Exhibit 10.14.1
==============================================
MID OCEAN LIMITED
____________________
CREDIT AGREEMENT (5-YEAR)
Dated as of September 2, 1997
____________________
$100,000,000
____________________
THE CHASE MANHATTAN BANK
as Administrative Agent
==============================================
TABLE OF CONTENTS
Page
----
Section 1. Definitions and Accounting Matters . ................................................ 1
1.01 Certain Defined Terms................................................................ 1
1.02 Accounting Terms; GAAP'.............................................................. 15
1.03 Currencies and Types of Loans . ..................................................... 16
Section 2. Commitments, Loans and Prepayments................................................... 16
2.01 Loans................................................................................ 16
2.02 Borrowings of Loans.................................................................. 17
2.03 Changes of Commitments; Reduction of Maximum Loan Amounts............................ 17
2.04 Fees................................................................................. 17
2.05 Lending Offices...................................................................... 18
2.06 Several Obligations; Remedies Independent............................................ 18
2.07 Evidence of Debt..................................................................... 18
2.08 Optional Prepayments................................................................. 18
2.09 Mandatory Prepayments................................................................ 19
Section 3. Payments of Principal and Interest................................................... 21
3.01 Repayment of Loans................................................................... 21
3.02 Interest............................................................................. 21
Section 4. Payments; Pro Rata Treatment; Computations; Etc...................................... 22
4.01 Payments............................................................................. 22
4.02 Pro Rata Treatment................................................................... 23
4.03 Computations......................................................................... 24
4.04 Minimum Amounts...................................................................... 24
4.05 Certain Notices...................................................................... 25
4.06 Non-Receipt of Funds by the Administrative Agent..................................... 26
4.07 Sharing of Payments, Etc............................................................. 27
Section 5. Yield Protection. Etc................................................................ 28
5.01 Additional Costs..................................................................... 28
5.02 Limitation on Types and Currencies of Loans.......................................... 30
5.03 Treatment of Affected Loans.......................................................... 31
5.04 Compensation......................................................................... 31
5.05 Taxes................................................................................ 32
5.06 Replacement of Banks................................................................. 33
Section 6. Conditions Precedent................................................................. 34
6.01 Initial Loan......................................................................... 34
6.02 Initial and Subsequent Loans......................................................... 35
-i-
Credit Agreement
----------------
Page
----
Section 7. Representations and Warranties ...................................................... 36
7.01 Corporate Existence.................................................................. 36
7.02 Financial Condition.................................................................. 36
7.03 Litigation........................................................................... 37
7.04 No Breach............................................................................ 37
7.05 Action............................................................................... 37
7.06 Approvals............................................................................ 37
7.07 Use of Credit........................................................................ 38
7.08 ERISA................................................................................ 38
7.09 Taxes................................................................................ 38
7.10 Investment Company Act............................................................... 38
7.11 Public Utility Holding Company Act................................................... 38
7.12 Environmental Matters................................................................ 38
7.13 Subsidiaries, Etc.................................................................... 39
7.14 Stamp Taxes.......................................................................... 39
7.15 Legal Form........................................................................... 39
7.16 True and Complete Disclosure......................................................... 39
7.17 Withholding of Taxes................................................................. 40
Section 8. Covenants of the Company............................................................. 40
8.01 Financial Statements, Etc............................................................ 40
8.02 Existence, Etc....................................................................... 42
8.03 Insurance............................................................................ 43
8.04 Prohibition of Fundamental Changes................................................... 43
8.05 Limitation on Liens.................................................................. 44
8.06 Certain Financial Covenants.......................................................... 45
8.07 Ratings.............................................................................. 45
8.08 Use of Proceeds...................................................................... 45
8.09 Transactions with Affiliates......................................................... 46
8.10 Compliance with Laws................................................................. 46
8.11 Payment of Obligations............................................................... 46
8.12 Indebtedness......................................................................... 46
8.13 Capital and Surplus of Mid Ocean Reinsurance......................................... 46
Section 9. Events of Default.................................................................... 46
Section 10. The Administrative Agent............................................................. 49
10.01 Appointment, Powers and Immunities................................................... 49
10.02 Reliance by Administrative Agent..................................................... 50
10.03 Defaults............................................................................. 50
10.04 Rights as a Bank..................................................................... 50
10.05 Indemnification...................................................................... 51
10.06 Non-Reliance on Administrative Agent and Other Banks................................. 51
-ii-
Credit Agreement
----------------
Page
----
10.07 Failure to Act....................................................................... 51
10.08 Resignation of Administrative Agent.................................................. 52
Section 11. Miscellaneous........................................................................ 52
11.01 Waiver............................................................................... 52
11.02 Notices.............................................................................. 52
11.03 Expenses, Etc........................................................................ 53
11.04 Amendments, Etc...................................................................... 53
11.05 Successors and Assigns............................................................... 54
11.06 Assignments and Participations....................................................... 54
11.07 Survival............................................................................. 57
11.08 Captions............................................................................. 57
11.09 Counterparts......................................................................... 57
11.10 Governing Law; Submission to Jurisdiction............................................ 57
11.11 Waiver of Jury Trial................................................................. 58
11.12 Confidentiality...................................................................... 58
11.13 Judgment Currency.................................................................... 59
11.14 European Monetary Union.............................................................. 59
SCHEDULE I - Subsidiaries
SCHEDULE II - Commitments
SCHEDULE III - Liens
SCHEDULE IV - Indebtedness
EXHIBIT A-I - Form of Opinion of Special Cayman Islands Counsel to the Company
EXHIBIT A-2 - Form of Opinion of Special Bermuda Counsel to the Company
EXHIBIT A-3 - Form of Opinion of Special New York Counsel to the Company
EXHIBIT B - Form of Opinion of Special New York Counsel to Chase
EXHIBIT C - Form of Confidentiality Agreement
EXHIBIT D - Form of Assignment and Acceptance
EXHIBIT E - Form of Promissory Note
-iii-
Credit Agreement
----------------
CREDIT AGREEMENT (5-YEAR) dated as of September 2, 1997, between:
MID OCEAN LIMITED. a corporation duly organized and validly existing
under the laws of the Cayman Islands (the "Company");
-------
Each of the lenders that is a signatory hereto identified under the
caption "BANKS" on the signature pages hereto or that pursuant to Section
11.06(b) hereof shall become a "Bank" hereunder; and
THE CHASE MANHATTAN BANK, a New York banking corporation, as
administrative agent for the Banks (in such capacity, together with its
successors in such capacity, the "Administrative Agent").
