member
of the Controlled Group has engaged in a transaction which resulted in a Single
Employer Plan with an Unfunded Liability being transferred out of the Controlled
Group. No Termination Event has occurred or is reasonably expected to occur with
respect to any Plan which is subject to Title IV of ERISA.
SECTION 3.12. Defaults. No Default or Event of Default has
--------
occurred and is continuing.
SECTION 3.13. Federal Reserve Regulations. Neither Borrower nor
---------------------------
any Subsidiary is engaged, directly or indirectly, principally, or as one of its
important activities, in the business of extending, or arranging for the
extension of, credit for the purpose of purchasing or carrying Margin Stock. No
part of the proceeds of any Loan will be used in a manner which would violate,
or result in a violation of, Regulation U or Regulation X of the Board. Neither
the making of any Loan hereunder nor the use of the proceeds thereof will
violate or be inconsistent with the provisions of Regulation U or Regulation X.
Following the application of the proceeds of the Loans, less than 25% of the
value (as determined by any reasonable method) of the assets of each Borrower
and its subsidiaries which are subject to any limitation on sale, pledge, or
other restriction hereunder, taken as a whole, will be represented by Margin
Stock.
SECTION 3.14. Investment Company. Neither Borrower nor any
------------------
Subsidiary is, or after giving effect to any Borrowing will be, an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
SECTION 3.15. Insurance Licenses. Schedule 3.15 hereto lists all
------------------
of the jurisdictions in which either Borrower or any Material Insurance
Subsidiary holds a License and is authorized to transact insurance business as
of the date of this Agreement and the line or lines of insurance in which such
Borrower and each such Material Insurance Subsidiary is engaged. No License held
by either Borrower or any Insurance Subsidiary, the loss of which could
reasonably be expected to have a Material Adverse Effect, is the subject of a
proceeding for suspension or revocation. To each Borrower's knowledge, there is
not a sustainable basis for such suspension or revocation, and no such
suspension or revocation has been threatened by any Governmental Authority.
SECTION 3.16. Material Agreements. Except as disclosed on
-------------------
Schedule 3.16, neither Borrower and no Subsidiary is a party to any agreement or
instrument or subject to any charter or other internal corporate restriction (a)
which could reasonably be expected to have a Material Adverse Effect or (b)
except to the extent imposed by applicable state Governmental Authorities, which
restricts or imposes conditions upon the ability of any Subsidiary to (i) pay
dividends or make other distributions on its capital stock, (ii) make loans or
advances to the Borrowers, (iii) repay loans or advances from the Borrowers or
(iv) grant Liens to the Administrative Agent to secure the Obligations. Neither
Borrower and no Subsidiary is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
agreement to which it is a party, which default could reasonably be expected to
have a Material Adverse Effect.
SECTION 3.17. Insurance. Each Borrower and each Subsidiary
---------
maintains with financially sound and reputable insurance companies insurance on
its Property in such amounts and covering such risks as are consistent with
sound business practice.
SECTION 3.18. Subordination Provisions. The subordination
------------------------
provisions contained in the Surplus Notes, and other instruments entered into or
issued in respect of the Surplus Notes, are enforceable against AICI and the
holders thereof, and the Loans are within the definition of "Indebtedness"
included in such provisions.
SECTION 3.19. Disclosure. None of the (a) information, exhibits
----------
or reports furnished or to be furnished by either Borrower or any Subsidiary to
the Administrative Agent or to any Lender in connection with the negotiation of
this Agreement, or (b) representations or warranties of either Borrower or any
Subsidiary contained in this Agreement or any other document, certificate or
written statement furnished to the Administrative Agent or the Lenders by or on
behalf of either Borrower, contained, contains or will contain any untrue
statement of a material fact or omitted, omits or will omit to state a material
fact necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances in which the same were made. As of the
date of this Agreement, there is no fact known to either Borrower (other than
matters of a general economic nature) that has had since December 31, 2000, or
could reasonably be expected to have a Material Adverse Effect and that has not
been disclosed herein or in such other documents, certificates and statements
furnished to the Lenders for use in connection with this Agreement and the
Transactions.
ARTICLE IV
Conditions
----------
SECTION 4.01. Effective Date. The obligations of the Lenders to
--------------
make Loans hereunder shall not become effective until the Borrowers shall have
furnished the following to the Administrative Agent and the other conditions set
forth below are satisfied (or waived in accordance with Section 8.02):
(a) Charter Documents; Good Standing Certificates. Copies of the
---------------------------------------------
articles of incorporation of each Borrower, together with all amendments
thereto, certified as of a date not earlier than 10 days prior to the date of
this Agreement, by the appropriate governmental officer in the State of Indiana,
together with (i) a certificate of existence as to each Borrower from the State
of Indiana and (ii) a certificate of compliance as to AICI from the Indiana
Department of Insurance.
(b) Demutualization. A certificate, executed by the Secretary or
---------------
Assistant Secretary of AI, certifying that the Demutualization (except for the
payment of a portion of the net proceeds from the public offering of AI common
stock to certain eligible statutory members of AICI, which will occur after the
date of this Agreement) has been completed substantially in accordance with the
terms of the Plan of Conversion, a copy of which shall be attached to such
certificate.
(c) By-Laws and Resolutions. Copies, certified by the Secretary or
-----------------------
Assistant Secretary of each Borrower, of its by-laws and of its Board of
Directors' resolutions authorizing the execution, delivery and performance of
this Agreement and the Transactions.
(d) Secretary's Certificate. An incumbency certificate, executed by
-----------------------
the Secretary or Assistant Secretary of each Borrower, which shall identify by
name and title and bear the signature of the officers of such Borrower
authorized to sign this Agreement and to authorize Borrowings hereunder, upon
which certificate the Administrative Agent and the Lenders shall be entitled to
rely until informed in writing of any change by such Borrower.
(e) Officer's Certificate. A certificate, dated the date of this
---------------------
Agreement, signed by an Authorized Officer of each Borrower, in form and
substance satisfactory to the Administrative Agent, to the effect that (i) on
such date (both before and after giving effect to the consummation of the
Transactions that have been completed on or prior to such date and the making of
any Loans hereunder) no Default or Event of Default has occurred and is
continuing and (ii) each of the representations and warranties set forth in
Article III of this Agreement is true and correct in all material respects on
and as of such date.
(f) Legal Opinions. A written opinion addressed to the Administrative
--------------
Agent and the Lenders of (i) Baker & Daniels, counsel to the Borrowers,
substantially in the form of Exhibit B hereto and (ii) David R. Frick, Esq.,
Executive Vice President and Chief Legal and Administrative Officer of AI,
substantially in the form of Exhibit C hereto.
(g) Executed Documents. Executed originals of this Agreement and the
------------------
other documents contemplated by this Agreement, which shall be in full force and
effect, together with all schedules, exhibits, certificates, instruments,
documents and financial statements required to be delivered pursuant hereto and
thereto.
(h) Loan Terminations. Evidence in form and substance satisfactory to
-----------------
the Administrative Agent that the Credit Agreement dated as of October 22, 1997
among AICI, the lenders named therein and The First National Bank of Chicago, as
agent, as amended, has been terminated and all obligations of AICI thereunder
have been discharged.
