Exhibit 10.1

EXECUTION VERSION

 

[ J.P.Morgan logo]

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

dated as of

 

July 30, 2014

 

among

 

HORACE MANN EDUCATORS CORPORATION

 

The Lenders Party Hereto

 

and

 

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

 

 

 

J.P. MORGAN SECURITIES LLC,

as Sole Bookrunner and Joint Lead Arranger

 

PNC CAPITAL MARKETS LLC,

as Joint Lead Arranger

 

PNC BANK, NATIONAL ASSOCIATION,

as Syndication Agent

 

NORTHERN TRUST COMPANY

and

STATE STREET BANK AND TRUST COMPANY,

as Co-Documentation Agents

 

 

 

 

Table of Contents

 

    Page       ARTICLE I Definitions 1       SECTION 1.01. Defined Terms 1
SECTION 1.02. Classification of Loans and Borrowings 17 SECTION 1.03. Terms
Generally 17 SECTION 1.04. Accounting Terms; GAAP 18 SECTION 1.05. Allocation of
Loans and Percentages as of the Effective Date 18       ARTICLE II The Credits
19       SECTION 2.01. Commitments 19 SECTION 2.02. Loans and Borrowings 19
SECTION 2.03. Requests for Borrowings 20 SECTION 2.04. Funding of Borrowings 20
SECTION 2.05. Interest Elections 21 SECTION 2.06. Termination and Reduction of
Commitments 22 SECTION 2.07. Repayment of Loans; Evidence of Debt 23 SECTION
2.08. Prepayment of Loans 23 SECTION 2.09. Fees 24 SECTION 2.10. Interest 24
SECTION 2.11. Alternate Rate of Interest 25 SECTION 2.12. Increased Costs 25
SECTION 2.13. Break Funding Payments 26 SECTION 2.14. Taxes 27 SECTION 2.15.
Payments Generally; Pro Rata Treatment; Sharing of Set-offs 31 SECTION 2.16.
Mitigation Obligations; Replacement of Lenders 32 SECTION 2.17. Defaulting
Lenders 33 SECTION 2.18. Increase of Commitments 33       ARTICLE III
Representations and Warranties 34       SECTION 3.01. Due Organization,
Authorization, Etc 34 SECTION 3.02. Statutory Financial Statements 35 SECTION
3.03. GAAP Financial Statements 36 SECTION 3.04. Litigation and Contingent
Liabilities 36 SECTION 3.05. Investment Company Act 37 SECTION 3.06. Regulations
T, U and X 37 SECTION 3.07. Proceeds 37 SECTION 3.08. Insurance 37 SECTION 3.09.
Accuracy of Information 37 SECTION 3.10. Subsidiaries 37 SECTION 3.11. Insurance
Licenses 38 SECTION 3.12. Taxes 38 SECTION 3.13. Compliance with Laws 38

 

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Table of Contents

(continued)

 

    Page       SECTION 3.14. No Default 38 SECTION 3.15. Ownership of Property;
Liens 38 SECTION 3.16. Anti-Corruption Laws and Sanctions 38       ARTICLE IV
Conditions 39       SECTION 4.01. Effective Date 39 SECTION 4.02. Each Credit
Event 40       ARTICLE V Affirmative Covenants 40       SECTION 5.01. Reports,
Certificates and Other Information 40 SECTION 5.02. Corporate Existence; Foreign
Qualification 44 SECTION 5.03. Books, Records and Inspections 44 SECTION 5.04.
Insurance 44 SECTION 5.05. Taxes and Liabilities 44 SECTION 5.06. Compliance
with Laws 44 SECTION 5.07. Conduct of Business 44 SECTION 5.08. Maintenance of
Properties 44 SECTION 5.09. Use of Proceeds 45 SECTION 5.10. Accuracy Of
Information 45 SECTION 5.11. Anti-Corruption Laws and Sanctions 45       ARTICLE
VI Negative Covenants 45       SECTION 6.01. Consolidated Debt to Total
Capitalization 45 SECTION 6.02. Net Worth 45 SECTION 6.03. Minimum Risk Based
Capital 45 SECTION 6.04. Mergers, Consolidations and Sales 46 SECTION 6.05.
Regulations T, U and X 46 SECTION 6.06. Restrictive Agreements 46 SECTION 6.07.
Transactions with Affiliates 46 SECTION 6.08. Liens 46 SECTION 6.09. Subsidiary
Debt 47 SECTION 6.10. Securities Lending 47       ARTICLE VII Events of Default
47       ARTICLE VIII The Administrative Agent 50       ARTICLE IX Miscellaneous
52       SECTION 9.01. Notices 52 SECTION 9.02. Waivers; Amendments 53 SECTION
9.03. Expenses; Indemnity; Damage Waiver 54 SECTION 9.04. Successors and Assigns
55 SECTION 9.05. Survival 58 SECTION 9.06. Counterparts; Integration;
Effectiveness 59 SECTION 9.07. Severability 59

 

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Table of Contents

(continued)

 

    Page       SECTION 9.08. Right of Setoff 59 SECTION 9.09. Governing Law;
Jurisdiction; Consent to Service of Process 59 SECTION 9.10. WAIVER OF JURY
TRIAL 60 SECTION 9.11. Headings 60 SECTION 9.12. Confidentiality 60 SECTION
9.13. Interest Rate Limitation 61 SECTION 9.14. USA PATRIOT Act 62 SECTION 9.15.
No Advisory or Fiduciary Responsibility 62

 

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SCHEDULES:

 

Schedule 2.01 Commitments Schedule 3.01 Jurisdictions Schedule 3.02(a) SAP
Exceptions Schedule 3.04 Litigation Schedule 3.10 Subsidiaries Schedule 3.11
Insurance Licenses Schedule 6.06 Restrictive Agreements

 

EXHIBITS:

 

Exhibit A Form of Assignment and Assumption Exhibit B Compliance Certificate
Exhibit C-1 U.S. Tax Certificate (For Non-U.S. Lenders that are not Partnerships
for U.S. Federal Income Tax Purposes) Exhibit C-2 U.S. Tax Certificate (For
Non-U.S. Lenders that are Partnerships for U.S. Federal Income Tax Purposes)
Exhibit C-3 U.S. Tax Certificate (For Non-U.S. Participants that are not
Partnerships for U.S. Federal Income Tax Purposes) Exhibit C-4 U.S. Tax
Certificate (For Non-U.S. Participants that are Partnerships for U.S. Federal
Income Tax Purposes)

 

 

 

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

CREDIT AGREEMENT, dated as of July 30, 2014, among HORACE MANN EDUCATORS
CORPORATION, a Delaware corporation (the “Borrower”), the LENDERS party hereto,
and JPMORGAN CHASE BANK, N.A., as Administrative Agent (the “Administrative
Agent”).

 

WHEREAS, the Borrower, various lenders and the Administrative Agent are parties
to a Credit Agreement, dated as of October 7, 2011, (the “Existing Credit
Agreement”);

 

WHEREAS, the parties have agreed to amend and restate the Existing Credit
Agreement pursuant to this Agreement; and

 

WHEREAS, the parties intend that this Agreement and the documents executed in
connection herewith not effect a novation of the obligations of the Borrower
under the Existing Credit Agreement, but merely a restatement of and, where
applicable, an amendment to the terms governing such obligations;

 

NOW, THEREFORE, the parties hereto agree as follows:

 

ARTICLE I

 

Definitions

 

SECTION 1.01.            Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:

 

“ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.

 

“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.

 

“Administrative Agent” has the meaning assigned to such term in the Preamble.

 

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

 

“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.

 

“Agreement” means this Credit Agreement as from time to time amended, modified,
supplemented, restated, refunded or renewed and in effect.

 

 

 

 

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus ½ of 1%, and (c) the Adjusted LIBO Rate for a
one-month Interest Period on such day (or if such day is not a Business Day, the
immediately preceding Business Day) plus 1%, provided that, for the avoidance of
doubt, the Adjusted LIBO Rate for any day shall be based on the rate appearing
on the Reuters Screen LIBOR01 Page (or on any successor or substitute page) at
approximately 11:00 a.m. London time on such day. Any change in the Alternate
Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or
the Adjusted LIBO Rate shall be effective from and including the effective date
of such change in the Prime Rate, the Federal Funds Effective Rate or the
Adjusted LIBO Rate, respectively.

 

“Annual Statement” means the annual statutory financial statement of any
Insurance Subsidiary required to be filed with the insurance commissioner (or
similar authority) of its jurisdiction of incorporation, which statement shall
be in the form required by such Insurance Subsidiary’s jurisdiction of
incorporation or, if no specific form is so required, in the form of financial
statements permitted by such insurance commissioner (or such similar authority)
to be used for filing annual statutory financial statements and shall contain
the type of information permitted by such insurance commissioner (or such
similar authority) to be disclosed therein, together with all exhibits or
schedules filed therewith.

 

“Anti-Corruption Laws” means all laws, rules, and regulations of any
jurisdiction applicable to the Borrower or its Subsidiaries from time to time
concerning or relating to bribery or corruption.

 

“Applicable Percentage” means, with respect to any Lender, the percentage of the
total Commitments represented by such Lender’s Commitment. If the Commitments
have terminated or expired, the Applicable Percentages shall be determined based
upon the Commitments most recently in effect, giving effect to any assignments.

 

“Applicable Rate” means, for any day, with respect to any ABR Loan or Eurodollar
Loan, or with respect to the commitment fees payable hereunder, as the case may
be, the applicable rate per annum set forth below under the caption “ABR
Spread”, “Eurodollar Spread” or “Commitment Fee Rate”, as the case may be, based
upon the ratings by S&P and Moody’s, respectively, applicable on such date to
the Index Debt:

 

Index Debt Ratings
(S&P/Moody’s):  ABR
Spread:   Eurodollar
Spread:   Commitment Fee
Rate:  Category 1
A-/A3 or better   0%   0.875%   0.10%                  Category 2
BBB+/Baa1   0.125%   1.000%   0.125%                  Category 3
BBB/Baa2   0.250%   1.150%   0.15%

  

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Category 4
BBB-/Baa3   0.375%   1.250%   0.175%                  Category 5
less than BBB-/Baa3   0.50%   1.375%   0.25%

  

For purposes of the foregoing, (i) if either Moody’s or S&P shall not have in
effect a rating for the Index Debt (other than by reason of the circumstances
referred to in the last sentence of this definition), then such rating agency
shall be deemed to have established a rating in Category 5; (ii) if the ratings
established or deemed to have been established by Moody’s and S&P for the Index
Debt shall differ by one rating, the Applicable Rate shall be based on the
higher of the two credit ratings; (iii) if the ratings established or deemed to
have been established by Moody’s and S&P for the Index Debt shall differ by two
or more ratings, the Applicable Rate shall be one rating level below the higher
of such credit ratings; and (iv) if the ratings established or deemed to have
been established by Moody’s and S&P for the Index Debt shall be changed (other
than as a result of a change in the rating system of Moody’s or S&P), such
change shall be effective as of the date on which it is first announced by the
applicable rating agency, irrespective of when notice of such change shall have
been furnished by the Borrower to the Agent and the Lenders pursuant to Section
5.01 or otherwise. Each change in the Applicable Rate shall apply during the
period commencing on the effective date of such change and ending on the date
immediately preceding the effective date of the next such change. If the rating
system of Moody’s or S&P shall change, or if either such rating agency shall
cease to be in the business of rating corporate debt obligations, the Borrower
and the Lenders shall negotiate in good faith to amend this definition to
reflect such changed rating system or the unavailability of ratings from such
rating agency and, pending the effectiveness of any such amendment, the
Applicable Rate shall be determined by reference to the rating most recently in
effect from such rating agency prior to such change or cessation.

 

“Approved Fund” means any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in bank loans and similar extensions
of credit in the ordinary course of its business and that is administered or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.

 

“Arrangers” means J.P. Morgan Securities, LLC and PNC Capital Markets LLC in
their capacities as joint lead arrangers.

 

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 9.04), and accepted by the Administrative Agent, in the form of
Exhibit A or any other form approved by the Administrative Agent.

 

“Attributable Debt” means, on any date, (a) in respect of any capital lease of
any Person, the capitalized amount thereof that would appear on a balance sheet
of such Person prepared as of such date in accordance with GAAP, and (b) in
respect of any Synthetic Lease Obligation, the capitalized amount of the
remaining lease payments under the relevant lease that

 

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would appear on a balance sheet of such Person prepared as of such date in
accordance with GAAP if such lease were accounted for as a capital lease.

 

“Augmenting Lender” has the meaning assigned to such term in Section 2.18.

 

“Availability Period” means the period from and including the Effective Date to
but excluding the earlier of the Maturity Date and the date of termination of
the Commitments.

 

“Bankruptcy Event” means, with respect to any Person, such Person becomes the
subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee, administrator, custodian, assignee for the benefit of
creditors or similar Person charged with the reorganization or liquidation of
its business appointed for it, or, in the good faith determination of the
Administrative Agent, has taken any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any such proceeding or appointment,
provided that a Bankruptcy Event shall not result solely by virtue of any
ownership interest, or the acquisition of any ownership interest, in such Person
by a Governmental Authority or instrumentality thereof, provided, further, that
such ownership interest does not result in or provide such Person with immunity
from the jurisdiction of courts within the United States or from the enforcement
of judgments or writs of attachment on its assets or permit such Person (or such
Governmental Authority or instrumentality) to reject, repudiate, disavow or
disaffirm any contracts or agreements made by such Person.

 

“Beneficial Owner” means, with respect to any U.S. federal withholding Tax, the
beneficial owner, for U.S. federal income tax purposes, to whom such Tax
relates.

 

“Board” means the Board of Governors of the Federal Reserve System of the United
States of America.

 

“Borrower” has the meaning assigned to such term in the Preamble.

 

“Borrowing” means Loans of the same Type, made, converted or continued on the
same date and, in the case of Eurodollar Loans, as to which a single Interest
Period is in effect.

 

“Borrowing Request” means a request by the Borrower for a Borrowing in
accordance with Section 2.03.

 

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in Chicago, Illinois or New York, New York are authorized
or required by law to remain closed; provided that, when used in connection with
a Eurodollar Loan, the term “Business Day” shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London 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

 

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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; (c) any “person” or “group” as
such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934 (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.

 

“Change in Law” means the occurrence after the date of this Agreement (or, with
respect to any Lender, such later date on which such Lender becomes a party to
this Agreement) of any of the following: (a) the adoption or taking effect of
any law, rule, regulation or treaty (including any rules or regulations issued
under or implementing any existing law), (b) any change in any law, rule,
regulation or treaty or in the administration, interpretation or application
thereof by any Governmental Authority or (c) compliance by any Lender (or, for
purposes of Section 2.15(b), by any lending office of such Lender or by such
Lender’s holding company, if any) with any request, guideline, requirement or
directive (whether or not having the force of law) of any Governmental Authority
made or issued after the date of this Agreement; provided that, notwithstanding
anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and
Consumer Protection Act and all requests, rules, guidelines, requirements or
directives thereunder or issued in connection therewith or in the implementation
thereof, and (y) all requests, rules, guidelines, requirements or directives
promulgated by the Bank for International Settlements, the Basel Committee on
Banking Supervision (or any successor or similar authority) or the U.S. or
foreign regulatory authorities, in each case pursuant to Basel III, shall in
each case be deemed to be a “Change in Law”, regardless of the date enacted,
adopted, issued or implemented.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Commitment” means, with respect to each Lender, the commitment of such Lender
to make Loans, expressed as an amount representing the maximum aggregate amount
of such Lender’s Revolving Credit Exposure hereunder, as such commitment may be
(a) reduced from time to time pursuant to Section 2.06, (b) increased from time
to time pursuant to Section 2.18 and (c) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to Section 9.04. The
initial amount of each Lender’s Commitment is set forth on

 

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Schedule 2.01, or in the Assignment and Assumption pursuant to which such Lender
shall have assumed its Commitment, as applicable. The initial aggregate amount
of the Lenders’ Commitments is $150,000,000.