--------------------
The Company has requested that the Banks make loans to it in an
aggregate principal amount not exceeding $100,000,000 at any one time
outstanding in U.S. Dollars and in certain other foreign currencies, and the
Banks are prepared to make such loans upon the terms and conditions hereof.
Accordingly, the parties hereto agree as follows:
Section 1. Definitions and Accounting Matters.
----------------------------------
1.01 Certain Defined Terms. As used herein, the following terms shall
---------------------
have the following meanings (all terms defined in this Section 1.01 or in other
provisions of this Agreement in the singular to have the same meanings when used
in the plural and vice versa):
---- -----
"Administrative Agent's Account" shall mean, for each Currency, an
------------------------------
account in respect of such Currency designated by the Administrative Agent in a
notice to the Company and the Banks.
"Administrative Questionnaire" shall mean an Administrative
----------------------------
Questionnaire in a form supplied by the Administrative Agent.
"Affiliate" shall mean any Person that directly or indirectly
---------
controls, or is under common control with, or is controlled by, the Company and,
if such Person is an individual, any member of the immediate family (including
parents, spouse, children and siblings) of such individual and any trust whose
principal beneficiary is such individual or one or more members of such
immediate family and any Person who is controlled by any such member or trust.
As used in this definition, "control" (including, with its correlative meanings,
controlled by" and "under common control with") shall mean possession, directly
or indirectly, of power to direct or cause the direction of management or
policies (whether through ownership of securities or partnership or other
ownership interests, by contract or otherwise), provided that, in any event, any
-------- ----
Person that owns directly or indirectly securities having 25% or more of the
voting power for the election of directors or other governing body of a
corporation or 25% or more of the partnership or other ownership interests of
any other Person (other than as a limited partner of such other Person) will be
deemed to control such corporation or other Person. Notwithstanding the
foregoing, (a) no individual shall be an
Credit Agreement
-----------------
-2-
Affiliate solely by reason of his or her being a director, officer or employee
of the Company or any of its Subsidiaries, (b) the Company and its Subsidiaries
shall not be Affiliates of each other, and (c) neither the Administrative Agent
nor any Bank shall be an Affiliate.
"Agreed Foreign Currency" shall mean at any time any of Australian
-----------------------
Dollars, English Pounds Sterling, Japanese Yen, New Zealand Dollars and, with
the agreement of each Bank, any other Foreign Currency, so long as at such time
(a) such Currency is dealt with in the London (or, in the case of English Pounds
Sterling, Paris) interbank deposit market, (b) such Currency is freely
transferable and convertible into Dollars in the London foreign exchange market
and (c) no central bank or other governmental authorization in the country of
issue of such Currency is required to permit use of such Currency by any Bank
for making any Loan hereunder and/or to permit the Company to borrow and repay
the principal thereof and to pay the interest thereon, unless such authorization
has been obtained and is in full force and effect.
"Assumed Reinsurance" shall mean reinsurance assumed by any Insurance
-------------------
Subsidiary from another Person (other than from another Insurance Subsidiary).
"Applicable Facility Fee Rate" and "Applicable Margin" shall mean,
----------------------------------------------------
during any period when any Rating Group set forth below is applicable, with
respect to any facility fee payable hereunder or any Type of Loan outstanding
hereunder, the percentage set forth below opposite such fee or Type of Loan
under such Rating Group:
==============================================================
Rating Rating Rating
Fee or Loan Group Group Group
I II III
--------------------------------------------------------------
Facility Fee 0.070% 0.100% 0.150%
--------------------------------------------------------------
Eurocurrency
Loans 0.155% 0.225% 0.325%
--------------------------------------------------------------
Base Rate Loans 0.0O0% 0.000% 0.000%
==============================================================
For the purposes of this Agreement, any change in the Applicable Facility Fee
Rate or Applicable Margin for any facility fee or any outstanding Loans by
reason of (a) a change in the Standard & Poor's Rating shall become effective on
the date of announcement or publication of a change in such rating or, in the
absence of such announcement or publication, on the effective date of such
changed rating and (b) any other change in the Rating Group shall become
effective on the date of the occurrence of the event that resulted in such
change in the Rating Group.
Credit Agreement
-----------------
-3-
"Applicable Insurance Regulatory Authority" shall mean, with respect
-----------------------------------------
to any Insurance Subsidiary, the insurance department or similar insurance
regulatory or administrative authority or agency of the jurisdiction in which
such Insurance Subsidiary is domiciled.
