LOAN AND SECURITY AGREEMENT
THIS AGREEMENT dated as of
May 23, 2008, by and between REGIONS BANK, an Alabama banking
corporation, whose address is 111 N. Orange Avenue, Suite
1585, Orlando, Florida 32801 (the "Lender"), and AMCOMP
INCORPORATED, a Delaware corporation, whose address is 701
U.S. Highway 1, Suite 200, North Palm Beach, Florida 33408
(the "Borrower").
RECITALS:
A.
The
Borrower has requested the Lender to lend the sum of up to
THIRTY MILLION AND NO/100 DOLLARS ($30,000,000.00) subject to
the compliance by Borrower of all the terms and conditions
hereof; and
B.
Each
Guarantor will derive a benefit from such loan and therefore
has agreed to guarantee the debt of Borrower to Lender and
enter into this Agreement; and
C.
The
Lender is willing to make such loan on the terms and
conditions and on the security as set forth
herein.
NOW, THEREFORE,
in consideration of the mutual promises, conditions,
representations and warranties hereinafter set forth and for
other good and valuable consideration, the parties hereto
have mutually agreed as follows:
1.
Defined
Terms . As used in this Loan and Security
Agreement, the following terms shall have the following
meanings:
Actuarial
Report means the actuarial review and valuation
statements of the Insurance Subsidiaries’ loss and loss
adjustment expense reserve positions as of December 31 of any
fiscal year (or such other date requested by the Lender),
with respect to the insurance business in force, and covering
such other subjects as are customary in actuarial reviews and
reasonably requested by the Lender, prepared by Milliman USA
or other independent actuarial firm reasonably acceptable to
the Lender in accordance with reasonable actuarial
assumptions and procedures, not inconsistent with the
assumptions and procedures previously employed, and
accompanied by a report prepared by such actuarial firm
reviewing the adequacy of loss reserves of each Insurance
Subsidiary (which firm shall be provided access to or copies
of all reserves analyses and valuations relating to the
insurance business of each such Insurance Subsidiary)
together with its report, substantially in the form of the
report currently provided by such firm to the
Borrower.
Additive
Basis
means the financial information from each of the relevant
companies is added together when determining the amount(s) to
be used in the calculations required in this
agreement.
Affiliate
means any corporation or other entity that is controlled by,
controls, or is under common control with,
Borrower.
Agreement
means this Loan and Security Agreement.
Alternative
Rate means the rate per annum to be used for the
interest rate on the Loan in the event the Base Rate is not
available. The Alternative Rate will be determined
by adding or subtracting a spread from either the Federal
Funds Rate or the Prime Rate (as reasonably selected by
Lender) so that the Alternative Rate on the first day it
becomes effective is reasonably equivalent to the Base Rate
as of the last day the Base Rate was
available. Thereafter the Alternative Rate will be
adjusted up or down based on changes to the Federal Funds
Rate or Prime Rate (as initially selected) adjusted on the
same date the Base Rate would have been adjusted and
utilizing the same spread as utilized on the first day the
Alternative Rate became effective.
AmComp
Assurance means AmComp Assurance Corporation, a
Florida corporation.
AmComp
Preferred means AmComp Preferred Insurance Company, a
Florida corporation.
Annual
Statement means, with respect to any Insurance
Subsidiary, such Insurance Subsidiary’s annual
statement to the insurance regulatory authorities of its
domiciliary state, as the same may be amended from time to
time.
Base
Rate means the interest rate applied to the unpaid
principal balance of the Note.
Borrower
means AMCOMP INCORPORATED, a Delaware
corporation.
Closing
Date means the date hereof.
Code
means the Uniform Commercial Code, as in effect in Florida
from time to time.
Collateral
means collectively: (a) all of the stock of AmComp Preferred;
(b) all Surplus Notes now or hereafter owned by Borrower or
its Subsidiaries.
Contingent
Obligations means any obligation, contingent or
otherwise, of any Person directly or indirectly guaranteeing
any Debt of any other Person and any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase
or payment of) such Debt of such Person (whether arising by
virtue of agreements to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered
into for the purpose of assuring in any other manner the
obligee of such Debt of the payment thereof or to protect
such obligee against loss in respect thereof (in whole or in
part).