 

“Compliance Certificate” means a certificate substantially in the form of
Exhibit B, 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” means the consolidated Debt of the Borrower and its
consolidated Subsidiaries, including without limitation the principal amount of
the Loans, but excluding FHLB Operating Debt in an aggregate amount at any time
outstanding up to the Threshold Amount less the aggregate market value of
securities subject to Securities Lending at such time; provided that any amount
of FHLB Operating Debt at any time outstanding in excess of the Threshold Amount
shall not be excluded from Consolidated Debt.

 

“Contingent Liability” means 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 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.

 

“Contractual Obligation” means, 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.

 

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.

 

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“Controlled Group” means 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” means, 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 and
Synthetic Lease Obligations of such 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. The amount of any net obligation under any Hedging Obligation on any
date shall be deemed to be the Swap Termination Value thereof as of such date.
The amount of any capital lease or Synthetic Lease Obligation as of any date
shall be deemed to be the amount of Attributable Debt in respect thereof as of
such date. Notwithstanding anything to the contrary, Debt shall not include any
Securities Lending.

 

“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.

 

“Defaulting Lender” means any Lender that (a) has failed, within two Business
Days of the date required to be funded or paid, to (i) fund any portion of its
Loans or (ii) pay over to the Administrative Agent or any Lender any other
amount required to be paid by it hereunder, unless, in the case of clause (i)
above, such Lender notifies the Administrative Agent in writing that such
failure is the result of such Lender’s good faith determination that a condition
precedent to funding (specifically identified and including the particular
default, if any) has not been satisfied, (b) has notified the Borrower, the
Administrative Agent or any Lender in writing, or has made a public statement to
the effect, that it does not intend or expect to comply with any of its funding
obligations under this Agreement (unless such writing or public statement
indicates that such position is based on such Lender’s good faith determination
that a condition precedent (specifically identified and including the particular
default, if any) to funding a loan under this Agreement cannot be satisfied) or
generally under other agreements in which it commits to extend credit, (c) has
failed, within three Business Days after request by the Administrative Agent or
any Lender, acting in good faith, to provide a certification in writing from an
authorized officer of such Lender that it will comply with its obligations (and
is financially able to meet such obligations) to fund prospective Loans under
this Agreement, provided that such Lender shall cease to be a Defaulting Lender
pursuant to this clause (c) upon the Administrative Agent’s or such Lender’s
receipt of such certification in form and substance

 

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satisfactory to it and the Administrative Agent, as applicable, or (d) has
become the subject of a Bankruptcy Event.

 

“Department” has the meaning assigned to such term in Section 3.02.

 

“dollars” or “$” refers to lawful money of the United States of America.

 

“Effective Date” means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

 

“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, bear interest at a rate
determined by reference to the Adjusted LIBO Rate.

 

“Event of Default” has the meaning assigned to such term in Article VII.

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient: (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan or Commitment pursuant
to a law in effect on the date on which (i) such Lender acquires such interest
in the Loan or Commitment (other than pursuant to an assignment request by the
Borrower under Section 2.19(b)) or (ii) such Lender changes its lending office,
except in each case to the extent that, pursuant to Section 2.17, amounts with
respect to such Taxes were payable either to such Lender’s assignor immediately
before such Lender acquired the applicable interest in a Loan or Commitment or
to such Lender immediately before it changed its lending office, (c) Taxes
attributable to such Recipient’s failure to comply with Section 2.17(f) and
(d) any U.S. federal withholding Taxes imposed under FATCA.

 

“Executive Officer” means, as to any Person, the president, the chief financial
officer, the chief executive officer, the senior vice president-finance, the
general counsel, the treasurer or the secretary.

 

“Existing Credit Agreement” has the meaning assigned to such term in the
Recitals.

 

“Existing Lender” has the meaning assigned to such term in Section 1.05(b).

 

“Existing Loans” has the meaning assigned to such term in Section 1.05(b).

 

8

 

 

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof and any agreement entered into
pursuant to Section 147(b)(1) of the Code.

 

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.

 

“Fee Letters” means, collectively, the JPMCB Fee Letter and the PNC Fee Letter.

 

“FHLB Liquidity Debt” means any transaction or series of transactions pursuant
to which any Insurance Subsidiary makes a pledge or assignment of marketable
securities as collateral to the Federal Home Loan Bank in exchange for cash, the
proceeds of which are to be used for anything other than to purchase marketable
securities.

 

“FHLB Operating Debt” means any transaction or series of transactions pursuant
to which any Insurance Subsidiary makes a pledge or assignment of marketable
securities as collateral to the Federal Home Loan Bank in exchange for cash, the
proceeds of which are to be used to purchase marketable securities.

 

“Fiscal Quarter” means any quarter of a Fiscal Year.

 

“Fiscal Year” means any period of twelve consecutive calendar months ending on
the last day of December.

 

“GAAP” means generally accepted accounting principles in the United States of
America.

 

“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.

 

“Hedging Obligations” means, with respect to any Person, the net liability of
such Person under Swap Contracts.

 

“Impacted Interest Period” has the meaning assigned to such term in the
definitions of “LIBO Rate.”

 

9

 

 

 

“Indemnified Taxes” means (a) Taxes other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of the
Borrower under any Loan Document and (b) to the extent not otherwise described
in subsection (a), Other Taxes.

 

“Indemnitee” has the meaning assigned to it in Section 9.03(b).

 

“Index Debt” means senior, unsecured, long-term indebtedness for borrowed money
of the Borrower that is not guaranteed by any other Person or subject to any
other credit enhancement.

 

“Ineligible Institution” has the meaning assigned to it in Section 9.04(b).

 

“Information” has the meaning assigned to it in Section 9.12.

 

“Insurance Code” means, 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” means 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” means any Life Subsidiary or any P/C Subsidiary.

 

“Interest Election Request” means a request by the Borrower to convert or
continue a Borrowing in accordance with Section 2.05.

 

“Interest Payment Date” means (a) with respect to any ABR Loan, the last day of
each March, June, September and December and (b) with respect to any Eurodollar
Loan, the last day of the Interest Period applicable to the Eurodollar Borrowing
of which such Loan is a part and, in the case of a Eurodollar Borrowing with an
Interest Period of more than three months’ duration, each day prior to the last
day of such Interest Period that occurs at intervals of three months’ duration
after the first day of such Interest Period.

 

“Interest Period” means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Eurodollar Borrowing and ending on the
numerically corresponding day in the calendar month that is one, three or
six months thereafter, as the Borrower may elect; provided that (i) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day and (ii) any
Interest Period pertaining to a Eurodollar Borrowing that commences on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period) shall end
on the last Business Day of the last calendar month of such Interest Period. For
purposes hereof, the date of a Borrowing initially shall be the date on

 

10

 

 

which such Borrowing is made and thereafter shall be the effective date of the
most recent conversion or continuation of such Borrowing.

 

“Interpolated Rate” means, at any time, for any Interest Period, the rate per
annum (rounded upward to four decimal places) determined by the Administrative
Agent (which determination shall be conclusive and binding absent manifest
error) to be equal to the rate that results from interpolating on a linear basis
between: (a) the LIBO Screen Rate for the longest period (for which the LIBO
Screen Rate is available) that is shorter than the Impacted Interest Period and
(b) the LIBO Screen Rate for the shortest period (for which the LIBO Screen Rate
is available) that exceeds the Impacted Interest Period, in each case, at such
time.

 

“IRS” means the United States Internal Revenue Service.

 

“JPMCB Fee Letter” means the letter agreement, dated as of July 3, 2014, among
the Borrower, the Administrative Agent and J.P. Morgan Securities LLC.

 

“Lease Obligations” means, 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” means the Persons listed on Schedule 2.01 and any other Person that
shall have become a party hereto pursuant to an Assignment and Assumption, other
than any such Person that ceases to be a party hereto pursuant to an Assignment
and Assumption.

 

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the London interbank offered rate as administered by ICE Benchmark
Administration (or any other Person that takes over the administration of such
rate for Dollars) for a period equal in length to such Interest Period as
displayed on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such
rate (or, in the event such rate does not appear on a Reuters page or screen, on
any successor or substitute page on such screen that displays such rate, or on
the appropriate page of such other information service that publishes such rate
from time to time as selected by the Administrative Agent in its reasonable
discretion; in each case the “LIBO Screen Rate”) at approximately 11:00 a.m.,
London time, two (2) Business Days prior to the commencement of such Interest
Period; provided that, if the LIBO Screen Rate shall be less than zero, such
rate shall be deemed to be zero for the purposes of this Agreement and provided,
further, if the LIBO Screen Rate shall not be available at such time for such
Interest Period (an “Impacted Interest Period”), then the LIBO Rate shall be the
Interpolated  Rate, provided that, if any Interpolated Rate shall be less than
zero, such rate shall be deemed to be zero for purposes of this Agreement.

 

“LIBO Screen Rate” has the meaning assigned to such term in the definition of
“LIBO Rate”.

 

“Licenses” has the meaning assigned to it in Section 3.11.

 

11

 

  

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.

 

“Life Subsidiary” means any Subsidiary of the Borrower that is engaged in the
business of providing life insurance and/or annuities, and related services.

 

“Loan Document” means, collectively, this Agreement, any Note and the Fee
Letters.

 

“Loans” means the loans made by the Lenders to the Borrower pursuant to Section
2.03.

 

“Material Adverse Effect” means, 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:

 

(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.

 

“Material Insurance Subsidiary” means, at any time, an Insurance Subsidiary
having (on a consolidated basis with its Subsidiaries) at such time either (a)
gross revenues for the most recent four Fiscal Quarter period in excess of 5% of
the gross revenues of the Borrower and its Subsidiaries for such Four Fiscal
Quarter period or (b) total assets, as of the last day of the preceding Fiscal
Quarter, having a net book value in excess of 5% of the total assets of the
Borrower and its Subsidiaries as of such day, in each case, based upon the
Borrower’s most recent annual or quarterly financial statements delivered to the
Administrative Agent under Section 5.01. Notwithstanding the foregoing, it is
agreed that Educators Life Insurance Company of America shall not be deemed a
Material Insurance Subsidiary but its Subsidiary, Horace Mann Life Insurance
Company, shall be a Material Insurance Subsidiary. The Material Insurance
Subsidiaries are set forth on Schedule 3.10, as such schedule may be updated
from time to time.

 

“Maturity Date” means July 30, 2019.

 

“Minimum Net Worth” has the meaning assigned to such term in Section 6.02.

 

“Moody’s” means Moody’s Investors Service, Inc.

 

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.

 

12

 

 

“NAIC” means 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.

 

“Non-U.S. Lender” means a Lender that is not a U.S. Person.

 

“Note” has the meaning assigned to such term in Section 2.07(e).

 

“OFAC” means the Office of Foreign Assets Control of the U.S. Department of the
Treasury.

 

“Ordinary Course Litigation” has the meaning assigned to such term in Section
3.04.

 

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such Taxes (other than a connection arising from such
Recipient having executed, delivered, enforced, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Document), or sold or assigned an interest in any Loan or any Loan
Document.

 

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made under Section 2.16(b)).

 

“P/C Subsidiary” means any Subsidiary of the Borrower that is engaged in the
business of providing property and casualty insurance and related services.

 

“Participant” has the meaning assigned to such term in Section 9.04.

 

“Participant Register” has the meaning assigned to such term in Section 9.04(c).

 

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

 

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Borrower or any member of its
Controlled Group is (or, if such plan were terminated, would under Section 4069
of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

13

 

 

 

“PNC Fee Letter” means the letter agreement, dated as of July 7, 2014, among the
Borrower, PNC Bank, National Association and PNC Capital Markets LLC.

 

“Prime Rate” means the rate of interest per annum publicly announced from time
to time by JPMorgan Chase Bank as its prime rate in effect at its office located
at 270 Park Avenue, New York, New York; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.

 

“Quarterly Statement” means the quarterly 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.

 

“Recipient” means, as applicable, (a) the Administrative Agent and (b) any
Lender.

 

“Register” has the meaning assigned to such term in Section 9.04.

 

“Reinsurance Agreements” means any agreement, contract, treaty, certificate or
other arrangement (other than a 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.

 

“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person’s Affiliates.

 

“Required Lenders” means, at any time, Lenders having Revolving Credit Exposures
and unused Commitments representing more than 50% of the sum of the total
Revolving Credit Exposures and unused Commitments at such time; provided that
for the purpose of determining the Required Lenders needed for any waiver,
amendment, modification or consent, any Lender that is the Borrower or any
Affiliate of the Borrower or, subject to Section 2.17(b), a Defaulting Lender
shall be disregarded.

 

“Requirement of Law” for any Person means 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.

 

“Revolving Credit Exposure” means, with respect to any Lender at any time, the
sum of the outstanding principal amount of such Lender’s Loans at such time.

 

“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial
Services LLC business.

 

14

 

 

“Sanctioned Country” means, at any time, a country or territory which is the
subject or target of any Sanctions.

 

“Sanctioned Person” means, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by the OFAC or the U.S.
Department of State, (b) any Person operating, organized or resident in a
Sanctioned Country or (c) any Person controlled by any such Person.

 

“Sanctions” means economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by the U.S. government, including
those administered by the OFAC or the U.S. Department of State.

 

“SAP” means, 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.

 

“Securities Lending” means any transaction or series of transactions pursuant to
which any Insurance Subsidiary makes a pledge or assignment of marketable
securities to another Person (including repurchase transactions, reserve
repurchase transactions, fee-based transactions and other similar securities
lending arrangements); provided that “Securities Lending” shall not include FHLB
Liquidity Debt or FHLB Operating Debt.

 

“Statutory Financial Statements” has the meaning specified in Section 3.02(a).

 

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentage (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve
percentage shall include those imposed pursuant to such Regulation D. Eurodollar
Loans shall be deemed to constitute eurocurrency funding and to be subject to
such reserve requirements without benefit of or credit for proration, exemptions
or offsets that may be available from time to time to any Lender under such
Regulation D or any comparable regulation. The Statutory Reserve Rate shall be
adjusted automatically on and as of the effective date of any change in any
reserve percentage.

 

“Subsidiary” means, with respect to the Borrower at any date, any corporation,
limited liability company, partnership, association or other entity the accounts
of which would be consolidated with those of the Borrower in the Borrower’s
consolidated financial statements if such financial statements were prepared in
accordance with GAAP as of such date, as well as any other corporation, limited
liability company, partnership, association or other entity (a) of which
securities or other ownership interests representing more than 50% of the equity
or more than 50% of the ordinary voting power or, in the case of a partnership,
more than 50% of the general partnership interests are, as of such date, owned,
controlled or held, or (b) that is, as of

 

15

 

  

such date, otherwise Controlled, by the Borrower or one or more subsidiaries of
the Borrower or by the Borrower and one or more Subsidiaries of the Borrower.

 

“Surplus Relief Reinsurance Agreements” means 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.

 

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.

 

“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).

 

“Synthetic Lease Obligation” means the monetary obligation of a Person under (a)
a so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property creating obligations that do not
appear on the balance sheet of such Person but which, upon the insolvency or
bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).

 

“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, withholdings (including backup withholding), assessments, fees or
other charges imposed by any Governmental Authority, including any interest,
additions to tax or penalties applicable thereto.

 

16

 

 

“Threshold Amount” means, as of any date of determination, ten percent (10%) of
the net admitted assets less separate accounts assets (as set forth on the
financial statements most recently provided pursuant to Section 5.01(c)) of
Horace Mann Life Insurance Company.

 

“Transactions” means the execution, delivery and performance by the Borrower of
this Agreement, the borrowing of Loans and the use of the proceeds thereof.

 

“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

 

“U.S.” means the United States of America.

 

“U.S. Person” means a “United States person” within the meaning of Section
7701(a)(30) of the Code.

 

“U.S. Tax Certificate” has the meaning assigned to such term in Section
2.14(f)(ii)(D)(2).

 

“Withholding Agent” means the Borrower and the Administrative Agent.

 

“2012 Annual Statement” has the meaning assigned to such term in
Section 3.02(b).

 

“2013 Annual Statement” has the meaning assigned to such term in
Section 3.02(b).

 

“2014 Quarterly Statement” has the meaning assigned to such term in Section
3.02(b).