"Applicable Lending Office" shall mean, for each Bank and for each
-------------------------
Type and Currency of Loan, the "Lending Office" of such Bank (or of an Affiliate
of such Bank) designated for such Type and Currency of Loan in the
Administrative Questionnaire submitted by such Bank or such other office of such
Bank (or of an Affiliate of such Bank) as such Bank may from time to time
specify to the Administrative Agent and the Company as the office by which its
Loans of such Type and Currency are to be made and maintained.
"Assignment and Acceptance" shall mean an assignment and acceptance
-------------------------
entered into by a Bank and an assignee (with the consent of any Person whose
consent is required by Section 11.06(b) hereof), and accepted by the
Administrative Agent, in the form of Exhibit D hereto or any other form approved
by the Administrative Agent.
"Bank" shall mean each of the lenders that is a signatory hereto
----
identified under the caption "BANKS" on the signature pages hereto or that,
pursuant to Section 11.06(b) hereof, shall become a "Bank" hereunder.
"Base Rate" means, for any day, a rate per annum equal to the higher
---------
of (a) the Prime Rate in effect on such day and (b) the Federal Funds Rate in
effect on such day plus 1/2 of 1%. Any change in the Base Rate due to a change
in the Prime Rate or the Federal Funds Rate shall be effective from and
including the effective date of such change in the Prime Rate or the Federal
Funds Rate respectively.
"Base Rate Loans" shall mean Loans denominated in Dollars that bear
---------------
interest at rates based upon the Base Rate.
"Basle Accord" shall mean the proposals for risk-based capital
------------
framework described by the Basle Committee on Banking Regulations and
Supervisory Practices in its paper entitled "International Convergence of
Capital Measurement and Capital Standards" dated July 1988, as amended, modified
and supplemented and in effect from time to time or any replacement thereof.
"Best Rating" shall mean, as at any date, the rating of Mid Ocean
-----------
Reinsurance most recently published by A.M. Best Company, Inc.
"Board of Directors" shall mean the Board of Directors of the Company
------------------
or any duly authorized committee thereof.
Credit Agreement
----------------
-4-
"Board Resolution" shall mean a copy of a resolution certified by the
----------------
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors, and to be in full force and effect on the date of the
certificate and delivered to the Administrative Agent.
"Business Day" shall mean any day (a) on which commercial banks are
------------
not authorized or required to close in New York City, (b) if such day relates to
a borrowing of, a payment or prepayment of principal of or interest on, or the
Interest Period for, a Eurocurrency Loan or a notice by the Company with respect
to any such borrowing, payment, prepayment or Interest Period, that is also a
day on which dealings in deposits denominated in the Currency of such Loan are
carried out in the London interbank market and (c) if such day relates to a
borrowing of, a payment or prepayment of principal of or interest on, or the
Interest Period for, any Loan denominated in any Foreign Currency or a notice by
the Company with respect to any such borrowing, payment, prepayment or Interest
Period, that is also a day on which commercial banks settle payments in the
Principal Financial Center for the Currency in which such Loan is denominated
and in which the London foreign exchange market settles payments in such
Currency.
"Capital and Surplus" shall mean, as at any date for any Person, the
-------------------
aggregate amount of policyholders surplus (determined in accordance with SAP) of
such Person.
"Capital Lease Obligations" shall mean, for any Person, all
-------------------------
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) Property to the extent such
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP, and, for purposes of this
Agreement, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.
"Ceded Reinsurance" shall mean reinsurance ceded by any Insurance
-----------------
Subsidiary to any other Person (other than to another Insurance Subsidiary),
other than Surplus Relief Reinsurance.
"Change of Control" shall mean (a) the acquisition of ownership,
-----------------
directly or indirectly, beneficially or of record, by any Person or group
(within the meaning of the Securities Exchange Act of 1934 and the rules of the
SEC thereunder as in effect on the date hereof) of shares representing more than
35% of the aggregate ordinary voting power represented by the issued and
outstanding capital stock of the Company; or (b) occupation of a majority of the
seats (other than vacant seats) on the Board of Directors by Persons who were
neither (i) nominated by the Board of Directors nor (ii) appointed by directors
so nominated.
Credit Agreement
----------------
-5-
"Chase" shall mean The Chase Manhattan Bank.
-----
"Class" shall have the meaning assigned to such term in Section 1.03
-----
hereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
----
time to time.
"Commitment" shall mean, as to each Bank, the obligation of such Bank
----------
to make Loans pursuant to Section 2.01 hereof in an aggregate principal amount
at any one time outstanding up to but not exceeding the amount set opposite such
Bank's name on Schedule II hereto under the caption "Commitment" (as the same
may at any time or from time to time be reduced pursuant to Section 2.03 hereof
or be increased or reduced pursuant to Section 11.06 hereof).
"Commitment Termination Date" shall mean September 2, 2002;
---------------------------
provided that, if such date is not a Business Day, the Commitment Termination
Date shall be the next preceding Business Day.
"Company Jurisdiction" shall mean (a) Bermuda, (b) the Cayman
--------------------
Islands and (c) any other country (i) where the Company is licensed or qualified
to do business or (ii) from which payments hereunder are made by the Company.
"Currency" shall mean Dollars or any Foreign Currency.
--------
"Debt" shall mean Indebtedness referred to in clauses (a) through (c)
----
inclusive, in the definition of the term Indebtedness.
"Default" shall mean an Event of Default or an event that with
-------
notice or lapse of time or both would become an Event of Default.
"Deferred Acquisition Expenses" shall mean, as at any date,
-----------------------------
the average of the deferred acquisition expenses for the Company and its
Subsidiaries (determined on a consolidated basis, without duplication, in
accordance with GAAP) for the four most recent Fiscal Dates.