Contractual
Obligation means any provision of any security issued
by a Person or of any agreement, instrument, or undertaking
to which such Person is a party or by which it or any of its
property is bound.
Debt
means any indebtedness or liability for borrowed money and
any other indebtedness or liability or similar obligations
which must be characterized as a Debt (whether long term or
short term) for the purpose of an audited financial statement
prepared pursuant to the standards of the American Institute
of Certified Public Accountants.
Debt
Service Coverage Ratio means, as of the last day of
any fiscal year of the Borrower, the ratio of (a) (i) Service
Fees from Insurance Subsidiaries for such fiscal year, plus
(ii) interest received by the Borrower on the Surplus Notes,
plus (iii) Dividends Available Without Regulatory Approval
during such fiscal year, plus (iv) Dividends Available With
Regulatory Approval during such fiscal year, plus (v)
depreciation expense, plus (vi) Tax Sharing Revenue, minus
(vii) Expenses of the Borrower and the Non-Insurance
Subsidiaries for such fiscal year, minus (viii) dividends
paid, to (b) (i) scheduled interest payments on Debt for such
fiscal year, plus (ii) scheduled principal payments on Debt
for such fiscal year.
Default
Rate means that default rate more specifically
described in the Note.
Dividends
Available With Regulatory Approval means dividends
payable with respect to ownership of the capital stock of an
Insurance Subsidiary that an Insurance Subsidiary may pay
stockholders only with the prior approval of the
FOIR.
Dividends
Available Without Regulatory Approval means dividends
payable with respect to ownership of the capital stock of an
Insurance Subsidiary that such Insurance Subsidiary is able
to pay stockholders without the prior approval of the
FOIR.
EIG
means Employers Holdings, Inc., a Nevada corporation, or any
subsidiary of Employers Holdings, Inc.
Employers
Merger means the merger of Sapphire Acquisition Corp,
a Delaware corporation and a wholly owned subsidiary of
Employers Holdings, Inc., a Nevada corporation, with and into
the Borrower with the Borrower continuing as the continuing
company under the merger, pursuant to the Merger Agreement
made and entered into as of January 10, 2008, as amended by
the amendment thereto dated April 28, 2008, and as the same
may be further amended, restated or otherwise
modified.
Expenses
of the Borrower and the Non-Insurance Subsidiaries
means operating expenses of the Borrower and each and every
Subsidiary with the exception of the Insurance
Subsidiaries.
ERISA
means the Employee Retirement Income Security Act of 1974 and
all rules and regulations promulgated
thereunder.
Event
of Default means any one of the events enumerated in
Article 9 (“Events of Default”).
Federal
Funds Rate means, for any day, the rate of interest
per annum (rounded upwards, if necessary, to the nearest
whole multiple of 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transaction with
members of the Federal Reserve System arranged by Federal
funds brokers as published by the Federal Reserve Bank of New
York on the Interest Rate Determination Date.
FOIR
shall mean the Florida Office of Insurance
Regulation.
GAAP
means generally accepted accounting principles in the United
States of America as defined by the Financial Accounting
Standards Board or its successor, as in effect from time to
time consistently applied.
Governmental
Authority means any nation or government, any state or
other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or
administrative functions pertaining to
government.
Guarantor
means
PINNACLE ADMINISTRATIVE COMPANY, a Florida corporation,
PINNACLE BENEFITS, INC., a Florida corporation, and AMSERV,
INC., a Florida corporation, jointly and
severally.
Insurance
Operating Expenses means those expenses as evidenced
on each Insurance Subsidiary’s SAP
Statement.
Insurance
Subsidiary means AmComp Preferred, AmComp Assurance
and all Wholly Owned Subsidiaries of the Borrower licensed to
engage in the business of property and casualty
insurance.
Interest
Expense shall mean interest payable on Debt during the
period in question.
IRIS
Tests means the ratios and other financial
measurements developed by the NAIC under its Insurance
Regulatory Information System or, in lieu thereof, any
successor thereto, replacement thereof, substitute therefor
or other substantially similar guidelines intended to measure
the financial performance of companies in the property and
casualty insurance industry, as the same shall be in effect
from time to time.
