Exhibit 10.1
CREDIT AGREEMENT
dated as of December 31, 1996
among
HORACE MANN EDUCATORS CORPORATION
as the Borrower,
VARIOUS FINANCIAL INSTITUTIONS,
as the Lenders,
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
as Administrative Agent
TABLE OF CONTENTS
-----------------
ARTICLE I
DEFINITIONS............................. 1
SECTION 1.1 Definitions..................................... 1
SECTION 1.2 Use of Defined Terms............................ 15
SECTION 1.3 Cross References; Headings...................... 15
SECTION 1.4 Other Definitional Provisions................... 16
ARTICLE II
AMOUNT AND TERMS OF COMMITMENT.............. 16
SECTION 2.1 Revolving Loan Commitment....................... 16
2.1.1 Voluntary Reduction of Commitment Amount......... 16
SECTION 2.2 Types of Loans.................................. 17
SECTION 2.3 Borrowing Request............................... 17
SECTION 2.4 Funding of Borrowing............................ 17
ARTICLE III
NOTE; RECORDKEEPING, PAYMENTS; SETOFF............. 18
SECTION 3.1 Note............................................ 18
SECTION 3.2 Recordkeeping................................... 18
SECTION 3.3 Payment of the Loans............................ 18
3.3.1 Required Payments................................ 18
3.3.2 Voluntary Payments............................... 18
3.3.3 Conditions Applicable to all Payments............ 18
SECTION 3.4 Making of Payments.............................. 19
SECTION 3.5 Due Date Extension.............................. 19
SECTION 3.6 Set-off......................................... 19
ARTICLE IV
INTEREST; CONVERSION; EURODOLLAR LOANS............. 20
SECTION 4.1 Interest Rates.................................. 20
SECTION 4.2 Interest Payment Dates.......................... 20
SECTION 4.3 Setting of Rates................................ 21
SECTION 4.4 Computation of Interest and Fees................ 21
SECTION 4.5 Continuation and Conversion Elections........... 21
SECTION 4.6 Funding......................................... 22
SECTION 4.7 Eurodollar Rate Lending Unlawful................ 22
SECTION 4.8 Eurodollar Deposits Unavailable................. 22
ARTICLE V
FEES............................ 23
SECTION 5.1 Payment of Fees................................. 23
SECTION 5.2 Non-Use Fee..................................... 23
SECTION 5.3 Compensation of Administrative Agent............ 23
ARTICLE VI
INCREASED COSTS AND OTHER SPECIAL PROVISIONS......... 24
SECTION 6.1 Increased Costs................................. 24
SECTION 6.2 Payment for Credits............................. 24
SECTION 6.3 Certificate Requirements........................ 24
SECTION 6.4 General Funding Losses.......................... 25
SECTION 6.5 Discretion of Lender as to Manner of
Funding................................................ 25
SECTION 6.6 Conclusiveness of Statements: Survival of
Provisions............................................. 25
ARTICLE VII
REPRESENTATIONS AND WARRANTIES................... 26
SECTION 7.1 Due Organization, Authorization, etc............ 26
SECTION 7.2 Statutory Financial Statements.................. 27
SECTION 7.3 GAAP Financial Statements....................... 28
SECTION 7.4 Litigation and Contingent Liabilities........... 29
SECTION 7.5 Investment Company Act.......................... 29
SECTION 7.6 Regulations G, T, U and X....................... 29
SECTION 7.7 Proceeds........................................ 30
SECTION 7.8 Insurance....................................... 30
SECTION 7.9 Accuracy of Information......................... 30
SECTION 7.10 Subsidiaries................................... 30
SECTION 7.11 Insurance Licenses............................. 30
SECTION 7.12 Taxes.......................................... 30
SECTION 7.13 Compliance with Laws........................... 31
ARTICLE VIII
COVENANTS................. 31
SECTION 8.1 Affirmative Covenants........................... 31
8.1.1 Reports, Certificates and Other
Information.................................... 32
(a) GAAP Financial Statements..................... 32
(b) Tax Returns................................... 33
(c) SAP Financial Statements...................... 33
(d) Notice of Default, etc........................ 34
(e) Other Information............................. 34
(f) Compliance Certificates....................... 36
(g) Reports to SEC and to Shareholders............ 36
(h) Notice of Litigation, License and ERISA
Matters....................................... 36
(i) Other Information............................. 37
8.1.2 Corporate Existence; Foreign Qualification....... 37
8.1.3 Books, Records and Inspections................... 37
8.1.4 Insurance........................................ 37
8.1.5 Taxes and Liabilities............................ 38
8.1.6 Compliance with Laws............................. 38
8.1.7 Conduct of Business.............................. 38
SECTION 8.2 Negative Covenants.............................. 38
8.2.1 Consolidated Debt to Total Capitalization........ 38
8.2.2 Risk Based Capital............................... 38
8.2.3 Statutory EBT to Future Interest Expense Ratio... 39
8.2.4 Mergers, Consolidations and Sales................ 39
8.2.5 Regulations G, T, U and X........................ 39
8.2.6 Other Agreements................................. 39
8.2.7 Transactions with Affiliates..................... 39
8.2.8 Liens............................................ 40
ARTICLE IX
CONDITIONS............................. 40
SECTION 9.1 Conditions to Occurrence of the Effective
Date.................................................... 40
9.1.1 This Agreement and Certain Related Documents..... 41
9.1.2 Resolutions...................................... 41
9.1.3 Incumbency and Signatures........................ 41
9.1.4 Opinion of Counsel............................... 41
9.1.5 Charter and By-Laws of the Borrower.............. 41
9.1.6 Insurance Proceedings............................ 41
9.1.7 Material Adverse Change Certificate.............. 41
9.1.8 Payment of Existing Credit Agreement............. 41
9.1.9 Other............................................ 42
SECTION 9.2 Conditions to All Borrowings.................... 42
9.2.1 No Default....................................... 42
9.2.2 Warranties and Representations................... 42
9.2.3 Litigation....................................... 42
9.2.4 Fees............................................. 43
9.2.5 Borrowing Request................................ 43
ARTICLE X
EVENTS OF DEFAULT AND THEIR EFFECT................. 43
SECTION 10.1 Events of Default.............................. 43
10.1.1 Non-Payment of Loan............................... 43
10.1.2 Non-Payment of Interest, Fees, etc................ 43
10.1.3 Non-Payment of Other Debt......................... 43
10.1.4 Other Material Obligations........................ 43
10.1.5 Bankruptcy, Insolvency, etc....................... 44
10.1.6 Non-compliance With Certain Provisions............ 45
10.1.7 Non-compliance With Other Provisions.............. 45
10.1.8 Warranties and Representations.................... 45
10.1.9 Employee Benefit Plans............................ 46
10.1.10 Change in Control................................ 46
10.1.11 Litigation....................................... 46
10.1.12 Change in Law.................................... 47
SECTION 10.2 Effect of Event of Default..................... 47
ARTICLE XI
THE AGENTS............................. 47
SECTION 11.1 Authorization.................................. 47
SECTION 11.2 Liability of the Administrative Agent......... 48
SECTION 11.3 Indemnification............................... 48
SECTION 11.4 Administrative Agent.......................... 49
SECTION 11.5 Credit Investigation.......................... 49
SECTION 11.6 Non-Receipt of Funds by the
Administrative Agent.................................... 49
SECTION 11.7 Successor Agents............................... 50
ARTICLE XII
ASSIGNMENTS AND PARTICIPATIONS.................. 50
SECTION 12.1 Assignments.................................... 50
SECTION 12.2 Participations................................. 52
ARTICLE XIII
GENERAL.............................. 53
SECTION 13.1 Waiver; Amendments............................. 53
SECTION 13.2 Confirmations.................................. 54
SECTION 13.3 Notices........................................ 54
SECTION 13.4 Costs, Expenses and Taxes...................... 54
SECTION 13.5 Indemnification................................ 55
SECTION 13.6 SUBMISSION TO JURISDICTION AND FORUM
SELECTION............................................... 56
SECTION 13.7 GOVERNING LAW.................................. 57
SECTION 13.8 JURY TRIAL..................................... 57
SECTION 13.9 Successors and Assigns......................... 57
SCHEDULES AND EXHIBITS
SCHEDULE 2.1 Commitments
SCHEDULE 7.1 Jurisdictions
SCHEDULE 7.2(a) SAP Exceptions
SCHEDULE 7.2(e) Adverse Changes and Dividends
SCHEDULE 7.4 Litigation
SCHEDULE 7.10 Subsidiaries
SCHEDULE 7.11 Insurance Licenses
SCHEDULE 7.12 Taxes
SCHEDULE 13.3 Addresses
EXHIBIT A Borrowing Request ((S)2.3)
EXHIBIT B Note ((S)3.1)
EXHIBIT C Continuation/Conversion Notice ((S)4.5)
EXHIBIT D Compliance Certificate ((S)8.1.1(f))
EXHIBIT E Opinion of Counsel ((S)9.1.4)
EXHIBIT F Assignment Agreement ((S)12.1.1)
CREDIT AGREEMENT
----------------
THIS CREDIT AGREEMENT, dated as of December 31, 1996, is entered into by
and among HORACE MANN EDUCATORS CORPORATION, a Delaware corporation (the
"Borrower"), various financial institutions which are parties hereto (the
"Lenders"), and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Lenders have agreed to make available to the Borrower a
revolving credit facility upon the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, and other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. When used herein the following terms shall
have the following meanings:
Administrative Agent shall mean (a) Bank of America National Trust and
Savings Association, in its capacity as administrative agent for the Lenders,
and (b) each other Person as shall have subsequently been appointed as the
successor Administrative Agent pursuant to Section 11.7.
Affiliate of any Person shall mean any other Person which, directly or
indirectly, controls or is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Plan). A Person shall be deemed to be:
(a) "controlled by" any other Person if such other Person possesses,
directly or indirectly, power:
(i) to vote 10% or more of the securities having at the time of
any determination hereunder voting power for the election of directors
of such Person; or
(ii) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise; or
(b) "controlled by" or "under common control with" such other Person
if such other Person is the executor, administrator, or other personal
representative of such Person.
Agent-Related Persons shall mean BofA and any successor Administrative
Agent arising under Section 11.7, together with its Affiliates, and the
officers, directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.
Agreement shall mean this Credit Agreement as from time to time
amended, modified, supplemented, restated, refunded or renewed and in effect.
Alternate Reference Rate shall mean, for any day, a fluctuating rate
per annum equal to the greater of (a) the Reference Rate in effect on such day
or (b) a rate per annum equal to the sum of 0.50% plus the Federal Funds Rate in
effect with respect to such day.
Alternate Reference Rate Loan shall mean any Loan which bears interest
at or by reference to the Alternate Reference Rate.
Annual Statement shall mean the annual financial statement of any
Insurance Subsidiary as required to be filed with the insurance commissioner (or
similar authority) of such Insurance Subsidiary's state of domicile, together
with all exhibits or schedules filed therewith, prepared in conformity with SAP.
References to amounts on particular exhibits, schedules, lines, pages and
columns of the Annual Statement are based on the format promulgated by the NAIC
for 1995 Annual Statements. If such format is changed in future years so that
different information is contained in such items or they no longer exist, it is
understood that the reference is to information consistent with that reported in
the referenced item in the 1995 Annual Statement of such Insurance Subsidiary.
Applicable Eurodollar Interest Rate Margin shall mean at any time,
subject to Section 4.1(c), the applicable percentage per annum determined
pursuant to the following table by reference to the higher public rating, if
any, assigned to the Borrower's
2
senior, unsecured long-term debt by Standard & Poor's Rating Group ("S&P") or
Moody's Investor Service Inc. ("Moody's"), as the case may be:
S&P/Moody's Rating Interest Rate Margin
------------------------------------------
A/A2 or above 0.250
A-/A3 0.325
BBB+/Baa1 0.400
BBB/Baa2 or lower
(or no rating) 0.500
------------------------------------------
Applicable Non-Use Fee Rate shall mean at any time, the applicable
percentage per annum determined pursuant to the following table by reference to
the higher public rating, if any, assigned to the Borrower's senior, unsecured
long-term debt by Standard & Poor's Rating Group ("S&P") or Moody's Investor
Service Inc. ("Moody's"), as the case may be:
S&P/Moody's Rating Non-Use Fee Rate
--------------------------------------
A/A2 or above 0.1000
A-/A3 0.1250
BBB+/Baa1 0.1500
BBB/Baa2 or lower
(or no rating) 0.1875
--------------------------------------
Assignment Agreement is defined in Section 12.1.1.
Authorized Officers shall mean those officers of the Borrower whose
signatures and incumbency shall have been certified to the Administrative Agent
pursuant to Section 9.1.3.
BofA shall mean Bank of America National Trust and Savings
Association.
Borrower is defined in the Preamble.
Borrowing shall mean the Loans of a single Type and Interest Period
made by the Lenders on any single specified day in accordance with Section 2.1.
Borrowing Date shall mean any Business Day on which a Borrowing is
made.
3
Borrowing Request shall mean a loan request and certificate duly
executed by two Authorized Officers of the Borrower substantially in the form of
Exhibit A.
Business Day shall mean any day other than a Saturday, Sunday or other
day on which commercial banks in New York City or Chicago are authorized or
required by law to close and, if the applicable Business Day relates to any
Eurodollar Loan, shall mean such a day on which dealings are carried on in the
applicable offshore dollar interbank market.
Capitalized Lease shall mean, as to any Person, any lease which is or
should be capitalized on the balance sheet in accordance with GAAP, together
with any other lease which is in substance a financing lease, including, without
limitation, any lease under which (a) such Person has or will have an option to
purchase the property subject thereto at a nominal amount or an amount less than
a reasonable estimate of the fair market value of such property as of the date
the lease is entered into or (b) the term of the lease approximates or exceeds
the expected useful life of the property leased thereunder.
Change in Control shall be deemed to have occurred if (a) there shall
be consummated (i) any consolidation or merger of the Borrower in which the
Borrower is not the continuing or surviving corporation, or pursuant to which
shares of the Borrower's common stock would be converted into cash, securities
or other property, other than a merger of the Borrower in which no Borrower
shareholder's ownership percentage in the surviving corporation immediately
after the merger is less than such shareholder's ownership percentage in the
Borrower immediately prior to such merger by ten percent (10%) or more, or (ii)
any sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all, or substantially all, of the assets of the
Borrower; (b) the shareholders of the Borrower approve any plan or proposal for
the liquidation or dissolution of the Borrower which is a part of a similar
transaction; (c) any "person" as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is or
becomes, directly or indirectly, the "beneficial owner," as defined in Rule 13d-
3 under the Exchange Act, of securities of the Borrower that represent 51% or
more of the combined voting power of the Borrower's then outstanding securities;
or (d) a majority of the members of the Borrower's Board of Directors are
persons who are then serving on the Board of Directors without having been
elected by the Board of Directors or having been nominated by the Borrower for
election by its shareholders.
Closing shall mean the execution and delivery of this Agreement by the
parties hereto.
4
Code shall mean the Internal Revenue Code of 1986, as amended and any
successor statute of similar import, together with the regulations thereunder,
as amended, reformed or otherwise modified and in effect from time to time.
References to sections of the Code shall be construed to also refer to successor
sections.