"Derivative Transaction" shall mean (a) any "swap agreement"
----------------------
as defined in Section 10l(53B) of the Bankruptcy Code (other than a spot foreign
exchange transaction), (b) any equity swap, floor, collar, cap or option
transaction, (c) any option to enter into any of the foregoing and (d) any
combination of the foregoing.
Credit Agreement
----------------
-6-
"Dollar Equivalent" shall mean, with respect to any Loan denominated
-----------------
in any Foreign Currency, the amount of Dollars that would be required to
purchase the amount of the Foreign Currency of such Loan on the date such Loan
is requested (or (i) in the case of any determination made under Section 2.01(e)
hereof, on the date of any borrowing referred to in said Section 2.01(c) and
(ii) in the case of any determination made under Section 2.09 or redenomination
under the last sentence of Section 4.01 hereof, on the date of determination or
redenomination therein referred to), based upon the spot selling rate at which
Chase offers to sell such Foreign Currency for Dollars in the London foreign
exchange market at approximately 11:00 a.m. London time for delivery two
Business Days later.
"Dollars" and "$" shall mean lawful money of the United States of
------- -
America.
"Environmental Laws" shall mean any and all present and future
------------------
Federal, state, local and foreign laws, rules or regulations, and any orders or
decrees, in each case as now or hereafter in effect, relating to the regulation
or protection of the environment or to emissions, discharges, releases or
threatened releases of pollutants, contaminants, chemicals or toxic or hazardous
substances or wastes into the indoor or outdoor environment, including, without
limitation, ambient air, soil, surface water, ground water, wetlands, land or
subsurface strata, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, chemicals or toxic or hazardous substances or wastes.
"Equity Rights" shall mean, with respect to any Person, any
-------------
outstanding subscriptions, options, warrants, commitments, preemptive rights or
agreements of any kind (including, without limitation, any stockholders' or
voting trust agreements) for the issuance, sale, registration or voting of, or
outstanding securities convertible into, any additional shares of capital stock
of any class, or partnership or other ownership interests of any type in, such
Person.
"ERISA" shall mean the Employee Retirement Income Security Act
-----
of 1974, as amended from time to time, and the regulations promulgated and the
rulings issued thereunder.
"ERISA Affiliate" shall mean any corporation or trade or business that
---------------
is a member of any group of organizations (i) described in Section 414(b) or (c)
of the Code of which the Company is a member and (ii) solely for purposes of
potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11)
of the Code and the lien created under Section 302(f) of ERISA and Section
412(n) of the Code, described in Section 414(m) or (o) of the Code, of which
the Company is a member.
Credit Agreement
----------------
-7-
"ERISA Plan" shall mean any "employee benefit plan" (as
----------
defined in Section 3(3) of ERISA) or any "multiemployer plan" (as defined in
Section 4001(a)(3) of ERISA that is or, within the preceding five years has
been, established or maintained, or to which contributions are or, within the
preceding five years have been, made or required to be made, by the Company or
any ERISA Affiliates or with respect to which the Company or an ERISA Affiliate
may have liability.
"Eurocurrency Base Rate" shall mean, with respect to any
----------------------
Eurocurrency Loan in Dollars or any Agreed Foreign Currency for the Interest
Period therefor:
(a) the arithmetic mean, as calculated by the Administrative
Agent of the respective rates per annum (rounded upwards, if
necessary, to the nearest 1/16 of 1%) of the rates appearing on the
Screen at approximately 11:00 a.m. London time (or as soon thereafter
as practicable) two Business Days prior to the first day of the
Interest Period for such Loan as LIBOR for such Currency having a term
comparable to such Interest Period; or
(b) if the Screen shall cease to report such LIBOR or, in the
reasonable judgment of the Majority Banks, shall cease accurately to
reflect such LIBOR (as reported by any publicly available source of
similar market data selected by the Majority Banks that, in the
reasonable judgment of the Majority Banks, accurately reflects LIBOR
for such Currency), the Eurocurrency Base Rate shall mean, with respect
to such Eurocurrency Loan for such Interest Period the rate per annum
(rounded upwards if necessary, to the nearest 1/16 of 1%), as
determined by the Administrative Agent quoted by the Reference Bank at
approximately 11:00 a.m. London time (or as soon thereafter as
practicable) two Business Days prior to the first day of the Interest
Period for such Eurocurrency Loan for the offering by the Reference
Bank to leading banks in the London (or, in the case of Loans
denominated in English Pounds Sterling, Paris) interbank market of
deposits denominated in such Currency having a term comparable to such
Interest Period and in an amount equal to $1,000,000 (or the Foreign
Currency Equivalent thereof).
"Eurocurrency Loans" shall mean Loans made to the Company in
------------------
Dollars or any Agreed Foreign Currency, which Loans bear interest at rates based
on rates referred to in the definition of "Eurocurrency Base Rate" in this
Section 1.01.
"Eurocurrency Rate" shall mean, for any Eurocurrency Loan for
-----------------
the Interest Period therefor, a rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) determined by the Administrative Agent to be equal
to the Eurocurrency Base Rate for such Loan for such Interest Period multiplied
by the Reserve Rate (if any) for such Interest Period.
Credit Agreement
----------------
-8-
"Event of Default" shall have the meaning assigned to such
----------------
term in Section 10 hereof.
"Federal Funds Rate" shall mean, for any day, the rate per
------------------
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (a) if the day for which such rate is to
be determined is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day and (b) if such rate is not so
published for any Business Day, the Federal Funds Rate for such Business Day
shall be the average rate charged to Chase on such Business Day on such
transactions as determined by the Administrative Agent.