Lender
means REGIONS BANK, an Alabama banking
corporation.
Lien
means any interest in property (real, personal, or mixed, and
tangible or intangible) securing an obligation owed to, or a
claim by, a Person other than the owner of the property,
whether such interest is based on the common law, statute or
contract, and including a security interest, security title
or Lien arising from a security agreement, mortgage, deed of
trust, deed to secure debt, encumbrance, pledge, conditional
sale or trust receipt or a lease, consignment or bailment for
security purposes. The term “Lien” shall include
covenants, conditions, restrictions, leases, and other
encumbrances affecting any property. For the purpose of this
Agreement, Borrower shall be deemed to be the owner of any
property which it has acquired or holds subject to a
conditional sale agreement or other arrangement pursuant to
which title to the Property has been retained by or vested in
some other Person for security purposes.
Loan
means the credit facility in the principal amount of THIRTY
MILLION AND NO/100 DOLLARS ($30,000,000.00) advanced by
Lender to Borrower from time to time evidenced by the Note
described in Section 2.1 (and any substitutions therefor,
extensions thereof, or renewal thereof).
Loan
Account means the loan account established on the
books of Lender pursuant to Section 2.3 (“Loan
Account”).
Loan
Documents means this Agreement, the Note, and each and
every security agreement, financing statement or other
instrument executed and delivered to evidence the Loan, and
any and all other agreements, instruments, and documents
heretofore, now or hereafter, executed by Borrower and
delivered to Lender in respect to the transactions
contemplated by this Agreement.
Material
Adverse Effect means with respect to a Person, a
material adverse effect on its business, assets, properties,
prospects, results of operation, or condition (financial or
other). The Employers Merger shall not be considered a
Material Adverse Effect.
NAIC
means the National Association of Insurance Commissioners and
any successor thereof.
Net
Losses means, as of the last day of any fiscal year,
with respect to any Insurance Subsidiary, loss and loss
adjustment expense net of any salvage, subrogation, or
deductibles after deducting reinsured losses as evidenced on
the Annual Statement by each Insurance Subsidiary in
accordance with SAP.
Net
Written Premiums means, as of the last day of any
fiscal year, with respect to any Insurance Subsidiary, the
sum of the total amount of premiums written after deducting
or adding premiums on business ceded to or assumed from
others as evidenced on the Annual Statement by each Insurance
Subsidiary in accordance with SAP.
Non-Excluded
Taxes means such term as is defined in Section
2.12.
Non-Insurance
Subsidiary means any Subsidiary of the Borrower which
is not an Insurance Subsidiary.
Note
means the promissory note executed and delivered by Borrower
to Lender evidencing the Loan, as further described
hereinafter, and any other promissory note, credit agreement
or letter of credit agreement now or hereafter executed by
Borrower in favor of Lender with respect to the Loan,
including without limitation those promissory notes, credit
agreements and letter of credit agreements described on any
schedule or exhibit attached to this Agreement from time to
time, and any renewals of, extensions of, modifications of,
refinancings to, consolidations of, and substitutions for any
of the foregoing.
Obligations
means all Loans and all other advances, debts, liabilities,
obligations, covenants, and duties owing, arising, due or
payable from Borrower to Lender of any kind or nature,
present or future whether or not evidenced by any note,
guaranty or other instrument, arising under this Agreement or
any of the other Loan Documents, including any swap, option
or forward obligations. The term includes, without
limitation, all interest, charges, expenses, fees, attorneys'
fees and any other sums chargeable to Borrower under any of
the Loan Documents. Unless the Borrower and
any other party to this Agreement shall have otherwise agreed
in writing or received written notice thereof, this Agreement
shall not secure any obligation owing to Lender which
constitutes “consumer credit” subject to the
disclosure requirements of the Federal Truth in Lending Act
and any regulations promulgated thereunder.