(i) Payment of Fees. The Borrowers shall have paid all accrued and
---------------
unpaid fees, costs and expenses to the extent due and payable on or prior to the
execution of this Agreement, including, to the extent invoiced, reimbursement or
payment of all out-of-pocket expenses required to be reimbursed or paid by the
Borrowers hereunder.
(j) Other. Such other documents as the Administrative Agent, any
-----
Lender or their counsel may have reasonably requested.
SECTION 4.02. Borrowings by AI. (a) The obligations of each Lender to
----------------
make a Loan on the occasion of the first Borrowing by AI hereunder shall be
subject to the satisfaction of the following conditions:
(i) AICI shall have obtained approval or non-disapproval (the "AI
--
Insurance Approval") by the Indiana Insurance Commissioner pursuant to Ind.
------------------
Code (S)27-1-23-4 of AICI's liability under Section 8.14 as joint obligor
in respect of Loans made to AI.
(ii) The Administrative Agent shall have received a certificate
confirming the obtaining of the AI Insurance Approval executed by a
Financial Officer of each Borrower.
(b) The obligation of each Lender to make a Loan on the occasion of
any Borrowing by AI hereunder shall be subject to the satisfaction of the
condition that, and each Borrowing by AI shall be deemed to constitute a
representation and warranty by AI that, the AI Insurance Approval has not been
revoked or suspended by the Indiana Insurance Commissioner or any other
Governmental Authority.
SECTION 4.03. Each Borrowing. The obligation of each Lender to make a
--------------
Loan on the occasion of any Borrowing shall be subject to the satisfaction of
the following conditions:
(a) The representations and warranties of each Borrower set forth in
Article III of this Agreement (except the representations and warranties
made by each Borrower in Sections 3.06 and 3.08) shall be true and correct
in all material respects on and as of the date of such Borrowing (except to
the extent any of them expressly relate to an earlier date, in which case
such representations and warranties shall be true and correct in all
material respects on and as of such earlier date).
(b) At the time of and immediately after giving effect to such
Borrowing, no Default shall have occurred and be continuing.
(c) All legal matters incident to such Borrowing shall be reasonably
satisfactory to the Lenders and their counsel.
Each Borrowing shall be deemed to constitute a representation and warranty by
each Borrower on the date thereof as to the matters specified in paragraphs (a)
and (b) of this Section.
ARTICLE V
Covenants
---------
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full, each Borrower covenants and agrees with the Lenders that:
SECTION 5.01. Financial Reporting. Each Borrower will maintain, for
-------------------
itself and each of its subsidiaries, a system of accounting established and
administered in accordance with GAAP, consistently applied, and will furnish to
the Administrative Agent and each Lender:
(a) As soon as practicable and in any event within 90 days after the
close of each Fiscal Year, the consolidated and consolidating statements of
income, retained earnings and cash flow of AI and its Subsidiaries for such
Fiscal Year, and the related consolidated and
consolidating balance sheet of AI and its Subsidiaries as at the end of such
Fiscal Year, setting forth in each case in comparative form the corresponding
figures for the preceding Fiscal Year, accompanied by an opinion of Ernst &
Young or such other certified public accountants of recognized standing which
are reasonably satisfactory to the Administrative Agent, which opinion shall not
be limited as to scope or contain a "going concern" or like qualification or
exception and shall state that such financial statements (other than
consolidating statements) fairly present the consolidated financial condition
and results of operations, as the case may be, of AI and its Subsidiaries in
accordance with GAAP as at the end of, and for, such Fiscal Year.
(b) As soon as practicable and in any event within 60 days
after the close of each of the first three Fiscal Quarters of each Fiscal Year,
the consolidated unaudited balance sheets of AI and its Subsidiaries as at the
close of each such period and related consolidated statements of income,
retained earnings and cash flow for the period from the beginning of such Fiscal
Year to the end of such Fiscal Quarter, in each case setting forth in
comparative form results of the corresponding period in the preceding Fiscal
Year, all certified by the chief financial officer or treasurer of AI as fairly
presenting the consolidated financial condition and results of operations of AI
and its Subsidiaries for such period in accordance with GAAP (subject to normal
year-end adjustments).
(c) As soon as practicable and in any event within 90 days
after the close of each Fiscal Year, copies of the unaudited Annual Statement of
AICI, certified by the chief financial officer or treasurer of AICI as fairly
presenting the financial condition and results of operations of AICI in
accordance with SAP consistently applied throughout the periods reflected
therein.
(d) As soon as practicable and in any event within 60 days
after the close of each of the first three Fiscal Quarters of each Fiscal Year,
copies of the unaudited Quarterly Statement of AICI, certified by the chief
financial officer or treasurer of AICI as fairly presenting the financial
condition and results of operations of AICI in accordance with SAP consistently
applied throughout the periods reflected therein.
(e) Promptly, and in any event within 15 days after learning
thereof, notification of any change after the date hereof in the ratings by
Moody's or S&P of the Index Debt.
(f) Together with the financial statements required by clauses
(a) and (b) above, a compliance certificate signed by the chief financial
officer or treasurer of AI showing the calculations necessary to determine
compliance with Sections 5.10 and 5.14 of this Agreement and stating that no
Default has occurred, or if a Default has occurred, stating the nature and
status thereof and the details of any action taken or proposed to be taken with
respect thereto.
(g) As soon as possible and in any event within 10 days after
either Borrower knows that any Termination Event has occurred, a statement,
signed by the chief financial officer or treasurer of AI, describing such
Termination Event and the action which AI proposes to take with respect thereto.
(h) Promptly upon the filing thereof, copies of all filings
and annual, quarterly, monthly or other regular reports which AI or any
Subsidiary files with (i) the Securities and Exchange Commission or (ii) to the
extent that it contains information indicating that an event or circumstance
constituting or resulting in a Material Adverse Effect has occurred, the NAIC or
any insurance commission or department or analogous Governmental Authority
(including, without limitation, any filing made by AI or any Subsidiary pursuant
to any insurance holding company act or related rules or regulations).
(i) As soon as possible (i) after learning thereof, notice
that the Blue Cross Blue Shield Association is taking or intends to take action
to terminate or materially modify any Blue Cross/Blue Shield license arrangement
of AI or an Insurance Subsidiary, and (ii) after taking such action, notice of
any action by such Borrower to materially modify such arrangement.
(j) Such other information as the Administrative Agent or any
Lender may from time to time reasonably request.
(k) Information required to be delivered pursuant to Sections
5.01(a) and 5.01(b) and clause (i) of Section 5.01(h) shall be deemed to have
been delivered on the date on which the Borrowers provide written notice to the
Lenders that such information has been posted on the Borrowers' website on the
Internet at http://www.Anthem.com or at http://www.sec.gov; provided that such
--------------------- ------------------ --------
notice may be included in the certificates delivered pursuant to Section 5.01(f)
and provided further that the Borrowers shall deliver paper copies of the
----------------
information referred to in Sections 5.01(a) and 5.01(b) and clause (i) of
Section 5.01(h) after the date delivery is required thereunder to any Lender
which requests such delivery within five Business Days after such request.