"Fiscal Dates" shall mean, with respect to the Company,
------------
January 31, April 30, July 31 and October 31 in each year.
"Foreign Benefit Plan" shall mean any plan, fund (including,
--------------------
without limitation, any superannuation fund) or other similar program
established or maintained outside the United States by the Company or a
Subsidiary thereof, with respect to which the Company or such Subsidiary has an
obligation to contribute, for the benefit of employees of the Company or the
Subsidiary, which plan, fund or other similar program provides, or results in
the type of benefits described in Section 3(1) or 3(2) of ERISA, and which plan
is not subject to ERISA or the Code.
"Foreign Currency" shall mean at any time any Currency other
----------------
than Dollars.
"Foreign Currency Equivalent" shall mean, with respect to any
---------------------------
amount in Dollars, the amount of any Foreign Currency that could be purchased
with such amount of Dollars using the reciprocal of the foreign exchange rate(s)
specified in the definition of the term "Dollar Equivalent", as determined by
the Administrative Agent.
"FRB" shall mean the Board of Governors of the Federal Reserve
---
System (or any successor thereto).
"GAAP" shall mean generally accepted accounting principles in
----
the United States of America.
"Governmental Authority" means the United States of America or
----------------------
any other nation, or any political subdivision of any thereof (whether state or
local), and any government, agency, authority, instrumentality, regulatory body,
court, central bank or other
Credit Agreement
----------------
-9-
entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"Guarantee" shall mean a guarantee, an endorsement a
---------
contingent agreement to purchase or to furnish funds for the payment or
maintenance of, or otherwise to be or become contingently liable under or with
respect to, the Indebtedness, other obligations, net worth, working capital or
earnings of any Person, or a guarantee of the payment of dividends or other
distributions upon the stock or equity interests of any Person, or an agreement
to purchase, sell or lease (as lessee or lessor) Property, products, materials,
supplies or services primarily for the purpose of enabling a debtor to make
payment of such debtor's obligations or an agreement to assure a creditor
against loss, and including, without limitation, causing a bank or other
financial institution to issue a letter of credit or other similar instrument
for the benefit of another Person, but excluding endorsements for collection or
deposit in the ordinary course of business. The terms "Guarantee" and
---------
"Guaranteed" used as a verb shall have a correlative meaning.
----------
"Indebtedness" shall mean, for any Person: (a) indebtedness
------------
created, incurred or assumed by such Person for borrowed money or obligations of
such Person evidenced by bonds, debentures, promissory notes or similar
instruments; (b) obligations of such Person to pay the deferred purchase or
acquisition price of Property or services, other than trade accounts payable
(other than for borrowed money) arising and accrued expenses incurred, in the
ordinary course of business; (c) Capital Lease Obligations of such Person; (d)
Indebtedness of others secured by a Lien on the Property of such Person, whether
or not the respective indebtedness so secured has been assumed by such Person;
(e) obligations of such Person in respect of letters of credit or similar
instruments issued or accepted by banks and other financial institutions for
account of such Person (other than letters of credit and banker's acceptances
arising in the ordinary course of such Person's business); and (f) Guarantees by
such Person of Indebtedness of others; provided that Indebtedness shall include
Surplus Relief Reinsurance but shall not include (i) obligations with respect to
insurance policies underwritten by, or Assumed Reinsurance underwritten by, or
Reinsurance Agreements entered into by, an Insurance Subsidiary in the ordinary
course of its business and (ii) commissions or other amounts payable in the
ordinary course of business to agents or to other representatives of any of the
Insurance Subsidiaries.
"Insurance Subsidiary" shall mean any Subsidiary of the
--------------------
Company that is licensed to conduct an insurance business by an Applicable
Insurance Regulatory Authority and provides capital to underwrite insurable
risks.
Credit Agreement
----------------
-10-
"Interest Period" shall mean:
---------------
(a) with respect to any Eurocurrency Loan, the period
commencing on the date such Loan is made and ending on the numerically
corresponding day in the first, second, third, or sixth calendar month
thereafter, as the Company may select as provided in Section 4.05
hereof, except that each Interest Period that commences on the last
Business Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar
month) shall end on the last Business Day of the appropriate subsequent
calendar month:
(b) with respect to any Base Rate Loan, the period commencing
on the date such Base Rate Loan is made and ending on the earlier of
the first Quarterly Date thereafter or the Commitment Termination Date.
Notwithstanding the foregoing: (i) if any Interest Period for any Loan would
otherwise end after the Commitment Termination Date in existence at the time
such Interest Period is selected, such Interest Period shall not be available
hereunder; (ii) each Interest Period that would otherwise end on a day that is
not a Business Day shall end on the next succeeding Business Day (or, in the
case of an Interest Period for a Eurocurrency Loan, if such next succeeding
Business Day falls in the next succeeding calendar month, on the next preceding
Business Day); and (iii) notwithstanding clauses (i) and (ii) above, no Interest
Period for any Eurocurrency Loan shall have a duration of less than one month
and, if the Interest Period for any Eurocurrency Loan would otherwise be a
shorter period, such Interest Period shall not be available hereunder.
"LIBOR" shall mean, for any Currency, the rate at which
-----
deposits in such Currency are offered to lending banks in the London (or, in the
case of English Pounds Sterling, Paris) interbank market.
"Lien" shall mean, with respect to any Property, any mortgage,
----
deed of trust, lien, pledge, charge or security interest (as defined in Section
1-201(37) of the Uniform Commercial Code as in effect in the State of New York)
of any kind in respect of such Property (it being understood that a banker's
right of setoff, banker's lien or any similar right of a bank is not a Lien).