 

SECTION 1.02.            Classification of Loans and Borrowings. For purposes of
this Agreement, Loans may be classified and referred to by Type (e.g., a
“Eurodollar Loan”). Borrowings also may be classified and referred to by Type
(e.g., a “Eurodollar Borrowing”).

 

SECTION 1.03.            Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “will”
shall be construed to have the same meaning and effect as the word “shall”.
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
restated, supplemented or otherwise modified (subject to any restrictions on
such amendments, restatements, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person’s successors and assigns (subject to any restrictions on assignments set
forth herein) and, in the case of any Governmental Authority, any other
Governmental Authority that shall have succeeded to any or all functions
thereof, (c) the words “herein”, “hereof” and “hereunder”, and words of similar
import, shall be construed to refer to

 

17

 

 

this Agreement in its entirety and not to any particular provision hereof, (d)
all references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement, (e) any reference in any definition to the phrase “at any time”
or “for any period” shall refer to the same time or period for all calculations
or determinations within such definition, and (f) the words “asset” and
“property” shall be construed to have the same meaning and effect and to refer
to any and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights.

 

SECTION 1.04.            Accounting Terms; GAAP. 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. Except as otherwise expressly provided herein, all
terms of an accounting or financial nature shall be construed in accordance with
GAAP, as in effect from time to time; provided that, if the Borrower notifies
the Administrative Agent that the Borrower requests an amendment to any
provision hereof to eliminate the effect of any change occurring after the date
hereof in GAAP or in the application thereof on the operation of such provision
(or if the Administrative Agent notifies the Borrower that the Required Lenders
request an amendment to any provision hereof for such purpose), regardless of
whether any such notice is given before or after such change in GAAP or in the
application thereof, then such provision shall be interpreted on the basis of
GAAP as in effect and applied immediately before such change shall have become
effective until such notice shall have been withdrawn or such provision amended
in accordance herewith.

 

SECTION 1.05.            Allocation of Loans and Percentages as of the Effective
Date. (a) The Borrower and each Lender agree that, as of the Effective Date, (i)
this Agreement shall amend and restate in its entirety the Existing Credit
Agreement and (ii) the outstanding “Loans” thereunder shall be allocated among
the Lenders in accordance with their respective Applicable Percentages.

 

(b)            To facilitate the allocation described in clause (a), as of the
Effective Date, (i) all “Loans” under the Existing Credit Agreement (“Existing
Loans”) shall be deemed to be Loans hereunder, (ii) each Lender that is a party
to the Existing Credit Agreement (an “Existing Lender”) shall transfer to the
Administrative Agent an amount equal to the excess, if any, of such Lender’s pro
rata share (according to its Applicable Percentage) of the outstanding Loans
hereunder (including any Loans made as of the Effective Date) over the amount of
all of such Lender’s Existing Loans, (iii) each Lender that is not a party to
the Existing Credit Agreement shall transfer to the Administrative Agent an
amount equal to such Lender’s pro rata share (according to its Applicable
Percentage) of the outstanding Loans hereunder (including any Loans made as of
the Effective Date), (iv) the Administrative Agent shall apply the funds
received from the Lenders pursuant to clauses (ii) and (iii), first, on behalf
of the Lenders (pro rata according to the amount of the applicable Existing
Loans each is required to purchase to achieve the allocation described in clause
(a)), to purchase from each Existing Lender that has

 

18

 

 

Loans in excess of such Lender’s pro rata share (according to its Applicable
Percentage) of the outstanding Loans hereunder (including any Loans made as of
the Effective Date), a portion of such Existing Loans equal to such excess,
second, to pay to each Existing Lender all interest, fees and other amounts
(including amounts payable pursuant to Section 2.12 of the Existing Credit
Agreement, assuming for such purpose that the Existing Loans were prepaid rather
than allocated as of the Effective Date) owed to such Existing Lender under the
Existing Credit Agreement (whether or not otherwise then due) and, third, as the
Borrower shall direct, and (v) all Loans shall commence new Interest Periods in
accordance with elections made by the Borrower at least three Business Days
prior to the Effective Date pursuant to the procedures applicable to conversions
and continuations set forth in Section 2.05 (all as if the Existing Loans were
continued or converted as of the Effective Date).  To the extent the Borrower
fails to make a timely election pursuant to clause (v) of the preceding sentence
with respect to any Loans, such Loans shall be ABR Loans.

 

ARTICLE II

 

The Credits

 

SECTION 2.01.            Commitments. Subject to the terms and conditions set
forth herein, each Lender agrees to make Loans to the Borrower from time to time
during the Availability Period in an aggregate principal amount that will not
result in such Lender’s Revolving Credit Exposure exceeding such Lender’s
Commitment. Within the foregoing limits and subject to the terms and conditions
set forth herein, the Borrower may borrow, prepay and reborrow Loans.

 

SECTION 2.02.            Loans and Borrowings. (a)  Each Loan shall be made as
part of a Borrowing consisting of Loans made by the Lenders ratably in
accordance with their respective Commitments. The failure of any Lender to make
any Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder; provided that the Commitments of the Lenders are several
and no Lender shall be responsible for any other Lender’s failure to make Loans
as required.

 

(b)            Subject to Section 2.14, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request in
accordance herewith. Each Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms of this
Agreement.

 

(c)            At the commencement of each Interest Period for any Eurodollar
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $1,000,000 and not less than $5,000,000. At the time that each ABR
Borrowing is made, such Borrowing shall be in an aggregate amount that is an
integral multiple of $100,000 and not less than $500,000; provided that an ABR
Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the total Commitments. Borrowings of more than one Type may be
outstanding at the same time; provided that there shall not at any time be more
than a total of 5 Eurodollar Borrowings outstanding.

 

19

 

 

(d)            Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Maturity Date.

 

SECTION 2.03.            Requests for Borrowings. To request a Borrowing, the
Borrower shall notify the Administrative Agent of such request by telephone (a)
in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before the date of the proposed Borrowing or (b) in
the case of an ABR Borrowing, not later than 11:00 a.m., New York City time, one
Business Day before the date of the proposed Borrowing. Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly by hand
delivery or facsimile (or e-mail with a PDF copy attached) to the Administrative
Agent of a written Borrowing Request in a form approved by the Administrative
Agent and signed by the Borrower. Each such telephonic and written Borrowing
Request shall specify the following information in compliance with Section 2.02:

 

(i)            the aggregate amount of the requested Borrowing;

 

(ii)           the date of such Borrowing, which shall be a Business Day;

 

(iii)          whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;

 

(iv)          in the case of a Eurodollar Borrowing, the initial Interest Period
to be applicable thereto, which shall be a period contemplated by the definition
of the term “Interest Period”; and

 

(v)           the location and number of the Borrower’s account to which funds
are to be disbursed, which shall comply with the requirements of Section 2.04.

 

If no election as to the Type of Borrowing is specified, then the requested
Revolving Borrowing shall be an ABR Borrowing. If no Interest Period is
specified with respect to any requested Eurodollar Borrowing, then the Borrower
shall be deemed to have selected an Interest Period of one month’s duration.
Promptly following receipt of a Borrowing Request in accordance with this
Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender’s Loan to be made as part of the
requested Borrowing.

 

SECTION 2.04.            Funding of Borrowings. (a) Each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, New York City time, to the account of
the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders. The Administrative Agent will make such Loans available
to the Borrower by promptly crediting the amounts so received, in like funds, to
an account of the Borrower maintained with the Administrative Agent in Illinois
and designated by the Borrower in the applicable Borrowing Request.

 

(b)            Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender’s share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with

 

20

 

 

paragraph (a) of this Section and may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. In such event, if a Lender has
not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment to
the Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation or (ii) in
the case of the Borrower, the interest rate applicable to ABR Loans. If such
Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Lender’s Loan included in such Borrowing.

 

SECTION 2.05.            Interest Elections. (a) Each Borrowing initially shall
be of the Type specified in the applicable Borrowing Request and, in the case of
a Eurodollar Borrowing, shall have an initial Interest Period as specified in
such Borrowing Request. Thereafter, the Borrower may elect to convert such
Borrowing to a different Type or to continue such Borrowing and, in the case of
a Eurodollar Revolving Borrowing, may elect Interest Periods therefor, all as
provided in this Section. The Borrower may elect different options with respect
to different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing.

 

(b)            To make an election pursuant to this Section, the Borrower shall
notify the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.03 if the Borrower were
requesting a Borrowing of the Type resulting from such election to be made on
the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery,
telecopy or facsimile (or e-mail with a PDF copy attached) to the Administrative
Agent of a written Interest Election Request in a form approved by the
Administrative Agent and signed by the Borrower.

 

(c)            Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:

 

(i)           the Borrowing to which such Interest Election Request applies and,
if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing (in
which case the information to be specified pursuant to clauses (iii) and (iv)
below shall be specified for each resulting Borrowing);

 

(ii)          the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;

 

(iii)         whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and

 

21

 

 

(iv)         if the resulting Borrowing is a Eurodollar Borrowing, the Interest
Period to be applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of the term “Interest Period”.

 

If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month’s duration.

 

(d)           Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender’s portion of each resulting Borrowing.

 

(e)           If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted to
an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and the Administrative Agent, at the
request of the Required Lenders, so notifies the Borrower, then, so long as an
Event of Default is continuing (i) no outstanding Borrowing may be converted to
or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.

 

SECTION 2.06.            Termination and Reduction of Commitments. (a) Unless
previously terminated, the Commitments shall terminate on the Maturity Date.

 

(b)           The Borrower may at any time terminate, or from time to time
reduce, the Commitments; provided that (i) each reduction of the Commitments
shall be in an amount that is an integral multiple of $1,000,000 and not less
than $5,000,000 and (ii) the Borrower shall not terminate or reduce the
Commitments if, after giving effect to any concurrent prepayment of the Loans in
accordance with Section 2.08, the Revolving Credit Exposures would exceed the
total Commitments.

 

(c)           The Borrower shall notify the Administrative Agent of any election
to terminate or reduce the Commitments under paragraph (b) of this Section at
least three Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof. Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by the Borrower pursuant
to this Section shall be irrevocable; provided that a notice of termination of
the Commitments delivered by the Borrower may state that such notice is
conditioned upon the effectiveness of other credit facilities, in which case
such notice may be revoked by the Borrower (by notice to the Administrative
Agent on or prior to the specified effective date) if such condition is not
satisfied. Any termination or reduction of the Commitments shall be permanent.
Each reduction of the Commitments shall be made ratably among the Lenders in
accordance with their respective Commitments.

 

22

 

  

SECTION 2.07.            Repayment of Loans; Evidence of Debt. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of each Lender the then unpaid principal amount of each Loan on the
Maturity Date.

 

(b)            Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrower to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.

 

(c)            The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder for the account of the Lenders and each Lender’s share thereof.

 

(d)            The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.

 

(e)            Any Lender may request that Loans made by it be evidenced by a
promissory note (each, a “Note”). In such event, the Borrower shall prepare,
execute and deliver to such Lender a Note payable to the order of such Lender
(or, if requested by such Lender, to such Lender and its registered assigns).
Thereafter, the Loans evidenced by such Note and interest thereon shall at all
times (including after assignment pursuant to Section 9.04) be represented by
one or more Notes payable to the order of the payee named therein (or, if such
Notes is a registered note, to such payee and its registered assigns).

 

SECTION 2.08.            Prepayment of Loans. (a) The Borrower shall have the
right at any time and from time to time to prepay any Borrowing in whole or in
part, subject to prior notice in accordance with paragraph (b) of this Section.

 

(b)            The Borrower shall notify the Administrative Agent by telephone
(confirmed by telecopy or facsimile (or e-mail with a PDF copy attached)) of any
prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing,
not later than 11:00 a.m., New York City time, three Business Days before the
date of prepayment or (ii) in the case of prepayment of an ABR Borrowing, not
later than 11:00 a.m., New York City time, one Business Day before the date of
prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date and the principal amount of each Borrowing or portion thereof to
be prepaid; provided that, if a notice of prepayment is given in connection with
a conditional notice of termination of the Commitments as contemplated by
Section 2.06, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.06. Promptly following
receipt of any such notice relating to a Revolving Borrowing, the Administrative
Agent shall advise the Lenders of the contents thereof. Each partial prepayment
of any Borrowing shall be in an amount that would be permitted in the case of an

 

 

23

 

  

advance of a Borrowing of the same Type as provided in Section 2.02. Each
prepayment of a Borrowing shall be applied ratably to the Loans included in the
prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.10.

 

SECTION 2.09.            Fees. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee, which
shall accrue at the Applicable Rate on the daily unused amount of the Commitment
of such Lender during the period from and including the Effective Date to but
excluding the date on which such Commitment terminates. Accrued commitment fees
shall be payable in arrears on the last day of March, June, September and
December of each year and on the date on which the Commitments terminate,
commencing on the first such date to occur after the date hereof; provided that
any commitment fees accruing after the date on which the Commitments terminate
shall be payable on demand. All commitment fees shall be computed on the basis
of a year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).

 

(b)            The Borrower agrees to pay to the Administrative Agent, for its
own account, fees payable in the amounts and at the times separately agreed upon
between the Borrower and the Administrative Agent.

 

(c)            All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent for distribution, in
the case of commitment fees, to the Lenders. Fees paid shall not be refundable
under any circumstances.

 

SECTION 2.10.            Interest. (a) The Loans comprising each ABR Borrowing
shall bear interest at the Alternate Base Rate plus the Applicable Rate.

 

(b)            The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Rate.

 

(c)            Notwithstanding the foregoing, if any principal of or interest on
any Loan or any fee or other amount payable by the Borrower hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, upon
the request of the Required Lenders such overdue amount shall bear interest,
after as well as before judgment, at a rate per annum equal to (i) in the case
of overdue principal of any Loan, 2% plus the rate otherwise applicable to such
Loan as provided in the preceding paragraphs of this Section or (ii) in the case
of any other amount, 2% plus the rate applicable to ABR Loans as provided in
paragraph (a) of this Section. If any other Event of Default hereunder shall
arise, then upon the request of the Required Lenders, all principal of and
interest on any Loan, and any other fee or other amount payable by the Borrower
hereunder shall bear interest at 2% plus the rate applicable to ABR Loans as
provided in paragraph (a) of this Section, until such Event of Default is cured
or is waived.

 

(d)            Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and upon termination of the Commitments;
provided that (i) interest accrued pursuant to paragraph (c) of this Section
shall be payable on demand, (ii) in the event of any repayment or prepayment of
any Loan (other than a prepayment of an ABR Loan prior to the end of the
Availability Period), accrued interest on the principal amount repaid or prepaid
shall

 

24

 

 

be payable on the date of such repayment or prepayment and (iii) in the event of
any conversion of any Eurodollar Loan prior to the end of the current Interest
Period therefor, accrued interest on such Loan shall be payable on the effective
date of such conversion.

 

(e)          All interest hereunder shall be computed on the basis of a year of
360 days, except that interest computed by reference to the Alternate Base Rate
at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Alternate Base Rate,
Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.

 

SECTION 2.11.            Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:

 

(a)          the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable,
for such Interest Period; or

 

(b)          the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (or Lender) of
making or maintaining their Loans (or its Loan) included in such Borrowing for
such Interest Period; then the Administrative Agent shall give notice thereof to
the Borrower and the Lenders by telephone or telecopy as promptly as practicable
thereafter and, until the Administrative Agent notifies the Borrower and the
Lenders that the circumstances giving rise to such notice no longer exist, (i)
any Interest Election Request that requests the conversion of any Borrowing to,
or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Revolving Borrowing,
such Borrowing shall be made as an ABR Borrowing provided that if the
circumstances giving rise to such notice affect only one Type of Borrowings,
then the other Type of Borrowings shall be permitted.