SECTION 5.02. Use of Proceeds. The Borrowers will use the
---------------
proceeds of the Loans for general corporate purposes, including stock
repurchases, the payment of maturing commercial paper and the funding of working
capital requirements. The Borrowers will not, nor will they permit any of the
Subsidiaries to, own Margin Stock to the extent the value of such Margin Stock
would exceed 25% of the value of the assets of AI and its consolidated
Subsidiaries that are subject to Section 5.10 or 5.12 or to use any of the
proceeds of the Loans to finance the Purchase of any Person which has not been
approved and recommended by the board of directors (or functional equivalent
thereof) of such Person.
SECTION 5.03. Notice of Material Events. Each Borrower will
-------------------------
give prompt notice in writing to the Lenders of (a) the occurrence of any
Default, (b) the occurrence of any other development, financial or otherwise,
relating specifically to AI or any Subsidiaries (and not of a general economic
or political nature) which could reasonably be expected to have a Material
Adverse Effect, (c) the receipt of any notice from any Governmental Authority of
the expiration without renewal, revocation or suspension of, or the institution
of any proceedings to revoke or suspend, any License now or hereafter held by AI
or any Insurance Subsidiary which is required to conduct insurance business in
compliance with all applicable laws and regulations and the expiration,
revocation or suspension of which could reasonably be expected to have a
Material Adverse Effect, (d) the receipt of any notice from any Governmental
Authority of the institution of any disciplinary proceedings against or in
respect of AI or any Insurance Subsidiary, or the issuance of any order, the
taking of any action or any request for an extraordinary audit for cause by any
Governmental Authority which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect, (e) any judicial or administrative
order limiting or controlling the business of AI or any of its subsidiaries (and
not the industry in which AI or such subsidiary is engaged generally) which has
been issued or adopted which could reasonably be expected to have a Material
Adverse Effect, (f) the receipt of any notice from the Indiana Insurance
Commissioner or any other Governmental Authority of the revocation or suspension
of, or the institution of any proceedings to revoke or suspend, the AI Insurance
Approval, or (g) the commencement of any litigation which could reasonably be
expected to result in a Material Adverse Effect.
SECTION 5.04. Conduct of Business. (a) Each Borrower will, and
-------------------
will cause each of its subsidiaries to, (i) carry on and conduct its business
only in substantially the same manner and in substantially the same fields of
enterprise as it is presently conducted, (ii)(w) with respect to each Borrower
and each Insurance Subsidiary, only engage in the insurance business or the
business of a holding company owning entities engaged in the insurance business
or the business of insurance or reasonably incidental activities, and (x) with
respect to each other Subsidiary, only engage in other activities reasonably
incidental to the insurance business, all substantially to the extent in which
it is engaged as of the date hereof, provided, that any subsidiary or
--------
subsidiaries with an aggregate net worth, determined in accordance with GAAP, of
less than 10% of the Net Worth of AI, may engage in other activities, (y) do all
things necessary to remain duly incorporated, validly existing and in good
standing in its jurisdiction of incorporation and its jurisdiction of domicile
and maintain all requisite authority to conduct its business in each other
jurisdiction in which such qualification is required, except where the failure
to maintain such qualification could not reasonably be expected to have a
Material
Adverse Effect, and (z) do all things necessary to renew, extend and
continue in effect all Licenses which may at any time and from time to time be
necessary for such Borrower or any Insurance Subsidiary to conduct business in
compliance with all applicable laws and regulations; provided, that either
--------
Borrower or any Insurance Subsidiary may withdraw from one or more states (other
than its state of domicile) as an admitted insurer if such withdrawal is
determined by such Borrower's or such Insurance Subsidiary's Board of Directors
to be in the best interest of such Borrower or such Insurance Subsidiary, as
applicable, and could not reasonably be expected to have a Material Adverse
Effect.
SECTION 5.05. Taxes. Each Borrower will, and will cause each
-----
of its subsidiaries to, timely file complete and correct United States federal
and applicable material foreign, state and local Tax returns required by
applicable law and pay when due all Taxes, except those which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves have been set aside in accordance with GAAP or SAP, as
applicable.
SECTION 5.06. Insurance. Each Borrower will, and will cause
---------
each of its subsidiaries to, maintain with financially sound and reputable
insurance companies insurance on all of its Property in such amounts and
covering such risks as is consistent with sound business practice (or, to an
extent not in excess of that customarily employed by Persons engaged in the same
or similar business similarly situated, by self-insurance), and each Borrower
will furnish to the Administrative Agent and any Lender upon request full
information as to the insurance carried.
SECTION 5.07. Compliance with Laws. Each Borrower will, and
--------------------
will cause each of its subsidiaries to, comply with all laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject, the failure to comply with which could reasonably be expected
to have a Material Adverse Effect.
SECTION 5.08. Maintenance of Properties. Each Borrower will,
-------------------------
and will cause each of its Material Subsidiaries to, do all things necessary to
maintain, preserve, protect and keep its Property in good repair, working order
and condition (ordinary wear and tear excepted), and make all necessary and
proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times.
SECTION 5.09. Inspection. Each Borrower will, and will cause
----------
each of its Material Subsidiaries to, permit the Administrative Agent and each
Lender, by its respective representatives and agents, to inspect any of the
Property, corporate books and financial records of such Borrower or Material
Subsidiary, to examine and make copies of the books of accounts and other
financial records of such Borrower or Material Subsidiary, and to discuss the
affairs, finances and accounts of such Borrower and each of its subsidiaries
with, and to be advised as to the same by, their respective officers at such
reasonable times and intervals as the Administrative Agent or such Lender may
designate upon reasonable notice. Each Borrower will keep or cause to be kept,
and cause each of its subsidiaries to keep or cause to be kept, appropriate
records and books of account in which complete entries are made reflecting its
and their business and financial transactions, such entries to be made in
accordance with GAAP or SAP, as applicable, consistently applied.