Combined shall mean with reference to any group of two or more Persons
and to any financial item (e.g., Statutory EBT, etc.), the amount obtained by
aggregating the respective amounts of such financial item for all such Persons,
without duplication.
Commitment is defined in Section 2.1.
Commitment Amount shall mean, on any date, the aggregate amount shown
on Schedule 2.1 for all Lenders, as such amount may be reduced pursuant to
Section 2.1.1 or 10.2.
Commitment Termination Date shall mean the earliest to occur of
December 31, 2001 or the date on which any Commitment Termination Event
occurs./1/
Commitment Termination Event shall mean (a) the occurrence of a
Default described in Section 10.1.5 or (b) the occurrence and continuance of any
other Event of Default and either (i) the Loans are declared to be due and
payable pursuant to Section 10.2, or (ii) in the absence of such declaration,
the Administrative Agent, acting at the direction of the Required Lenders, gives
notice to the Borrower that the Commitments have been terminated.
Compliance Certificate shall mean a certificate substantially in the
form of Exhibit D but with such changes as the Administrative Agent may from
time to time request for purposes of monitoring the Borrower's compliance
herewith.
Consolidated Debt shall mean the consolidated Debt of the Borrower and
its consolidated Subsidiaries, including without limitation the principal amount
of the Loans.
Contingent Liability shall mean any agreement, undertaking or
arrangement by which any Person (outside the ordinary course of business)
guarantees, endorses, acts as surety for or otherwise becomes or is contingently
liable for (by direct or indirect agreement, contingent or otherwise, to provide
funds for payment by, to supply funds to, or otherwise to invest in, a debtor,
or otherwise to assure a creditor against loss) the debt, obligation or other
liability of any other Person (other than by
- ------------------------
/1/ Five years from Closing.
5
endorsements of instruments in the course of collection), or for the payment of
dividends or other distributions upon the shares of any other Person or
undertakes or agrees (contingently or otherwise) to purchase, repurchase, or
otherwise acquire or become responsible for any Debt, obligation or liability or
any security therefor, or to provide funds for the payment or discharge thereof
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise), or to maintain solvency, assets, level of income, or other
financial condition of any other Person, or to make payment or transfer property
to any other Person other than for fair value received; provided, however, that
obligations of each of the Insurance Subsidiaries under insurance policies,
annuities, or surety contracts issued by it or to which it is a party,
reinsurance treaties, certificates or other agreements of each of the Insurance
Subsidiaries which are entered into in the ordinary course of business
(including security posted by each of the Insurance Subsidiaries in the ordinary
course of its business to secure obligations thereunder) shall not be deemed to
be Contingent Liabilities of such Insurance Subsidiary or the Borrower for the
purposes of this Agreement. The amount of any Person's obligation under any
Contingent Liability shall (subject to any limitation set forth therein) be
deemed to be the outstanding principal amount (or maximum permitted principal
amount, if larger) of the debt, obligation or other liability guaranteed or
supported thereby.
Continuation/Conversion Notice shall mean a notice of continuation or
conversion duly executed by two Authorized Officers substantially in the form of
Exhibit C.
Contractual Obligation shall mean, relative to any Person, any
obligation, commitment or undertaking under any agreement or other instrument to
which such Person is a party or by which it or any of its property is bound or
subject.
Controlled Group shall mean the Borrower and any corporation, trade or
business that is, along with the Borrower, a member of a controlled group of
corporations or a controlled group of trades or businesses as described in
sections 414(b) and 414(c), respectively, of the Code or in section 4001 of
ERISA.
Debt shall mean, with respect to any Person, at any date, without
duplication, (a) all obligations of such Person for borrowed money or in respect
of loans or advances; (b) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments; (c) all obligations in respect
of letters of credit which have been drawn but not reimbursed by the Person for
whose account such letter of credit was issued, and bankers' acceptances issued
for the account of such Person; (d) all obligations in respect of Capitalized
Leases of such
6
Person; (e) all Hedging Obligations of such Person; (f) whether or not so
included as liabilities in accordance with GAAP, all obligations of such Person
to pay the deferred purchase price of property or services; (g) Debt of such
Person secured by a Lien on property owned or being purchased by such Person
(including Debt arising under conditional sales or other title retention
agreements) whether or not such Debt is limited in recourse; (h) any Debt of
another Person secured by a Lien on any assets of such first Person, whether or
not such Debt is assumed by such first Person; (i) any Debt of a partnership in
which such Person is a general partner; and (j) all Contingent Liabilities of
such Person whether or not in connection with the foregoing.
Default shall mean any Event of Default or any Unmatured Event of
Default.
Default Rate is defined in Section 4.1(c).
Department is defined in Section 7.2(a).
Dollar(s) and the sign "$" shall mean lawful money of the United
States of America.
Effective Date shall mean the first date when all of the conditions
set forth in Article IX shall have been satisfied.
Eligible Assignee shall mean any bank, pension fund, mutual fund,
investment fund, other financial institution or non-financial Person (other than
an insurance company or any Affiliate of an insurance company except those to
which the Borrower consents).
ERISA shall mean the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute of similar import, together with the
regulations promulgated thereunder and under the Code, in each case as in effect
from time to time. References to sections of ERISA also refer to successor
sections.
Eurodollar Loan(s) shall mean any Loan bearing interest at a rate
determined with reference to the Offshore Rate.
Event of Default shall mean any of the events described in Section
10.1.
Executive Officer shall mean, as to any Person, the president, the
chief financial officer, the chief executive officer, the general counsel, the
treasurer or the secretary.
Federal Funds Rate means, for any day, the rate set forth in the
weekly statistical release designated as H.15(519),
7
or any successor publication, published by the Federal Reserve Bank of New York
(including any such successor, "H.15(519)") on the preceding Business Day
opposite the caption "Federal Funds (Effective)"; or, if for any relevant day
such rate is not so published on any such preceding Business Day, the rate for
such day will be the arithmetic mean as determined by the Agent of the rates for
the last transaction in overnight Federal funds arranged prior to 9:00 a.m. (New
York City time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Agent.
Fiscal Quarter shall mean any quarter of a Fiscal Year.
Fiscal Year shall mean any period of twelve consecutive calendar
months ending on the last day of December.
F.R.S. Board shall mean the Board of Governors of the Federal Reserve
System (or any successor thereto).
Funding Percentage shall mean for any Lender, the percentage set forth
opposite the name of such Lender in Schedule 2.1.
Future Interest Expense shall mean at any time the sum of (a) the
consolidated projected interest expense on Consolidated Debt. For purposes of
this definition, the projected interest expense with respect to any Debt shall
be calculated by multiplying the outstanding principal amount of such Debt at
the date of calculation by the annualized interest rate then applicable to such
principal amount and subtracting therefrom, for each mandatory reduction of such
principal that is scheduled to occur within such four Fiscal Quarters, the
corresponding portion of such interest.
GAAP shall mean generally accepted accounting principles in the United
States of America as in effect from time to time.
Governmental Authority shall mean any nation or government, any state
or other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
Hedging Obligations shall mean, with respect to any Person, the net
liability of such Person under interest rate swap agreements and interest rate
collar agreements, and all other agreements or arrangements designed to protect
such Person against fluctuations in interest rates or currency exchange rates.
8
Included Taxes shall mean all taxes, duties or other similar charges
imposed on a Lender including any interest or penalties thereon, except for any
taxes, duties or similar charges imposed on the net income of such Lender by the
jurisdiction under the laws of which such Lender is constituted, by the
jurisdiction in which such Lender booked the Loans made pursuant to this
Agreement, or by the jurisdiction in which such Lender's principal office is
located, but including taxes, duties or similar charges including any interest
or penalties thereon imposed by the United States by means of withholding at the
source on payments of principal and interest on the Loans.
Indemnified Obligations is defined in Section 13.5.
Indemnified Parties is defined in Section 13.5.
Insurance Code shall mean, with respect to any Insurance Subsidiary,
the Insurance Code of such Insurance Subsidiary's state of domicile and any
successor statute of similar import, together with the regulations thereunder,
as amended or otherwise modified and in effect from time to time. References to
sections of the Insurance Code shall be construed to also refer to successor
sections.
Insurance Policies shall mean policies purchased from insurance
companies by any of the Borrower or its Subsidiaries, for its own account to
insure against its own liability and property loss (including, without
limitation, casualty, liability and workers' compensation insurance), other than
Reinsurance Agreements and Surplus Relief Reinsurance Agreements.
Insurance Subsidiary shall mean any Life Subsidiary or any P/C
Subsidiary.
Interest Period shall mean, relative to any Eurodollar Loan, the
period which begins on (and includes) the date on which such Eurodollar Loan is
made or continued as, or converted into, a Eurodollar Loan pursuant to Section
4.5 and, unless the maturity of such a Eurodollar Loan is accelerated, ends on
(but excludes) the day which numerically corresponds to such date one, two,
three or six months thereafter, as the Borrower may select in its relevant
Borrowing Request or Continuation/Conversion Notice; provided, that:
(a) if there exists no numerically corresponding day in such month,
such Interest Period shall end on the last Business Day of such month;
(b) if such Interest Period would otherwise end on a day which is not
a Business Day, such Interest Period shall end on the next following
Business Day
9
(unless such next following Business Day is the first Business Day of a
calendar month, in which case such Interest Period shall end on the
Business Day next preceding such numerically corresponding day); and
(c) the Borrower shall not be permitted to select, and there shall not
be applicable, any Interest Period that would end later than the maturity
of the Loans.
Lease Obligations shall mean, at any date, the rental commitments of
any person under leases for real and/or personal property (including taxes,
insurance, maintenance and similar expenses which any Person is obligated to pay
under the terms of said leases) on such date, whether or not such obligations
are reflected as liabilities or commitments on a balance sheet of such Person or
in the notes thereto, excluding, however, obligations under Capitalized Leases.
Lenders is defined in the Preamble.
License(s) is defined in Section 7.13.
Lien shall mean, when used with respect to any Person, any interest in
any real or personal property, asset or other right held, owned or being
purchased or acquired by such Person for its own use, consumption or enjoyment
which secures payment or performance of any obligation and shall include any
mortgage, lien, pledge, encumbrance, charge, retained title of a conditional
vendor or lessor, or other security agreement, mortgage, deed of trust, chattel
mortgage, assignment, pledge, retention of title, financing or similar statement
or notice, or other encumbrance arising as a matter of law, judicial process or
otherwise.
Life Subsidiary shall mean any Subsidiary of the Borrower that is
engaged in the business of providing life insurance and/or annuities, and
related services.
Loan(s) is defined in Section 2.1.
Loan Documents shall mean this Agreement, the Note, and all other
agreements, instruments, certificates, documents, schedules or other written
indicia relating to or delivered by the Borrower or any of its Subsidiaries in
connection with any of the foregoing.
Material Adverse Effect shall mean, relative to any occurrence of
whatever nature (including any adverse determination in any litigation,
arbitration, or governmental investigation or proceeding), a materially adverse
effect on:
10
(a) the assets, business, financial condition, operations or prospects
of the Borrower or any Subsidiary; or
(b) the ability of the Borrower or any Subsidiary to perform any of
its payment or other material obligations under any of the Loan Documents.
Multiemployer Plan shall mean a "multiemployer plan" as defined in
section 4001(a)(3) of ERISA, and to which the Borrower or any of the
Subsidiaries is making, or is obligated to make, contributions, or has made, or
has been obligated to make, contributions.
NAIC shall mean the National Association of Insurance Commissioners,
or any successor thereto.
Net Worth means the consolidated net worth, calculated in accordance
with GAAP, of the Borrower and its consolidated Subsidiaries, excluding
unrealized gains and losses as calculated in accordance with FASB 115.
1995 Annual Statement is defined in Section 7.2(b).
1996 Quarterly Statement is defined in Section 7.2(b).
Note is defined in Section 3.1.
Obligations shall mean all obligations and liabilities of the Borrower
and its Subsidiaries to the Administrative Agent or any of the Lenders,
howsoever created, arising or evidenced, whether direct or indirect, absolute or
contingent, primary or secondary, joint or several, recourse or nonrecourse or
now or hereafter existing or due or to become due, whether for principal,
interest, fees, expenses, lease obligations, claims, indemnities or otherwise,
under or in connection with this Agreement or any other Loan Document and
including any Hedging Obligations to the Administrative Agent or any of the
Lenders.
Offshore Rate means, for any Interest Period, with respect to
Eurodollar Loans comprising part of the same Borrowing, the rate of interest per
annum (rounded upward to the next 1/100th of 1%) determined by the
Administrative Agent as follows:
Offshore Rate = IBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
11
"Eurodollar Reserve Percentage" means for any day for any Interest
Period the maximum reserve percentage (expressed as a decimal, rounded
upward to the next 1/100th of 1%) in effect on such day (whether or not
applicable to any Lender) under regulations issued from time to time by the
F.R.S. Board for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with respect
to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities"); and
"IBOR" means the rate of interest per annum determined by the
Administrative Agent as the rate at which dollar deposits in the
approximate amount of Bank of America National Trust and Savings
Association' Eurodollar Loan for such Interest Period would be offered by
BofA's Grand Cayman Branch, Grand Cayman B.W.I. (or such other office as
may be designated for such purpose by BofA), to major banks in the offshore
dollar interbank market at their request at approximately 10:00 a.m.
(Chicago time) two Business Days prior to the commencement of such Interest
Period.
The Offshore Rate shall be adjusted automatically as to all Eurodollar
Loans then outstanding as of the effective date of any change in the
Eurodollar Reserve Percentage.
Ordinary Course Litigation is defined in Section 7.4.
Participants is defined in Section 12.2.1.
Participations is defined in Section 12.2.1.
Payment Date shall mean (a) with respect to any Eurodollar Loan, the
last day of each Interest Period with respect thereto and, if such Interest
Period is in excess of three months, the day three months after the commencement
of such Interest Period, and (b) with respect to any Alternate Reference Rate
Loan, the last Business Day of each month.
Payor is defined in Section 11.6.
PBGC shall mean the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions.
P/C Subsidiary shall mean any Subsidiary of the Borrower that is
engaged in the business of providing property and casualty insurance and related
services.
Person shall mean any natural person, corporation, partnership, firm,
trust, association, government, governmental
12
agency or other entity, whether acting in an individual, fiduciary or other
capacity.
Plan shall mean any "employee pension benefit plan," as such term is
defined in ERISA, which is subject to Title IV of ERISA (other than a
"Multiemployer Plan"), and as to which any entity in the Controlled Group has or
may have any liability, including any liability by reason of having been a
substantial employer within the meaning of section 4063 of ERISA for any time
within the preceding five years or by reason of being deemed to be a
contributing sponsor under section 4069 of ERISA.
Reference Rate shall mean, at any time, the rate of interest then most
recently announced by the Administrative Agent at Chicago, Illinois as its
reference rate. (The Reference Rate is a rate set by BofA based upon various
factors including BofA's costs and desired return, general economic conditions
and other factors, and is used as a reference point for pricing some loans,
which may be priced at, above, or below such announced rate.)
Any change in the Reference Rate announced by BofA shall take effect
at the opening of business on the day specified in the public announcement of
such change.