 

SECTION 2.12.            Increased Costs. (a) If any Change in Law shall:

 

(i)            impose, modify or deem applicable any reserve, special deposit or
similar requirement (including any compulsory loan requirement, insurance charge
or other assessment) against assets of, deposits with or for the account of, or
credit extended by, any Lender (except any such reserve requirement reflected in
the Adjusted LIBO Rate);

 

(ii)           impose on any Lender or the London interbank market any other
condition, cost or expense affecting this Agreement or Eurodollar Loans made by
such Lenders; or

 

(iii)          subject any Recipient to any Taxes (other than (A) Indemnified
Taxes, (B) Taxes described in clauses (b) through (d) of the definition of
Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal,

 

25

 

 

letters of credit, commitments, or other obligations, or its deposits, reserves,
other liabilities or capital attributable thereto;

 

and the result of any of the foregoing shall be to increase the cost to such
Lender or such other Recipient of making, continuing, converting into or
maintaining any Loan (or of maintaining its obligation to make any such Loan) or
to reduce the amount of any sum received or receivable by such Lender or such
other Recipient hereunder (whether of principal, interest or otherwise), then
the Borrower will pay to such Lender or such other Recipient, as the case may
be, such additional amount or amounts as will compensate such Lender or such
other Recipient, as the case may be, for such additional costs incurred or
reduction suffered.

 

(b)            If any Lender determines that any Change in Law regarding capital
or liquidity requirements has or would have the effect of reducing the rate of
return on such Lender’s capital or on the capital of such Lender’s holding
company, if any, as a consequence of this Agreement, the Commitments of or the
Loans made by such Lender to a level below that which such Lender or such
Lender’s holding company could have achieved but for such Change in Law (taking
into consideration such Lender’s policies and the policies of such Lender’s
holding company with respect to capital adequacy or liquidity), then from time
to time the Borrower will pay to such Lender such additional amount or amounts
as will compensate such Lender or such Lender’s holding company for any such
reduction suffered.

 

(c)            A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.

 

(d)            Failure or delay on the part of any Lender to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender’s right to
demand such compensation; provided that the Borrower shall not be required to
compensate a Lender pursuant to this Section for any increased costs or
reductions incurred more than 270 days prior to the date that such Lender
notifies the Borrower of the Change in Law giving rise to such increased costs
or reductions and of such Lender’s intention to claim compensation therefor;
provided, further, that, if the Change in Law giving rise to such increased
costs or reductions is retroactive, then the 270-day period referred to above
shall be extended to include the period of retroactive effect thereof.

 

SECTION 2.13.            Break Funding Payments. In the event of (a) the payment
of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of Default
or as a result of any prepayment pursuant to Section 2.08), (b) the conversion
of any Eurodollar Loan other than on the last day of the Interest Period
applicable thereto, (c) the failure to borrow, convert, continue or prepay any
Eurodollar Loan on the date specified in any notice delivered pursuant hereto
(regardless of whether such notice may be revoked under Section 2.08(b) and is
revoked in accordance therewith), or (d) the assignment of any Eurodollar Loan
other than on the last day of the Interest Period applicable thereto as a result
of a request by the Borrower pursuant to Section 2.16, then, in any such event,
the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such

 

26

 

  

event. In the case of a Eurodollar Loan, such loss, cost or expense to any
Lender shall be deemed to include an amount determined by such Lender to be the
excess, if any, of (i) the amount of interest which would have accrued on the
principal amount of such Eurodollar Loan had such event not occurred, at the
Adjusted LIBO Rate that would have been applicable to such Eurodollar Loan, for
the period from the date of such event to the last day of the then current
Interest Period therefor (or, in the case of a failure to borrow, convert or
continue, for the period that would have been the Interest Period for such
Eurodollar Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which such Lender would
bid were it to bid, at the commencement of such period, for dollar deposits of a
comparable amount and period from other banks in the eurodollar market. A
certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.

 

SECTION 2.14.            Taxes.

 

(a)            Withholding Taxes; Gross-Up. Any and all payments by or on
account of any obligation of the Borrower under any Loan Document shall be made
without deduction or withholding for any Taxes except as required by applicable
law. If any applicable law (as determined in good faith discretion of an
applicable Withholding Agent) requires the deduction or withholding of any Tax
from any such payment by a Withholding Agent, then the applicable Withholding
Agent shall be entitled to make such deduction or withholding and shall timely
pay the full amount deducted or withheld to the relevant Governmental Authority
in accordance with applicable law and, if such Tax is an Indemnified Tax, then
the sum payable by the Borrower shall be increased as necessary so that after
such deduction or withholding has been made (including such deduction and
withholdings applicable to additional sums payable under this Section 2.14), the
applicable Recipient receives an amount equal to the sum it would have received
had no such deduction or withholding been made.

 

(b)            Payment of Other Taxes by the Borrower. The Borrower shall timely
pay to the relevant Governmental Authority in accordance with applicable law, or
at the option of the Administrative Agent timely reimburse it for, Other Taxes.

 

(c)            Evidence of Payment. As soon as practicable after any payment of
Taxes by the Borrower to a Governmental Authority pursuant to this Section 2.14,
the Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.

 

(d)            Indemnification by the Borrower. The Borrower shall indemnify
each Recipient, within 10 days after demand therefor, for the full amount of any
Indemnified Taxes (including Indemnified Taxes imposed or asserted on or
attributable to amounts payable under this Section 2.14(d)) payable or paid by
such Recipient or required to be withheld or deducted from a payment to such
Recipient and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability

 

27

 

 

delivered to the Borrower by a Lender (with a copy to the Administrative Agent),
or by the Administrative Agent on its own behalf or on behalf of a Lender, shall
be conclusive absent manifest error.

 

(e)            Indemnification by the Lenders. Each Lender shall severally
indemnify the Administrative Agent, within ten 10 days after demand therefor,
for (i) any Indemnified Taxes attributable to such Lender (but only to the
extent that the Borrower has not already indemnified the Administrative Agent
for such Indemnified Taxes and without limiting the obligation of the Borrower
to do so) and (ii) any Excluded Taxes attributable to such Lender, in each case,
that are payable or paid by the Administrative Agent in connection with any Loan
Document, and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to any Lender by the Administrative Agent shall be
conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Loan Document or otherwise payable by the
Administrative Agent to such Lender from any other source against any amount due
to the Administrative Agent under this paragraph (e).

 

(f)            Status of Lenders.

 

(i)           Any Lender that is entitled to an exemption from or reduction of
withholding Tax with respect to payments made under any Loan Document shall
deliver to the Borrower and the Administrative Agent, at the time or times
reasonably requested by the Borrower or the Administrative Agent, such properly
completed and executed documentation reasonably requested by the Borrower or the
Administrative Agent as will permit such payments to be made without withholding
or at a reduced rate of withholding. In addition, any Lender, if reasonably
requested by the Borrower or the Administrative Agent, shall deliver such other
documentation prescribed by applicable law or reasonably requested by the
Borrower or the Administrative Agent as will enable the Borrower or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements. Notwithstanding
anything to the contrary in the preceding two sentences, the completion,
execution and submission of such documentation (other than such documentation
set forth in Section 2.14 U.S. (f)(ii)(A), (ii)(B) and (ii)(D) below) shall not
be required if in the Lender’s reasonable judgment such completion, execution or
submission would subject such Lender to any material unreimbursed cost or
expense or would materially prejudice the legal or commercial position of such
Lender.

 

(ii)          Without limiting the generality of the foregoing, if the Borrower
is a U.S. Person,

 

(A)            any Lender that is a U.S. Person shall deliver to the Borrower
and the Administrative Agent on or prior to the date on which such Lender
becomes a Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the

 

28

 

 

Administrative Agent), executed originals of IRS Form W-9 certifying that such
Lender is exempt from U.S. federal backup withholding tax;

 

(B)         any Non-U.S. Lender shall, to the extent it is legally entitled to
do so, deliver to the Borrower and the Administrative Agent (in such number of
copies as shall be requested by the recipient) on or prior to the date on which
such Non-U.S. Lender becomes a Lender under this Agreement (and from time to
time thereafter upon the reasonable request of the Borrower or the
Administrative Agent), whichever of the following is applicable:

 

(1)            in the case of a Non-U.S. Lender claiming the benefits of an
income tax treaty to which the U.S. is a party (x) with respect to payments of
interest under any Loan Document, executed originals of IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “interest” article of such tax treaty and (y) with respect to
any other applicable payments under any Loan Document, IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “business profits” or “other income” article of such tax treaty;

 

(2)            in the case of a Non-U.S. Lender claiming that its extension of
credit will generate U.S. effectively connected income, executed originals of
IRS Form W-8ECI;

 

(3)            in the case of a Non-U.S. Lender claiming the benefits of the
exemption for portfolio interest under Section 881(c) of the Code, (x) a
certificate substantially in the form of Exhibit C-1 to the effect that such
Non-U.S. Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of
the Code, a “10 percent shareholder” of the Borrower within the meaning of
Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation”
described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance
Certificate”) and (y) executed originals of IRS Form W-8BEN; or

 

(4)            to the extent a Non-U.S. Lender is not the Beneficial Owner,
executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form
W-8BEN, a U.S. Tax Compliance Certificate substantially in the form of Exhibit
C-2 or Exhibit C-3, IRS Form W-9, and/or other certification documents from each
Beneficial Owner, as applicable; provided that if the Non-U.S. Lender is a
partnership and one or more direct or indirect partners of such Non-U.S. Lender
are claiming the portfolio interest exemption, such Non-U.S. Lender may provide
a

 

29

 

 

U.S. Tax Compliance Certificate substantially in the form of Exhibit C-4 on
behalf of each such direct and indirect partner

 

(C)            any Non-U.S. Lender shall, to the extent it is legally entitled
to do so, deliver to the Borrower and the Administrative Agent (in such number
of copies as shall be requested by the recipient) on or prior to the date on
which such Non-U.S. Lender becomes a Lender under this Agreement (and from time
to time thereafter upon the reasonable request of the Borrower or the
Administrative Agent), executed originals of any other form prescribed by
applicable law as a basis for claiming exemption from or a reduction in U.S.
federal withholding Tax, duly completed, together with such supplementary
documentation as may be prescribed by applicable law to permit the Borrower or
the Administrative Agent to determine the withholding or deduction required to
be made; and

 

(D)            if a payment made to a Lender under any Loan Document would be
subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to
fail to comply with the applicable reporting requirements of FATCA (including
those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such
Lender shall deliver to the Borrower and the Administrative Agent at the time or
times prescribed by law and at such time or times reasonably requested by the
Borrower or the Administrative Agent such documentation prescribed by applicable
law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower or the
Administrative Agent as may be necessary for the Borrower and the Administrative
Agent to comply with their obligations under FATCA and to determine that such
Lender has complied with such Lender’s obligations under FATCA or to determine
the amount to deduct and withhold from such payment. Solely for purposes of this
clause (D), “FATCA” shall include any amendments made to FATCA after the date of
this Agreement.

 

Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the Borrower and the Administrative
Agent in writing of its legal inability to do so.

 

(g)            Treatment of Certain Refunds. If any party determines, in its
sole discretion exercised in good faith, that it has received a refund of any
Taxes as to which it has been indemnified pursuant to this Section 2.14
(including by the payment of additional amounts pursuant to this Section 2.14),
it shall pay to the indemnifying party an amount equal to such refund (but only
to the extent of indemnity payments made under this Section 2.14 with respect to
the Taxes giving rise to such refund), net of all out-of-pocket expenses
(including Taxes) of such indemnified party and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund). Such indemnifying party, upon the request of such indemnified party,
shall repay to such indemnified party the amount paid over

 

30

 

 

pursuant to this paragraph (g) (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) in the event that such
indemnified party is required to repay such refund to such Governmental
Authority. Notwithstanding anything to the contrary in this paragraph (g), in no
event will the indemnified party be required to pay any amount to an
indemnifying party pursuant to this paragraph (g) the payment of which would
place the indemnified party in a less favorable net after-Tax position than the
indemnified party would have been in if the Tax subject to indemnification and
giving rise to such refund had not been deducted, withheld or otherwise imposed
and the indemnification payments or additional amounts giving rise to such
refund had never been paid. This paragraph (g) shall not be construed to require
any indemnified party to make available its Tax returns (or any other
information relating to its Taxes that it deems confidential) to the
indemnifying party or any other Person.

 

(h)            Survival. Each party’s obligations under this Section 2.14 shall
survive the resignation or replacement of the Administrative Agent or any
assignment of rights by, or the replacement of, a Lender, the termination of the
Commitments and the repayment, satisfaction or discharge of all obligations
under any Loan Document.

 

(i)             Defined Terms. For purposes of this Section 2.14, the term
“applicable law” includes FATCA.

 

SECTION 2.15.            Payments Generally; Pro Rata Treatment; Sharing of
Set-offs. (a) The Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or of amounts payable under
Section 2.12, 2.13 or 2.14, or otherwise) prior to 2:00 p.m., New York City
time, on the date when due, in immediately available funds, without set-off or
counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made to the Administrative Agent at its offices at 270
Park Avenue, New York, New York, except that payments pursuant to Sections 2.12,
2.13, 2.14 and 9.03 shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension. All payments
hereunder shall be made in dollars.

 

(b)            If at any time insufficient funds are received by and available
to the Administrative Agent to pay fully all amounts of principal, interest and
fees then due hereunder, such funds shall be applied (i) first, towards payment
of interest and fees then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of interest and fees then due to such
parties, and (ii) second, towards payment of principal then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal then due to such parties.

 

(c)            If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans resulting

 

31

 

 

in such Lender receiving payment of a greater proportion of the aggregate amount
of its Loans and accrued interest thereon than the proportion received by any
other Lender, then the Lender receiving such greater proportion shall purchase
(for cash at face value) participations in the Loans of other Lenders to the
extent necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans; provided that (i) if any such
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). The Borrower
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.

 

(d)            Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders hereunder that the Borrower will not make
such payment, the Administrative Agent may assume that the Borrower has made
such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders severally
agrees to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.

 

(e)            If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.04(b), 2.15(d) or 9.03(c), then the Administrative
Agent may, in its discretion and notwithstanding any contrary provision hereof,
apply any amounts thereafter received by the Administrative Agent for the
account of such Lender to satisfy such Lender’s obligations under such Sections
until all such unsatisfied obligations are fully paid, and/or hold such amounts
in a segregated account over which the Administrative Agent shall have exclusive
control as cash collateral for, and application to, any future funding
obligations of such Lender under any such Section, in each case, in any order as
determined by the Administrative Agent in its discretion.

 

SECTION 2.16.            Mitigation Obligations; Replacement of Lenders. (a) If
any Lender requests compensation under Section 2.12, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.14, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation

 

32

 

 

or assignment (i) would eliminate or reduce amounts payable pursuant to Section
2.12 or 2.14, as the case may be, in the future and (ii) would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.

 

(b)            If any Lender requests compensation under Section 2.12, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.14,
or if any Lender becomes a Defaulting Lender, then the Borrower may, at its sole
expense and effort, upon notice to such Lender and the Administrative Agent,
require such Lender to assign and delegate, without recourse (in accordance with
and subject to the restrictions contained in Section 9.04), all its interests,
rights and obligations under this Agreement to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) the Borrower shall have received the prior
written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts) and (iii) in the case
of any such assignment resulting from a claim for compensation under
Section 2.12 or payments required to be made pursuant to Section 2.14, such
assignment will result in a reduction in such compensation or payments. A Lender
shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Borrower to require such assignment and delegation cease to apply.

 

SECTION 2.17.            Defaulting Lenders.

 

Notwithstanding any provision of this Agreement to the contrary, if any Lender
becomes a Defaulting Lender, then the following provisions shall apply for so
long as such Lender is a Defaulting Lender:

 

(a)            fees shall cease to accrue on the unfunded portion of the
Commitment of such Defaulting Lender pursuant to Section 2.12(a); and

 

(b)           such Defaulting Lender shall not have the right to vote on any
issue on which voting is required (other than to the extent provided in Section
9.02(b)) and the Commitment and Revolving Credit Exposure of such Defaulting
Lender shall not be included in determining whether the Required Lenders have
taken or may take any action hereunder; provided that, except as otherwise
provided in Section 9.02, this clause (b) shall not apply to the vote of a
Defaulting Lender in the case of an amendment, waiver or other modification
requiring the consent of such Lender or each Lender affected thereby.

 

SECTION 2.18.            Increase of Commitments.