SECTION 5.10. Fundamental Changes. (a) Neither Borrower will,
-------------------
nor will it permit any of its subsidiaries to, liquidate or dissolve itself (or
suffer any liquidation or dissolution) or otherwise wind up, merge or
consolidate with any other corporation, or sell, lease or otherwise dispose of
all or any part of its assets (other than in the ordinary course of business),
except that, so long as no Default then exists or would result therefrom:
(i) Subsidiaries which are not Material Subsidiaries may be
liquidated or dissolved and their affairs wound up;
(ii) A Borrower or Subsidiary may merge, consolidate or
amalgamate with any other Person; provided, that such Borrower or
--------
Subsidiary, as the case may be, is the
surviving, continuing or resulting Person in such merger,
consolidation or amalgamation and, in the case of a Subsidiary,
continues to be a Subsidiary;
(iii) any Subsidiary (other than a Borrower) may merge into a
Borrower or another Subsidiary;
(iv) any Subsidiary (other than a Borrower) may sell, lease
or otherwise dispose of any of its assets (whether now owned or
hereafter acquired and including shares of capital stock, receivables
and leasehold interests) to a Borrower or to another Subsidiary; and
(v) a Borrower may sell, lease or otherwise dispose of less
than all of its assets (whether now owned or hereafter acquired and
including shares of capital stock, receivables and leasehold
interests) to any Person, and any Subsidiary may sell, lease or
otherwise dispose of all or any part of its assets to a Person other
than a Borrower or another Subsidiary (whether in connection with a
merger, consolidation or amalgamation of such Subsidiary into a Person
other than a Borrower or another Subsidiary or otherwise), in each
case, for a consideration which represents the fair market value of
such assets (as determined in good faith by an Authorized Officer of
such Subsidiary) of such Subsidiary at the time of such sale, lease or
other disposition; provided, that immediately after such sale, lease
--------
or other disposition and after giving effect thereto, the aggregate
market value of all assets so sold, leased or otherwise disposed of by
AI and the Subsidiaries during any Fiscal Year does not exceed 10% of
the consolidated assets of the Parent and its subsidiaries as shown in
the consolidated financial statements of the Parent and the
Subsidiaries as at the end of the Fiscal Year next preceding the date
on which such determination is made.
(b) Neither Borrower shall, nor shall it permit any of its
subsidiaries to, at any time, acquire any assets of or interests in any other
Person for a total consideration in excess of $250,000,000, unless such Borrower
shall provide to the Administrative Agent and the Lenders, not less than 10 days
prior to the proposed acquisition, calculations specifically demonstrating
compliance with the financial covenants in Section 5.14, both before and after
giving effect to the proposed acquisition.
SECTION 5.11. Investments and Purchases. AICI will not, and
-------------------------
the Borrowers will not permit any Insurance Subsidiary to, make or suffer to
exist any Investments (including, without limitation, loans and advances to, and
other Investments in, Subsidiaries), or commitments therefor, or to create any
Subsidiary or to become or remain a partner in any partnership or joint venture,
or to make any Purchases, except for Investments and Purchases approved by
applicable insurance departments or commissioners, or as otherwise permitted by,
or not prohibited by, applicable insurance laws.
SECTION 5.12. Liens. Neither Borrower will, or will permit any
-----
Subsidiary to, create, assume, incur, or permit to exist or to be created,
assumed, incurred or permitted to exist, directly or indirectly, any Lien on any
of its Property, whether now owned or hereafter acquired, except for Permitted
Liens.
SECTION 5.13. Affiliates. Neither Borrower will, or will
----------
permit any Subsidiary to, sell or transfer any assets to, or purchase or acquire
any assets of, or otherwise engage in any transaction with, any of its
respective Affiliates, except in the ordinary course of business and upon fair
and reasonable terms no less favorable than such Borrower or Subsidiary could
obtain or could be entitled to in an arm's-length transaction with a Person
which is not an Affiliate.
SECTION 5.14. Financial Covenants. AI on a consolidated
-------------------
basis with the Subsidiaries shall:
(a) Minimum Net Worth. Maintain a minimum Net Worth as of the
-----------------
last day of each Fiscal Quarter after the date hereof of an amount at least
equal to the sum of (a) 75% of the Net Worth of AICI as of June 30, 2001, plus
----
(b) 50% of positive Net Income, if any, of the Parent for each Fiscal Quarter
ending after the June 30, 2001, Fiscal Quarter and prior to the time of
determination.
(b) Total Debt to Capital Ratio. At all times after the date
---------------------------
hereof, maintain a Total Debt to Capital Ratio of not more than 40%.
SECTION 5.15. Change in Corporate Structure; Fiscal Year.
------------------------------------------
Neither Borrower shall, nor shall it permit any of its subsidiaries to, (a)
permit any amendment or modification to be made to its certificate or articles
of incorporation, by-laws or code of regulations which is materially adverse to
the interests of the Lenders or (b) change its Fiscal Year to end on any date
other than December 31 of each year.
SECTION 5.16. Inconsistent Agreements. Neither Borrower shall,
-----------------------
nor shall it permit any of its subsidiaries to, enter into any material
indenture, agreement, instrument or other arrangement which, (a) directly or
indirectly prohibits or restrains, or has the effect of prohibiting or
restraining, or imposes materially adverse conditions upon, the Transactions or
the Obligations, the amending of this Agreement or the ability of any Material
Subsidiary to (i) pay dividends or make other distributions on its capital
stock, (ii) make loans or advances to a Borrower or (iii) repay loans or
advances from a Borrower (other than as required by applicable state
Governmental Authorities), or (b) contains any provision which would be violated
or breached by the making of Loans or by the performance by either Borrower of
any of the Obligations or the Transactions.
SECTION 5.17. ERISA Compliance. With respect to each Plan,
----------------
neither Borrower nor any Subsidiary nor any member of the Controlled Group
shall:
(a) engage in any "prohibited transaction" (as such term is
defined in Section 406 of ERISA or Section 4975 of the Code) for which a civil
penalty pursuant to Section 502(i) of ERISA or a tax pursuant to Section 4975 of
the Code in excess of $15,000,000 for such Plan and all other Plans in the
aggregate (less any amount outstanding under clause (b) or (c)) could be
imposed;
(b)(i) incur any "accumulated funding deficiency" (as such
term is defined in Section 302 of ERISA) in excess of $15,000,000 for such Plan
and all other Plans in the aggregate (less any amount outstanding under clause
(a), (b)(ii) or (c)), whether or not waived, or (ii) permit any Unfunded
Liability to exceed $15,000,000 for such Plan and all other Plans in the
aggregate (less any amount outstanding under clause (a), (b)(i) or (c));
(c) permit the occurrence of any Termination Event which could
result in a liability to such entity in excess of $15,000,000 for such Plan and
all other Plans in the aggregate (less any amount outstanding under clause (b)
or (a));
(d) be an "employer" (as such term is defined in Section 3(5)
of ERISA) required to contribute to such Plan if it is a Multiemployer Plan or a
"substantial employer" (as such term is defined in Section 4001(a)(2) of ERISA)
required to contribute to such Plan if it is a Multiemployer Plan if the same
could reasonably be expected to have a Material Adverse Effect; or
(e) permit the establishment or amendment of such Plan or fail
to comply with the applicable provisions of ERISA and the Code with respect to
such Plan which could result in liability to either Borrower or any member of
the Controlled Group which, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect.
SECTION 5.18. Subsidiary Indebtedness. The Borrowers will not
-----------------------
permit the aggregate principal amount of Indebtedness of the Subsidiaries
(excluding any Indebtedness of a Subsidiary that is a Borrower, any Indebtedness
of a Subsidiary owed to a Borrower or another Subsidiary and Contingent
Obligations of any Subsidiary where the "other Person" referred to in the
definition of "Contingent Obligations" is a Subsidiary that is not a Borrower,
but including, without duplication, any guarantee (or obligations having the
economic effect of a guarantee) by a Subsidiary of Indebtedness of a Borrower)
at any time to exceed $100,000,000.