Regulatory Change shall mean, relative to any Lender:
(a) any change in (or the adoption, implementation, phase-in or
commencement of effectiveness of) any
(i) United States federal or state law or foreign law applicable
to such Lender;
(ii) regulation, interpretation, directive, requirement or
request applicable to such Lender of any court or governmental
authority charged with the interpretation or administration of any law
referred to in clause (a)(i) or of any fiscal, monetary or other
authority having jurisdiction over such Lender; or
(b) any change in the application to such Lender of any existing law,
regulation, interpretation, directive, requirement or request referred to
in clause (a)(i) or (a)(ii) above;
in either case, occurring after the date hereof.
Reinsurance Agreements shall mean any agreement, contract, treaty,
certificate or other arrangement (other than a
13
Surplus Relief Reinsurance Agreement) whereby any Insurance Subsidiary agrees to
transfer or cede to another insurer all or part of the liability assumed by such
Insurance Subsidiary under a policy or policies of insurance reinsured by such
Insurance Subsidiary.
Required Lenders shall mean, at any time, Lenders having, in the
aggregate, a Voting Percentage of 66-2/3% or more at such time.
Required Payment is defined in Section 11.6.
Requirement of Law for any Person shall mean the corporate charter and
by-laws or other organizational or governing documents of such Person, and any
law, treaty, rule, ordinance or regulation or determination of an arbitrator or
a court or other governmental authority, in each case applicable to or binding
upon such Person or any of its property or to which such Person or any of its
property is subject.
SAP shall mean, as to each Insurance Subsidiary, the statutory
accounting practices prescribed or permitted by the insurance commissioner (or
other similar authority) in such Insurance Subsidiary's state of domicile for
the preparation of Annual Statements and other financial reports by insurance
corporations of the same type as such Insurance Subsidiary.
Statutory Carrying Value shall mean, as to any investment of any
Insurance Subsidiary, the value of such investment as determined in accordance
with SAP consistently applied.
Statutory EBT shall mean, as of any date, with respect to (a) any Life
Subsidiary, the amount reported on page 4, line 29, column 1 of its Annual
Statement, and (b) any P/C Subsidiary, the amount reported on page 4, line 14B,
column 1 of its Annual Statement; or an amount determined in a consistent manner
for any date other than one as of which an Annual Statement is prepared.
Statutory EBT to Future Interest Expense Ratio is defined in Section
8.2.3.
Statutory Financial Statements is defined in Section 7.2.
Statutory Liabilities shall mean, as to any Person, as of any date,
with respect to (a) any Life Subsidiary, the amount reported on page 3, line 28,
column 1 of its Annual Statement, and (b) any P/C Subsidiary, the amount
reported on page 3, line 21, column 1 of its Annual Statement; or an amount
determined in
14
a consistent manner for any date other than one as of which an Annual Statement
is prepared.
Subsidiary shall mean a corporation of which the indicated Person
and/or its other Subsidiaries, individually or in the aggregate, own, directly
or indirectly, such number of outstanding shares as have at the time of any
determination hereunder more than 50% of the ordinary voting power. Unless
otherwise specified, "Subsidiary" shall mean a Subsidiary of the Borrower.
Surplus Relief Reinsurance Agreements shall mean any agreement whereby
any Insurance Subsidiary assumes or cedes business under a reinsurance agreement
that would be considered a "financing-type" reinsurance agreement and (a) with
respect to any P/C Subsidiary, which is entered into solely for the purpose of
affecting the income statement of such P/C Subsidiary as the same may be amended
from time to time, and (b) with respect to any Life Subsidiary, as determined in
the Fourth Edition of the AICPA Audit Guide for Stock Life Insurance Companies
on pp. 91-92 thereof as the same may be amended from time to time.
Types of Loan -- see Section 2.2. The Types of Loans under this
Agreement are as follows: Alternate Reference Rate Loans and Eurodollar Loans.
Unmatured Event of Default shall mean any condition or event, which,
after notice or lapse of time or both, would constitute an Event of Default.
Voting Percentage shall mean at any time, with respect to any Lender,
the percentage calculated by dividing the aggregate principal amount of such
Lender's Loans by the aggregate principal amount of all Lenders' Loans then
outstanding or, if no Loans are outstanding, the Funding Percentage.
Welfare Plan shall mean any "employee welfare benefit plan" as such
term is defined in ERISA, as to which the Borrower has any liability.
SECTION 1.2 Use of Defined Terms. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in the Schedules hereto, the Loan
Documents, the Exhibits and any other communications delivered from time to time
in connection with this Agreement.
SECTION 1.3 Cross References; Headings. The words "hereof," "herein"
and "hereunder" and words of similar import when used in this Agreement or in
any of the Loan Documents shall refer to this Agreement or such Loan Document as
a whole and not
15
to any particular provision of this Agreement or such Loan Document. Section,
Schedule and Exhibit references contained in this Agreement are references to
Sections, Schedules and Exhibits in or to this Agreement unless otherwise
specified. Any reference in any Section or definition to any clause is, unless
otherwise specified, to such clause of such Section or definition. The various
headings in this Agreement and the Loan Documents are inserted for convenience
only and shall not affect the meaning or interpretation of this Agreement or
such Loan Document or any provision hereof or thereof.
SECTION 1.4 Other Definitional Provisions. Unless otherwise defined or
the context otherwise requires, all financial and accounting terms used herein
or in any of the Loan Documents or any certificate or other document made or
delivered pursuant hereto shall be defined in accordance with GAAP or SAP, as
the context may require. When used in this Agreement, the term "financial
statements" shall include the notes and schedules thereto. In addition, when
used herein, the terms "best knowledge of" or "to the best knowledge of" any
Person shall mean matters within the actual knowledge of such Person (or an
Executive Officer or general partner of such Person) or which should have been
known by such Person after reasonable inquiry.
ARTICLE II
AMOUNT AND TERMS OF COMMITMENT
SECTION 2.1 Revolving Loan Commitment. Upon and subject to the terms
and conditions hereof, each of the Lenders severally and for itself agrees to
make revolving loans (collectively called the "Loans" and individually called a
"Loan") from time to time on any Business Day occurring prior to the Commitment
Termination Date, in such Lender's Funding Percentage of the aggregate amount of
the Borrowing requested by the Borrower to be made on such date; provided, that
(i) the aggregate unpaid principal amount of all Loans from any single Lender
shall not exceed the amount set forth opposite the name of such Lender on
Schedule 2.1 and (ii) the aggregate unpaid principal amount of all Loans from
all Lenders outstanding at any time shall not exceed the Commitment Amount. The
Commitment of each Lender to make the Loans pursuant to this Section 2.1 is
herein referred to as its "Commitment."
2.1.1 Voluntary Reduction of Commitment Amount. The Borrower may, from
time to time on any Business Day, voluntarily reduce the unused amount of
the Commitment Amount in whole or in part; provided, however, that (i) each
such voluntary reduction shall require at least two (2) Business Days'
prior written notice to the Administrative Agent and shall be permanent,
and (ii) each such voluntary
16
reduction shall be in an aggregate minimum amount of $1,000,000 and an
integral multiple of $100,000 (or, if less, the entire unused amount of the
Commitment Amount).
SECTION 2.2 Types of Loans. The Loans shall be denominated as
Alternate Reference Rate Loans or Eurodollar Loans (each being herein called a
"Type" of Loan), as the Borrower shall specify in the related Borrowing Request
pursuant to Section 2.3 or Continuation/Conversion Notice pursuant to Section
4.5. Alternate Reference Rate Loans and Eurodollar Loans may be outstanding at
the same time, provided that (a) in the case of Eurodollar Loans, not more than
three (3) different Interest Periods shall be outstanding at any one time for
all such Loans, and (b) the Borrower shall specify Types of Loans and Interest
Periods such that no payment or prepayment of any principal on any Eurodollar
Loan shall result in an interruption of any Interest Period. In the absence of
instructions to the contrary in any Borrowing Request and in the absence of the
delivery of any Continuation/Conversion Notice, the Borrower shall be deemed to
have requested that any affected Loan be made or converted to an Alternate
Reference Rate Loan.
SECTION 2.3 Borrowing Request. By delivering to the Agent a Borrowing
Request at or before 9:00 a.m., Chicago time, on a Business Day, the Borrower
may from time to time irrevocably request, on not less than two (2) Business
Days' notice, that a Borrowing be made in an amount equal to all or any portion
of the unused Commitment Amount (i.e., the Commitment Amount minus the aggregate
amount of all outstanding Loans).
SECTION 2.4 Funding of Borrowing. On each Borrowing Date, each Lender
shall deposit with the Administrative Agent same day funds, at or before 10:00
a.m., Chicago time, in an amount equal to its Funding Percentage of the
requested Borrowing. Such deposit shall be made to such account as the
Administrative Agent shall specify. After timely receipt of such funds, the
Administrative Agent shall, at or before 1:00 p.m., Chicago time, on the
Borrowing Date, make such funds available to the Borrower by wire transfer in
same day funds to such accounts of the Borrower as the Borrower shall have
specified in writing. No Lender's obligation to make any portion of the Loans
shall be affected by any other Lender's failure to make any portion of the
Loans.
17
ARTICLE III
NOTE; RECORDKEEPING, PAYMENTS; SETOFF
SECTION 3.1 Note. The Loans shall be evidenced by a promissory note
(herein, as from time to time supplemented, extended, amended, modified or
replaced, called the "Note") substantially in the form set forth in Exhibit B,
with appropriate insertions, dated the date hereof, payable to the order of the
Administrative Agent for the benefit of the Lenders in the maximum principal
amount of the Loans.
SECTION 3.2 Recordkeeping. The Administrative Agent shall record in
its records, or at its option on the schedule attached to the Note, the
principal amount of the Loans, the date such Loans were made, the amount of the
Loans which are Alternate Reference Rate and Eurodollar Loans, each repayment
thereof and the other information provided for thereon. The aggregate unpaid
principal amount so recorded shall be rebuttable presumptive evidence of the
principal amount owing and unpaid on the Note. The failure so to record any such
information or any error in such recording of any information shall not,
however, limit or otherwise affect the actual obligations of the Borrower
hereunder or under the Note to repay the principal amount of the Loans together
with all interest accruing thereon.
SECTION 3.3 Payment of the Loans.
3.3.1 Required Payments.
(a) If at any time the aggregate outstanding principal amount of the
Loans shall exceed the Commitment Amount in effect at such time, the
Borrower shall make a principal repayment of the Loans in an amount equal
to such excess.
(b) The Borrower shall, immediately upon any acceleration of the
maturity date of the Loans pursuant to Section 11.2, repay the Loans.
3.3.2 Voluntary Payments. The Borrower may, from time to time on any
Business Day, make a voluntary payment, in whole or in part, of the
outstanding principal amount of any Loans, subject to Section 3.3.3.
3.3.3 Conditions Applicable to all Payments.
(a) Each payment of a portion of the Loans shall be made pro rata
among Loans of the same Type and, if applicable, having the same Interest
Period of all Lenders.
18
(b) No payment of any Eurodollar Loan may be made on any day other
than the last day of the Interest Period for such Loan.
(c) All voluntary payments shall require at least three but no more
than five Business Days' prior written notice to the Administrative Agent.
(d) All voluntary partial payments shall be in an aggregate minimum
amount of $1,000,000 and an integral multiple of $100,000.
(e) All payments of principal of the Loans (in whole or in part)
shall be accompanied by the payment of interest accrued on the principal
amount being prepaid.
SECTION 3.4 Making of Payments. All payments of principal of, or
interest on, the Note and of all fees and other Obligations to be made by the
Borrower pursuant to this Agreement shall be made by the Borrower to the
Administrative Agent for the Administrative Agent's account or for the benefit
of the Lenders, as applicable, in immediately available Dollars. All such
payments shall be deposited to the Borrower's Account No. 74-50915 at Bank of
America Illinois (or such other account as the Administrative Agent may from
time to time specify), not later than 10:00 am., Chicago time, on the date due.
The Administrative Agent shall have the authority to debit such account for the
amount of any payments due in order to effect each such payment. Funds received
after 11:30 a.m., Chicago time, shall be deemed to have been received by the
Administrative Agent on the next following Business Day (unless such failure to
receive funds in a timely fashion is due to the Administrative Agent's failure
to debit the Borrower's account).
SECTION 3.5 Due Date Extension. If any payment of principal or
interest with respect to the Loans falls due on a day which is not a Business
Day, then such due date shall be extended to the next following Business Day,
and additional interest shall accrue and be payable for the period of such
extension.
SECTION 3.6 Set-off. The Borrower agrees that each of the Lenders, the
Administrative Agent and any Participant shall have all rights of set-off
provided by applicable law, and in addition thereto, the Borrower agrees that at
any time (a) any payment or amount owing by the Borrower under or in connection
with this Agreement or the Loan Documents is then due or (b) any Unmatured Event
of Default pursuant to Section 10.1.5 or Event of Default exists, each Lender,
the Administrative Agent or any Participant may apply to the payment of such
payment or other amount any and all balances, credits, deposits, accounts or
19
moneys of the Borrower then or thereafter with such Lender, the Administrative
Agent or any Participant; provided, that, any proceeds or recoveries obtained by
any such Lender, the Administrative Agent or any Participant from any such
appropriation and application in excess of such entity's pro rata share of such
payments or amounts shall be shared with the other Lenders, the Administrative
Agent and the participants on a pro rata basis; provided, further however, no
such set-off shall be undertaken by any Lender or Participant domiciled in or
with respect to property located in California without the written consent of
the Administrative Agent.
ARTICLE IV
INTEREST; CONVERSION; EURODOLLAR LOANS
SECTION 4.1 Interest Rates. The Borrower shall pay interest on the
unpaid principal amount of the Loans for the period commencing on the date of
each such Loan until such Loan is paid in full, at the rates per annum specified
below:
(a) On the outstanding principal amount of the Loans maintained from
time to time as Alternate Reference Rate Loans, interest shall accrue at
the Alternate Reference Rate from time to time in effect; and
(b) On the outstanding principal amount of each Loan maintained from
time to time as a Eurodollar Loan, interest shall accrue at a rate per
annum equal to the Offshore Rate from time to time in effect for the
related Interest Period plus the Applicable Eurodollar Interest Rate Margin
in effect from time to time; and
(c) Notwithstanding the foregoing, (i) any amount past due shall bear
interest at a rate per annum (the "Default Rate") equal to the Alternate
Reference Rate from time to time in effect (but not less than the Alternate
Reference Rate as in effect at such occurrence date) plus 3.5% per annum,
and (ii) upon the occurrence and during the continuation of any Event of
Default, and after notice by the Administrative Agent to the Borrower of
the Required Lenders' intent to apply the Default Rate of interest the
outstanding principal amount of the Loans and any other monetary
Obligations shall bear interest at the Default Rate.
SECTION 4.2 Interest Payment Dates. Accrued interest on the Loans
shall be paid on each Payment Date, commencing with the first such date
following the Effective Date. After
20
maturity, accrued interest on the Loans shall be payable on demand.
SECTION 4.3 Setting of Rates. Interest rates hereunder shall be
calculated from time to time by the Administrative Agent and each such
calculation of an interest rate shall be conclusive and binding on the Borrower
in the absence of manifest error. Any change in the Applicable Eurodollar Rate
Margin resulting from a change in the Borrower's public ratings shall be
effective on the date such public rating change is announced.