Permitted
Liens
means
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(i)
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Liens
in favor of the Lender;
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(ii)
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Liens
(other than Liens created or imposed under ERISA) for taxes,
assessments or governmental charges or levies not yet due or Liens
for taxes being contested in good faith by appropriate proceedings
for which adequate reserves determined in accordance with GAAP have
been established (and as to which the Property subject to any such
Lien is not yet subject to foreclosure, sale or loss on account
thereof);
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(iii)
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statutory
Liens of landlords and Liens of carriers, warehousemen, mechanics,
materialmen and suppliers and other Liens imposed by law or
pursuant to customary reservations or retentions of title arising
in the ordinary course of business, provided
that such Liens secure only amounts not yet due and payable or, if
due and payable, are unfiled and no other action has been taken to
enforce the same or are being contested in good faith by
appropriate proceedings for which adequate reserves determined in
accordance with GAAP have been established (and as to which the
Property subject to any such Lien is not yet subject to
foreclosure, sale or loss on account thereof);
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(iv)
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Liens
(other than Liens created or imposed under ERISA) incurred or
deposits made by the Borrower and its Subsidiaries in the ordinary
course of business in connection with workers’ compensation,
unemployment insurance and other types of social security, or to
secure the performance of tenders, statutory obligations, bids,
leases, government contracts, performance and return-of-money bonds
and other similar obligations (exclusive of obligations for the
payment of borrowed money);
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(v)
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Liens
in connection with attachments or judgments (including judgment or
appeal bonds) provided
that the judgments secured shall, within 30 days after the entry
thereof, have been discharged or execution thereof stayed pending
appeal, or shall have been discharged within 30 days after the
expiration of any such stay;
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(vi)
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easements,
rights-of-way, restrictions (including zoning restrictions), minor
defects or irregularities in title and other similar charges or
encumbrances not, in any material respect, impairing the sue of the
encumbered Property for its intended purposes;
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(vii)
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Liens
on Property securing purchase money Indebtedness to the extent
permitted under this Agreement, provided
that (i) the Indebtedness secured by such Liens does not exceed the
purchase price of the assets financed, and (ii) any such Lien
attaches to such Property concurrently with or within 90 days after
the acquisition thereof;
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(viii)
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Liens
arising under escrows, trusts, custodianships, separate accounts,
funds withheld procedures, and similar deposits, arrangements or
agreements established with respect to insurance policies,
annuities, guaranteed investment contracts and similar products
underwritten by, or Reinsurance Agreements entered into by, the
Borrower or any Insurance Subsidiary in the ordinary course of
business;
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(ix)
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deposits
with insurance regulatory authorities;
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(x)
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Liens
on assets at the time such assets are acquired by the Borrower or
any Subsidiary; provided
that such Liens are not created in contemplation of such
acquisition;
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(xi)
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normal
and customary rights of setoff upon deposits of cash in favor of
banks or other depository institutions;
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(xii)
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Liens
existing as of the Closing Date, provided
that no such Lien shall at any time be extended to or cover any
Property other than the Property subject thereto on the Closing
Date;
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(xiii)
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Liens
arising from the rendering of a final judgment against the Borrower
or any Subsidiary; provided
that such Liens do not give rise to an Event of Default
hereunder;
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(xiv)
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Liens
arising in the ordinary course of business not to exceed
$100,000.00 in the aggregate without the prior written consent of
Lender; and
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(xv)
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Liens
in connection with the Restated Loan Agreement.
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Person
means an individual, partnership, corporation, joint stock
company, firm, land trust, business trust, unincorporated
organization, limited liability company, or other business
entity, or a government or agency or political subdivision
thereof.
Plan
means an employee benefit plan now or hereafter maintained
for employees of Borrower that is covered by Title IV of
ERISA.
Prime
Rate means the rate of interest per annum publicly
announced from time to time by Lender as its prime rate in
effect at its principal office in Birmingham, Alabama, with
each change in the Prime Rate being effective on the date
such change is publicly announced as effective (it being
understood and agreed that the Prime Rate is a reference rate
used by Lender in determining interest rates on certain loans
and is not intended to be the lowest rate of interest charged
on any extension of credit by Lender to any
debtor.
Prohibited
Transaction means any transaction set forth in Section
406 of ERISA or Section 4975 of the Internal Revenue Code of
1986. The Employers Merger shall not be
considered a Prohibited Transaction.
Property
means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or
intangible.
Quarterly
Statement means, with respect to any Insurance
Subsidiary, such Insurance Subsidiary’s quarterly
statement to the insurance regulatory authorities of its
domiciliary state, as the same may be amended from time to
time.