ARTICLE VI
Events of Default
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If any of the following events ("Events of Default") shall
-----------------
occur:
(a) any representation or warranty made or deemed made by or
on behalf of either Borrower to the Lenders or the Administrative Agent
under or in connection with this Agreement or the Transactions, or any
certificate or information delivered in connection with this Agreement
or the Transactions, shall be false in any material respect on the date
as of which made, deemed made, or delivered;
(b) (i) either Borrower shall fail to pay any principal of any
Loan when and as the same shall become due and payable, whether at the
due date thereof or at a date fixed for prepayment thereof or
otherwise; or (ii) either Borrower shall fail to pay any interest on
any Loan or any fee or any other amount (other than an amount referred
to in clause (i) ) payable under this Agreement, when and as the same
shall become due and payable, and such failure shall continue
unremedied for a period of five days;
(c) the breach by either Borrower or any Subsidiary of any of
the terms or provisions of Section 5.02, Section 5.03(a) or Sections
5.10, 5.11, 5.12 (to the extent that a Lien was created, assumed,
incurred or permitted to exist in violation thereof with the knowledge
or approval of a Financial Officer) or 5.13 through 5.18, or by any
member of the Controlled Group of Section 5.17;
(d) the breach by either Borrower (other than breaches
specified in clause (a), (b) or (c) of this Article) of any of the
terms or provisions of this Agreement which is not remedied within 30
days after the earlier of (i) first knowledge thereof by such Borrower
and (ii) written notice from the Administrative Agent or any Lender;
(e) the default by either Borrower or any Subsidiary in the
performance of any term, provision or condition contained in any
agreement or agreements under which any Indebtedness aggregating in
excess of $30,000,000 was created or is governed, or the occurrence of
any other event or existence of any other condition, the effect of any
of which is to cause, or to permit the holder or holders of such
Indebtedness to cause, such Indebtedness to become due prior to its
stated maturity; or any such Indebtedness of either Borrower or any
Subsidiary shall be declared to be due and payable or required to be
prepaid (other than by regularly scheduled payment) prior to the stated
maturity thereof;
(f) a Borrower or any of its Material Subsidiaries shall (i)
have an order for relief entered with respect to it under the Federal
bankruptcy laws as now or hereafter in effect, (ii) make an assignment
for the benefit of creditors, (iii) apply for, seek, consent to, or
acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or its Property, (iv)
institute any proceeding seeking an order for relief under the Federal
bankruptcy laws as now or hereafter in effect or seeking to adjudicate
it as bankrupt or insolvent, or seeking dissolution, winding up,
liquidation, reorganization, rehabilitation, arrangement, adjustment or
composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors or fail to file an answer or other pleading denying
the material allegations of any such proceeding filed against it, (v)
take any corporate action to authorize or effect any of the foregoing
actions set forth in this clause (f), (vi) fail to contest in good
faith any appointment or proceeding described in clause (g) of this
Article or (vii) become unable to pay, not pay, or admit in writing
its inability to pay, its debts generally as they become due;
(g) Without the application, approval or consent of a Borrower or
any of its Material Subsidiaries, a receiver, trustee, examiner,
liquidator, conservator or similar official shall be appointed for
such Borrower or any of its Material Subsidiaries or its Property, or
a proceeding described in clause (f)(iv) of this Article shall be
instituted against such Borrower or any of its Material Subsidiaries
and such appointment continues undischarged or such proceeding
continues undismissed or unstayed for a period of thirty consecutive
days;
(h) Any court, government or governmental agency shall condemn,
seize or otherwise appropriate, or take custody or control of (each a
"Condemnation"), all or any portion of the Property of a Borrower and
its subsidiaries which, when taken together with all other Property of
such Borrower and its subsidiaries so condemned, seized, appropriated,
or taken custody or control of, during the twelve-month period ending
with the month in which any such Condemnation occurs, constitutes a
Substantial Portion;
(i) There is entered against a Borrower or any of its
subsidiaries (i) a final judgment or order for the payment of money in
excess of $30,000,000 (or multiple judgments or orders for the payment
of an aggregate amount in excess of $30,000,000) which has not been
paid, bonded or otherwise discharged within 30 days after such
judgment becomes final, or (ii) any non-monetary final judgment that
has, or could reasonably be expected to have, a Material Adverse
Effect which has not been bonded or discharged within 30 days after
such judgment becomes final and, in either case, such judgment or
order has not been stayed on appeal or is not otherwise being
appropriately contested in good faith;
(j) any License of AICI or any Insurance Subsidiary, the loss of
which could reasonably be expected to have a Material Adverse Effect,
(a) shall be revoked by the Governmental Authority which issued such
License, or any action (administrative or judicial) to revoke such
License shall have been commenced against AICI or such Insurance
Subsidiary and shall not have been dismissed within 30 days after the
commencement thereof, (b) shall be suspended by such Governmental
Authority for a period in excess of 30 days, or (c) shall not be
reissued or renewed by such Governmental Authority upon the expiration
thereof following application for such reinsurance or renewal by AICI
or such Insurance Subsidiary;
(k) either Borrower or any Insurance Subsidiary shall be fined by
or at the request of any state insurance regulatory agency as a result
of such violation by such Borrower or Insurance Subsidiary of such
state's applicable insurance laws or the regulations promulgated in
connection therewith and the imposition of such fine or the payment
thereof could reasonably be expected to have a Material Adverse
Effect;
(l) either Borrower or any Insurance Subsidiary shall become
subject to (a) any conservation or liquidation order, directive or
mandate issued by any Governmental Authority or (b) any other
directive or mandate issued by any Governmental Authority which could
reasonably be expected to have a Material Adverse Effect, which in
either case is not stayed within 10 days; or
(m) a Change in Control shall occur;
then, and in every such event (other than an event with respect to a Borrower
described in clause (f) or (g) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent at the request of
the Required Lenders shall, by notice to the Borrowers, take either or both of
the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrowers accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by each Borrower; and in case of any
event with respect to a Borrower described in clause (f) or (g) of this Article,
the Commitments shall automatically terminate and the principal of the Loans
then outstanding, together with accrued interest thereon and all fees and other
obligations of the Borrowers accrued hereunder, shall automatically become due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by each Borrower.
ARTICLE VII
The Administrative Agent
------------------------
Each of the Lenders hereby irrevocably appoints the
Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Administrative Agent by the terms hereof, together with such actions and
powers as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall
have the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not the Administrative Agent, and
such bank and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with either Borrower or any Subsidiary
or other Affiliate thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or
obligations except those expressly set forth herein. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated hereby that the
Administrative Agent is required to exercise in writing by the Required Lenders
(or such other number or percentage of the Lenders as shall be necessary under
the circumstances as provided in Section 8.02), and (c) except as expressly set
forth herein, the Administrative Agent shall not have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to
either Borrower or any Subsidiary that is communicated to or obtained by the
bank serving as Administrative Agent or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not taken
by it with the consent or at the request of the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 8.02) or in the absence of its own gross
negligence or wilful misconduct. The Administrative Agent shall be deemed not to
have knowledge of any Default, except with respect to defaults in the payment of
principal, interest, fees or other amounts required to be paid to the
Administrative Agent for the account of the Lenders, unless and until written
notice thereof is given to the Administrative Agent by the Borrowers or a
Lender, and the Administrative Agent shall not be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with this Agreement, (ii) the contents of any
certificate, report or other document delivered hereunder or in connection
herewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement or any other
agreement, instrument or document, or (v) the satisfaction of any condition set
forth in Article IV or elsewhere herein,
other than to confirm receipt of items expressly required to be delivered to the
Administrative Agent. None of the Lenders identified on the facing page or
signature pages of this Agreement as a "syndication agent" or a "documentation
agent" shall have any right, power, obligation, liability, responsibility or
duty under this Agreement other than those applicable to all Lenders as such.