SECTION 4.4 Computation of Interest and Fees. Interest on Eurodollar
Loans and fees shall be computed on the basis of actual days elapsed and a year
consisting of 360 days. Interest on Reference Rate Loans shall be computed on
the basis of actual days elapsed and a year consisting of 365 or 366 days, as
applicable.
SECTION 4.5 Continuation and Conversion Elections. At the election of
the Borrower pursuant to a Continuation/Conversion Notice delivered to the
Administrative Agent at or before 10:00 a.m., Chicago time, the Borrower may
elect, from time to time on not less than three (3) Business Days' notice:
(a) that all, or any portion, in an aggregate minimum amount of
$1,000,000 and an integral multiple of $100,000, of the Loans be converted
from Alternate Reference Rate Loans into Eurodollar Loans; and
(b) on the expiration of the Interest Period applicable to any
Eurodollar Loans, that all, or any portion, in an aggregate minimum amount
of $1,000,000 and an integral multiple of $100,000, of such Loans be
continued as Eurodollar Loans or converted into Alternate Reference Rate
Loans;
provided, however, that:
(i) no portion of the outstanding principal amount of any Loan
may be continued as, or be converted into, a Eurodollar Loan when any
Default has occurred and is continuing; and
(ii) no portion of the outstanding principal amount of any Loan
may be made or continued as, or be converted into, a Eurodollar Loan
if, after giving effect to such action, the Interest Period applicable
thereto shall extend beyond the date of any mandatory payment of such
Loan unless a sufficient principal amount of the Loans is being
21
maintained as Alternate Reference Rate Loans or as Eurodollar Loans
having Interest Periods ending on or prior to the date of any such
mandatory prepayment to permit such repayment to be applied in full to
Alternate Reference Rate Loans.
SECTION 4.6 Funding. In the event the Borrower elects to obtain any
portion of the Loans as Eurodollar Loans, or elects to convert any portion of
the principal amount of any Alternate Reference Rate Loan into a Eurodollar
Loan, each Lender may, if it so elects, fulfill its obligation to make or
continue any portion of the principal amount of the Loans as, or to convert any
portion of the principal amount of any Loan into, a Eurodollar Loan in
accordance with any election made by the Borrower by causing a foreign branch or
Affiliate of such Lender or an international banking facility created by such
Lender to make such Eurodollar Loan; provided, however, that in such event such
Eurodollar Loan shall be deemed to have been made by such Lender for the purpose
of all provisions of this Agreement, and the obligation of the Borrower to repay
such Eurodollar Loan shall nevertheless be to such Lender and shall be deemed to
be held by it, to the extent of such Eurodollar Loan, for the account of such
foreign branch, Affiliate or international banking facility.
SECTION 4.7 Eurodollar Rate Lending Unlawful. If as the result of any
Regulatory Change, any Lender shall determine (which determination shall be
conclusive and binding on the Borrower) that it is unlawful for such Lender to
make, continue, or maintain any Loan as, or to convert any Loan into, a
Eurodollar Loan, the obligations of all Lenders to make, continue or maintain
any portion of the principal amount of any Loan as, or to convert any Loan into,
a Eurodollar Loan shall be, upon such determination (and telephonic notice
thereof, confirmed in writing, to the Administrative Agent and the Borrower),
forthwith suspended until such Lender shall notify the Administrative Agent that
the circumstances causing such suspension no longer exist, and all Eurodollar
Loans shall automatically convert into Alternate Reference Rate Loans; provided,
however, that each Lender shall take any reasonable actions available to it
(including the designation of its lending office) consistent with legal and
regulatory restrictions that will avoid the need for such suspension and will
not, in the reasonable judgment of such Lender, be otherwise materially
disadvantageous to the Lender.
SECTION 4.8 Eurodollar Deposits Unavailable. If prior to the date on
which all or any portion of the principal amount of any Loan is to be made or
continued as, or be converted into, a Eurodollar Loan, the Administrative Agent
shall have determined (and telephonic notice thereof, confirmed in writing,
shall have been given to the Borrower and the Lenders) that:
22
(a) Dollar deposits in the relevant amount and for the relevant
Interest Period are not available to the Administrative Agent or any Lender
in the interbank eurodollar market; or
(b) by reason of circumstances affecting the interbank eurodollar
market in Dollars, adequate means do not exist for ascertaining the
interest rate applicable hereunder to such Eurodollar Loan;
then, the obligations of all Lenders to make or continue any portion of the
principal amount of any Loan as, or to convert any portion of any Loan into,
Eurodollar Loans shall forthwith be suspended until the Administrative Agent
shall notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist; provided, however, that each Lender shall take any
reasonable actions available to it (including the designation of its lending
office) consistent with legal and regulatory restrictions that will avoid the
need for such suspension and will not, in the reasonable judgment of such
Lender, be otherwise materially disadvantageous to the Lender.
ARTICLE V
FEES
SECTION 5.1 Payment of Fees. The Borrower agrees to pay the fees set
forth in this Article V. Where such fees are paid to the Administrative Agent
for the benefit of the Lenders, the Administrative Agent shall, upon receipt of
any such fees, promptly transmit to each Lender such Lender's ratable portion of
such fees.
SECTION 5.2 Non-Use Fee. The Borrower agrees to pay to the
Administrative Agent for the ratable benefit of the Lenders a fee for the period
commencing on the Effective Date and ending on the Commitment Termination Date,
equal to the Applicable Non-Use Fee Rate in effect from time to time in each
case applied to the daily average unused portion of the Commitment Amount from
time to time. Accrued non-use fees shall be payable in arrears on the last day
of each Fiscal Quarter of Borrower and on the Commitment Termination Date.
SECTION 5.3 Compensation of Administrative Agent. The Borrower shall
pay to the Administrative Agent such fees and other amounts as each shall agree
to in writing with the Borrower from time to time.
23
ARTICLE VI
INCREASED COSTS AND OTHER SPECIAL PROVISIONS
SECTION 6.1 Increased Costs. If, after the date hereof, any Regulatory
Change, or compliance by the Administrative Agent or any Lender with any request
or directive (whether or not having the force of law) of any Governmental
Authority, shall subject the Administrative Agent or any Lender to any Included
Tax or capital adequacy requirement with respect to, or shall otherwise increase
the effective cost of the Loans or such Lender's obligation to make, issue or
maintain the Loans (except for taxes, duties or similar charges including any
interest or penalties thereon which do not constitute Included Taxes), or shall
impose on a Lender any other condition, except with respect to taxes, duties or
similar charges including any interest or penalties thereon which do not
constitute Included Taxes, affecting the Loan, or such Lender's obligation to
make the Loans and the result of any of the foregoing is to increase the cost to
any Lender of making, issuing or maintaining the Loans, or to reduce the amount
of, or any rate of return on, any sum received or receivable by such Lender
under this Agreement or under the Note with respect thereto, then upon written
notice of such occurrence to the Borrower by such Lender (which notice shall
contain a statement setting forth a description of such occurrence and shall be
signed by an authorized officer of such Lender), the Borrower shall pay directly
to such Lender such additional amount or amounts as will compensate such Lender
for such increased cost or such reduction; provided, however, that each Lender
shall take any reasonable actions available to it (including the designation of
a different lending office) consistent with legal and regulatory restrictions
that will avoid the need for, or reduce the amount of, such compensation and
will not, in the reasonable judgment of such Lender, be otherwise materially
disadvantageous to such Lender.
SECTION 6.2 Payment for Credits. If the Borrower is required pursuant
to Section 6.1 to pay and pays a Lender for any increased costs or any reduction
of any rate of return, and if such Lender, in good faith, determines that it has
received or been granted a credit against or relief or remission for or
repayment of any tax paid or payable by it, it shall, to the extent that it
could do so without prejudice to the retention of the amount of such credit,
relief, remission or repayment, pay to the Borrower such amount as such Lender
shall, in good faith, have determined to be attributable to such payment by the
Borrower.
SECTION 6.3 Certificate Requirements. Each Lender that is not an
entity organized under the laws of the United States shall deliver to the
Borrower (with a copy to the
24
Administrative Agent) an accurate and complete original signed copy of an
Internal Revenue Service Form 1001 or 4224 properly claiming complete exemption
from withholding, within thirty days of the signing of this Agreement, and shall
promptly deliver such additional or supplemental forms thereafter as may be
required in order to maintain the effectiveness and accuracy of such forms. In
addition, each Lender shall deliver to the Borrower such other forms or
documentation as the Borrower may reasonably request in order to comply with the
United States tax laws.
SECTION 6.4 General Funding Losses. The Borrower hereby agrees that
upon demand by the Administrative Agent (which demand shall be accompanied by a
statement signed by an authorized officer of the Administrative Agent setting
forth the basis for the calculations of the amount being claimed) the Borrower
will indemnify such Lender against any loss or expense which each Lender may
sustain or incur as reasonably determined by such Lender in accordance with the
provisions of this Section 6.4, as a result of any failure of the Borrower to
borrow, continue, convert or repay any Loan on a date specified therefor in a
notice (whether written or oral) of borrowing continuation, conversion or
repayment pursuant to this Agreement. For the purposes of this Section 6.4 such
loss or expense for each Lender shall include an amount equal to the excess, if
any, of (a) its cost of obtaining in the interbank eurodollar market the funds
for the Loans being repaid or not borrowed for the period from the date of such
prepayment or failure to borrow to the last day of the then current Interest
Period for such Loans (or, in the case of a failure to borrow, the Interest
Period for such Loans that would have commenced on the date of such failure)
over (b) the amount of interest that such Lender would have earned had it
invested the entire amount of funds so prepaid or the entire amount of funds
acquired to effect, fund or maintain the Loans not borrowed, at the Federal
Funds Rate. For this purpose, all notices to a Lender or the Administrative
Agent pursuant to this Agreement shall be deemed to be irrevocable.
SECTION 6.5 Discretion of Lender as to Manner of Funding.
Notwithstanding any provision of this Agreement to the contrary, each Lender
shall be entitled to fund and maintain its funding of all or its portion of the
Loans in any manner it sees fit; provided, however, that each Lender shall take
any reasonable actions available to it (including the designation of its lending
office) consistent with legal and regulatory restrictions that will avoid
increased cost to the Borrower and will not, in the reasonable judgment of such
Lender, be otherwise materially disadvantageous to the Lender.
SECTION 6.6 Conclusiveness of Statements: Survival of Provisions. In
making the determinations contemplated by this Article VI, the Administrative
Agent or the Lenders may make such
25
reasonable estimates, assumptions, allocations and the like that the
Administrative Agent or the Lenders in good faith determine to be appropriate.
Upon making any determination pursuant to this Article VI, the Administrative
Agent shall provide the Borrower with a certificate signed by an authorized
officer of the Administrative Agent setting forth any estimates, assumptions,
allocations or other similar calculations made by the Administrative Agent in
connection with such determination. Subject to the foregoing, determinations and
statements of the Administrative Agent and the Lenders pursuant to this Article
VI and any certificates delivered in connection therewith shall be conclusive
absent manifest error. The provisions of this Article VI shall survive
termination of this Agreement.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make Loans
hereunder, the Borrower represents and warrants to each Lender that:
SECTION 7.1 Due Organization, Authorization, etc. Each of the Borrower
and each Subsidiary (a) is a corporation duly organized, validly existing and in
good standing under the laws of its state of incorporation, (b) is duly
qualified to do business and in good standing in each jurisdiction where,
because of the nature of its activities or properties, such qualification is
required, which jurisdictions are set forth with respect to the Borrower and
each Subsidiary on Schedule 7.1, (c) has the requisite corporate power and
authority and the right to own and operate its properties, to lease the property
it operates under lease, and to conduct its business as now and proposed to be
conducted, and (d) has obtained all material licenses, permits, consents or
approvals from or by, and has made all filings with, and given all notices to,
all Governmental Authorities having jurisdiction, to the extent required for
such ownership, operation and conduct (including, without limitation, the
consummation of the transactions contemplated by this Agreement) as to each of
the foregoing except where the failure to do so would not have a Material
Adverse Effect on the Borrower, or on the Borrower and its Subsidiaries taken as
a whole. The execution, delivery and performance by the Borrower of this
Agreement and the consummation of the transactions contemplated hereby and
thereby are within its corporate powers and have been duly authorized by all
necessary corporate action (including, without limitation, shareholder approval,
if required). Each of the Borrower and its Subsidiaries has received all
material governmental and other consents and approvals (if any shall be
required) necessary for such execution, delivery and performance,
26
and such execution, delivery and performance do not and will not contravene or
conflict with, or create a Lien or right of termination or acceleration under,
any Requirement of Law or Contractual Obligation binding upon the Borrower or
such Subsidiaries. This Agreement and each of the Loan Documents is (or when
executed and delivered will be) the legal, valid, and binding obligation of the
Borrower enforceable against the Borrower in accordance with its respective
terms; provided that the Borrower assumes for purposes of this Section 7.1 that
this Agreement and the other Loan Documents have been validly executed and
delivered by each of the parties thereto other than the Borrower.
SECTION 7.2 Statutory Financial Statements. (a) The Annual Statement
of each of the Insurance Subsidiaries (including, without limitation, the
provisions made therein for investments and the valuation thereof, reserves,
policy and contract claims and Statutory Liabilities) as filed with the
appropriate Governmental Authority of its state of domicile (the "Department")
and delivered to each Lender prior to the execution and delivery of this
Agreement, as of and for the 1991, 1992, 1993, 1994 and 1995 Fiscal Years, and
as of and for the Fiscal Quarters ended March 31, June 30 and September 30, 1996
(collectively, the "Statutory Financial Statements"), have been prepared in
accordance with SAP applied on a consistent basis (except as noted therein).
Each such Statutory Financial Statement was in material compliance with
applicable law when filed. The Statutory Financial Statements fairly present the
financial position, the results of operations, changes in equity and changes in
financial position of each such Insurance Subsidiary as of and for the
respective dates and periods indicated therein in accordance with SAP applied on
a consistent basis, except as set forth in the notes thereto or on Schedule
7.2(a). Except for liabilities and obligations, including, without limitation,
reserves, policy and contract claims and Statutory Liabilities (all of which
have been computed in accordance with SAP), disclosed or provided for in the
Statutory Financial Statements, the Insurance Subsidiaries did not have, as of
the respective dates of each of such financial statements, any material
liabilities or obligations (whether absolute or contingent and whether due or to
become due) which, in conformity with SAP, applied on a consistent basis, would
have been required to be or should be disclosed or provided for in such
financial statements. All books of account of each of the Insurance Subsidiaries
fully and fairly disclose all of the transactions, properties, assets,
investments, liabilities and obligations of such Insurance Subsidiary and all of
such books of account are in the possession of each such Insurance Subsidiary
and are true, correct and complete in all material respects.
27
(b) The investments of Insurance Subsidiaries reflected in the Annual
Statements filed with the respective Departments with respect to the 1995 Fiscal
Year (the "1995 Annual Statement") and the March 31, June 30 and September 30,
1996 Quarterly Statements (collectively, the "1996 Quarterly Statements") comply
in all material respects with all applicable requirements of the Department with
respect to each such Insurance Subsidiary as well as those of any other
applicable jurisdiction relating to investments in respect of which it may
invest its funds.