 

(a)            The Borrower may, from time to time, by notice to the
Administrative Agent, request that the aggregate Commitments be increased by an
amount that will not result in

 

33

 

 

the aggregate Commitments exceeding $200,000,000; provided that each increase in
aggregate Commitments under this Section shall be in a minimum amount of
$25,000,000. Each such notice shall set forth the requested amount of the
increase in the Commitments and the date on which such increase is to become
effective. The Borrower shall have the right, but not the obligation, to arrange
for one or more commercial banks or other financial institutions (any such bank
or other financial institution being called an “Augmenting Lender”), which may
include any Lender, to extend Commitments or increase their existing Commitments
in an aggregate amount up to, but not greater than, the requested increase,
provided that each Augmenting Lender, if not already a Lender hereunder (i)
shall extend a new Commitment of not less than $5,000,000, (ii) shall execute
all such documentation as the Administrative Agent shall reasonably specify to
evidence its status as a Lender hereunder and (iii) shall be consented to by the
Administrative Agent (which consent shall not be unreasonably withheld or
delayed). Such increases and such new Commitments shall become effective on the
date agreed to by the Borrower, the Augmenting Lenders and the Administrative
Agent. Notwithstanding the foregoing, no increase in the aggregate Commitments
(or in the Commitment of any Lender) shall become effective under this paragraph
unless, on the date of such increase, the conditions set forth in Section 4.02
shall be satisfied (with all references in such paragraphs to a Loan being
deemed to be references to such increase) and the Administrative Agent shall
have received a certificate to that effect dated such date and executed by an
Executive Officer of the Borrower. Notwithstanding anything else in the
foregoing, no Lender shall become an Augmenting Lender without such Lender’s
consent.

 

(b)            Upon the effectiveness of any increase pursuant to this Section
2.18 of the aggregate Commitments and any resulting adjustment in the Applicable
Percentages, the Lenders and the Augmenting Lenders will purchase from each
other and sell to each other outstanding Loans sufficient to cause the
outstanding Loans of each Lender and Augmenting Lender to equal its Applicable
Percentage (as so adjusted) of the aggregate outstanding Revolving Loans. Such
purchase and sale shall be made pursuant to Section 9.04 except that no minimum
amount shall be required, no processing fee shall be charged and, if any Lender
shall suffer a loss or incur an expense as a result of the effectiveness of such
purchase or sale being during an Interest Period, the Borrower shall reimburse
such Lender the amount of such loss or expense. Each such Lender shall furnish
the Borrower with a certificate setting forth, in reasonable detail, the basis
for determining the amount to be paid to it hereunder.

 

ARTICLE III

 

Representations and Warranties

 

The Borrower represents and warrants to the Lenders that:

 

SECTION 3.01.            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 3.01, (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

 

34

 

 

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, have been duly authorized by all
necessary corporate action (including, without limitation, shareholder approval,
if required) and do not contravene or conflict with the Borrower’s articles of
incorporation or bylaws. 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, 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 3.01 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 3.02.            Statutory Financial Statements. (a) The Annual
Statement of each of the Insurance Subsidiaries 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 2012 and 2013 Fiscal Years and as of and for the Fiscal Quarter ended
March 31, 2014 (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 3.02(a). 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.

 

(b)            The investments of Insurance Subsidiaries reflected in the Annual
Statements filed with the respective Departments with respect to the 2012 Fiscal
Year (the “2012 Annual Statement”), the 2013 Fiscal Year (the “2013 Annual
Statement”) and the March 31, 2014 Quarterly Statement (the “2014 Quarterly
Statement”) 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.

 

35

 

 

(c)            Marketable securities and short term investments reflected in the
2012 Annual Statement, the 2013 Annual Statement and in the 2014 Quarterly
Statement of each Insurance Subsidiary are valued at cost, amortized cost or
market value, as required by applicable law.

 

(d)            There has been no event or occurrence 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 March 31, 2014.

 

SECTION 3.03.            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 March 31,
2014 and the related consolidated statements of income and cash flows for that
portion of the Fiscal Year ending as of the close of March 31, 2014 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 March 31, 2014, 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 March 31, 2014 and the period then ended.

 

(b)            The Borrower has provided to the Administrative Agent and each
Lender 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 years
ended December 31, 2012 and December 31, 2013, which financial statements have
been prepared in accordance with GAAP and certified without material
qualification by KPMG LLP. 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.

 

(c)            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 3.04.            Litigation and Contingent Liabilities. Except as set
forth (including estimates of the dollar amounts involved) in Schedule 3.04
hereto and 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

 

36

 

 

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 3.03.

 

SECTION 3.05.            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 3.06.            Regulations 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 the Loans to violate Regulations T, U or X of
the Board.

 

SECTION 3.07.            Proceeds. The proceeds of the Loans will be used for
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 Board.

 

SECTION 3.08.            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 3.09.            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 3.10.            Subsidiaries. As of the Effective Date, Schedule 3.10
contains a complete list of the Borrower’s Subsidiaries and indicates which
Subsidiaries are Material Insurance Subsidiaries.

 

37

 

 

SECTION 3.11.            Insurance Licenses. Except as set forth on Schedule
3.11, 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 3.12.            Taxes. The Borrower and each of its Subsidiaries has
filed all material Tax returns and reports that are required to be filed by it,
and has paid or provided adequate reserves for the payment of all material Taxes
payable by it that have become due, other than those that are not yet delinquent
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.

 

SECTION 3.13.            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 (including,
without limitation, ERISA or environmental laws), 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.

 

SECTION 3.14.            No Default. Neither the Borrower nor any Subsidiary is
in default under or with respect to any Contractual Obligation that could,
either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. No Default has occurred and is continuing or would
result from the consummation of the transactions contemplated by this Agreement
or any other Loan Document.

 

SECTION 3.15.            Ownership of Property; Liens. Each of the Borrower and
each Subsidiary has good record and marketable title in fee simple to, or valid
leasehold interests in, all real property necessary or used in the ordinary
conduct of its business, except for such defects in title as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The property of the Borrower and its Subsidiaries is subject to
no Liens, other than Liens permitted by Section 6.08.

 

SECTION 3.16.            Anti-Corruption Laws and Sanctions. The Borrower has
implemented and maintains in effect policies and procedures designed to ensure
compliance by the Borrower, its Subsidiaries and their respective directors,
officers, employees and agents with

 

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Anti-Corruption Laws and applicable Sanctions, and the Borrower, its
Subsidiaries and their respective directors, officers, employees and agents are
in compliance with Anti-Corruption Laws and applicable Sanctions in all material
respects. None of (a) the Borrower, any Subsidiary or any of their respective
directors, officers or employees, or (b) to the knowledge of the Borrower, any
Subsidiary or any of their respective agents that will act in any capacity in
connection with or benefit from the credit facility established hereby, is a
Sanctioned Person. No Borrowing, use of proceeds, Transaction or other
transaction contemplated by this Agreement or the other Loan Documents will
violate Anti-Corruption Laws or applicable Sanctions.

 

ARTICLE IV

Conditions

 

SECTION 4.01.            Effective Date. The obligations of the Lenders to make
Loans hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 9.02):

 

(a)            The Administrative Agent (or its counsel) shall have received
from each party hereto either (i) a counterpart of this Agreement signed on
behalf of such party or (ii) written evidence satisfactory to the Administrative
Agent (which may include telecopy transmission of a signed signature page of
this Agreement) that such party has signed a counterpart of this Agreement.

 

(b)            The Administrative Agent shall have received a favorable written
opinion (addressed to the Administrative Agent and the Lenders and dated the
Effective Date) of counsel for the Borrower, covering such other matters
relating to the Borrower, this Agreement or the Transactions as the
Administrative Agent shall reasonably request. The Borrower hereby requests such
counsel to deliver such opinion.

 

(c)            The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably request
relating to the organization, existence and good standing of the Borrower, the
authorization of the Transactions and any other legal matters relating to the
Borrower, this Agreement or the Transactions, all in form and substance
satisfactory to the Administrative Agent and its counsel.

 

(d)            The Administrative Agent shall have received a certificate, dated
the Effective Date and signed by the President, a Vice President or an Executive
Officer of the Borrower, confirming compliance with the conditions set forth in
paragraphs (a) and (b) of Section 4.02.

 

(e)            The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Effective Date, including, to the
extent invoiced, reimbursement or payment of all out-of-pocket expenses required
to be reimbursed or paid by the Borrower hereunder.

 

(f)            The Borrower shall have delivered the financial statements
referred to in Section 3.02.

 

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The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding.

 

SECTION 4.02.            Each Credit Event. The obligation of each Lender to
make a Loan on the occasion of any Borrowing is subject to the satisfaction of
the following conditions:

 

(a)            The representations and warranties of the Borrower set forth in
this Agreement shall be true and correct on and as of the date of such
Borrowing, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and
correct as of the date of such earlier date.

 

(b)            At the time of and immediately after giving effect to such
Borrowing, no Default shall have occurred and be continuing.

 

Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date thereof as to the matters specified in paragraphs (a)
and (b) of this Section.

 

ARTICLE V

Affirmative Covenants

 

Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in
full, the Borrower covenants and agrees with the Lenders that it will:

 

SECTION 5.01.            Reports, Certificates and Other Information. Furnish or
cause to be furnished to the Administrative Agent and the Lenders:

 

(a)            GAAP Financial Statements:

 

(i)           Within 50 days after the close of each of the first three Fiscal
Quarters of each Fiscal Year of the Borrower, a copy of its Form 10-Q filed with
the Securities and Exchange Commission and accompanied by the certification of
the chief executive officer, chief financial officer or treasurer of the
Borrower that the financial statements set forth therein 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 95 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

 

40

 

 

certified public 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 5 days after the applicable regulatory filing date for each
of its Fiscal Quarters, but in any event within 50 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 60 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.

 

(iii)         Within 5 days after the applicable regulatory filing date for each
of its Fiscal Years, but in any event within 95 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.

 

41

 

 

(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 and (B) new business plans, if any, which 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 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 Regulatory Act
filings with Governmental Authorities in the applicable state of domicile, with
respect to any occurrence which might reasonably be expected to have a Material
Adverse Effect, 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 upon any change in the rating for Index Debt of the
Borrower, notice of such change.

 

(vii)        Promptly, such additional financial and other information as the
Administrative Agent or any Lender may from time to time reasonably request.

 

42

 

 

(viii)       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.

 

(ix)          Promptly upon effectiveness, notice of any change of accounting or
financial reporting practices.

 

(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 5.01(a) and 5.01(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 an Executive Officer 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 6.01 through 6.03, 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 5.01(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 IRS, Department of Labor,
or Pension Benefit Guaranty Corporation proceeding with respect to any 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 in an
amount sufficient to give rise to a Lien under section 303(k) of ERISA or 430(k)
of the Code, (iii) the institution of any steps by any entity in the Controlled
Group to withdraw from a Plan subject to section 4063 of ERISA or from a
Multiemployer Plan, or the institution of any steps by any entity in the
Controlled Group or any other Person to terminate any Plan (other than in a
standard termination within the meaning of section 4041(b) of ERISA), or the
taking of any 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.

 

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(i)            Other Information. From time to time such other information
concerning the Borrower or any Subsidiary as the Administrative Agent or any
Lender may reasonably request.

 

SECTION 5.02.            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.

 

SECTION 5.03.            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 and the Lenders to its books and
records, (c) permit, and cause each of its Subsidiaries to permit, the
Administrative Agent, the Lenders or their respective designated representatives
to inspect at reasonable times its properties and operations, and (d) permit,
and cause each of its Subsidiaries to permit, the Administrative Agent and the
Lenders to discuss its business, operations and financial condition with its
officers.

 

SECTION 5.04.            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.

 

SECTION 5.05.            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.

 

SECTION 5.06.            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.

 

SECTION 5.07.            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 5.08.            Maintenance of Properties. Maintain, preserve and
protect and cause each of its Subsidiaries to maintain, preserve and protect,
all of its material properties and equipment necessary in the operation of its
business in good working order and condition, ordinary wear and tear excepted.

 

44

 

 

SECTION 5.09.            Use of Proceeds. Use proceeds of the Loans only for
general corporate purposes. No part of the proceeds of any Loan will be used,
whether directly or indirectly, for any purpose that entails a violation of any
Regulations of the Board (including Regulations T, U and X), Anti-Corruption
Laws or applicable Sanctions.

 

SECTION 5.10.            Accuracy Of Information. Ensure that any information,
including financial statements or other documents, furnished to the
Administrative Agent or the Lenders in connection with this Agreement or any
amendment or modification hereof or waiver hereunder contains no material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and the furnishing of such information shall be deemed to
be representation and warranty by the Borrower on the date thereof as to the
matters specified in this Section 5.10.

 

SECTION 5.11.            Anti-Corruption Laws and Sanctions. Maintain in effect
policies and procedures designed to ensure compliance by the Borrower, its
Subsidiaries and their respective directors, officers and employees with
Anti-Corruption Laws and applicable Sanctions, and the Borrower will remain, and
shall cause its Subsidiaries and their respective directors, officers and
employees to remain, in compliance with Anti-Corruption Laws and applicable
Sanctions in all material respects.

 

ARTICLE VI

 

Negative Covenants

 

Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full, the
Borrower covenants and agrees that, unless at any time the Required Lenders
shall otherwise expressly consent in writing, it will:

 

SECTION 6.01.            Consolidated Debt to Total Capitalization. Not permit
the ratio of (a) the principal amount of Consolidated Debt to (b) the sum of (i)
Net Worth plus (ii) Consolidated Debt to exceed 0.35 to 1.0 at any time.

 

SECTION 6.02.            Net Worth. Not permit its Net Worth at any time to be
less than the Minimum Net Worth. “Minimum Net Worth” means $801,270,400 plus 50%
of equity contributions after June 30, 2014; provided that on each June 30,
commencing June 30, 2015, if 80% of the consolidated net worth of the Borrower
and its Subsidiaries, calculated in accordance with GAAP, is greater than the
Minimum Net Worth, the Minimum Net Worth shall be increased to such greater
amount.

 

SECTION 6.03.            Minimum Risk Based Capital. The Borrower shall not
permit Horace Mann Life Insurance Company or the P/C Subsidiaries (taken as a
whole) to maintain, as of the end of any Fiscal Year, a ratio (expressed as a
percentage) of (a) Total Adjusted Capital (as defined in the Risk-Based Capital
(RBC) for Insurers Act in the applicable state of domicile or in the rules and
procedures prescribed from time to time by the NAIC with respect thereto) to (b)
the Company Action Level RBC (as defined in the Risk-Based Capital Act or in the
rules and procedures prescribed from time to time by the NAIC with respect
thereto) of less than 300%.

 

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SECTION 6.04.         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 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.

 

SECTION 6.05.         Regulations 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 Board.

 

SECTION 6.06.         Restrictive Agreements. Not, and will not permit any of
its Subsidiaries to, directly or indirectly, enter into, incur or permit to
exist any agreement or other arrangement that prohibits, restricts or imposes
any condition upon (a) the ability of the Borrower or any Subsidiary to create,
incur or permit to exist any Lien upon any of its property or assets, or (b) the
ability of any Subsidiary to pay dividends or other distributions with respect
to any shares of its capital stock or to make or repay loans or advances to the
Borrower or any other Subsidiary or to guarantee Indebtedness of the Borrower or
any other Subsidiary; provided that (i) the foregoing shall not apply to
restrictions and conditions imposed by law or by this Agreement, (ii) the
foregoing shall not apply to restrictions and conditions existing on the date
hereof identified on Schedule 6.06 (but shall apply to any extension or renewal
of, or any amendment or modification expanding the scope of, any such
restriction or condition), (iii) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary pending such sale, provided such restrictions and conditions apply
only to the Subsidiary that is to be sold and such sale is permitted hereunder,
(iv) clause (a) of the foregoing shall not apply to restrictions or conditions
imposed by any agreement relating to secured Indebtedness permitted by this
Agreement if such restrictions or conditions apply only to the property or
assets securing such Indebtedness and (v) clause (a) of the foregoing shall not
apply to customary provisions in leases and other contracts restricting the
assignment thereof.

 

SECTION 6.07.         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 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 6.07.