Without limiting the foregoing, none of the Lenders so identified shall have or
be deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.
The Administrative Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent may consult
with legal counsel (who may be counsel for the Borrowers), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.
The Administrative Agent may perform any and all its duties
and exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders and the Borrowers. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Borrowers, to appoint a successor. If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent which shall be a bank with an office in New York,
New York, or an Affiliate of any such bank. Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by the Borrowers to a successor Administrative Agent shall be the same
as those payable to its predecessor unless otherwise agreed between the
Borrowers and such successor. After the Administrative Agent's resignation
hereunder, the provisions of this Article and Section 8.03 shall continue in
effect for the benefit of such retiring Administrative Agent, its sub-agents and
their respective Related Parties in respect of any actions taken or omitted to
be taken by any of them while it was acting as Administrative Agent.
Each Lender acknowledges 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 credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges 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 from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any related agreement or any document furnished hereunder or thereunder.
ARTICLE VIII
Miscellaneous
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SECTION 8.01. Notices. Except in the case of notices and other
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communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to a Borrower, to it at Anthem, Inc., 120 Monument
Circle, Indianapolis, Indiana 46204, Attention of Treasurer (Telecopy
No. 317-488-6160);
(b) if to the Administrative Agent, to The Chase Manhattan
Bank, Loan and Agency Services Group, One Chase Manhattan Plaza, 8th
Floor, New York, New York 10081, Attention of Monica Mikolajczyk
(Telecopy No. (212) 552-7500), with a copy to The Chase Manhattan Bank,
270 Park Avenue, New York 10017, Attention of Robert Bottamedi
(Telecopy No. (212) 270-3279); and
(c) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 8.02. Waivers; Amendments. (a) No failure or delay by
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the Administrative Agent or any Lender in exercising any right or power
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Administrative Agent and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or consent to any departure by a Borrower
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan shall not
be construed as a waiver of any Default, regardless of whether the
Administrative Agent or any Lender may have had notice or knowledge of such
Default at the time.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Borrowers and the Required Lenders or by the
Borrowers and the Administrative Agent with the consent of the Required Lenders;
provided that no such agreement shall (i) increase the Commitment of any Lender
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without the written consent of such Lender, (ii) reduce the principal amount of
any Loan or reduce the rate of interest thereon, or reduce any fees payable
hereunder, without the written consent of each Lender affected thereby, (iii)
postpone the scheduled date of payment of the principal amount of any Loan, or
any interest thereon, or any fees payable hereunder, or reduce the amount of,
waive or excuse any such payment, or postpone the scheduled date of expiration
of any Commitment, without the written consent of each Lender affected thereby,
(iv) change Section 2.16(b) or (c) in a manner that would alter the pro rata
sharing of payments required thereby, without the written consent of each
Lender, or (v) change any of the provisions of this Section or the definition of
"Required Lenders" or any other provision hereof specifying the number or
percentage of Lenders required to waive, amend or modify any rights hereunder or
make any determination or grant any consent hereunder, without the written
consent of each Lender; provided further that no such agreement shall amend,
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modify or otherwise affect the rights or duties of the Administrative Agent
hereunder without the prior written consent of the
Administrative Agent. Notwithstanding the foregoing, any provision of this
Agreement may be amended by an agreement in writing entered into by the
Borrowers, the Required Lenders and the Administrative Agent if (i) by the terms
of such agreement the Commitment of each Lender not consenting to the amendment
provided for therein shall terminate upon the effectiveness of such amendment
and (ii) at the time such amendment becomes effective, each Lender not
consenting thereto receives payment in full of the principal of and interest
accrued on each Loan made by it and all other amounts owing to it or accrued for
its account under this Agreement.
SECTION 8.03. Expenses; Indemnity; Damage Waiver. (a) The
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Borrowers shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including the reasonable fees, charges
and disbursements of counsel for the Administrative Agent, in connection with
the syndication of the credit facilities provided for herein, the preparation
and administration of this Agreement or any amendments, modifications or waivers
of the provisions hereof (whether or not the transactions contemplated hereby or
thereby shall be consummated) and (ii) all out-of-pocket expenses incurred by
the Administrative Agent or any Lender, including the fees, charges and
disbursements of any counsel for the Administrative Agent or any Lender, in
connection with the enforcement or protection of its rights in connection with
this Agreement, including its rights under this Section, or in connection with
the Loans made hereunder, including all such out-of-pocket expenses incurred
during any workout, restructuring or negotiations in respect of such Loans.
(b) Each Borrower shall indemnify the Administrative Agent and
each Lender, and each Related Party of any of the foregoing Persons (each such
Person being called an "Indemnitee") against, and hold each Indemnitee harmless
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from, any and all losses, claims, damages, liabilities and related expenses,
including the fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection
with, or as a result of (i) the execution or delivery of this Agreement or any
agreement or instrument contemplated hereby, the performance by the parties
hereto of their respective obligations hereunder or the consummation of the
Transactions or any other transactions contemplated hereby, (ii) any Loan or the
use of the proceeds therefrom, (iii) any actual or alleged presence or release
of Hazardous Materials on or from any property owned or operated by either
Borrower or any of its subsidiaries, or any Environmental Liability related in
any way to either Borrower or any of its subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
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indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses resulted from the gross
negligence or wilful misconduct of such Indemnitee.
(c) To the extent that the Borrowers fail to pay any amount
required to be paid by them to the Administrative Agent under paragraph (a) or
(b) of this Section, each Lender severally agrees to pay to the Administrative
Agent such Lender's Applicable Percentage (determined as of the time that the
applicable unreimbursed expense or indemnity payment was incurred) of such
unpaid amount; provided that the unreimbursed expense or indemnified loss,
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claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative Agent in its capacity as such.
(d) To the extent permitted by applicable law, neither
Borrower shall assert, and each Borrower hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any agreement or
instrument contemplated hereby, the Transactions, any Loan or the use of the
proceeds thereof.
(e) All amounts due under this Section shall be payable
promptly after written demand therefor.