(c) The provisions made by each Insurance Subsidiary in its 1995
Annual Statement and in its 1996 Quarterly Statements for reserves, policy and
contract claims and Statutory Liabilities are in compliance in all material
respects with the requirements of the applicable Department as well as those of
any other applicable jurisdiction, and have been computed in accordance with
SAP.
(d) Marketable securities and short term investments reflected in the
1995 Annual Statement and in the 1996 Quarterly Statements of each Insurance
Subsidiary are valued at cost, amortized cost or market value, as required by
applicable law.
(e) Except as set forth on Schedule 7.2(e), there has been no material
adverse change in the business, assets, operations or financial condition of the
Borrower or any Subsidiary which has had or could reasonably be expected to have
a Material Adverse Effect on the Borrower, or on the Borrower and its
Subsidiaries taken as a whole since September 30, 1996.
SECTION 7.3 GAAP Financial Statements. (a) The Borrower has furnished
to the Administrative Agent and each of the Lenders (i) a copy of the unaudited
consolidated balance sheets of the Borrower and its Subsidiaries, and the
balance sheet of the Borrower on an unconsolidated basis as of the close of such
Fiscal Quarter and the related consolidated statements of income and cash flows
for that portion of the Fiscal Year ending as of the close of such a Fiscal
Quarter and (ii) a copy of the unaudited consolidated statement of Income of the
Borrower and its Subsidiaries, and the statement of income of the Borrower on an
unconsolidated basis, for such Fiscal Quarter, all prepared in accordance with
GAAP (subject to normal year-end adjustments and except that footnote and
schedule disclosures are abbreviated) which financial statements are complete
and correct and present fairly in accordance with GAAP (subject to normal year-
end adjustments) consolidated or unconsolidated, as the case may be results of
operations and cash flows of the Borrower as of the end of such Fiscal Quarter
and the period then ended.
28
(b) With respect to any representation and warranty which is deemed to
be made after the date hereof by the Borrower, the balance sheet and statements
of operations, of shareholders' equity and of cash flow, which as of such date
shall most recently have been furnished by or on behalf of the Borrower to each
Lender for the purposes of or in connection with this Agreement or any
transaction contemplated hereby, shall have been prepared in accordance with
GAAP consistently applied (except as disclosed therein), and shall present
fairly the consolidated financial condition of the corporations covered thereby
as at the dates thereof for the periods then ended, subject, in the case of
quarterly financial statements, to normal year-end audit adjustments.
SECTION 7.4 Litigation and Contingent Liabilities. (a) Except as set
forth (including estimates of the dollar amounts involved) in Schedule 7.4
hereto and (b) except for claims which are covered by Insurance Policies,
coverage for which has not been denied in writing, or which relate to insurance
policies or surety contracts issued by the Borrower or to which it is a party,
reinsurance treaties, reinsurance certificates, or any other such agreements
entered into by the Borrower in the ordinary course of business (referred to
herein as "Ordinary Course Litigation"), no claim, litigation (including,
without limitation, derivative actions), arbitration, governmental investigation
or proceeding or inquiry is pending or threatened against the Borrower or any of
its Subsidiaries (i) which would, if adversely determined, have a Material
Adverse Effect on the Borrower, or on the Borrower and its Subsidiaries taken as
a whole or (ii) which relates to any of the transactions contemplated hereby,
and there is no basis known to the Borrower for any of the foregoing. Other than
any liability incident to such claims, litigation or proceedings, the Borrower
has no material Contingent Liabilities not provided for or referred to in the
financial statements delivered pursuant to Section 7.3.
SECTION 7.5 Investment Company Act. Other than Horace Mann Investors,
Inc., neither the Borrower nor any of its Subsidiaries is an "investment
company" or a company "controlled by an investment company," within the meaning
of the Investment Company Act of 1940, as amended.
SECTION 7.6 Regulations G, T, U and X. Neither the Borrower nor any
of its Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying margin stock. None of the Borrower, any of its Subsidiaries or any
Person acting on their behalf has taken or will take action to cause the
execution, delivery or performance of this Agreement or the Note, the making or
existence of the Loans or the use of proceeds of
29
the Loans to violate Regulations G, T, U or X of the F.R.S. Board.
SECTION 7.7 Proceeds. The proceeds of the Loans will be used (a) to
repay existing Debt of the Borrower and (b) for other general corporate
purposes. None of such proceeds will be used in violation of applicable law,
and none of such proceeds will be used, directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of buying or carrying any margin
stock as defined in Regulation U of the F.R.S. Board.
SECTION 7.8 Insurance. The Borrower and its Subsidiaries maintain
Insurance Policies to such extent and against such hazards and liabilities as is
required by law or customarily maintained by prudent companies similarly
situated.
SECTION 7.9 Accuracy of Information. All factual written information
furnished heretofore or contemporaneously herewith by or on behalf of the
Borrower or any of its Subsidiaries to the Administrative Agent or the Lenders
for purposes of or in connection with this Agreement or any of the transactions
contemplated hereby, as supplemented to the date hereof, is and all other such
factual written information hereafter furnished by or on behalf of the Borrower
or any of its Subsidiaries to the Administrative Agent or the Lenders will be,
true and accurate in every material respect on the date as of which such
information is dated or certified and not incomplete by omitting to state any
material fact necessary to make such information not misleading.
SECTION 7.10 Subsidiaries. Schedule 7.10 contains a complete list of
the Borrower's Subsidiaries.
SECTION 7.11 Insurance Licenses. Except as set forth on Schedule
7.11, to the best of the Borrower's knowledge, no license (including, without
limitation, licenses or certificates of authority from applicable insurance
departments), permits or authorizations to transact insurance and reinsurance
business (collectively, the "Licenses") is the subject of a proceeding for
suspension or revocation or any similar proceedings, there is no sustainable
basis for such a suspension or revocation, and no such suspension or revocation
is threatened by any state insurance department.
SECTION 7.12 Taxes. The Borrower and each of its Subsidiaries has
filed all material tax returns that are required to be filed by it, and has paid
or provided adequate reserves for the payment of all material taxes, including,
without limitation, all payroll taxes and federal and state withholding taxes,
and all assessments payable by it that have become due, other than those that
are not yet delinquent or that are disclosed on
30
Schedule 7.12 and are being contested in good faith by appropriate proceedings
and with respect to which reserves have been established, and are being
maintained, in accordance with GAAP. Except as set forth in Schedule 7.12,
there is no ongoing audit or, to the Borrower's knowledge, other governmental
investigation of the tax liability of the Borrower or any of its Subsidiaries
and there is no unresolved claim by a taxing authority concerning the Borrower's
or any such Subsidiary's tax liability, for any period for which returns have
been filed or were due. As used in this Section 7.12, the term "taxes" includes
all taxes of any nature whatsoever and however denominated, including, without
limitation, excise, import, governmental fees, duties and all other charges, as
well as additions to tax, penalties and interest thereon, imposed by any
government or instrumentality, whether federal, state, local, foreign or other.
SECTION 7.13 Compliance with Laws. Neither the Borrower nor any of
its Subsidiaries is in violation of any law, ordinance, rule, regulation, order,
policy, guideline or other requirement of any Governmental Authority, if the
effect of such violation could reasonably be expected to have a Material Adverse
Effect on the Borrower, or on the Borrower and its Subsidiaries taken as a whole
and, to the best of the Borrower's knowledge, no such violation has been alleged
and each of the Borrower and its Subsidiaries (a) has filed in a timely manner
all reports, documents and other materials required to be filed by it with any
Governmental Authority, if such failure to so file could reasonably be expected
to have a Material Adverse Effect on the Borrower, or on the Borrower and its
Subsidiaries taken as a whole; and the information contained in each of such
filings is true, correct and complete in all material respects and (b) has
retained all records and documents required to be retained by it pursuant to any
law, ordinance, rule, regulation, order, policy, guideline or other requirement
of any Governmental Authority, if the failure to so retain such records and
documents could reasonably be expected to have a Material Adverse Effect on the
Borrower, or on the Borrower and its Subsidiaries taken as a whole.
ARTICLE VIII
COVENANTS
Until the Loans and all other Obligations are paid in full, and until
the Commitment Termination Date, the Borrower agrees that, unless at any time
the Required Lenders shall otherwise expressly consent in writing, it will:
SECTION 8.1 Affirmative Covenants.
31
8.1.1 Reports, Certificates and Other Information. Furnish or cause
to be furnished to the Administrative Agent and the Lenders:
(a) GAAP Financial Statements:
(i) Within 53 days after the close of each of the first three
Fiscal Quarters of each Fiscal Year of the Borrower, (A) a copy of the
unaudited consolidated balance sheets of the Borrower and its
Subsidiaries, and the balance sheet of the Borrower on an
unconsolidated basis, as of the close of such quarter and the related
consolidated statements of income and cash flows for that portion of
the Fiscal Year ending as of the close of such Fiscal Quarter, and (B)
a copy of the unaudited consolidated statement of income of the
Borrower and its Subsidiaries, and the statement of income of the
Borrower on an unconsolidated basis, for such Fiscal Quarter, all
prepared in accordance with GAAP (subject to normal year-end
adjustments and except that footnote and schedule disclosure may be
abbreviated) and accompanied by the certification of the chief
executive officer, chief financial officer or treasurer of the
Borrower that all such financial statements are complete and correct
and present fairly in accordance with GAAP (subject to normal year-end
adjustments) the consolidated, or unconsolidated, as the case may be,
results of operations and cash flows of the Borrower as at the end of
such Fiscal Quarter and for the period then ended.
(ii) Within 98 days after the close of each Fiscal Year, a copy
of the annual audited consolidated financial statements of the
Borrower and its Subsidiaries, consisting of consolidated balance
sheets and consolidated statements of income and retained earnings and
cash flows, setting forth in comparative form in each case the
consolidated figures for the previous Fiscal Year, which financial
statements shall be prepared in accordance with GAAP, certified
without material qualification by the independent certified public
accountants regularly retained by the Borrower, or any other firm of
independent certified public
32
accountants of recognized national standing selected by the Borrower
and reasonably acceptable to the Required Lenders that all such
financial statements are complete and correct and present fairly in
accordance with GAAP the consolidated financial position and the
consolidated results of operations and cash flows of the Borrower and
its Subsidiaries as at the end of such year and for the period then
ended.
(b) Tax Returns. If requested by the Administrative Agent, copies of
all federal, state, local and foreign tax returns and reports in respect of
income, franchise or other taxes on or measured by income (excluding sales,
use or like taxes) filed by the Borrower or any of its Subsidiaries.
(c) SAP Financial Statements:
(i) Within 8 days after the applicable regulatory filing date
for each of its Fiscal Quarters, but in any event within 53 days after
the end of each of the first three Fiscal Quarters of each Fiscal Year
of each Insurance Subsidiary a copy of the Quarterly Statement of such
Insurance Subsidiary for such Fiscal Quarter, all prepared in
accordance with SAP and accompanied by the certification of the chief
financial officer or chief executive officer of each Insurance
Subsidiary that all such financial statements are complete and correct
and present fairly in accordance with SAP the financial position of
such Insurance Subsidiary for the periods then ended.
(ii) Within 5 days after the applicable regulatory filing date
for each of its Fiscal Years, but in any event within 65 days after
the end of each Fiscal Year of each Insurance Subsidiary a copy of the
Annual Statement of each Insurance Subsidiary for such Fiscal Year
prepared in accordance with SAP and accompanied by the certification
of the chief financial officer or chief executive officer of each
Insurance Subsidiary that such financial statement is complete and
correct and presents fairly in accordance with SAP the financial
position of such Insurance Subsidiary for the period then ended.
33
(iii) Within 8 days after the applicable regulatory filing date
for each of its Fiscal Years, but in any event within 98 days after
the close of each Fiscal Year of each Insurance Subsidiary a copy of
each Insurance Subsidiary's "Statement of Actuarial Opinion" which is
provided to the applicable Department (or equivalent information
should the Department no longer require such a statement) as to the
adequacy of loss reserves of such Insurance Subsidiary. Such opinion
shall be in the format prescribed by the applicable Insurance Code.
(d) Notice of Default, etc. Immediately after an Executive Officer
of the Borrower knows or has reason to know of the existence of any
Default, or any development or other information which would have a
Material Adverse Effect on the Borrower, or on the Borrower and its
Subsidiaries taken as a whole, telephonic notice specifying the nature of
such Default or development or information, including the anticipated
effect thereof, which notice shall be promptly confirmed in writing within
two (2) Business Days.
(e) Other Information. The following certificates and other
information related to the Borrower:
(i) Promptly after completion of each such item but in no event
later than the first day of April of each Fiscal Year of the Borrower,
a copy of the Borrower's (A) operating budget, (B) new business plans,
if any, and (C) estimated quarterly Statutory EBT of the Insurance
Subsidiaries for such Fiscal Year which, in the case of each of clause
(A) and (B), are in the form approved by the Board of Directors of the
Borrower.
(ii) Within five (5) Business Days of receipt, a copy of any
financial examination reports by a Governmental Authority with respect
to the Insurance Subsidiaries relating to the insurance business of
the Insurance Subsidiaries (when, and if, prepared); provided, the
Borrower shall only be required to deliver any interim report
hereunder at such time as Borrower has
34
knowledge that a final report will not be issued and delivered to the
Administrative Agent within 90 days of any such interim report.
(iii) Copies of all Insurance Holding Company System Act filings
with Governmental Authorities by the Borrower or any Subsidiary not
later than five (5) Business Days after such filings are made,
including, without limitation, filings which seek approval of
Governmental Authorities with respect to transactions between the
Borrower or such Subsidiary and its Affiliates.
(iv) Within five (5) Business Days of such notice, notice of
actual suspension, termination or revocation of any material License
of the Insurance Subsidiaries by any Governmental Authority or of
receipt of notice from any Governmental Authority notifying the
Borrower of a hearing (which is not withdrawn within ten (10) days)
relating to such a suspension, termination or revocation, including
any request by a Governmental Authority which commits the Borrower to
take, or refrain from taking, any action or which otherwise materially
and adversely affects the authority of the Borrower to conduct its
business.
(v) Within five (5) Business Days of such notice, notice of any
pending or threatened investigation or regulatory proceeding (other
than routine periodic investigations or reviews) by any Governmental
Authority concerning the business, practices or operations of the
Borrower, including any agent or managing general agent thereof.
(vi) Promptly, such additional financial and other information
as the Administrative Agent may from time to time reasonably request.
(vii) Promptly, notice of any actual or, to the best of the
Borrower's knowledge, proposed material changes in the Insurance Code
governing the investment or dividend practices of any Insurance
Subsidiary.
35
(f) Compliance Certificates. Concurrently with the later to occur of
delivery to the Administrative Agent of the GAAP financial statements and
delivery to the Administrative Agent of the SAP financial statements under
Sections 8.1.1(a) and 8.1.1(c), for each Fiscal Quarter and Fiscal Year of
the Borrower, and at any other time no later than thirty (30) Business Days
following a written request of the Administrative Agent, a duly completed
Compliance Certificate, signed by the chief financial officer or treasurer
of the Borrower, containing, among other things, a computation of, and
showing compliance with, each of the applicable financial ratios and
restrictions contained in Sections 8.2.1 through 8.2.3, and to the effect
that, to the best of such officer's knowledge, as of such date no Default
has occurred and is continuing.