 

SECTION 6.08.         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

 

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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, (f) Liens
securing FHLB Operating Debt, FHLB Liquidity Debt and Securities Lending and (g)
other Liens securing Debt which Debt does not in the aggregate exceed
$5,000,000; provided, however, that, no Lien shall be permitted to exist on the
shares of stock of any of its Subsidiaries.

 

SECTION 6.09.         Subsidiary Debt. Not permit the aggregate amount of Debt
of its Subsidiaries at any time outstanding to exceed $20,000,000, plus, solely
with respect to any Insurance Subsidiary, FHLB Operating Debt.

 

SECTION 6.10.         Securities Lending. Not permit the aggregate market value
of securities subject to Securities Lending at any time to exceed the Threshold
Amount less the aggregate amount of FHLB Operating Debt outstanding at such
time; provided that for purposes of this Section 6.10, the market value of any
security subject to Securities Lending shall be measured as of the time the
applicable Securities Lending transaction was entered into.

 

ARTICLE VII

Events of Default

 

If any of the following events (“Events of Default”) shall occur:

 

(a)          Non-Payment of Loan. Default in the payment when due of any
principal on the Loans;

 

(b)          Non-Payment of Interest, Fees, Etc. Default, and continuance
thereof for 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;

 

(c)          Non-Payment of Other Debt. (i) 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

 

47

 

 

$20,000,000 or more, or (ii) 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 $20,000,000 or more
in the aggregate or to permit the holder or holders of such Debt of $20,000,000
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;

 

(d)          Other Material Obligations. Except for obligations covered under
other provisions of this Article VII, 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 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;

 

(e)          Bankruptcy, Insolvency, Etc. (i) (A) The Borrower becomes insolvent
or generally fails to pay, or admits in writing its inability to pay, debts as
they become due; or (B) 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 (C) 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 (1) the Borrower institutes appropriate proceedings to contest
or discharge such appointment within 30 days and thereafter continuously and
diligently prosecutes such proceedings and (2) such appointment is in fact
discharged within 60 days of such appointment; or (D) 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 (1) such case or proceeding is not
commenced by the Borrower, (2) such case or proceeding is not consented to or
acquiesced in by the Borrower, (3) the Borrower institutes appropriate
proceedings to dismiss such case or proceeding within 30 days and thereafter
continuously and diligently prosecutes such proceedings, and (4) such case or
proceeding is in fact dismissed within 60 days after the commencement thereof;
or (5) the Borrower takes any action to authorize, or in furtherance of, any of
the foregoing; or (ii) (A) there shall be commenced against any Insurance
Subsidiary any case, proceeding or other action (1) 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,
rehabilitation, conservation, supervision, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, obligations or liabilities, or (2) 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 (x) results in the entry of an order for relief or any such
adjudication or appointment or (y) remains undismissed, undischarged or unbonded
for a period of 60 days; or (B) 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

 

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days from the entry thereof; or (C) 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(ii)(A) or (B) above; or (D)
any Governmental Authority shall issue any order of conservation, supervision or
any other order of like effect relating to any of such Subsidiaries;

 

(f)          Non-compliance with Certain Provisions. Failure of the Borrower to
comply with the provisions of each of Sections 5.01(d), 5.01(h), 5.02(a), 6.01
through 6.03, 6.04, 6.07, 6.08 or 6.09;

 

(g)          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 VII) and continuance of such failure for 30 days
after notice thereof from the Administrative Agent to the Borrower;

 

(h)          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 date as of which the facts
therein set forth are stated or certified;

 

(i)          Employee Benefit Plans. Any of the following occurs: (i) 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 303(k) of
ERISA or 430(k) of the Code or a Lien arises against the Borrower or any of its
Subsidiaries under section 4068 of ERISA, (ii) a withdrawal by one or more
entities in the Controlled Group from one or more Plans subject to section 4063
of ERISA or from one or more Multiemployer Plans to which it or they have an
obligation to contribute and the withdrawal liability (without unaccrued
interest) to such Plans or Multiemployer Plans as a result of such withdrawal or
withdrawals (including any outstanding withdrawal liability that any entity in
the Controlled Group has incurred on the date of such withdrawal) is in excess
of $20,000,000, (iii) the termination of one or more Plans and the liability of
the entities in the Controlled Group with respect to such terminated Plan or
Plans is in excess of $20,000,000;

 

(j)           Change in Control. A Change in Control occurs;

 

(k)          Litigation. (i) There shall be entered against the Borrower or any
of its Subsidiaries one or more judgments, awards or decrees, or orders of
attachment, garnishment or any other writ, which exceed $50,000,000,
individually or in the aggregate, excluding judgments, awards, decrees, orders
or writs (A) for which there is insurance, but only to the extent there is
actual insurance coverage, (B) 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, (C) 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

 

49

 

 

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), (D) which
constitute Ordinary Course Litigation, or (E) which are reserved for, to the
actual extent of reserves or (ii) there has been a final judgment or final
judgments for the payment of money exceeding, in the aggregate, $50,000,000
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;

 

(l)            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; or

 

(m)          Invalidity of Loan Documents. Any Loan Document, at any time after
its execution and delivery and for any reason other than as expressly permitted
hereunder or thereunder or satisfaction in full of all principal of and interest
on each Loan and all fees payable hereunder, ceases to be in full force and
effect; or the Borrower or any other Person contests in any manner the validity
or enforceability of any Loan Document; or the Borrower denies that it has any
or further liability or obligation under any Loan Document, or purports to
revoke, terminate or rescind any Loan Document;

 

then, and in every such event (other than an event with respect to the Borrower
described in clause (e) of this Article), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders shall, by notice to the Borrower, take either or both of
the following actions, at the same or different times:  (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and
(ii) declare the Loans then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of the Borrower accrued hereunder,
shall become due and payable immediately, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower; and
in case of any event with respect to the Borrower described in clause (e) of
this Article, the Commitments shall automatically terminate and the principal of
the Loans then outstanding, together with accrued interest thereon and all fees
and other obligations of the Borrower accrued hereunder, shall automatically
become due and payable, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrower.

 

ARTICLE VIII

The Administrative Agent

 

Each of the Lenders hereby irrevocably appoints the Administrative Agent as its
agent and authorizes the Administrative Agent to take such actions on its behalf
and to exercise such powers as are delegated to the Administrative Agent by the
terms hereof, together with such actions and powers as are reasonably incidental
thereto.

 

50

 

 

The bank serving as the Administrative Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.

 

The Administrative Agent shall not have any duties or obligations except those
expressly set forth herein. Without limiting the generality of the foregoing,
(a) the Administrative Agent shall not be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing,
(b) the Administrative Agent shall not have any duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights and
powers expressly contemplated hereby that the Administrative Agent is required
to exercise in writing as directed by the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02), and (c) except as expressly set forth herein, the
Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Borrower or
any of its Subsidiaries that is communicated to or obtained by the bank serving
as Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02) or in the absence of its own gross negligence or
willful misconduct. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with this
Agreement, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection herewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.

 

The Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.

 

The Administrative Agent may perform any and all its duties and exercise its
rights and powers by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory

 

51

 

 

provisions of the preceding paragraphs shall apply to any such sub-agent and to
the Related Parties of the Administrative Agent and any such sub-agent, and
shall apply to their respective activities in connection with the syndication of
the credit facilities provided for herein as well as activities as
Administrative Agent.

 

Subject to the appointment and acceptance of a successor Administrative Agent as
provided in this paragraph, the Administrative Agent may resign at any time upon
10 business days’ notice to the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Borrower, to appoint a successor. If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent which shall be a bank with an office in New York,
New York, or an Affiliate of any such bank. Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by the Borrower to a successor Administrative Agent shall be the same as
those payable to its predecessor unless otherwise agreed between the Borrower
and such successor. After the Administrative Agent’s resignation hereunder, the
provisions of this Article and Section 9.03 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.

 

Each Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall from time
to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any related agreement or any
document furnished hereunder or thereunder.

 

ARTICLE IX

Miscellaneous

 

SECTION 9.01.         Notices. (a) Except in the case of notices and other
communications expressly permitted to be given by telephone (and subject to
paragraph (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopy or facsimile (or
email with a PDF copy attached), as follows:

 

(i)          if to the Borrower, to it at One Horace Mann Plaza, Springfield,
Illinois 62715-001, Attention of Angela Christian (Telephone No.  217.788.5350)
(Telecopy No. 217.788.5796) (Email: angela.christian@horacemann.com) (Website
www.horacemann.com);

 

52

 

 

(ii)         if to the Administrative Agent for purposes of loan administration
information, to JPMorgan Chase Bank, 10 South Dearborn, Floor 7, Chicago,
Illinois 60603, Attention of Joyce Kind (Telephone No.  312.385.7084) (Telecopy
No. 888.292.9533) (Email: joyce.p.king@jpmchase.com);

 

(iii)        if to the Administrative Agent for purposes of covenant
compliance/financial information, to JPMorgan Chase Bank, 10 South Dearborn,
Floor 9, Chicago, Illinois 60603-2300, Attention of Danielle Babine (Telephone
No. 312.325.3261) (Telecopy No. 312.386.7632) (Email:
danielle.d.babine@jpmorgan.com); and

 

(iv)        if to any other Lender, to it at its address (or telecopy number)
set forth in its Administrative Questionnaire.

 

(b)          Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications (including internet or
intranet websites) pursuant to procedures approved by the Administrative Agent;
provided that the foregoing shall not apply to notices pursuant to Article II
unless otherwise agreed by the Administrative Agent and the applicable Lender.
The Administrative Agent or the Borrower may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it; provided that approval of such procedures
may be limited to particular notices or communications.

 

(c) Any party hereto may change its address or facsimile number for notices and
other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.

 

SECTION 9.02.         Waivers; Amendments. (a) No failure or delay by the
Administrative Agent or any Lender in exercising any right or power hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the
Administrative Agent and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or consent to any departure by the Borrower
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan shall not
be construed as a waiver of any Default, regardless of whether the
Administrative Agent or any Lender may have had notice or knowledge of such
Default at the time.

 

(b)          Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or by the Borrower and the
Administrative Agent with the consent of the Required Lenders; provided that no
such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal

 

53

 

 

amount of any Loan or reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the written consent of each Lender affected thereby,
(iii) postpone the scheduled date of payment of the principal amount of any
Loan, or any interest thereon, or any fees payable hereunder, or reduce the
amount of, waive or excuse any such payment, or postpone the scheduled date of
expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) change Section 2.15(b) or (c) in a manner that would
alter the pro rata sharing of payments required thereby, without the written
consent of each Lender, or (v) change any of the provisions of this Section or
the definition of “Required Lenders” or any other provision hereof specifying
the number or percentage of Lenders required to waive, amend or modify any
rights hereunder or make any determination or grant any consent hereunder,
without the written consent of each Lender; provided, further, that no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent hereunder without the prior written consent of the
Administrative Agent.

 

SECTION 9.03.         Expenses; Indemnity; Damage Waiver. (a) The Borrower shall
pay (i) all reasonable out-of-pocket expenses incurred by the Administrative
Agent, the Arrangers and any of their respective Affiliates, including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent, in connection with the syndication of the credit facilities provided for
herein, the preparation and administration of this Agreement or any amendments,
modifications or waivers of the provisions hereof (whether or not the
transactions contemplated hereby or thereby shall be consummated) and (ii) all
out-of-pocket expenses incurred by the Administrative Agent or any Lender,
including the fees, charges and disbursements of any counsel for the
Administrative Agent or any Lender, in connection with the enforcement or
protection of its rights in connection with this Agreement, including its rights
under this Section, or in connection with the Loans made hereunder, including
all such out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans.

 

(b)          The Borrower shall indemnify the Administrative Agent, the
Arrangers and each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an “Indemnitee”) against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the fees, charges and disbursements of any counsel
for any Indemnitee, incurred by or asserted against any Indemnitee arising out
of, in connection with, or as a result of (i) the execution or delivery of this
Agreement or any agreement or instrument contemplated hereby, the performance by
the parties hereto of their respective obligations hereunder or the consummation
of the Transactions or any other transactions contemplated hereby, (ii) any Loan
or (iii) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on contract, tort or
any other theory and regardless of whether any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee. This Section 9.3(b) shall not apply with respect to Taxes other
than any Taxes that represent losses or damages arising from any non-Tax claim.

 

(c)          To the extent that the Borrower fails to pay any amount required to
be paid by it to the Administrative Agent under paragraph (a) or (b) of this
Section, each Lender

 

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severally agrees to pay to the Administrative Agent such Lender’s Applicable
Percentage (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent in its capacity as such.

 

(d)          To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
Transactions, any Loan or the use of the proceeds thereof.

 

(e)          All amounts due under this Section shall be payable not later than
10 Business Days after written demand therefor.

 

SECTION 9.04.                 Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that (i)
the Borrower may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by the Borrower without such consent shall be
null and void) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section. Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby, Participants (to the extent provided in paragraph (c) of this
Section) and, to the extent expressly contemplated hereby, the Related Parties
of each of the Administrative Agent and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.

 

(b)          (i)          Subject to the conditions set forth in paragraph
(b)(ii) below, any Lender may assign to one or more Persons (other than an
Ineligible Institution) all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans at
the time owing to it) with the prior written consent (such consent not to be
unreasonably withheld) of:

 

(A)         the Borrower, provided that, the Borrower shall be deemed to have
consented to an assignment unless it shall have objected thereto by written
notice to the Administrative Agent within five (5) Business Days after having
received notice thereof; provided, further, that no consent of the Borrower
shall be required for an assignment to a Lender, an Affiliate of a Lender, an
Approved Fund or, if an Event of Default has occurred and is continuing, any
other assignee; and

 

(B)         the Administrative Agent, provided that no consent of the
Administrative Agent shall be required for an assignment of any Commitment to an
assignee that is a Lender with a Commitment immediately prior to giving effect
to such assignment.

 

55

 

 

As used herein, “Ineligible Institution” means a (a) natural person or (b)
holding company, investment vehicle or trust for, or owned and operated for the
primary benefit of, a natural person or relative(s) thereof; provided that, such
holding company, investment vehicle or trust shall not constitute an Ineligible
Institution if it (x) has not been established for the primary purpose of
acquiring any Loans or Commitments, (y) is managed by a professional advisor,
who is not such natural person or a relative thereof, having significant
experience in the business of making or purchasing commercial loans, and (z) has
assets greater than $25,000,000 and a significant part of its activities consist
of making or purchasing commercial loans and similar extensions of credit in the
ordinary course of its business; provided that upon the occurrence of an Event
of Default, any Person (other than a Lender) shall be an Ineligible Institutions
if after giving effect any proposed assignment to such Person, such Person would
hold more than 25% of the then outstanding Revolving Credit Exposure or
Commitments, as the case may be.

 

(ii)         Assignments shall be subject to the following additional
conditions:

 

(A)         except in the case of an assignment to a Lender or an Affiliate of a
Lender or an assignment of the entire remaining amount of the assigning Lender’s
Commitment or Loans, the amount of the Commitment or Loans of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 unless each of the
Borrower and the Administrative Agent otherwise consent, provided that no such
consent of the Borrower shall be required if an Event of Default has occurred
and is continuing;

 

(B)         each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender’s rights and obligations under
this Agreement;

 

(C)         the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500; and

 

(D)         the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire in which the assignee
designates one or more Credit Contacts to whom all syndicate-level information
(which may contain material non-public information about the Borrower and its
related parties or its securities) will be made available and who may receive
such information in accordance with the assignee’s compliance procedures and
applicable laws, including Federal and state securities laws.

 

(iii)        Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) of this Section, from and after the effective date specified
in each Assignment and Assumption the assignee thereunder shall be a party
hereto

 

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and, to the extent of the interest assigned by such Assignment and Assumption,
have the rights and obligations of a Lender under this Agreement, and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Assumption, be released from its obligations under this
Agreement (and, in the case of an Assignment and Assumption covering all of the
assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.12, 2.13, 2.14 and 9.03). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this Section 9.04 shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with
paragraph (c) of this Section.

 

(iv)        The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitment of, and principal amount of the
Loans owing to, each Lender pursuant to the terms hereof from time to time (the
“Register”). The entries in the Register shall be conclusive, and the Borrower,
the Administrative Agent and the Lenders shall treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.