SECTION 8.04. Successors and Assigns. (a) The provisions of
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this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby, except that
neither Borrower may assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by either Borrower without such consent shall
be null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided that
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(i) except in the case of an assignment to a Lender, an Affiliate of a Lender or
an Approved Fund, the Borrowers and the Administrative Agent must give their
prior written consent to such assignment (which consent shall not be
unreasonably withheld or delayed), (ii) except in the case of an assignment to a
Lender or an Affiliate of a Lender or an assignment of the entire remaining
amount of the assigning Lender's Commitment, the amount of the Commitment of the
assigning Lender subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 unless the Borrowers and
the Administrative Agent otherwise consent, (iii) each partial assignment shall
be made as an assignment of a proportionate part of all the assigning Lender's
rights and obligations under this Agreement, except that this clause (iii) shall
not apply to rights in respect of outstanding Competitive Loans, (iv) the
parties to each assignment shall execute and deliver to the Administrative Agent
an Assignment and Acceptance, together with a processing and recordation fee of
$3,500, and (v) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire; and provided further that
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any consent of the Borrowers otherwise required under this paragraph shall not
be required if a Default has occurred and is continuing. Subject to acceptance
and recording thereof pursuant to paragraph (d) of this Section, from and after
the effective date specified in each Assignment and Acceptance the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.13, 2.14, 2.15 and 8.03). Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this paragraph shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an
agent of the Borrowers, shall maintain at one of its offices in The City of New
York a copy of each Assignment and Acceptance delivered to it and a 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 pursuant to the
terms hereof from time to time (the "Register"). The entries in the Register
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shall be conclusive, and the Borrowers, the Administrative Agent and the Lenders
may treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrowers and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required
by paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Acceptance and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrowers or
the Administrative Agent, sell participations to one or more banks or other
entities (a "Participant") in all or a portion of such Lender's rights and/or
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obligations under this Agreement (including all or a portion of its Commitment
and/or the Loans owing to it); provided that (i) such Lender's obligations under
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this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrowers, the Administrative Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such
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Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 8.02(b) (ii) or
(iii) that affects such Participant. Subject to paragraph (f) of this Section,
each Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.13, 2.14 and 2.15 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.13 or 2.15 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrowers' prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.15 unless
the Borrowers are notified of the participation sold to such Participant and
such Participant agrees, for the benefit of the Borrowers, to comply with
Section 2.15(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
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or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
(h) Notwithstanding anything to the contrary contained herein,
any Lender (a "Granting Lender") may grant to a special purpose funding vehicle
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utilized by such Granting Lender (a "SPC"), identified as such in writing from
---
time to time by the Granting Lender to the Administrative Agent and the
Borrowers, the option to provide to the Borrowers all or any part of any Loan
that such Granting Lender would otherwise be obligated to make to the Borrowers
pursuant to this Agreement; provided that (i) nothing herein shall constitute a
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commitment by any SPC to make any Loan, (ii) if a SPC elects not to exercise
such option or otherwise fails to provide all or any part of such Loan, the
Granting Lender shall be obligated to make such Loan pursuant to the terms
hereof. The making of a Loan by a SPC hereunder shall utilize the Commitment of
the Granting Lender to the same extent, and as if, such Loan were made by such
Granting Lender. Each party hereto hereby agrees that no SPC shall be liable for
any indemnity or similar payment obligation under this Agreement (all liability
for which shall remain with the Granting Lender). In furtherance of the
foregoing, each party hereto hereby agrees (which agreement shall survive the
termination of this Agreement) that, prior to the date that is one year and one
day after the payment in full of all outstanding commercial paper or other
senior indebtedness of any SPC, it will not institute against, or join any other
person in instituting against, such SPC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the United
States or any State thereof. In addition, notwithstanding anything to the
contrary contained in this Agreement, any SPC may (i) with prior notice to, but
without the prior written consent of, the Borrowers and the Administrative Agent
and without paying any processing fee therefor, assign all or a portion of its
interests in any Loans to its Granting Lender or to any financial institutions
providing liquidity and/or credit support to or for the account of such SPC to
support the funding or maintenance of Loans and (ii) disclose on a confidential
basis any non-public information relating to its Loans to any rating agency,
commercial paper dealer or provider of any surety, guarantee or credit or
liquidity enhancement to such SPC. This subsection (h) may not be amended
without the written consent of each SPC which has Loans outstanding at the time
such amendment is made. Except for its obligation to fund any portion of its
Commitment that is actually funded by an SPC, the obligations of the Granting
Lender under this Agreement shall remain unchanged, the Granting Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, and the Borrowers, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with the Granting Lender in
connection with the Granting Lender's rights and obligations under this
Agreement. Except as otherwise provided in this subsection (h), the Granting
Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement.
SECTION 8.05. Survival. All covenants, agreements,
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representations and warranties made by each Borrower herein and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of this Agreement and the
making of any Loans, regardless of any investigation made by any such other
party or on its behalf and notwithstanding that the Administrative Agent or any
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid and so long as the Commitments have not
expired or terminated. The provisions of Sections 2.13, 2.14, 2.15 and 8.03 and
Article VII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Commitments or the termination of
this Agreement or any provision hereof.
SECTION 8.06. Counterparts; Integration; Effectiveness. This
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Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement and
any separate letter agreements with respect to fees payable to the
Administrative Agent constitute the entire contract among the parties relating
to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 8.07. Severability. Any provision of this Agreement held
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to be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 8.08. Right of Setoff. If an Event of Default shall have
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occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of the
Borrowers
against any of and all the obligations of either Borrower now or hereafter
existing under this Agreement held by such Lender, irrespective of whether or
not such Lender shall have made any demand under this Agreement and although
such obligations may be unmatured. The rights of each Lender under this Section
are in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.
SECTION 8.09. Governing Law; Jurisdiction; Consent to Service of
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Process. (a) This Agreement shall be construed in accordance with and governed
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by the law of the State of New York.
(b) Each Borrower hereby irrevocably and unconditionally submits,
for itself and its Property, to the nonexclusive jurisdiction of the Supreme
Court of the State of New York sitting in New York County and of the United
States District Court of the Southern District of New York, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to this Agreement, or for recognition or enforcement of any judgment, and each
of the parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and determined
in such New York State or, to the extent permitted by law, in such Federal
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Administrative Agent
or any Lender may otherwise have to bring any action or proceeding relating to
this Agreement against either Borrower or its Properties in the courts of any
jurisdiction.
(c) Each Borrower hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any court referred to
in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 8.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 8.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
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WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 8.11. Headings. Article and Section headings and the
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Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 8.12. Confidentiality. Each of the Administrative Agent
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and the Lenders agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or the enforcement of rights hereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to any assignee of
or Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement, (g) with the consent of the
Borrowers or (h) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section or (ii) becomes available to
the Administrative Agent or any Lender on a nonconfidential basis from a source
other than a Borrower. For the purposes of this Section, "Information" means all
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information received from Borrowers relating to the Borrowers or their business,
other than any such information that is available to the Administrative Agent or
any Lender on a nonconfidential basis prior to disclosure by the Borrowers;
provided that, in the case of information received from the Borrowers after the
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date hereof, such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information.