(g) Reports to SEC and to Shareholders. Promptly upon the filing or
making thereof (i) copies of each filing and report made by the Borrower or
any of its Subsidiaries with or to any securities exchange or the
Securities and Exchange Commission and (ii) of each communication from the
Borrower to shareholders generally; provided that only those items
described in clauses (i) and (ii) of this Section 8.1.1(g) which are
material to the interest of the Lenders hereunder shall be provided to the
Administrative Agent and the Lenders hereunder.
(h) Notice of Litigation, License and ERISA Matters. Upon learning
of the occurrence of any of the following, written notice thereof,
describing the same and the steps being taken by the Borrower with respect
thereto: (i) the institution of, or any adverse determination in, any
litigation, arbitration proceeding or governmental proceeding (including
any Internal Revenue Service or Department of Labor proceeding with respect
to any Plan or Welfare Plan) which could, if adversely determined, be
reasonably expected to have a Material Adverse Effect on the Borrower, or
on the Borrower and its Subsidiaries taken as a whole and which is not
Ordinary Course Litigation, (ii) the failure of any Person in the
Controlled Group to make a required contribution to any Plan if such
failure is sufficient to give rise to a Lien under section 302(f)(1) of
ERISA, (iii) the institution of any steps by any entity in the Controlled
Group to withdraw from, or the institution of any steps by the Borrower or
any other Person to terminate under a distress termination, any Plan or the
taking of any
36
action with respect to a Plan which could result in the requirement that
the Borrower or any of its Subsidiaries furnish a bond or other security to
such Plan, or the occurrence of any event with respect to any Plan which
could result in the incurrence by the Borrower or any of its Subsidiaries
of any material liability (other than a liability for contributions or
premiums), fine or penalty, (iv) the commencement of any dispute which
might lead to the modification, transfer, revocation, suspension or
termination of this Agreement or any Loan Document or (v) any event which
could be reasonably expected to have a Material Adverse Effect on the
Borrower, or on the Borrower and its Subsidiaries taken as a whole.
(i) Other Information. From time to time such other information
concerning the Borrower or any Subsidiary as the Administrative Agent may
reasonably request.
8.1.2 Corporate Existence; Foreign Qualification. Do and cause to be
done at all times all things necessary to (a) maintain and preserve the
corporate existence of the Borrower, (b) be, and ensure that each
Subsidiary of the Borrower is, duly qualified to do business and be in good
standing as a foreign corporation in each jurisdiction where the nature of
its business makes such qualification necessary, and (c) do or cause to be
done all things necessary to preserve and keep in full force and effect the
Borrower's corporate existence.
8.1.3 Books, Records and Inspections. (a) Maintain, and cause each
of its Subsidiaries to maintain, materially complete and accurate books and
records, (b) permit, and cause each of its Subsidiaries to permit, access
at reasonable times by the Administrative Agent to its books and records,
(c) permit, and cause each of its Subsidiaries to permit, the
Administrative Agent or its designated representative to inspect at
reasonable times its properties and operations, and (d) permit, and cause
each of its Subsidiaries to permit, the Administrative Agent to discuss its
business, operations and financial condition with its officers.
8.1.4 Insurance. Maintain, and cause each of its Subsidiaries to
maintain, Insurance Policies to such extent and against such hazards and
liabilities as is required by law or customarily maintained by prudent
companies similarly situated.
37
8.1.5 Taxes and Liabilities. Pay, and cause each of its Subsidiaries
to pay, when due all material taxes, assessments and other material
liabilities except as contested in good faith and by appropriate
proceedings with respect to which reserves have been established, and are
being maintained, in accordance with GAAP if and so long as such contest
could not reasonably be expected to have a Material Adverse Effect on the
Borrower, or on the Borrower and its Subsidiaries taken as a whole.
8.1.6 Compliance with Laws. Comply, and cause each of its
Subsidiaries to comply, (a) with all federal, state and local laws, rules
and regulations related to its businesses (including, without limitation,
the establishment of all insurance reserves required to be established
under SAP and applicable laws restricting the investments of the Borrower),
and (b) with all Contractual Obligations binding upon such entity, except
where failure so to comply would not in the aggregate have a Material
Adverse Effect on the Borrower, or on the Borrower and its Subsidiaries
taken as a whole.
8.1.7 Conduct of Business. Engage on a consolidated basis with its
Subsidiaries primarily in the same business in which the Borrower and its
Subsidiaries are engaged on the date hereof.
SECTION 8.2 Negative Covenants. From and after the Effective Date.
8.2.1 Consolidated Debt to Total Capitalization. Not permit the
principal amount of Consolidated Debt to exceed forty percent (40%) of the
sum of Net Worth plus Consolidated Debt plus warrants of the Borrower
subject to redemption as reflected in the balance sheets delivered pursuant
to Section 8.1.1(a).
8.2.2 Risk Based Capital. Not permit (a) the adjusted surplus (as
defined by the applicable Department's risk based capital guidelines) of
each of Horace Mann Life Insurance Company, Horace Mann Insurance Company
and Teachers Insurance Company to be less than 150% of such Insurance
Subsidiary's respective Company Action Level (as defined by the applicable
Department's risk based capital guidelines) as of the end of each Fiscal
Year and (b) the adjusted surplus (as defined by the applicable
Department's risk based capital guidelines) of any other Insurance
Subsidiary to be less than 125% of such Insurance Subsidiary's Company
Action Level (as defined by the applicable Department's risk based capital
guidelines) as of the end of each Fiscal Year.
38
8.2.3 Statutory EBT to Future Interest Expense Ratio. Not permit the
Statutory EBT to Future Interest Expense Ratio at any time to be less than
3.0. "Statutory EBT to Future Interest Expense Ratio" at any time shall
mean the amount obtained by dividing (x) the Combined Statutory EBT of the
Insurance Subsidiaries for the four Fiscal Quarters then most recently
ended by (y) the aggregate Future Interest Expense of the Borrower and its
Subsidiaries for the next four Fiscal Quarters.
8.2.4 Mergers, Consolidations and Sales. Not, and not permit any of
its Subsidiaries to, (a) merge or consolidate, or purchase or otherwise
acquire all or substantially all of the assets or stock of any class of, or
any partnership or joint venture interest in, any other Person, other than
(i) the acquisition by Borrower of all or a portion of the capital stock of
Horace Mann Life Insurance Company from Allegiance Life Insurance Company,
(ii) mergers or acquisitions where the corporate existence of the Borrower
is not affected by such merger or acquisition and, subsequent to such
merger or acquisition, the Borrower is in compliance with all the
provisions of this Agreement and no Default shall exist, or (b) sell,
transfer, convey or lease all or any substantial part of its assets or sell
or assign with or without recourse any receivables, other than any sale,
transfer, conveyance or lease in the ordinary course of business.
8.2.5 Regulations G, T, U and X. Not, and not permit any of its
Subsidiaries to, use or permit any proceeds of the Loans to be used, either
directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of purchasing or carrying margin stock, as defined in Regulation
U of the F.R.S. Board.
8.2.6 Other Agreements. Not, and not permit any of its Subsidiaries
to, enter into any agreement containing any provision which would be
violated or breached by the performance of obligations hereunder or under
any instrument or document delivered or to be delivered by it hereunder or
in connection herewith.
8.2.7 Transactions with Affiliates. Not, and not permit any
Subsidiary to, enter into, or cause, suffer or permit to exist, directly or
indirectly, any arrangement, transaction or contract with any of its
Affiliates unless such arrangement, transaction or contract is in the
ordinary course of business, reasonably intended to satisfy the reasonable
business requirements of the Borrower or such Subsidiary, and on terms and
conditions at least as favorable to the Borrower or such Subsidiary as the
terms
39
and conditions which would apply in a similar arrangement, transaction or
contract with a Person or entity not an Affiliate; provided that
transactions between the Borrower and any wholly-owned Subsidiary of the
Borrower or between any wholly-owned Subsidiaries of the Borrower shall be
excluded from the restrictions set forth in this Section 8.2.7.
8.2.8 Liens. Not, and not permit any of its Subsidiaries to, create
or permit to exist any Lien with respect to any assets now or hereafter
existing or acquired, except the following: (a) Liens for current taxes not
delinquent or for taxes being contested in good faith and by appropriate
proceedings and with respect to which adequate reserves have been
established, and are being maintained, in accordance with GAAP, (b) Liens
arising in the ordinary course of business or by operation of law for sums
being contested in good faith and by appropriate proceedings and with
respect to which adequate reserves have been established, and are being
maintained, in accordance with GAAP, or for sums not due, and in either
case not involving any deposits or advances for borrowed money or the
deferred purchase price of property or services, (c) Liens in connection
with the acquisition of fixed assets after the date hereof and attaching
only to the property being acquired, (d) Liens incurred in the ordinary
course of business in connection with workers' compensation, unemployment
insurance or other forms of governmental insurance or benefits, (e)
mechanics', workers', materialmen's and other like Liens arising in the
ordinary course of business in respect of obligations which are not
delinquent or which are being contested in good faith and by appropriate
proceedings and with respect to which adequate reserves have been
established, and are being maintained, in accordance with GAAP, and (f)
other Liens securing Debt which Debt does not in the aggregate exceed
$10,000,000; provided, however, that, no Lien shall be permitted to exist
on the shares of stock of any of its Subsidiaries.
ARTICLE IX
CONDITIONS
SECTION 9.1 Conditions to Occurrence of the Effective Date. The
occurrence of the Effective Date shall be subject to receipt by the
Administrative Agent of all of the following, each duly executed and dated the
Effective Date (or such earlier date as shall be satisfactory to the
Administrative Agent), each in form and substance satisfactory to the
Administrative Agent (with sufficient copies for each Lender):
40
9.1.1 This Agreement and Certain Related Documents. This Agreement,
the Note and such other Loan Documents as are required to be delivered by
the terms of this Agreement.
9.1.2 Resolutions. Certified copies of resolutions of the Board of
Directors of the Borrower authorizing the execution, delivery and
performance, respectively, of those documents and matters required of it
with respect to this Agreement or the other Loan Documents.
9.1.3 Incumbency and Signatures. A certificate of an Authorized
Officer certifying the names of the individual or individuals authorized to
sign this Agreement and the other Loan Documents, together with a sample of
the true signature of each such individual. (The Lenders may conclusively
rely on each such certificate until formally advised by a like certificate
of any changes therein.)
9.1.4 Opinion of Counsel. The opinion of the general counsel of the
Borrower, addressed to the Administrative Agent and the Lenders, in the
form of Exhibit E.
9.1.5 Charter and By-Laws of the Borrower. Copies of the corporate
charter and by-laws of the Borrower certified by the Secretary of the
Borrower.
9.1.6 Insurance Proceedings. Certificate of an Authorized Officer
that there are no material insurance regulatory proceedings pending or
threatened against the Borrower in any state.
9.1.7 Material Adverse Change Certificate. An officer's certificate,
signed by an Authorized Officer, certifying that to such officer's best
knowledge, since September 30, 1996, no event has occurred which
individually or in the aggregate could reasonably be expected to have a
Material Adverse Effect on the Borrower, or on the Borrower and its
Subsidiaries taken as a whole.
9.1.8 Payment of Existing Credit Agreement. Evidence satisfactory to
the Administrative Agent that prior to or simultaneously with the initial
Borrowing under this Agreement all obligations of the Borrower under that
certain Second Amended and Restated Credit Agreement dated as of January 8,
1996 among the Borrower, various financial
41
institutions and Bank of America Illinois, as administrative agent, have
been paid in full.
9.1.9 Other. Such other documents as the Administrative Agent may
reasonably request.
SECTION 9.2 Conditions to All Borrowings. The obligation of the
Lenders to make all Loans shall be subject to the prior or concurrent
satisfaction (in form and substance satisfactory to the Administrative Agent) of
each of the conditions precedent set forth below:
9.2.1 No Default. No Default shall have occurred and be continuing
or will result from the making of the Loans.
9.2.2 Warranties and Representations. (a) All warranties and
representations contained in this Agreement (other than Section 7.4 except
in the case of the initial Borrowing) shall be true and correct in all
material respects as of the date of any Loan, with the same effect as
though made on the date of and concurrently with the making of such Loan
(except where such representation speaks as of specified date) and (b) all
covenants contained herein and in such documents to be performed by each of
the parties thereto (other than the Administrative Agent or the Lenders)
prior to the date of any Loan shall have been performed.
9.2.3 Litigation. (a) No litigation (including, without limitation,
derivative actions), arbitration, governmental investigation or proceeding
or inquiry shall be, on the date of any Loan, pending, or to the knowledge
of the Borrower, threatened which seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or to obtain material relief as
a result of, the transactions contemplated hereunder or, in the reasonable
opinion of the Required Lenders, could be reasonably expected to be
materially adverse to any of the parties to this Agreement and which is not
Ordinary Course Litigation, and (b) in the reasonable opinion of the
Required Lenders, no material adverse development shall have occurred in
any litigation (including, without limitation, derivative actions),
arbitration, government investigation or proceeding or inquiry disclosed in
Schedule 7.4 which is likely to have a Material Adverse Effect on the
Borrower, or on the Borrower and its Subsidiaries taken as a whole.
42
9.2.4 Fees. The fees referred to in Article V which are due and
payable on or prior to the Effective Date or the date of any Loan shall
have been paid to the Administrative Agent, where applicable, for the
benefit of the Lenders.
9.2.5 Borrowing Request. The Administrative Agent shall have
received a Borrowing Request in form and substance acceptable to the
Administrative Agent.
ARTICLE X
EVENTS OF DEFAULT AND THEIR EFFECT
SECTION 10.1 Events of Default. Each of the following shall
constitute an Event of Default under this Agreement:
10.1.1 Non-Payment of Loan. Default in the payment when due of any
principal on the Loans.
10.1.2 Non-Payment of Interest, Fees, etc. Default, and continuance
thereof for three (3) Business Days, in the payment when due of interest on
the Loans or of any other amount payable hereunder or under the Loan
Documents.
10.1.3 Non-Payment of Other Debt. (a) Default in the payment when due
(subject to any applicable grace period), whether by acceleration or
otherwise, of any other Debt of, or guaranteed by, the Borrower or any of
its Subsidiaries if the aggregate amount of Debt of the Borrower and/or any
of its Subsidiaries which is accelerated or due and payable, or which may
be accelerated or otherwise become due and payable, by reason of such
default or defaults is $10,000,000 or more, or (b) default in the
performance or observance of any obligation or condition with respect to
any such other Debt of, or guaranteed by, the Borrower and/or any of its
Subsidiaries if the effect of such default or defaults is to accelerate the
maturity of any such Debt of $10,000,000 or more in the aggregate or to
permit the holder or holders of such Debt of $10,000,000 or more in the
aggregate, or any trustee or agent for such holders, to cause such Debt to
become due and payable prior to its expressed maturity.