"Loans" shall mean Loans provided for by Section 2.01 hereof
-----
which may be Base Rate Loans or Eurocurrency Loans.
"Local Time" shall mean, with respect to any Loan denominated
----------
in or any payment to be made in any Currency, the local time in the Principal
Financial Center for the Currency in which such Loan is denominated or such
payment is to be made.
Credit Agreement
----------------
-11-
"Majority Banks" shall mean Banks having more than 50% of the
--------------
aggregate amount of the Commitments or if the Commitments shall have
terminated. Banks holding more than 50% of the aggregate unpaid principal amount
of the Loans.
"Margin Stock" shall mean "margin stock" within the meaning of
------------
Regulations G, U and X.
"Material Adverse Effect" shall mean a material adverse effect
-----------------------
on (a) the business, assets, property, condition (financial or otherwise) or
prospects of the Company and its Subsidiaries taken as a whole or (b) the
validity or enforceability of this Agreement or the rights and remedies of the
Administrative Agent or any Bank hereunder.
"Material Insurance Subsidiary" shall mean, at any time. (i)
-----------------------------
Mid Ocean Reinsurance and (ii) any other Insurance Subsidiary that is a Material
Subsidiary.
"Material Subsidiary" shall mean, at any time, each Subsidiary
-------------------
of the Company that as of such time meets the definition of a "significant
subsidiary" contained as of the date hereof in Regulation S-X of the SEC.
"Mid Ocean Reinsurance" shall mean Mid Ocean Reinsurance
---------------------
Company Limited, a Wholly-Owned Insurance Subsidiary of the Company.
"NAIC" shall mean the National Association of Insurance
----
Commissioners and any successor thereto.
"Net Worth" shall mean, as at any date, the amount of total
---------
shareholders' equity for the Company and its Subsidiaries (determined on a
consolidated basis without duplication in accordance with GAAP).
"Officer" shall mean the Chairman of the Board, the President
-------
or any Vice President of the Company.
"Officer's Certificate" shall mean a certificate signed by any
---------------------
Officer.
"Person" shall mean any individual, corporation, company,
------
voluntary association, partnership, limited liability company, joint venture,
trust, unincorporated organization or government (or any agency, instrumentality
or political subdivision thereof).
"Post-Default Rate" shall mean, in respect of any principal of
-----------------
any Loan or any other amount under this Agreement that is not paid when due
(whether at stated maturity, by acceleration, by optional or mandatory
prepayment or otherwise), a rate per annum equal to
Credit Agreement
----------------
-12-
2% plus the Base Rate as in effect from time to time (provided that, if the
--------
amount so in default is principal of a Eurocurrency Loan and the due date
thereof is a day other than the last day of such Interest Period therefor, the
"Post-Default Rate" for such principal shall be. for the period from and
including such due date to but excluding the last day of such Interest Period,
2% Plus the interest rate for such Loan as provided in Section 3.02 hereof and
thereafter, the rate provided for above in this definition).
"Prime Rate" shall mean the rate of interest from time to time
----------
announced by Chase at its principal office in New York, New York as its prime
commercial lending rate.
"Principal Financial Center" shall mean, in the case of an"
--------------------------
Currency, the principal financial center of the country that issues such
Currency as determined by the Administrative Agent.
"Property" shall mean any right or interest in or to property
--------
of any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Quarterly Dates" shall mean the last Business Day of January,
---------------
April, July and October in each year, the first of which shall be the first such
day after the date hereof
"Rating Group" shall mean any of Rating Group I, Rating Group
------------
II or Rating Group III.
"Rating Grout I" shall mean (a) no Event of Default has
--------------
occurred and is continuing and the Standard & Poor's Rating is at or above AA:
"Rating Grout II" shall mean (a) Rating Group I is not in effect and (b) no
Event of Default has occurred and is continuing and (c) the Standard & Poor's
Rating is at or above A; and "Rating Group III" shall mean neither Rating Group
I nor Rating Group II is in effect.
"Reference Bank" shall mean Chase.
--------------
"Resister" shall have the meaning assigned to such term in
--------
Section 11.06 hereof.
"Regulations A. D. G. U and X" shall mean, respectively,
----------------------------
Regulations A, D, G, U and X of the FRB, as the same may be modified and
supplemented and in effect from time to time.
"Regulatory Change" shall mean, with respect to any Bank, any
-----------------
change after the date hereof in Federal, state or foreign law or regulations
(including, without limitation, Regulation D) or the adoption or making after
such date of any interpretation, directive or
Credit Agreement
----------------
-13-
request applying to a class of banks including such Bank of or under any
Federal, state or foreign law or regulations (whether or not having the force of
law and whether or not failure to comply therewith would be unlawful) by any
court or governmental or monetary authority charged with the interpretation or
administration thereof.
"Reinsurance Agreement" shall mean any agreement contract,
---------------------
treaty or other arrangement providing for Ceded Reinsurance by any Insurance
Subsidiary or any Subsidiary of such Insurance Subsidiary.
"Reserve Rate" shall mean 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 percentages (including any
marginal, special emergency or supplemental reserves) expressed as a decimal
established by the FRB to which member banks of the Federal Reserve System in
New York City with deposits exceeding $1,000,000,000 are subject with respect
to eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D). Such reserve percentages shall include those imposed pursuant to
Regulation D. The Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
"SAP" shall mean the accounting procedures and practices
---
prescribed or permitted by the Applicable Insurance Regulatory Authority or the
NAIC.