 

(v)         Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Lender and an assignee, the assignee’s completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Assumption and record the information contained therein in the Register;
provided that if either the assigning Lender or the assignee shall have failed
to make any payment required to be made by it pursuant to Section 2.04(b),
2.15(d) or 9.03(c), the Administrative Agent shall have no obligation to accept
such Assignment and Assumption and record the information therein in the
Register unless and until such payment shall have been made in full, together
with all accrued interest thereon. No assignment shall be effective for purposes
of this Agreement unless it has been recorded in the Register as provided in
this paragraph.

 

(c)          Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
(a “Participant”), other than an Ineligible Institution, in all or a portion of
such Lender’s rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans owing to it); provided that (A) such
Lender’s obligations under this Agreement shall remain unchanged, (B) such
Lender shall remain solely responsible to the other parties hereto for the
performance of

 

57

 

 

such obligations and (C) the Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the first proviso to Section
9.02(b) that affects such Participant. The Borrower agrees that each Participant
shall be entitled to the benefits of Sections 2.12, 2.13 and 2.14 (subject to
the requirements and limitations therein, including the requirements under
Section 2.14(f) (it being understood that the documentation required under
Section 2.14(f) shall be delivered to the participating Lender)) to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section; provided that such Participant (A)
agrees to be subject to the provisions of Sections 2.15 and 2.16 as if it were
an assignee under paragraph (b) of this Section; and (B) shall not be entitled
to receive any greater payment under Sections 2.12 or 2.14, with respect to any
participation, than its participating Lender would have been entitled to
receive, except to the extent such entitlement to receive a greater payment
results from a Change in Law that occurs after the Participant acquired the
applicable participation.. To the extent permitted by law, each Participant also
shall be entitled to the benefits of Section 9.08 as though it were a Lender,
provided that such Participant agrees to be subject to Section 2.15(c) as though
it were a Lender. Each Lender that sells a participation shall, acting solely
for this purpose as an agent of the Borrower, maintain a register on which it
enters the name and address of each Participant and the principal amounts (and
stated interest) of each Participant’s interest in the Loans or other
obligations under this Agreement (the “Participant Register”); provided that no
Lender shall have any obligation to disclose all or any portion of the
Participant Register to any Person (including the identity of any Participant or
any information relating to a Participant’s interest in any Commitments, Loans
or its other obligations under any Loan Document) except to the extent that such
disclosure is necessary to establish that such Commitment, Loan or other
obligation is in registered form under Section 5f.103-1(c) of the United States
Treasury Regulations. The entries in the Participant Register shall be
conclusive absent manifest error, and such Lender shall treat each person whose
name is recorded in the Participant Register as the owner of such participation
for all purposes of this Agreement notwithstanding any notice to the contrary.

 

(d)          Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.

 

SECTION 9.05.         Survival. All covenants, agreements, representations and
warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any
Loans, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Administrative Agent or any Lender may have
had notice or

 

58

 

 

knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid and so long
as the Commitments have not expired or terminated. The provisions of Sections
2.12, 2.13, 2.14 and 9.03 and Article VIII shall survive and remain in full
force and effect regardless of the consummation of the transactions contemplated
hereby, the repayment of the Loans, the expiration or termination of the
Commitments or the termination of this Agreement or any provision hereof.

 

SECTION 9.06.         Counterparts; Integration; Effectiveness. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents and any separate letter agreement with respect to fees payable to
the Administrative Agent constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy or any other electronic means
that reproduces an image of the actual executed signature page shall be
effective as delivery of a manually executed counterpart of this Agreement.

 

SECTION 9.07.         Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

 

SECTION 9.08.         Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of the
Borrower against any of and all the obligations of the Borrower now or hereafter
existing under this Agreement held by such Lender, irrespective of whether or
not such Lender shall have made any demand under this Agreement and although
such obligations may be unmatured. The rights of each Lender under this Section
are in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.

 

SECTION 9.09.         Governing Law; Jurisdiction; Consent to Service of
Process. (a) This Agreement shall be construed in accordance with and governed
by the law of the State of Illinois.

 

59

 

 

(b)          The Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the exclusive jurisdiction of the Circuit Court of
the State of Illinois sitting in Cook County, Illinois and of the United States
District Court for the Northern District of Illinois, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such
Illinois State or, to the extent permitted by law, in such Federal court. Each
of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that the Administrative Agent or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement
against the Borrower or its properties in the courts of any jurisdiction.

 

(c)          The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any court referred to in
paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.

 

(d)          Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.

 

SECTION 9.10.         WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

SECTION 9.11.         Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

 

SECTION 9.12.         Confidentiality. (a) Each of the Administrative Agent and
the Lenders agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (i) to its and its
Affiliates’ directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such

 

60

 

 

Information and instructed to keep such Information confidential), (ii) to the
extent requested by any regulatory authority, (iii) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (iv)
to any other party to this Agreement, (v) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or the enforcement of rights hereunder, (vi) subject to an agreement containing
provisions substantially the same as those of this Section, to (A) any assignee
of or Participant in, or any prospective assignee of or Participant in, any of
its rights or obligations under this Agreement or (B) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Borrower and its obligations, (vii) with the consent of the Borrower or
(viii) to the extent such Information (A) becomes publicly available other than
as a result of a breach of this Section or (B) becomes available to the
Administrative Agent or any Lender on a nonconfidential basis from a source
other than the Borrower. For the purposes of this Section, “Information” means
all information received from the Borrower relating to the Borrower or its
business, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by the Borrower; provided that, in the case of information received
from the Borrower after the date hereof, such information is clearly identified
at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

 

(b)          EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN SECTION
9.12(a) FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL
NON-PUBLIC INFORMATION CONCERNING THE BORROWER AND ITS RELATED PARTIES OR THEIR
RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES
REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE
SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND
APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

 

(c)          ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS,
FURNISHED BY THE BORROWER OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE
COURSE OF ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION,
WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE BORROWER AND ITS
RELATED PARTIES OR ITS SECURITIES. ACCORDINGLY, EACH LENDER REPRESENTS TO THE
BORROWER AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS
ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT
MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE
PROCEDURES AND APPLICABLE LAW.

 

SECTION 9.13.         Interest Rate Limitation. Notwithstanding anything herein
to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges

 

61

 

 

and other amounts which are treated as interest on such Loan under applicable
law (collectively the “Charges”), shall exceed the maximum lawful rate (the
“Maximum Rate”) which may be contracted for, charged, taken, received or
reserved by the Lender holding such Loan in accordance with applicable law, the
rate of interest payable in respect of such Loan hereunder, together with all
Charges payable in respect thereof, shall be limited to the Maximum Rate and, to
the extent lawful, the interest and Charges that would have been payable in
respect of such Loan but were not payable as a result of the operation of this
Section shall be cumulated and the interest and Charges payable to such Lender
in respect of other Loans or periods shall be increased (but not above the
Maximum Rate therefor) until such cumulated amount, together with interest
thereon at the Federal Funds Effective Rate to the date of repayment, shall have
been received by such Lender.

 

SECTION 9.14.         USA PATRIOT Act. Each Lender that is subject to the
requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the “Act”) hereby notifies the Borrower that pursuant to
the requirements of the Act, it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name
and address of the Borrower and other information that will allow such Lender to
identify the Borrower in accordance with the Act.

 

SECTION 9.15.         No Advisory or Fiduciary Responsibility. In connection
with all aspects of each transaction contemplated hereby, the Borrower
acknowledges and agrees that: (i) the credit facility provided for hereunder and
any related arranging or other services in connection therewith (including in
connection with any amendment, waiver or other modification hereof or of any
other Loan Document) are an arm’s-length commercial transaction between the
Borrower, on the one hand, and the Administrative Agent and the Arrangers, on
the other hand, and the Borrower is capable of evaluating and understanding and
understands and accepts the terms, risks and conditions of the transactions
contemplated hereby and by the other Loan Documents (including any amendment,
waiver or other modification hereof or thereof); (ii) in connection with the
process leading to such transaction, the Administrative Agent and the Arrangers
each is and has been acting solely as a principal and is not the financial
advisor, agent or fiduciary, for the Borrower or any of its Affiliates,
stockholders, creditors or employees or any other Person; (iii) neither the
Administrative Agent nor any Arranger has assumed or will assume an advisory,
agency or fiduciary responsibility in favor of the Borrower with respect to any
of the transactions contemplated hereby or the process leading thereto,
including with respect to any amendment, waiver or other modification hereof or
of any other Loan Document (irrespective of whether the Administrative Agent or
any Arranger has advised or is currently advising the Borrower or its Affiliates
on other matters) and neither the Administrative Agent nor any Arranger has any
obligation to the Borrower or its Affiliates with respect to the transactions
contemplated hereby except those obligations expressly set forth herein and in
the other Loan Documents; (iv) the Administrative Agent and each Arranger and
its respective Affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Borrower and its Affiliates, and
neither the Administrative Agent nor any Arranger has any obligation to disclose
any of such interests by virtue of any advisory, agency or fiduciary
relationship; and (v) neither the Administrative Agent nor any Arranger has
provided and will not provide any legal, accounting, regulatory or tax advice
with respect to any of the transactions contemplated hereby (including any
amendment, waiver or other modification hereof or of any other Loan Document)
and the Borrower has consulted its own legal, accounting, regulatory and

 

62

 

 

tax advisors to the extent it has deemed appropriate. The Borrower hereby waives
and releases, to the fullest extent permitted by law, any claims that it may
have against the Administrative Agent and the Arrangers with respect to any
breach or alleged breach of agency or fiduciary duty.

 

[Signature pages follow.]

 

63

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

 

  HORACE MANN EDUCATORS CORPORATION         By /s/ Dwayne D. Hallman   Name:
Dwayne D. Hallman   Title: Executive Vice President and CFO         By /s/
Angela S. Christian   Name: Angela S. Christian   Title: Vice President and
Treasurer

 

S-1

 

 

  JPMORGAN CHASE BANK, individually and as
Administrative Agent,         By   /s/ Thomas A. Kiepura   Name:  Thomas A.
Kiepura   Title: Senior Credit Executive

 

S-2

 

 

  PNC Bank, National Association       By   /s/ Nicole Limberg   Name: Nicole
Limberg   Title: VP

 

S-3

 

 

[Intentionally Blank]

 

S-4

 

 

  The northern trust company       By   /s/ Peter J. Hallan   Name: Peter J.
Hallan   Title: Vice President

 

S-5

 

 

  comerica bank       By   /s/ Heather Whiting   Name: Heather Whiting   Title:
Vice President

 

S-6

 

 

  STATE STREET BANK AND TRUST COMPANY       By /s/ Kimberly R. Costa   Name:
Kimberly R. Costa   Title: Vice President

 

S-7

 

 

  ILLINOIS NATIONAL BANK       By   /s/ John Wilson   Name: John Wilson   Title:
EVP

 

S-8

 

 

Schedule 2.01

 

Commitments

 

Lender  Commitment        JPMorgan Chase Bank, N.A.  $36,000,000  PNC Bank,
National Association  $36,000,000  Northern Trust Company  $30,000,000  State
Street Bank and Trust Company  $25,000,000  Comerica Bank  $15,000,000  Illinois
National Bank  $8,000,000         TOTAL:  $150,000,000 

 

 

 

 

Schedule 3.01

 

Jurisdictions

 

CERTIFICATES OF AUTHORITY BY STATE AND DATE ISSUED

 

STATE   HMIC   TIC   HMP&CIC   HMLIC   ELICA   HMSC                          
Alabama   12-19-66   04-18-73   08-20-03   12-15-58       X                    
      Alaska   01-31-64   03-26-73   12-22-87   02-02-62       X                
          Arizona   05-27-59   11-12-74   06-09-80   07-15-59   08-21-57   X    
                      Arkansas   01-31-64   10-06-77   11-19-75   05-06-50      
X                           California   01-31-64       03-25-65   08-18-67    
  X                           Colorado   06-05-64   09-05-73   11-13-81  
11-02-56   12-31-84   X                           Connecticut   06-28-74  
11-18-99   11-18-99   11-20-78       X                           Delaware  
06-02-59   03-02-71   09-25-98   12-08-55       X                          
Dist. of Col.   08-20-59   01-30-73   05-01-97   12-03-65       X              
            Florida   09-23-63   08-19-76   04-02-10   07-16-62   08-15-66   X  
                        Georgia   01-31-64   02-09-78   07-02-07   04-05-61    
  X                           Hawaii               08-25-87   02-01-85          
                    Idaho   12-16-68   04-16-73   05-26-88   05-09-60       X  
                        Illinois   01-31-64*   03-09-77*   04-25-75*   08-09-49*
  12-31-84*   08-13-73*                           Indiana   05-01-68   12-01-77
  01-15-98   05-01-57       X                           Iowa   12-29-64  
05-04-73   11-26-74   08-01-52       X                           Kansas  
01-31-64   09-13-96   12/21/99   11-12-61       X                          
Kentucky   01-31-64   08-02-64   11-01-99   02-21-69       X                    
      Louisiana   12-23-58   11-14-73   09-30-99   05-16-61       X            
              Maine   06-01-70   05-04-88   12-30-98   09-02-60       X        
                  Maryland   01-10-68   10-29-91   03-31-98   06-26-56       X  
                        Massachusetts   10-25-68   02-12-81       09-09-68      
X                           Michigan   03-19-59   12-14-77   02-23-99   10-27-59
      X                           Minnesota   02-11-64   06-01-74   08-19-98  
10-08-56       X                           Mississippi   06-01-58   07-19-74  
06-01-97   10-  -61       X

 

 

 

 

STATE   HMIC   TIC   HMP&CIC   HMLIC   ELICA   HMSC                          
Missouri   03-01-64   07-19-88   11-25-74   06-27-60       X                    
      Montana   01-31-64   06-01-73   02-26-88   01-02-54       X              
            Nebraska   08-30-60   12-15-76   06-24-97   10-29-59   09-28-61   X
                          Nevada   02-12-68   06-14-99   06-17-99   05-10-60  
02-04-83   X                           New Hampshire   04-09-69   11-15-76  
03-19-01   07-13-61       X                           New Jersey   Cancelled
05-30-96                   X                           New Mexico   03-01-64  
08-15-73   01-03-03   05-21-56       X                           New York  
01-31-64   06-17-02   03-27-00           X                           North
Carolina   10-18-68   07-01-74   03-05-98   07-10-59       X                    
      North Dakota   05-08-62   03-22-73   06-21-88   05-29-62       X          
                Ohio   02-07-64   12-03-84   12-31-96   12-02-59   10-09-84   X
                          Oklahoma   03-01-68   11-25-74   11-07-74   12-07-60  
08-02-66   X                           Oregon   07-15-70   09-01-73   11-15-74  
11-01-53   06-05-57   X                           Pennsylvania   12-29-63  
04-16-81   12-20-99   09-01-49       X                           Rhode Island  
01-23-70   12-13-73   01-12-98   09-05-61       09-10-73                        
  South Carolina   10-02-58   02-08-74   05-04-82   08-14-61       X            
              South Dakota   05-01-62   01-22-74   09-14-88   08-03-53       X  
                        Tennessee   01-31-64   09-07-77   11-19-97   03-28-56  
    X                           Texas   01-31-64   12-29-78   05-29-75  
07-14-60   06-26-68   09-10-73                           Utah   03-01-64  
06-14-73   04-05-88   11-22-55       X                           Vermont  
10-01-68   08-25-99   08-25-97   04-18-56       X                          
Virginia   02-03-64   03-19-91   03-30-99   04-18-56       X                    
      Washington   02-10-64   12-28-73   12-31-98   11-13-58   09-20-57   X    
                      West Virginia   01-23-64   10-23-89   03-29-99   12-28-60
      X                           Wisconsin   01-31-64   09-14-73   06-27-74  
11-22-68       X                           Wyoming   12-24-58   07-23-87  
01-18-88   03-24-53       X                           Puerto Rico   Cancelled
12-17-12                    

 

 

 

 

HMIC: Horace Mann Insurance Company TIC: Teachers Insurance Company HMP&CIC:
Horace Mann Property & Casualty Insurance Company HMLIC: Horace Mann Life
Insurance Company HMSC: Horace Mann Service Corporation ELICA: Educators Life
Insurance Company of America

 

 

 

 

Schedule 3.02(a)

 

SAP Exceptions

 

None.