10.1.4 Other Material Obligations. Except for obligations covered
under other provisions of this Article X, default in the payment when due,
or in the performance or observance of, any material obligation of, or
material condition agreed to by, the Borrower or
43
any of its Subsidiaries with respect to any material purchase or Lease
Obligation (except only to the extent that the existence of any such
default is being contested by the Borrower in good faith and by appropriate
proceedings and the Borrower has established, and is maintaining, adequate
reserves therefor in accordance with GAAP) which default continues for a
period of 30 days.
10.1.5 Bankruptcy, Insolvency, etc. (a) (i) The Borrower becomes
insolvent or generally fails to pay, or admits in writing its inability to
pay, debts as they become due; or (ii) the Borrower applies for, consents
to, or acquiesces in the appointment of, a trustee, receiver or other
custodian or similar Person for the Borrower or any property of any
thereof, or makes a general assignment for the benefit of creditors; or
(iii) in the absence of such application, consent or acquiescence, a
trustee, receiver or other custodian or similar Person is appointed for the
Borrower or for a substantial part of the property of any thereof, unless
(A) the Borrower institutes appropriate proceedings to contest or discharge
such appointment within 30 days and thereafter continuously and diligently
prosecutes such proceedings and (B) such appointment is in fact discharged
within 60 days of such appointment; or (iv) any bankruptcy, reorganization,
debt arrangement, or other case or proceeding under any bankruptcy or
insolvency law, or any dissolution or liquidation proceeding is commenced
in respect of the Borrower, unless (A) such case or proceeding is not
commenced by the Borrower, (B) such case or proceeding is not consented to
or acquiesced in by the Borrower, (C) the Borrower institutes appropriate
proceedings to dismiss such case or proceeding within 30 days and
thereafter continuously and diligently prosecutes such proceedings, and (D)
such case or proceeding is in fact dismissed within 60 days after the
commencement thereof; or (E) the Borrower takes any action to authorize, or
in furtherance of, any of the foregoing; or (b) (i) there shall be
commenced against Horace Mann Life Insurance Company, Horace Mann Insurance
Company or Teachers Insurance Company any case, proceeding or other action
(A) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, supervision, conservatorship,
liquidation, reorganization or relief of debtors, seeking to have an order
for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization,
44
rehabilitation, conservation, supervision, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with
respect to it or its debts, obligations or liabilities, or (B) seeking
appointment of a receiver, trustee, custodian, rehabilitator, conservator,
supervisor, liquidator or other similar official for it or for all or any
substantial part of its assets, in each case which (1) results in the entry
of an order for relief or any such adjudication or appointment or (2)
remains undismissed, undischarged or unbonded for a period of 60 days; or
(ii) there shall be commenced against any of such Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part
of its assets which results in the entry of an order for any such relief
which shall not have been vacated, discharged, or stayed or bonded pending
appeal within 60 days from the entry thereof; or (iii) any of such
Subsidiaries shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in
clause(b)(i) or (ii) above; or (iv) any Governmental Authority shall issue
any order of conservation, supervision or any other order of like effect
relating to any of such Subsidiaries.
10.1.6 Non-compliance With Certain Provisions. Failure of the
Borrower to comply with the provisions of each of Sections 8.1.1(d),
8.1.1(h), 8.2.1 through 8.2.4, 8.2.7 or 8.2.8.
10.1.7 Non-compliance With Other Provisions. Failure by the Borrower
to comply with or to perform any provision of this Agreement or the other
Loan Documents (and not constituting an Event of Default under any of the
other provisions of this Article X) and continuance of such failure for 30
days after notice thereof from the Administrative Agent to the Borrower.
10.1.8 Warranties and Representations. Any warranty or representation
made by or on behalf of the Borrower or any Subsidiary herein is inaccurate
or incorrect or is breached or false or misleading in any material respect
as of the date such warranty or representation is made; or any schedule,
certificate, financial statement, report, notice, or other instrument
furnished by or on behalf of Borrower or any Subsidiary to the
Administrative Agent or the Lenders is false or misleading in any material
respect on the
45
date as of which the facts therein set forth are stated or certified.
10.1.9 Employee Benefit Plans. A contribution failure occurs with
respect to any Plan sufficient to give rise to a Lien against the Borrower
or any of its Subsidiaries under section 302(f)(1) of ERISA (as in effect
on the Effective Date); or withdrawal by one or more companies in the
Controlled Group from one or more Multiemployer Plans to which it or they
have an obligation to contribute and the withdrawal liability (without
unaccrued interest) to multiemployer plans as a result of such withdrawal
or withdrawals (including any outstanding withdrawal liability that the
Controlled Group has incurred on the date of such withdrawal) is material.
10.1.10 Change in Control. A Change in Control occurs.
10.1.11 Litigation. (a) There shall be entered against the Borrower
one or more judgments, awards or decrees, or orders of attachment,
garnishment or any other writ, which exceed ten percent (10%) of Net Worth
at any one time outstanding, excluding judgments, awards, decrees, orders
or writs (i) for which there is insurance, but only to the extent there is
actual insurance coverage, (ii) for which there is indemnification (upon
terms and from creditworthy indemnitors which are satisfactory to
Administrative Agent), but only to the extent there is actual
indemnification, (iii) which have been in force for less than the
applicable period for filing an appeal so long as execution is not levied
thereunder (or in respect of which the Borrower or its appropriate
Subsidiary shall at the time in good faith be prosecuting an appeal or
proceeding for review and in respect of which a stay of execution or
appropriate appeal bond shall have been obtained pending such appeal or
review), (iv) which constitute Ordinary Course Litigation, or (v) which are
reserved for, to the actual extent of reserves or (b) there has been a
final judgment or final judgments for the payment of money exceeding, in
the aggregate, ten percent (10%) of Net Worth rendered against the Borrower
or any of its Subsidiaries by a court of competent jurisdiction and such
judgment(s) remain undischarged for a period (during which execution shall
not be effectively stayed) of 60 days after such judgment(s) become final
and nonappealable.
46
10.1.12 Change in Law. Any change is made in the Insurance Code which
affects the dividend practices of any Insurance Subsidiary and which is
reasonably likely to have a Material Adverse Effect on the ability of the
Borrower to perform its obligations under the Agreement and such
circumstances shall continue for 120 days.
SECTION 10.2 Effect of Event of Default. If any Event of Default
described in Section 10.1.5 shall occur, the Loans and the Note and all other
Obligations shall become immediately due and payable, all without notice of any
kind; and, in the case of any other Event of Default, the Administrative Agent
may, and upon the written request of the Required Lenders shall, terminate the
Commitments hereunder and declare all or any portion of the Loans and all or
such portion of the Note and all other Obligations to be due and payable,
whereupon the Commitment shall terminate and all or such portion of the Loans
and all or such portion of the Note and all other Obligations shall become
immediately due and payable, all without further notice of any kind. The
Administrative Agent shall promptly advise the Borrower of any such declaration
but failure to do so shall not impair the effect of such declaration.
Notwithstanding the foregoing, the effect as an Event of Default of any event
described in Section 10.1.1 may not be waived except by consent of all of the
Lenders in writing.
ARTICLE XI
THE AGENTS
SECTION 11.1 Authorization. Each Lender authorizes the
Administrative Agent to act on behalf of such Lender as Administrative Agent on
its behalf and to exercise such powers to the extent provided herein or in any
document or instrument delivered hereunder or in connection herewith, and to
take such other action as may be reasonably incidental thereto. As to matters
not expressly provided for by this Agreement (including, without limitation,
enforcement or collection of this Agreement or any other Loan Document) the
Administrative Agent shall not be required to exercise any discretion, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required Lenders
and such instructions shall be binding upon all Lenders and Holders. Under no
circumstances shall the Administrative Agent have any fiduciary duties to any
Lender or be required to take any action which exposes the Administrative Agent
to personal liability or which is contrary to this Agreement or to the Loan
Documents or applicable law. Upon receipt by the Administrative Agent of any
written notice, report or financial statement delivered by the Borrower as
required
47
pursuant to this Agreement, the Administrative Agent shall forward a copy
thereof to each Lender.
SECTION 11.2 Liability of the Administrative Agent. None of the
Agent-Related Persons nor any of their directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with this Agreement and the Loan Documents, except for its or
their own gross negligence or willful misconduct. Without limiting the
generality of the foregoing, the Administrative Agent (a) may treat a Lender as
such until the Administrative Agent receives an executed Assignment Agreement
entered into between a Lender and an Eligible Assignee pursuant to Section 12.1
hereof; (b) may consult with legal counsel (including counsel for the Borrower),
independent public accountants and other experts or consultants selected by it;
(c) shall not be liable for any action taken or omitted to be taken in good
faith by the Administrative Agent in accordance with the advice of counsel,
accountants, consultants or experts; (d) make no warranty or representation to
any Lender and shall not be responsible to any Lender for any recitals,
statements, warranties or representations, whether written or oral, made in or
in connection with this Agreement or the Loan Documents; (e) shall not have any
duty to ascertain or to inquire as to the performance or observance of any of
the terms, obligations, covenants or conditions of this Agreement on the part of
the Borrower or to inspect the property (including, without limitation, any
books and records) of the Borrower; (f) shall not be responsible to any Lender
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement, any Loan Document or any other document
furnished in connection with any of the foregoing; and (g) shall incur no
liability under or in respect of this Agreement or any Loan Document by action
upon any written notice, statement, certificate, order, telephone message,
facsimile or other document which the Administrative Agent believes in good
faith to be genuine and correct and to have been signed, sent or made by the
proper person.
SECTION 11.3 Indemnification. Each Lender agrees to, ratably in
accordance with its Voting Percentage, indemnify the Agent-Related Persons (to
the extent not reimbursed by the Borrower) against any cost, expense (including
fees and out-of-pocket expenses of counsel), claim, demand, action, loss or
liability (except as to the Agent-Related Persons such as result from the gross
negligence or willful misconduct of the Agent-Related Persons) that the Agent-
Related Persons may suffer or incur in connection with this Agreement, the Note,
the Loan Documents and any documents or certificates delivered in connection
therewith or any action taken or omitted by the Agent-Related Persons hereunder
or thereunder.
48
SECTION 11.4 Administrative Agent. With respect to the Loans made by
it, any Agent-Related Person shall have the same rights and powers under this
Agreement and the other Loan Documents as any other Lender and may exercise the
same as though its Affiliate were not the Administrative Agent; and the term
"Lender" or "Lenders" shall, unless otherwise expressly indicated, include such
financial institutions in their individual capacities. Each Lender and its
Affiliates may accept deposits from, lend money to, act as trustee under
indentures of, and generally engage in any kind of business with, the Borrower
and any of its Subsidiaries and any Person who may do business with or own
securities of the Borrower or any such Subsidiary, all as if such Lender or its
Affiliate were not the Administrative Agent and without any duty to account
therefor to the Lenders.
SECTION 11.5 Credit Investigation. Each Lender acknowledges that it
(i) has made such inquiries and taken such care on its own behalf as would have
been the case had the Loan been made directly by such Lender to the Borrower
without the intervention of any Agent-Related Person, and (ii) will,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement. Each Lender agrees and acknowledges that no Agent-Related
Person makes any representations or warranties about the creditworthiness of the
Borrower or with respect to the legality, validity, sufficiency or
enforceability of this Agreement, the Note, the Loan Documents or security
therefor.
SECTION 11.6 Non-Receipt of Funds by the Administrative Agent.
Unless Administrative Agent shall have been notified by a Lender or the Borrower
(any such party being herein called the "Payor") prior to the date on which such
Payor is to make payment to the Administrative Agent of the proceeds of the Loan
to be made by it hereunder (in the case of a Lender) or such Payor is to make a
payment hereunder or under the Note to the Administrative Agent for the account
of the Lenders (in the case of the Borrower), as the case may be (such payment
being herein called the "Required Payment"), which notice shall be effective
upon receipt, that the Payor does not intend to make the Required Payment to the
Administrative Agent, the Administrative Agent may assume that the Required
Payment has been made and may, in reliance upon such assumption (but shall not
be required to), make the amount thereof available to the intended recipient on
such date and, if the Payor has not in fact made the Required Payment to the
Administrative Agent, the recipient of such payment (and, if such recipient is
the Borrower and the Lender which is the Payor fails to pay the amount thereof
to the Administrative Agent forthwith upon such demand, the
49
Borrower) shall, on demand, repay to the Administrative Agent the amount made
available to it, together with interest thereon in respect of each day during
the period commencing on the date such amount was so made available by the
Administrative Agent until the date the Administrative Agent recovers such
amount, at a rate per annum equal to (a) in the case of the Borrower, the
Default Rate, provided, if the Borrower has to repay such amount through no
fault of its own, the Borrower shall pay the Reference Rate and (b) in the case
of a Lender, for the first 3 Business Days the rate set by interbank custom and
practice for the correction of errors among banks and for every day thereafter,
the Default Rate.
SECTION 11.7 Successor Agents. The Administrative Agent may resign
at any time by giving written notice thereof to the Lenders and may be removed
at any time with cause by the Required Lenders. Upon any such resignation or
removal, the Required Lenders shall have the right to appoint a successor
Administrative Agent. If no successor Administrative Agent shall have been so
appointed by the Required Lenders, and shall have accepted such appointment
within thirty (30) days after the retiring Administrative Agent's giving of
notice of resignation or the Required Lenders' removal of the retiring
Administrative Agent, then the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent which shall be a
commercial bank having a combined capital and surplus of at least $250,000,000.
Upon the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations in its capacity as
Administrative Agent under this Agreement. After any retiring Administrative
Agent's resignation or removal hereunder as Administrative Agent, the provisions
of this Article XI shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Administrative Agent under this Agreement.
ARTICLE XII
ASSIGNMENTS AND PARTICIPATIONS
SECTION 12.1 Assignments.
12.1.1 Each Lender shall have the right at any time to assign to any
Eligible Assignee, subject (except in the case of an Eligible Assignee (i)
that is controlled by the same bank holding company as the assigning Lender
and (ii) which has combined capital and surplus of at least $100,000,000)
50
to the written approval of the Borrower and Administrative Agent which
approval will not be unreasonably withheld (it being understood that among
the criteria to be considered would be the financial condition of the
Eligible Assignee), all or any part of such Lender's rights and obligations
under this Agreement and each Loan Document including its rights in respect
of its Loans and the Note; provided that the aggregate number of bank
holding companies represented by all Lenders hereunder shall not exceed
twelve (12) at any time. Any such assignment shall be pursuant to an
assignment agreement, substantially in the form of Exhibit F (an
"Assignment Agreement"), duly executed by such Lender and the Eligible
Assignee, and acknowledged by the Administrative Agent. Although its
failure to do so will not affect any of the rights or obligations provided
for therein or herein, the Borrower agrees to duly acknowledge any
Assignment Agreement executed by any assigning Lender promptly after its
receipt of the same.
12.1.2 Each assignment shall be pro rata with respect to all rights
and obligations of the assigning Lender including the Loans and the Note.
Each assignment, if to a Person other than a Lender, shall be in an amount
equal to or in excess of $5,000,000. No assignment shall require the
Borrower to file a registration statement with the Securities and Exchange
Commission or apply to qualify any of the Loans or the Note, or any
interest in any thereof, under the "blue sky" or other securities law of
any jurisdiction. In the case of any such assignment (upon the fulfillment
of the conditions in Section 12.1.3), this Agreement shall be deemed to be
amended to the extent, and only to the extent, necessary to reflect the
addition of such Eligible Assignee, and the Eligible Assignee shall for all
purposes be a Lender party hereto and shall have, to the extent of such
assignment, the same rights and obligations as a Lender hereunder.