"Screen" shall mean, for any Currency the relevant display
------
page for LIBOR for such Currency (as determined by the Administrative Agent) on
the Dow ▇▇▇▇▇ Markets Service; provided that, if the Administrative Agent
determines that there is no such relevant display page for LIBOR for such
Currency. "Screen" shall mean the relevant display page for LIBOR for such
Currency (as determined by the Administrative Agent) on the ▇▇▇▇▇▇ Monitor Money
Rates Service.
"SEC" shall mean the Securities and Exchange Commission or any
---
governmental authority succeeding to its principal functions.
"Standard & Poor's" shall mean Standard & Poor's Ratings
-----------------
Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. or any successor
thereto.
"Standard and Poor's Rating" shall mean, as at any date, the
--------------------------
claims-paying rating of Mid Ocean Reinsurance most recently published by
Standard & Poor's.
"Statutory Statement" shall mean, as to any Insurance
-------------------
Subsidiary, a statement of the condition and affairs of such Insurance
Subsidiary prepared in accordance with
Credit Agreement
----------------
-14-
statutory accounting practices required or permitted by the Applicable Insurance
Regulatory Authority, and filed with the Applicable Insurance Regulatory
Authority.
"Subsidiary" shall mean, with respect to any Person, any
----------
corporation partnership or other entity of which at least a majority of the
securities or other ownership interests having by the terms thereof ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions of such corporation, partnership or other entity
(irrespective of whether or not at the time securities or other ownership
interests of any other class or classes of such corporation, partnership or
other entity shall have or might have-voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned or controlled by
such Person or one or more Subsidiaries of such Person or by such Person and one
or more Subsidiaries of such Person.
"Surplus Relief Reinsurance" shall mean any transaction in
--------------------------
which any Insurance Subsidiary or any Subsidiary of such Insurance Subsidiary
cedes business under a reinsurance agreement that would be considered a
"financing-type" reinsurance agreement as determined by the independent
certified public accountants of the Company in accordance with principles
published by the Financial Accounting Standards Board or the Second Edition of
the AICPA Audit Guide for Stock Life Insurance Companies (pp. 91-92), as the
same may be revised from time to time.
"Tangible Net Worth" shall mean, as at any date, the sum for
------------------
the Company and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following:
(a) Net Worth. minus
-----
(b) the sum of the following (without duplication of
deductions in respect of items already deducted in arriving at Net
Worth): cost of treasury shares and the book value of all assets which
should be classified as intangibles but in any event including
goodwill, minority interests, trademarks, trade names, copyrights,
patents and franchises, unamortized debt discount and expense, Deferred
Acquisition Expenses and any write-up in the book value of assets
resulting from a revaluation thereof subsequent to December 31, 1996.
"Taxes" shall have the meaning assigned to such term in
-----
Section 5.05(a) hereof.
"Total Capital" shall mean the sum of (i) Total Debt and (ii)
-------------
Net Worth.
Credit Agreement
----------------
-15-
"Total Debt" shall mean the aggregate principal amount of all
----------
Debt of the Company and its Subsidiaries (determined on a consolidated basis
without duplication in accordance with GAAP).
"Type" shall have the meaning assigned to such term in Section
----
1.03 hereof.
"Wholly Owned Subsidiary" shall mean, with respect to any
-----------------------
Person, any corporation, partnership or other entity of which all of the equity
securities or other ownership interests (other than, in the case of a
corporation or other similar legal entity, directors qualifying shares or
shares held by residents of the jurisdiction in which such corporation or other
similar legal entity is organized as required by the law of such jurisdiction)
are directly or indirectly owned or controlled by such Person or one or more
Wholly Owned Subsidiaries of such Person or by such Person and one or more
Wholly Owned Subsidiaries of such Person.
1.02 Accounting Terms: GAAP.
----------------------
(a) Except as otherwise expressly provided herein, all terms
of an accounting or financial nature shall be construed in accordance with GAAP
or SAP, as the case may be, as in effect on the date hereof.
(b) The Company shall deliver to the Banks at the same time as
the delivery of any annual or quarterly financial statement under Section 8.01
hereof (i) a description in reasonable detail of any material variation between
the application of GAAP or SAP, as the case may be, employed in the preparation
of such statement and the application of GAAP or SAP, as the case may be, as in
effect on the date hereof and (ii) reasonable estimates of the difference in
covenant compliance arising as a consequence thereof.
1.03 Currencies and Types of Loans. Loans hereunder are
-----------------------------
distinguished by "Currency" and by "Type". The "Currency" of a Loan refers to
the Currency in which such Loan is denominated. The "Type" of a Loan refers to
whether such Loan is a Base Rate Loan or a Eurocurrency Loan, each of which
constitutes a Type. Loans may be identified by one or more of their Currency and
Type.
Section 2. Commitments, Loans and Prepayments.
----------------------------------
2.01 Loans.
-----
(a) Each Bank severally agrees, on the terms and conditions of
this Agreement, to make loans to the Company in Dollars or in any Agreed Foreign
Currency during the period from and including the date hereof to but not
including the Commitment Termination
Credit Agreement
----------------
-16-
Date in an aggregate principal amount at any one time outstanding up to but not
exceeding the amount of the Commitment of such Bank as in effect from time to
time. Subject to the terms and conditions of this Agreement during such period
the Company may borrow, prepay, repay and reborrow the amount of the
Commitments.
(b) If, after giving effect to any Loan to be made under this
Section 2.01. more than four separate Interest Periods in respect of Loans
denominated in any single Currency would be outstanding at the same time (for
which purpose Interest Periods described in different lettered clauses of the
definition of the term "Interest Period" shall be deemed to be different
Interest Periods even if they are coterminious), then such Loan shall not be
required to be made hereunder.