SECTION 8.13. Interest Rate Limitation. Notwithstanding anything
------------------------
herein to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts which are treated as interest
on such Loan under applicable law (collectively the "Charges"), shall exceed the
-------
maximum lawful rate (the "Maximum Rate") which may be contracted for, charged,
------------
taken, received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
SECTION 8.14. Obligations Joint and Several. (a) Each Borrower
-----------------------------
agrees that it shall be fully liable for all the Obligations both severally and
jointly with the other Borrower; provided that AICI shall have no liability for
Obligations in respect of Loans to AI until the receipt by the Administrative
Agent of the certificate referred to in Section 4.02(a)(ii).
(b) Each Borrower waives presentment to, demand of payment from
and protest to the other Borrower of any of the Obligations, and also waives
notice of acceptance of its obligations hereunder and notice of protest for
nonpayment. The obligations of a Borrower hereunder shall not be affected by (i)
the failure of any Lender or the Administrative Agent to assert any claim or
demand or to enforce any right or remedy against the other Borrower pursuant to
or arising from this Agreement or the Transactions or otherwise; (ii) any
rescission of any of the terms or provisions of this Agreement; or (iii) the
failure of any Lender or the Administrative Agent to exercise any right or
remedy against the other Borrower.
(c) Each Borrower further agrees that its agreement hereunder
constitutes a promise of payment when due and not of collection, and waives any
right to require that any resort be had by any Lender or the Administrative
Agent to any balance of any deposit account or credit on the books of any Lender
or the Administrative Agent in favor of the other Borrower or any other person.
(d) The obligations of each Borrower hereunder shall not be
subject to any reduction, limitation, impairment or termination for any reason,
including compromise, and shall not be subject to any defense or setoff,
counterclaim, recoupment or termination whatsoever by
reason of the invalidity, illegality or unenforceability of the Obligations of
the other Borrower or otherwise. Without limiting the generality of the
foregoing, the obligations of each Borrower hereunder shall not be discharged or
impaired or otherwise affected by the failure of any Lender or the
Administrative Agent to assert any claim or demand or to enforce any remedy
under this Agreement, by any waiver or modification in respect thereof, by any
default, failure or delay, wilful or otherwise, in the performance of the
Obligations of the other Borrower, or by any other act or omission which may or
might in any manner or to any extent vary the risk of such Borrower or otherwise
operate as a discharge of such Borrower as a matter of law or equity.
(e) Each Borrower further agrees that its obligations hereunder
shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of principal of or interest on any Obligation
of the other Borrower is rescinded or must otherwise be restored by any Lender
or the Administrative Agent upon the bankruptcy or reorganization of the other
Borrower or otherwise.
(f) In furtherance of the foregoing and not in limitation of any
other right which any Lender or the Administrative Agent may have at law or in
equity against any Borrower by virtue hereof, upon the failure of a Borrower to
pay any Obligation when and as the same shall become due, whether at maturity,
by acceleration, after notice of prepayment or otherwise, the other Borrower
hereby promises to and will, upon receipt of written demand by the
Administrative Agent, forthwith pay, or cause to be paid, in cash the amount of
such unpaid Obligation, and thereupon each Lender shall, in a reasonable manner,
assign the amount of the Obligations of the other Borrower owed to it and paid
by such Borrower pursuant to this guarantee to such Borrower, such assignment to
be pro tanto to the extent to which the Obligations in question were discharged
by such Borrower, or make such disposition thereof as such Borrower shall direct
(all without recourse to any Lender and without any representation or warranty
by any Lender).
(g) Upon payment by a Borrower of any sums as provided above, all
rights of such Borrower against the other Borrower arising as a result thereof
by way of right of subrogation or otherwise shall in all respects be
subordinated and junior in right of payment to the prior indefeasible payment in
full of all the Obligations.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day and
year first above written.
ANTHEM INSURANCE COMPANIES, INC.,
by /s/ George D. Martin
------------------------------------------
Name: George D. Martin
Title: Vice President and Treasurer
ANTHEM, INC,
by /s/ George D. Martin
------------------------------------------
Name: George D. Martin
Title: Vice President and Treasurer
THE CHASE MANHATTAN BANK,
individually and as Administrative Agent,
by /s/ Robert Bottamedi
------------------------------------------
Name: Robert Bottamedi
Title: Vice President
BANK OF AMERICA, N.A.,
individually and as Syndication Agent,
by /s/ Philip Potter
------------------------------------------
Name: Philip Potter
Title: Vice President
FLEET NATIONAL BANK,
individually and as Documentation Agent,
by /s/ Paul Chmielinski
------------------------------------------
Name: Paul Chmielinski
Title: Director
ABN AMRO BANK N.V.:
by /s/ Neil R. Stein
------------------------------------------
Name: Neil R. Stein
Title: Vice President
by /s/ Ineke P. Garbacz
------------------------------------------
Name: Ineke P. Garbacz
Title: Group Vice President
WELLS FARGO BANK, N.A.
by /s/ Robert C. Meyer
---------------------------------------------
Name: Robert C. Meyer
Title: Vice President
UBS AG, STAMFORD BRANCH
by /s/ Wilfred V. Saint
---------------------------------------------
Name: Wilfred V. Saint
Title: Associate Director
Banking Products Services, US
by /s/ Susan Brunner
---------------------------------------------
Name: Susan Brunner
Title: Associate Director
Banking Products Services, US
MERRILL LYNCH BANK USA
by /s/ D. Kevin Imlay
---------------------------------------------
Name: D. Kevin Imlay
Title: Senior Lending Officer
CREDIT SUISSE FIRST BOSTON
by /s/ William S. Lutkins
---------------------------------------------
Name: William S. Lutkins
Title: Vice President
by /s/ Bill O'Daly
---------------------------------------------
Name: Bill O'Daly
Title: Vice President
THE BANK OF NEW YORK
by /s/ Michael Flannery
---------------------------------------------
Name: Michael Flannery
Title: Vice President
UNION PLANTERS BANK
by /s/ Kristen K. Hodge
---------------------------------------------
Name: Kristen K. Hodge
Title: Assistant Vice President
SUNTRUST BANK
by /s/ W. Brooks Hubbard
---------------------------------------------
Name: W. Brooks Hubbard
Title: Vice President
PNC BANK
by /s/ Nicholas A. Aponte
---------------------------------------------
Name: Nicholas A. Aponte
Title: Vice President
LEHMAN COMMERCIAL PAPER INC.
by /s/ Michele Swansen
---------------------------------------------
Name: Michele Swansen
Title: Authorized Signatory
KEYBANK NATIONAL ASSOCIATION
by /s/ Sherrie I. Manson
---------------------------------------------
Name: Sherrie I. Manson
Title: Vice President
THE HUNTINGTON NATIONAL BANK
by /s/ Marcia J. Carmean
---------------------------------------------
Name: Marcia J. Carmean
Title: Assistant Vice President
FIRST UNION NATIONAL BANK
by /s/ Gail M. Golightly
---------------------------------------------
Name: Gail M. Golightly
Title: Senior Vice President
FIFTH THIRD BANK, INDIANA
by /s/ Andrew M. Cardimen
---------------------------------------------
Name: Andrew M. Cardimen
Title: Vice President
NATIONAL CITY BANK OF INDIANA
by /s/ Thomas E. Bale
---------------------------------------------
Name: Thomas E. Bale
Title: Vice President