Reportable
Event means any of the events set forth in Section
4043(b) of ERISA.
Requirement
of Law means as to any Person, the articles of
incorporation and bylaws or other organizational or governing
documents of the Person, and any law, treaty, rule or
regulation, or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or
binding on the Person or any of its property or to which the
Person or any of its property is subject.
Restated
Loan Agreement means the Restated Loan and Security
Agreement dated as of May 23, 2008 by and between the Lender
and the Borrower, as the same may be amended, restated or
otherwise modified from time to time.
SAP
means, with respect to any Insurance Subsidiary, the
accounting practices prescribed or permitted by the insurance
commissioner (or other similar authority) in the jurisdiction
of domicile of such insurance company for the preparation of
Annual Statements, Quarterly Statements and other financial
reports by insurance corporation of the same type as such
Insurance Subsidiary, as applied on a consistent
basis.
SAP
Statement means an Annual Statement or a Quarterly
Statement.
Service
Fees from Insurance Subsidiaries means the service
fees received by the Non-Insurance Subsidiaries paid by the
Insurance Subsidiaries each month, which fees are based on
the amount of earned premium.
Solvent
means as to any Person, means such Person (i) owns property,
real, personal, and mixed, whose aggregate fair saleable
value is greater than the amount required to pay all of such
Person's Debt and Contingent Obligations, and (ii) is able to
pay all of its Debt as such Debt matures, and (iii) has
capital sufficient to carry on its business and transactions
and all business and transactions in which it is about to
engage.
Subsidiary
or Subsidiaries means any corporate entity or
partnership, or other business entity, the controlling
interest of which is owned directly or indirectly by
Borrower.
Surplus
Notes shall mean those certain promissory notes issued
by AmComp Preferred or AmComp Assurance to the
Borrower.
Tax
Sharing Revenue means as of the last day of any fiscal
year, the net tax benefit/(expense) recognized by the
Borrower without giving effect to any Insurance Subsidiary
income or loss.
Wholly
Owned Subsidiary of any Person means any Subsidiary
100% of whose voting stock or other equity interests is at
the time owned by such Person directly or indirectly through
other Wholly Owned Subsidiaries.
Certain
Other Words .
All accounting terms used herein have the
respective meanings attributed to them under, and shall be
construed in accordance with, GAAP, unless indicated to be
SAP. The terms “herein,” “hereof,”
and “hereunder,” and other words of similar
import refer to this Agreement as a whole and not to any
particular section, paragraph or subdivision. Any pronouns
used shall be deemed to cover all genders. As used
in this Agreement, (a) the word “including” is
always without limitation; (b) words in the singular number
include words of the plural number and vice versa; (c) the
word “costs” includes all internal out-of-pocket
expenses, fees, costs, and expenses of experts and collection
agents, supersedeas bonds, and all attorneys' fees, costs,
and expenses, whether incurred before, during, or after
demand or litigation, and whether pursuant to trial,
appellate, arbitration, bankruptcy, or judgement-execution
proceedings; and (d) the word “property” includes
both tangible and intangible property, unless the context
otherwise requires. All references to statutes and related
regulations shall include any amendments of same and any
successor statutes and regulations. All references to any
instruments or agreements, including references to any of the
Loan Documents, shall include any and all modifications or
amendments thereto and any and all extensions or renewals
thereof. All other terms contained in this Agreement shall,
unless otherwise defined herein or unless the context
otherwise indicates, have the meanings provided for by the
Uniform Commercial Code of the State of Florida.
Directly
and Indirectly .
When any provision of this Agreement or any Loan
Document requires or prohibits action to be taken by a
Person, the provision applies regardless of whether the
action is taken directly or indirectly by the
Person.
2.
The
Loan .
2.1
Loan
.
(a) In
the event Borrower is in compliance with the terms,
provisions and conditions of this Agreement, the Lender
hereby covenants and agrees to make available to the Borrower
to be disbursed from the date of this Agreement through May
23, 2010 the sum of up to THIRTY MILLION AND NO/100 DOLLARS
($30,000,000.00) to be disbursed in accordance with the
terms, provisions and conditions of this Agreement, provided,
however, this is a term loan and once principal has been
repaid it may not be reborrowed. Borrower shall
execute and deliver to Lender the Note in the face amount of
the Loan, payable to the order of Lender. The Note
shall evidence the Borrower's obligation to repay the Loan
and is not incorporated by reference.