 

 

 

 

Schedule 3.04

 

Litigation

 

None.

 

 

 

 

 

Schedule 3.10

Subsidiaries

  

[tpg84a.jpg]

 

[tpg84b.jpg]

 

 

 

 

Schedule 3.11

Insurance Licenses

 

None.

 

 

 

 

Schedule 6.06

Restrictive Agreements

 

1.          Restrictions pursuant to First Supplemental Indenture, dated as of
June 9, 2005, by and between Borrower and The Bank of New York Mellon Trust
Company, N.A., as trustee (formerly JPMorgan Chase Bank, N.A. was trustee)

 

The Borrower can not, and it can not permit any Subsidiary, create, assume,
incur or permit to exist any indebtedness secured by a pledge, lien or other
encumbrance on the voting securities of any “Significant Subsidiary” (as defined
in paragraph (w) of Rule 1-02 of Regulation S-X (17 CFR § 210.1-01, et seq.)),
or the voting securities of a Subsidiary that owns, directly or indirectly, the
voting securities of any “Significant Subsidiary” without making effective
provision whereby the outstanding 6.05% Senior Notes due June 15, 2015 shall be
equally and ratably secured with such secured indebtedness so long as such other
indebtedness shall be secured.

 

2.          Restrictions pursuant to Second Supplemental Indenture, dated as of
April 21, 2006, by and between Borrower and The Bank of New York Mellon Trust
Company, N.A., as trustee (formerly JPMorgan Chase Bank, N.A. was trustee)

 

The Borrower can not, and it can not permit any Subsidiary, create, assume,
incur or permit to exist any indebtedness secured by a pledge, lien or other
encumbrance on the voting securities of any “Significant Subsidiary” (as defined
in paragraph (w) of Rule 1-02 of Regulation S-X (17 CFR § 210.1-01, et seq.)),
or the voting securities of a Subsidiary that owns, directly or indirectly, the
voting securities of any “Significant Subsidiary” without making effective
provision whereby the outstanding 6.85% Senior Notes due April 15, 2016 shall be
equally and ratably secured with such secured indebtedness so long as such other
indebtedness shall be secured.

 

 

 

 

 

EXHIBIT A

 

ASSIGNMENT AND ASSUMPTION

 

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended, the
“Credit Agreement”), receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed to and incorporated herein by reference and made a part of
this Assignment and Assumption as if set forth herein in full.

 

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of the Assignor’s rights and
obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the
amount and percentage interest identified below of all of such outstanding
rights and obligations of the Assignor under the respective facilities
identified below and (ii) to the extent permitted to be assigned under
applicable law, all claims, suits, causes of action and any other right of the
Assignor (in its capacity as a Lender) against any Person, whether known or
unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing,
including contract claims, tort claims, malpractice claims, statutory claims and
all other claims at law or in equity related to the rights and obligations sold
and assigned pursuant to clause (i) above (the rights and obligations sold and
assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as the “Assigned Interest”). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.

 

1. Assignor: ______________________________       2. Assignee:
______________________________     [and is an Affiliate/Approved Fund of
[identify Lender]]       3. Borrower(s): HORACE MANN EDUCATORS CORPORATION      
4. Administrative Agent: JPMORGAN CHASE BANK, N.A., as the administrative agent
under the Credit Agreement       5. Credit Agreement: The Credit Agreement,
dated as of July 30, 2014, among Horace Mann Educators Corporation, the Lenders
parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the
other agents parties thereto

 

A-1

 

  

6.Assigned Interest:

 

Aggregate Amount of
Commitment/Loans for all
Lenders   Amount of
Commitment/Loans Assigned   Percentage Assigned of
Commitment/Loans1  $   $    % $   $    % $   $    %

 

Effective Date: _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]

 

The Assignee agrees to deliver to the Administrative Agent a completed
Administrative Questionnaire in which the Assignee designates one or more Credit
Contacts to whom all syndicate-level information (which may contain material
non-public information about the Borrower and its Related Parties or their
respective securities) will be made available and who may receive such
information in accordance with the Assignee’s compliance procedures and
applicable laws, including Federal and state securities laws.

 

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

  ASSIGNOR       [NAME OF ASSIGNOR]         By:     Title:       ASSIGNEE      
[NAME OF ASSIGNEE]         By:    

Title: 

 

 

1 Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.

A-2

 

  

[Consented to and]2 Accepted:

 

JPMORGAN CHASE BANK, N.A.,, as   Administrative Agent         By     Title:    
  [Consented to:]3       HORACE MANN EDUCATORS CORPORATION         By     Title:
 

 

 

2 To be added only if the consent of the Administrative Agent is required by the
terms of the Credit Agreement.

3 To be added only if the consent of the Borrower is required by the terms of
the Credit Agreement.

 

A-3

 

 

ANNEX 1

 

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

 

1. Representations and Warranties.

 

1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim and (iii) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any collateral thereunder, (iii) the financial condition of the
Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by the
Borrower, any of its Subsidiaries or Affiliates or any other Person of any of
their respective obligations under any Loan Document.

 

1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the
requirements, if any, specified in the Credit Agreement that are required to be
satisfied by it in order to acquire the Assigned Interest and become a Lender,
(iii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement as a Lender thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 5.01 thereof, as applicable,
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase the Assigned Interest on the basis of which it has
made such analysis and decision independently and without reliance on the
Administrative Agent or any other Lender, and (v) if it is a Non-U.S. Lender,
attached to the Assignment and Assumption is any documentation required to be
delivered by it pursuant to the terms of the Credit Agreement, duly completed
and executed by the Assignee; and (b) agrees that (i) it will, independently and
without reliance on the Administrative Agent, the Assignor or any other Lender,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.

 

2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignor for amounts which
have accrued to but excluding the

 

A-4

 

 

 

Effective Date and to the Assignee for amounts which have accrued from and after
the Effective Date.

 

3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by
telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of Illinois.

 

A-5

 

 

EXHIBIT B

 

[FORM OF]

COMPLIANCE CERTIFICATE

 

To:The Lenders parties to the

Credit Agreement Described Below

 

For the period ended                  , 20   , this Compliance Certificate is
furnished pursuant to that certain Credit Agreement, dated as of July 30, 2014
(as amended, modified, renewed or extended from time to time, the “Agreement”),
among Horace Mann Educators Corporation (the “Borrower”), the lenders party
thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent. Unless
otherwise defined herein, capitalized terms used in this Compliance Certificate
have the meanings ascribed thereto in the Agreement.

 

THE UNDERSIGNED HEREBY CERTIFIES THAT:

 

1.I am a duly elected Executive Officer of the Borrower;

 

2.            I have reviewed the terms of the Agreement and I have made, or
have caused to be made under my supervision, a detailed review of the
transactions and conditions of the Borrower and its Subsidiaries during the
accounting period covered by the attached financial statements;

 

3.            The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
a Default or Event of Default during or at the time of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth below; and

 

4.            To the extent that there are any changes from the most recently
delivered Schedule 3.10, Schedule I attached hereto sets forth a current
Schedule 3.10, setting forth each of the Borrower’s Subsidiaries and indicating
which Subsidiaries are Material Insurance Subsidiaries, accurate as of the date
hereof.

 

5.            Schedule II attached hereto sets forth financial data and
computations calculating each of FHLB Liquidity Debt, FHLB Operating Debt and
Securities Lending, all of which data and computations are true, complete and
correct.

 

6.            Schedule III attached hereto sets forth financial data and
computations evidencing the Borrower’s compliance with certain covenants of the
Agreement, all of which data and computations are true, complete and correct.

 

B-1

 

 

Described below are the exceptions, if any, to paragraph 3 by listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking, or proposes to
take with respect to each such condition or event:

 

                             

 

B-2

 

 

The foregoing certifications, together with the computations set forth in
Schedule II hereto and the financial statements delivered with this Certificate
in support hereof, are made and delivered this ___ day of ______, ____.

 

      Name:   Title:

 

B-3

 

 

SCHEDULE I TO COMPLIANCE CERTIFICATE

 

Updated Schedule 3.10 as of _________, ____

 

B-4

 

 

SCHEDULE II TO COMPLIANCE CERTIFICATE

 

Calculation of FHLB Liquidity Debt,
FHLB Operating Debt and Securities Lending

 

B-5

 

 

SCHEDULE III TO COMPLIANCE CERTIFICATE

 

Compliance as of _________, ____ with
Provisions of Sections 6.01, 6.02, 6.03 and 6.10 of
the Agreement

 

 

Section 6.01 – Consolidated Debt to Total Capitalization     Required   0.35:1.0
          Actual                 (a) Consolidated Debt of the Borrower and its
Consolidated Subsidiaries on date of determination:   $__________            
(b) Consolidated Net Worth on date of determination:   $__________            
(c) (a) plus (b):   $__________             (d) Ratio of (a) to (c):        :1.0
            Section 6.02 – Net Worth     Required Minimum Net Worth:  
$__________             Actual Net Worth:                 Net Worth (excluding
the effect of unrealized gain or loss under FASB 115):   $__________   Section
6.03 – Minimum Risk-Based Capital (as of the end of any Fiscal Year)    
Required:   300%                 Actual:               (a) Horace Mann Life
Insurance Company                     (1) Total Adjusted Capital on date of
determination:   $__________                 (2) Company Action Level RBC on
date of determination:   $__________

 

B-1

 

 

  (3) Ratio of (1) to (2) (expressed as a percentage):   ______%                
(b) The P/C Subsidiaries (taken as a whole)                     (1) Total
Adjusted Capital on date of determination:   $__________                 (2)
Company Action Level RBC on date of determination:   $__________                
(3) Ratio of (1) to (2) (expressed as a percentage):   ______%   Section 6.10 –
Securities Lending     Maximum market value of securities subject to Securities
Lending Worth:   $                   4           Actual market value of
securities subject to Securities Lending Worth (provided that the market value
of any security subject to Securities Lending shall be measured as of the time
the applicable Securities Lending transaction was entered into):   $__________

 

 

4 Maximum Worth to be set at the Threshold Amount less the aggregate amount of
FHLB Operating Debt outstanding at time of reporting.

 

B-2

 

 

EXHIBIT C-1

 

[FORM OF]

U.S. TAX CERTIFICATE

(For Non-U.S. Lenders That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is hereby made to the Credit Agreement, dated as of July 30, 2014 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Horace Mann Educators Corporation, and each lender from time
to time party thereto.

 

Pursuant to the provisions of Section 2.14 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of
which it is providing this certificate, (ii) it is not a bank within the meaning
of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder
of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (iv) it
is not a controlled foreign corporation related to the Borrower as described in
Section 881(c)(3)(C) of the Code and (v) the interest payments in question are
not effectively connected with the undersigned’s conduct of a U.S. trade or
business.

 

The undersigned has furnished the Administrative Agent and the Borrower with a
certificate of its non-U.S. person status on IRS Form W-8BEN. By executing this
certificate, the undersigned agrees that (1) if the information provided on this
certificate changes, the undersigned shall promptly so inform the Borrower and
the Administrative Agent and (2) the undersigned shall have at all times
furnished the Borrower and the Administrative Agent with a properly completed
and currently effective certificate in either the calendar year in which each
payment is to be made to the undersigned, or in either of the two calendar years
preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF LENDER]

 

By:       Name:     Title:  

 

Date: ________ __, 20[  ]

 

C-1-1

 

 

EXHIBIT C-2

 

[FORM OF]

U.S. TAX CERTIFICATE

 

(For Non-U.S. Lenders That Are Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is hereby made to the Credit Agreement, dated as of July 30, 2014 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Horace Mann Educators Corporation, and each lender from time
to time party thereto.

 

Pursuant to the provisions of Section 2.14 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the Loan(s)
(as well as any Note(s) evidencing such Loan(s)) in respect of which it is
providing this certificate, (ii) its partners/members are the sole beneficial
owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)),
(iii) with respect to the extension of credit pursuant to this Credit Agreement,
neither the undersigned nor any of its partners/members is a bank extending
credit pursuant to a loan agreement entered into in the ordinary course of its
trade or business within the meaning of Section 881(c)(3)(A) of the Code,
(iv) none of its partners/members is a ten percent shareholder of the Borrower
within the meaning of Section 871(h)(3)(B) of the Code, (v) none of its
partners/members is a controlled foreign corporation related to the Borrower as
described in Section 881(c)(3)(C) of the Code, and (vi) the interest payments in
question are not effectively connected with the undersigned’s or its
partners/members’ conduct of a U.S. trade or business.

 

The undersigned has furnished the Administrative Agent and the Borrower with
IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of its
partners/members claiming the portfolio interest exemption. By executing this
certificate, the undersigned agrees that (1) if the information provided on this
certificate changes, the undersigned shall promptly so inform the Borrower and
the Administrative Agent and (2) the undersigned shall have at all times
furnished the Borrower and the Administrative Agent with a properly completed
and currently effective certificate in either the calendar year in which each
payment is to be made to the undersigned, or in either of the two calendar years
preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF LENDER]

 

By:       Name:     Title:  

 

Date: ________ __, 20[  ]

 

C-2-1

 

 

EXHIBIT C-3

 

[FORM OF]

 

U.S. TAX CERTIFICATE

 

(For Non-U.S. Participants That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is hereby made to the Credit Agreement, dated as of July 30, 2014 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Horace Mann Educators Corporation, and each lender from time
to time party thereto.

 

Pursuant to the provisions of Section 2.14 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the participation in respect of which it is providing this certificate,
(ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code,
(iii) it is not a ten percent shareholder of the Borrower within the meaning of
Section 871(h)(3)(B) of the Code, (iv) it is not a controlled foreign
corporation related to the Borrower as described in Section 881(c)(3)(C) of the
Code, and (v) the interest payments in question are not effectively connected
with the undersigned’s conduct of a U.S. trade or business.

 

The undersigned has furnished its participating Lender with a certificate of its
non-U.S. person status on IRS Form W-8BEN. By executing this certificate, the
undersigned agrees that (1) if the information provided on this certificate
changes, the undersigned shall promptly so inform such Lender in writing and
(2) the undersigned shall have at all times furnished such Lender with a
properly completed and currently effective certificate in either the calendar
year in which each payment is to be made to the undersigned, or in either of the
two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF LENDER]

 

By:       Name:     Title:  

 

Date: ________ __, 20[  ]

 

C-3-1

 

 

EXHIBIT C-4

 

[FORM OF]

 

U.S. TAX CERTIFICATE

 

(For Non-U.S. Participants That Are Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is hereby made to the Credit Agreement, dated as of July 30, 2014 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Horace Mann Educators Corporation, and each lender from time
to time party thereto.

 

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the
participation in respect of which it is providing this certificate, (ii) its
partners/members are the sole beneficial owners of such participation,
(iii) with respect such participation, neither the undersigned nor any of its
partners/members is a bank extending credit pursuant to a loan agreement entered
into in the ordinary course of its trade or business within the meaning of
Section 881(c)(3)(A) of the Code, (iv) none of its partners/members is a ten
percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B)
of the Code, (v) none of its partners/members is a controlled foreign
corporation related to the Borrower as described in Section 881(c)(3)(C) of the
Code, and (vi) the interest payments in question are not effectively connected
with the undersigned’s or its partners/members’ conduct of a U.S. trade or
business.

 

The undersigned has furnished its participating Lender with IRS Form W-8IMY
accompanied by an IRS Form W-8BEN from each of its partners/members claiming the
portfolio interest exemption. By executing this certificate, the undersigned
agrees that (1) if the information provided on this certificate changes, the
undersigned shall promptly so inform such Lender and (2) the undersigned shall
have at all times furnished such Lender with a properly completed and currently
effective certificate in either the calendar year in which each payment is to be
made to the undersigned, or in either of the two calendar years preceding such
payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF PARTICIPANT]

 

By:       Name:     Title:  

 

Date: ________ __, 20[  ]

 

C-4-1