12.1.3 An assignment shall become effective hereunder when all of the
following shall have occurred: (a) the Assignment Agreement shall have
been executed by the parties thereto, (b) the Assignment Agreement shall
have been acknowledged by the Administrative Agent and, to the extent
required by Section 12.1.1, by the Borrower, (c) either the assigning
Lender or the Eligible Assignee shall have paid a processing fee of
$3,000.00 to the Administrative Agent for its own account, and (d) the
assigning Lender and the Administrative Agent shall have agreed upon a date
upon which the Assignment shall become effective. Upon the Assignment
becoming effective, the Administrative Agent shall forward all payments of
interest, principal, fees and other amounts that would have been made to
the assigning
51
Lender, in proportion to the percentage of the assigning Lender's rights
transferred, to the Eligible Assignee.
12.1.4 Upon the effectiveness of any assignment, the assigning Lender
shall be relieved from its obligations hereunder to the extent of the
obligations so assigned (except to the extent, if any, that the Borrower,
any other Lender or the Administrative Agent has rights against such
assigning Lender as a result of any default by such Lender under this
Agreement). Promptly following the consummation of each assignment, the
Administrative Agent shall furnish to the Borrower and each Lender a
revised Schedule 2.1 and Schedule 13.3, revised to reflect such assignment.
Notwithstanding anything to the contrary contained herein, any Lender
may at any time assign all or any portion of its rights under this
Agreement including its Loans to a Federal Reserve Bank. No such
assignment shall release the transferor Lender from its obligations
hereunder.
SECTION 12.2 Participations.
12.2.1 Each Lender may grant participations (the "Participations") in
all or any part of its Loans and the Note to any commercial bank or other
financial institution (other than insurance companies and Affiliates
thereof) (the "Participants"). A Participant shall not have any rights
under this Agreement or any other document delivered in connection herewith
(the Participant's rights against such Lender in respect of such
Participation to be those set forth in the agreement executed by such
Lender in favor of the Participant relating thereto, which agreement with
respect to such Participation shall not restrict such Lender's ability to
make any modification, amendment or waiver to this Agreement without the
consent of the Participant except that the consent of such Participant may
be required in connection with any extension of the stated maturity date of
the Loans, or any scheduled mandatory reduction of the Commitment Amount,
reduction of the interest rate, fees or commissions on, any Loans in which
such Participation was sold or forgiveness of any principal of or interest,
fees or commissions payable on any Loans in which such Participation was
sold. Notwithstanding the foregoing, each Participant shall have the
rights of a Lender pursuant to Section 3.6. All amounts payable by the
Borrower under this Agreement shall be determined as if the Lender had not
sold such Participation. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations under
this Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall
52
remain the holder of any obligation for all purposes under this Agreement,
and the Borrower and the Administrative Agent shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement.
12.2.2 Limitation of Rights of any Participant. Notwithstanding
anything in the foregoing to the contrary, (a) no Participant shall have
any direct rights hereunder, (b) the Borrower, the Administrative Agent,
and the Lenders, other than the assigning or selling Lender, shall deal
solely with the assigning or selling Lender and shall not be obligated to
extend any rights or make any payment to, or seek any consent of, the
Participant, (c) no Participation shall relieve the assigning or selling
Lender of any of its other obligations hereunder and such Lender shall
remain solely responsible for the performance thereof, and (d) no
Participant, other than an affiliate of the assigning or selling Lender,
shall be entitled to require such Lender to take or omit to take any action
hereunder, except that such Lender may agree with such Participant that
such Lender will not, without Participant's consent, take any action which
would, affect any principal, interest or fee in which the Participant has
an ownership or beneficial interest.
12.2.3 Any Lender may, in connection with any Assignment or
Participation or proposed Assignment or Participation pursuant to Sections
12.1 and 12.2, and disclose to the Assignee or Participant or proposed
Assignee or Participant any information relating to the Borrower furnished
to such Lender by or on behalf of the Borrower; provided, that prior to any
such disclosure, the Assignee or Participant or proposed Assignee or
Participant shall agree to preserve the confidentiality of any confidential
information relating to the Borrower received by it from such Lender to the
same extent as the Lenders hereunder.
ARTICLE XIII
GENERAL
SECTION 13.1 Waiver; Amendments. No delay on the part of the
Administrative Agent or any Lender or any holder of a Note or other Obligation
in the exercise of any right, power or remedy shall operate as a waiver thereof,
nor shall any single or partial exercise by any of them of any right, power or
remedy preclude other or further exercise thereof, or the exercise of any other
right, power or remedy. No amendment, modification or waiver of, or consent
with respect to, any provision of this
53
Agreement or the Note or any Loan Document shall in any event be effective
unless the same shall be in writing and signed and delivered by the Borrower and
the Required Lenders and acknowledged by the Administrative Agent and then any
such amendment, modification, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. Notwithstanding
the foregoing, no amendment, modification, waiver or consent which would do any
of the following shall be effective unless in writing and signed by the Borrower
and each of the Lenders and acknowledged by the Administrative Agent: (a)
extend the due date for, or reduce the amount of, any payment or prepayment of
principal of or interest on any Loan (or reduce the principal amount of or rate
of interest on any Loan) or any fees; (b) change the definition of Required
Lenders or subject any Lender to any additional obligations including, without
limitation, any increase in the Commitment Amount; (c) waive any of the
conditions precedent set forth in Article IX (other than Sections 9.1.5, 9.1.6,
9.1.7, and 9.1.8), or (d) amend this Section 13.1, Section 10.2 with regard to
the waiver of an Event of Default under Section 10.1.1 or 13.9. Notwithstanding
the foregoing, no provisions of Article XI shall be amended, modified or waived
without the written consent the Administrative Agent.
SECTION 13.2 Confirmations. The Borrower and the Administrative
Agent (or any holder of a Note) agree from time to time, upon written request
received by it from the other, to confirm to the other in writing the aggregate
unpaid principal amount of the Loan then outstanding under such Note.
SECTION 13.3 Notices. (a) Notices forwarded by mail shall be deemed
to have been given five days after the date sent if sent by registered or
certified mail, postage paid to the address set forth for each party hereto on
Schedule 13.3, and (b) notices given by telegram or telex shall be deemed to
have been given when sent if addressed to the party to whom sent, at its address
as aforesaid, and (c) notices sent by facsimile or overnight courier shall be
deemed to have been given one (1) Business Day after sent. The Administrative
Agent shall be entitled to rely upon all facsimiles and the Borrower shall
indemnify and hold Administrative Agent harmless from any loss, cost or expense
ensuing from any such reliance, which indemnification shall survive any
termination of this Agreement.
SECTION 13.4 Costs, Expenses and Taxes. The Borrower agrees to pay
on demand all out-of-pocket costs and expenses of the Administrative Agent
(including the reasonable fees and out-of-pocket expenses of outside counsel
and, without duplication, the allocated costs of internal legal counsel for the
Administrative Agent), in its individual capacity and on behalf of the Lenders,
in connection with the preparation, execution,
54
delivery and administration of this Agreement, the Loan Documents and all other
instruments or documents provided for herein or delivered or to be delivered
hereunder or in connection herewith. The Borrower further agrees to pay all
out-of-pocket costs and expenses (including attorneys' fees and legal expenses
and, without duplication, the allocated costs of internal legal counsel)
incurred by the Administrative Agent (and any Lender after the occurrence of any
Default) in connection with the enforcement, waiver or amendment of this
Agreement, the Loan Documents and any such other instruments or documents. All
obligations provided for in this Section 13.4 shall survive any termination of
this Agreement.
SECTION 13.5 Indemnification. (a) In consideration of the Lenders'
execution and delivery of this Agreement and the Lenders' extension of the
Loans, the Borrower hereby agrees to indemnify, exonerate and hold each Lender
and each Lender's respective officers, directors, employees, Persons controlling
or controlled by any of them and their respective agents, consultants, attorneys
and advisors (including, without limitation, each Agent-Related Person, herein
collectively called for purposes of this Section 13.5 "Indemnified Parties" and
individually called an "Indemnified Party") free and harmless from and against
any and all claims, demands, actions, causes of action, suits, losses, costs
(including, without limitation, all documentary, recording, filing, mortgage or
other stamp taxes or duties), charges, liabilities, claims and damages, and
expenses in connection therewith (irrespective of whether such Indemnified Party
is a party to the action for which indemnification hereunder is sought), and
including, without limitation, legal fees, disbursements and any out-of-pocket
expenses (called in this clause (a) the "Indemnified Obligations"), to which any
of the Indemnified Parties may become subject, whether directly or indirectly,
that result or arise from, or relate to (i) any transaction financed or to be
financed in whole or in part, directly or indirectly, with the proceeds of any
Loan or involving any Loan, (ii) the Indemnified Parties' furnishing of funds to
the Borrower or (iii) any other matter related thereto, except for any such
Indemnified Obligations arising on account of the relevant Indemnified Party's
gross negligence or willful misconduct and, to the extent that the foregoing
undertaking may be unenforceable for any reason except for the gross negligence
or willful misconduct of the Indemnified Parties, the Borrower agrees to make
the maximum contribution to the payment and satisfaction of each of the
Indemnified Obligations which is permissible under applicable law.
(b) Without limiting the generality of the indemnities set out in the
preceding clause (a) the Borrower hereby further agrees to indemnify, exonerate
and hold each Lender and all Indemnified Parties free and harmless from and
against any
55
claims, demands, actions, causes of action, suits, losses, costs, charges,
liabilities and damages, and expenses in connection therewith, including,
without limitation, counsel fees (called in this clause (b) the "Indemnified
Obligations") under federal or state securities laws or otherwise (i) arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in any registration statement, prospectus or offering
memorandum or in any preliminary prospectus or preliminary offering memorandum
or any amendment or supplement to any thereof or in any other writing prepared
in connection with the offer, sale or resale of any securities of the Borrower
or any of its respective Subsidiaries, or (ii) arising out of or based upon any
omission or alleged omission to state therein a material fact required to be
stated or necessary to make the statements therein not misleading. If and to the
extent that the foregoing undertakings in this paragraph may be unenforceable
for any reason, the Borrower agrees to make the maximum contribution to the
payment and satisfaction of each of the Indemnified Obligations which is
permissible under applicable law.
(c) All obligations provided for in this Section 13.5 shall survive
any termination of this Agreement and shall not be reduced or impaired by any
investigation made by or on behalf of any Lender or any Indemnified Party.
SECTION 13.6 SUBMISSION TO JURISDICTION AND FORUM SELECTION. ANY CLAIM
ARISING OUT OF THIS AGREEMENT, ANY LOAN DOCUMENT OR ANY AMENDMENT, INSTRUMENT,
DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN
CONNECTION HEREWITH, OR ARISING FROM OR RELATED TO ANY CREDIT RELATIONSHIP
EXISTING IN CONNECTION WITH THIS AGREEMENT MAY BE ENFORCED BY THE ADMINISTRATIVE
AGENT AND THE LENDERS IN ANY STATE OR FEDERAL COURT HAVING SUBJECT MATTER
JURISDICTION AND LOCATED IN CHICAGO, ILLINOIS. FOR THE PURPOSE OF ANY ACTION OR
PROCEEDING INSTITUTED WITH RESPECT TO ANY SUCH CLAIM, THE BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION AND EXCLUSIVE VENUE OF SUCH COURTS. THE
BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF SAID
COURTS BY MAILING A COPY THEREOF, BY REGISTERED MAIL, POSTAGE PREPAID, TO THE
BORROWER AND AGREES THAT SUCH SERVICE, TO THE FULLEST EXTENT PERMITTED BY LAW,
(i) SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON IT IN ANY
SUCH SUIT, ACTION OR PROCEEDING AND (ii) SHALL BE TAKEN AND HELD TO BE VALID
PERSONAL SERVICE UPON AND PERSONAL DELIVERY TO IT. NOTHING HEREIN CONTAINED
SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT AND THE LENDERS TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR PRECLUDE THE ADMINISTRATIVE
AGENT, IN ITS SOLE DISCRETION, FROM BRINGING AN ACTION OR PROCEEDING IN RESPECT
HEREOF IN ANY OTHER COUNTRY, STATE OR PLACE HAVING JURISDICTION OVER SUCH
ACTION. THE BORROWER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER HAVE TO THE LAYING OR MAINTENANCE
56
OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
LOCATED IN CHICAGO, ILLINOIS AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
SECTION 13.7 GOVERNING LAW. THIS AGREEMENT, THE LOAN DOCUMENTS AND THE
NOTE SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF ILLINOIS WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES. WHENEVER
POSSIBLE EACH PROVISION OF THIS AGREEMENT SHALL BE INTERPRETED IN SUCH MANNER AS
TO BE EFFECTIVE AND VALID UNDER APPLICABLE LAW, BUT IF ANY PROVISION OF THIS
AGREEMENT SHALL BE PROHIBITED BY OR INVALID UNDER APPLICABLE LAW, SUCH PROVISION
SHALL BE INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR INVALIDITY, WITHOUT
INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS OF THIS
AGREEMENT. ALL OBLIGATIONS OF THE BORROWER AND RIGHTS OF ANY LENDER EXPRESSED
HEREIN OR IN THE LOAN DOCUMENTS SHALL BE IN ADDITION TO AND NOT IN LIMITATION OF
THOSE PROVIDED BY APPLICABLE LAW OR IN ANY OTHER WRITTEN INSTRUMENT OR AGREEMENT
RELATING TO ANY OF THE OBLIGATIONS.
SECTION 13.8 JURY TRIAL. EACH PARTY HEREBY EXPRESSLY WAIVES ANY RIGHT
TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS
UNDER THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS TO WHICH IT IS A PARTY, OR
UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN
THE FUTURE BE DELIVERED IN CONNECTION THEREWITH OR ARISING FROM ANY RELATIONSHIP
EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY LOAN DOCUMENTS, AND AGREES
THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY.
SECTION 13.9 Successors and Assigns. This Agreement shall be binding
upon Borrower, the Administrative Agent, the Lenders and their respective
successors and assigns, and shall inure to the benefit of the Borrower, the
Administrative Agent, the Lenders and their respective successors and assigns;
provided, however, that the Borrower shall have no right to assign its rights or
delegate its duties under this Agreement. This Agreement and the Loan Documents
contain the entire agreement of the parties hereto with respect to the matters
covered hereby.
57
Delivered at Chicago, Illinois, as of the day and year first above written.
HORACE MANN EDUCATORS CORPORATION
By: /s/ Larry K. Becker
----------------------------
Title: Chief Financial Officer
----------------------------
By: /s/ George J. Zock
----------------------------
Title: Treasurer
----------------------------
58
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Administrative Agent
By: /s/ Michael T. Ernst
----------------------------
Title: Vice President
--------------------------
BANK OF AMERICA ILLINOIS, as Lender
By: /s/ Michael T. Ernst
----------------------------
Title: Vice President
--------------------------
59