(b) In
no event shall any advances be made under the Note after May
23, 2010.
(c) All
requests for advances shall be evidenced by written request
of Borrower indicating the amount and purpose of such advance
and shall be delivered to Lender one (1) business day prior
to the date of the requested advance.
2.2
Terms
Governing All Loans .
(a) All
payments of interest and principal under the Note shall be
made without setoff or counterclaim, and in such coin or
currency of the United States of America that at the time of
payment is legal tender for the payment of public and private
debt.
(b) Any
payments not made as and when due with respect to the Loan
(whether at stated maturity, by acceleration, or otherwise)
shall bear interest at the Default Rate from the date due
until paid, payable on demand.
2.3
Loan
Account . Amounts due under the Note and
otherwise under this Agreement and under the Loan Documents
shall be reflected in the Loan Account. Lender shall enter
disbursements hereunder or under the Note as debits to the
Loan Account and shall also record in the Loan Account all
payments made by Borrower and all proceeds of Collateral
which are finally paid to Lender, and may record therein, in
accordance with customary accounting practice, all charges
and expenses properly chargeable to Borrower
hereunder.
2.4
Use
of Proceeds . Borrower shall use the
proceeds of the Loan for the following purposes and no other:
(a) to provide funds for the loan of money to AmComp
Preferred and AmComp Assurance in return for Surplus Notes;
(b) to make capital contributions to AmComp Preferred and
AmComp Assurance for the purpose of providing funds for the
acquisition and capitalization of an additional underwriting
insurance company; (c) to provide funds for Borrower to
acquire and capitalize an additional underwriting insurance
company; and (d) to provide funds approved by Lender in its
sole discretion to EIG for the purpose of acquiring an
additional underwriting insurance entity or
entities.
2.5
Term
. This Agreement shall remain in force and effect
until the Loan, and any renewals or extensions, and all
interest thereon and costs provided for herein with regard to
either of them have been indefeasibly paid or satisfied in
full and until Lender has no further obligation to advance
funds to Borrower hereunder. Borrower may
terminate without prepayment penalties at any time the Loan
facilities and prepay the Obligations at any time before the
scheduled maturity date by paying the Loan. The
indemnities provided for in this Agreement shall survive the
payment in full of the Loan and the other Obligations
and the termination of this
Agreement.
2.6
Payments
. All sums paid to Lender by Borrower hereunder
shall be paid directly to Lender in immediately available
funds. Lender shall send Borrower statements of all amounts
due hereunder, which statements shall be considered correct
and conclusively binding on Borrower absent manifest error or
negligence of Lender unless Borrower notifies Lender to the
contrary within thirty (30) days of its receipt of any
statement which it deems to be incorrect. Lender
may, in its sole discretion (a) charge against any deposit
account of Borrower all or any part of any amount due
hereunder and (b) advance to Borrower, and charge to the
Loan, a sum sufficient each month to pay all interest accrued
on the Loan and fees due under this Agreement during or for
the immediately preceding month. Borrower shall be deemed to
have requested an advance under the Loan upon the occurrence
of an overdraft in any of Borrower’s checking accounts
maintained with Lender. Notwithstanding the
foregoing, if the Borrower provides reasonable evidence that
any sums set off by Lender were funds being held by Borrower
for or on behalf of its Insurance Subsidiaries, Lender will
disgorge those funds and reverse the set off to the extent of
those funds.
2.7
Non-Usage
Fee . The Borrower agrees to pay a fee on
any difference between the amount of the Loan and the amount
of credit it actually uses, determined by the average of the
daily amount of credit outstanding during the calendar
year. The fee will be calculated at 0.25% per year
and shall be due January 30, 2009 and on the same day of each
following year until the earlier of the termination of the
Loan or Termination of Advance Date (as defined in the Note)
in which case such fee shall be due at the earlier of the
Termination of Advance Date or termination of the
Loan.
2.8
Limitation
on Interest Charges . Lender and Borrower
intend to comply strictly with applicable law regulating the
maximum allowable rate or amount of interest that Lender may
charge and collect on the Loan to Borrower pursuant to this
Agreement. Accordingly, and notwithstanding anything in any
Note or in this Agreement to the contrary, the maximum,
aggregate amount of interest and other charges constituting
interest under applicable law that are payable, chargeable,
or receivable under any Note and this Agreement shall not
exceed the maximum amount of interest now allowed by
applicable law or any greater amount of interest allowed
because of a future amendment to existing law. Borrower is
not liable for any interest in excess of the maximum lawful
amount, and any excess interest charged or collected by
Lender will constitute an inadvertent mistake and, if charged
but not paid, will be cancelled automatically, or, if paid,
will be either refunded to Borrower or credited against the
outstanding principal balance of the applicable Note, at the
election of Lender.
2.9
Capital
Adequacy . If the Lender has determined,
after the date hereof, that the adoption or the becoming
effective of, or any change in, or any change by any
Governmental Authority, central bank or comparable agency
charged with the interpretation or administration thereof in
the interpretation or administration of, any applicable law,
rule or regulation regarding capital adequacy, or compliance
by the Lender with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on capital or
assets as a consequence of its commitments or obligations
hereunder to a level below that which the Lender could have
achieved but for such adoption, effectiveness, change or
compliance (taking into consideration the Lender’s
policies with respect to capital adequacy), then, ninety (90)
days after presentation by Lender to Borrower of a statement
in the amount and setting forth in reasonable detail such
Lender’s calculation thereof and the assumptions upon
which such calculation was based, the Borrower shall be
obligated to pay to the Lender such additional amount or
amounts as will compensate the Lender for such
reduction. Each determination by the Lender of
amounts owing under this Section shall, absent manifest
error, be conclusive and binding on the parties
hereto.
2.10
Illegality
.
Notwithstanding any other provision herein, if
the adoption of or any change in any Requirement of Law of in
the interpretation or application thereof occurring after the
Closing Date shall make it unlawful for the Lender to charge
interest on the Loan based on the Base Rate as contemplated
by this Agreement, (a) the Lender shall promptly give written
notice of such circumstances to the Borrower (which notice
shall be withdrawn whenever such circumstances no longer
exist), (b) the obligation of the Lender hereunder to charge
interest on the Loan at the Base Rate shall be forthwith be
canceled and, until such time as it shall no longer be
unlawful for the Lender to charge interest at the Base Rate,
the Lender shall then have an obligation only to charge
interest on the Loan at the Alternative Rate and (c) the
outstanding principal amount of the Loan shall automatically
bear interest at the Alternative Rate.
2.11
Requirements
of Law . If,
after the date hereof, the adoption of or any change in any
Requirement of Law or in the interpretation or application
thereof applicable to the Lender, or compliance by the Lender
with any request or directive (whether or not having the
force of law) from any central bank or other Governmental
Authority, in each case made subsequent to the Closing
Date:
(a) shall
subject the Lender to any tax of any kind whatsoever with
respect to the Loan made by it or its obligation to make the
Loan, or change the basis of taxation of payments to the
Lenders in respect thereof (except for (i) Non-Excluded Taxes
covered by Section 2.12 and (ii) changes in taxes measured by
or imposed upon the overall net income, or franchise tax
(imposed in lieu of such net income tax), of the Lender or
its applicable lending office, branch, or any affiliate
thereof);
(b) shall impose, modify or
hold applicable any reserve, special deposit, compulsory loan
or similar requirement against assets held by, deposits or
other liabilities in or for the account of, advances, loans
or other extensions of credit by, or any other acquisition of
funds by, any office of the Lender which is not otherwise
included in the determination of Base Rate hereunder;
or
(c) shall impose on the
Lender any other condition (excluding any tax of any kind
whatsoever);
and
the result of any of the foregoing is to increase the cost to
the Lender, by an amount which the Lender deems to be
material, of making, continuing or maintaining Loan or to
reduce any amount receivable hereunder in respect thereof,
then, in any such case, upon notice to the Borrower from the
Lender, in accordance herewith, the Borrower shall be
obligated to promptly pay the Lender, upon its demand, any
additional amounts necessary to compensate the Lenders for
such increased cost or reduced amount
receivable. If the Lender becomes entitled to claim
any additional amounts pursuant to this subsection, it shall
provide prompt notice thereof to the Borrower, certifying (x)
that one of the events described in this paragraph (a) has
occurred and describing in reasonable detail the nature of
such event, (y) as to the increased cost or reduced amount
resulting from such event and (z) as to the additional amount
demanded by the Lender and a reasonably detailed explanation
of the calculation thereof. Such a certificate as
to any additional amounts payable pursuant to this subsection
submitted by the Lender, to the Borrower shall be conclusive
and binding on the parties hereto in the absence of manifest
error. This covenant shall survive the termination
of this Agreement and the payment of the Loan and all other
amounts payable hereunder.
2.12
Taxes
. (a)
Except as provided below in this subsection, all payments
made by the Borrower under this Agreement and the Note shall
be made free and clear of, and without deduction or
withholding for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any
court, or governmental body, agency or other official,
excluding taxes measured by or imposed upon the overall net
income of the Lender or its applicable lending office, or any
branch or affiliate thereof, and all franchise taxes, branch
taxes, taxes on doing business or taxes on the overall
capital or net worth of the Lender or its applicable lending
office, or any branch or affiliate thereof, in each case
imposed in lieu of net income taxes, imposed: (i) by the
jurisdiction under the laws of which the Lender, applicable
lending office, branch or affiliate is organized or is
located, or in which its principal executive office is
located, or any nation within which such jurisdiction is
located or any political subdivision thereof; or (ii) by
reason of any connection between the jurisdiction imposing
such tax and the Lender, applicable lending office, branch or
affiliate other than a connection arising solely from the
Lender having executed, delivered or performed its
obligations, or received payment under or enforced, this
Agreement or the Note. If any such non-excluded
taxes, levies, imposts, duties, charges, fees, deductions or
withholdings (“ Non-Excluded
Taxes ”) are required to be withheld from any
amounts payable to the Lender hereunder or under the Note,
(A) the amounts so payable to the Lender shall be increased
to the extent necessary to yield to the Lender (after payment
of all Non-Excluded Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in
this Agreement and the Note, and (B) as promptly as possible
thereafter the Borrower shall send to the Lender for its own
account, a certified copy of an original official receipt
received by the Borrower showing payment
thereof. If the Borrower fails to pay any
Non-Excluded Taxes when due to the appropriate taxing
authority or fails to remit to the Lender the required
receipts or other required documentary evidence, the Borrower
shall indemnify the Lender for any incremental taxes,
interest or penalties that may become payable by the Lender
as a result of any such failure. The agreements in
this subsection shall survive the termination of this
Agreement and the payment of the advances and all other
amounts payable hereunder.
(b) In connection with this
transaction there may or may not be due certain documentary
stamp taxes and/or intangible taxes imposed by the State of
Florida (the “ Florida
Taxes ”). In addition to (and not in
limitation of) the indemnification with respect to tax
liabilities set forth above, the Borrower agrees to indemnify
the Lender, its directors, officer, agents and employees from
and against any and all liability, damage, loss, cost,
expense or reasonable attorney fees which may accrue to or be
sustained by the Lender or its directors, officers, agents or
employees on account of or arising from any claim or action
raised by, filed or brought by or in the name of any Florida
governmental or administrative department with respect to
nonpayment of the Florida Taxes against the Lender, or any of
its directors, officers, agents or employees.
2.13
Termination
and No Prepayment Fee . The
Loan may be prepaid in full or in part at any time without a
prepayment fee or penalty.
3.
Conditions
of Lending . In addition to any other
requirements set forth in this Agreement, Lender shall not be
obligated to make any advance under the Loan unless at the
time thereof the following conditions shall have been
met:
3.1
Company
Proceedings . All proper company
proceedings shall have been taken by Borrower to authorize
this Agreement and the transactions contemplated
hereby.
3.2
Documentation
. All instruments and proceedings in connection
with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to Lender, and Lender
shall have received on the date of this Agreement copies of
all documents including records of company proceedings, which
it may have requested in connection therewith, including
certified copies of resolutions adopted by the board of
directors of Borrower and G