(c) For purposes of determining (i) whether the amount of any
borrowing of Loans, together with all other Loans then outstanding, would exceed
the aggregate amount of Commitments, (ii) under Section 2.03(b) hereof, the
aggregate unutilized amount of the Commitments and (iii) under Section 6.02
hereof, the outstanding aggregate principal amount of Loans, the outstanding
principal amount of any Loan that is denominated in any Foreign Currency shall
be deemed to be the Dollar Equivalent (determined as of the date of borrowing of
such Loan) of the amount in the Foreign Currency of such Loan of the amount in
the Currency of such Loan.
2.02 Borrowings of Loans. The Company shall give the
-------------------
Administrative Agent notice of each borrowing of Loans hereunder as provided in
Section 4.05 hereof. Not later than 11:00 a.m. Local Time on the date specified
for each borrowing of Loans hereunder each Bank shall make available the amount
of the Loan or Loans to be made by it on such date to the Administrative Agent,
at the Administrative Agent's Account for the Currency in which such Loan is
denominated, in immediately available funds, for account of the Company. The
amount so received by the Administrative Agent shall, subject to the terms and
conditions of this Agreement, be made available to the Company by depositing the
same, in immediately available funds, in an account of the Company designated by
the Company.
2.03 Chances of Commitments: Reduction of Maximum Loan
-------------------------------------------------
Amounts.
-------
(a) The aggregate amount of the Commitments shall be
automatically reduced to zero on the Commitment Termination Date.
(b) The Company shall have the right at any time or from time
to time (i) so long as no Loans are (or at the time will be) outstanding, to
terminate the Commitments and (ii) to reduce the aggregate unutilized amount of
the Commitments; provided that (x) the Company shall give notice of each such
--------
termination or reduction as provided in Section 4.05
Credit Agreement
----------------
-17-
hereof and (y) each partial reduction of Commitments shall be in an aggregate
amount at least equal to $ 10,000,000 (or a larger integral multiple of
$1.000.000).
(c) The Commitments once terminated or reduced may not be reinstated.
2.04 Fees.
----
(a) Facility Fee. The Company shall pay to the Administrative Agent
------------
for account of each Bank a facility fee on the daily average amount of such
Bank's Commitment (whether used or unused), for the period from and including
the date hereof to but not including the earlier of the date such Commitment is
terminated and ~he Commitment Termination Date, at a rate per annum equal to the
Applicable Facility Fee Rate. Accrued facility fee shall be payable on each
Quarterly Date and on the earlier of the date the Commitments are terminated and
the Commitment Termination Date.
(b) Utilization Fee. The Company shall pay to the Administrative Agent
---------------
for account of each Bank, during any period that the aggregate outstanding
principal amount of Loans exceeds 50% of the aggregate amount of the
Commitments, a utilization fee on the daily average aggregate outstanding
principal amount of such Bank's Loans at a rate per annum equal to 0.025% per
annum. Accrued utilization fee shall be payable on each Quarterly Date and on
the earlier of the date Commitments are terminated and the Commitment
Termination Date interest on such Bank's Loans are payable.
2.05 Lending Offices. The Loans of each Type and Currency made by each
---------------
Bank shall be made and maintained at such Bank's Applicable Lending Office for
Loans of such Type and Currency.
2.06 Several Obligations. The failure of any Bank to make any Loan to
-------------------
be made by it on the date specified therefor shall not relieve any other Bank of
its obligation to make its Loan on such date, and neither any Bank nor the
Administrative Agent shall be responsible for the failure of any other Bank to
make a Loan to be made by such other Bank.
2.07 Evidence of Debt.
----------------
(a) Each Bank shall maintain in accordance with its usual practice an
account or accounts evidencing, with respect to each Loan made by such Bank to
the Company, the amounts of principal of and interest on such Loan payable and
paid to such Bank from time to time hereunder.
(b) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Type and Currency thereof
and the Interest
Credit Agreement
----------------
-18-
Period applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Company to each Bank hereunder and
(iii) the amount of any sum received by the Administrative Agent hereunder for
account of the Banks and each Bank's share thereof.
(c) The entries made in the accounts maintained pursuant to
clause (a) or (b) of this Section 2.07 shall be prima facie evidence of the
----- ----- -----
existence and amounts of the obligations recorded therein; provided that the
failure of any Bank or the Administrative Agent to maintain such accounts or any
error therein shall not in any manner affect the obligation of the Company to
repay the principal of, interest on and other amounts in respect of Loans in
accordance with the terms of this Agreement.
(d) Any Bank may request that Loans made by it be evidenced by a
a promissory note of the Company. In such event the Company shall prepare,
execute and deliver to such Bank a promissory note payable to the order of such
Bank and in substantially the form of Exhibit E hereto.
2.08 Optional Prepayments. Subject to Sections 3.02, 4.04 and 5.04
--------------------
hereof, Loans may be prepaid at any time or from time to time, provided that,
--------
the Company' shall give the Administrative Agent notice of each such prepayment
as provided in Section 4.05 hereof (and, upon the date specified in any such
notice of prepayment the amount to be prepaid shall become due and payable
hereunder).
2.09 Mandatory Prepayments.
---------------------
(a) Upon the receipt by the Administrative Agent of a Currency
Valuation Notice (as defined below) and on each Quarterly Date, the
Administrative Agent shall promptly determine the aggregate outstanding
principal amount of all Loans (for which purpose the outstanding principal
amount of any Loan that is denominated in any Foreign Currency shall be deemed
to be the Dollar Equivalent (determined as of the Business Day on which the
Administrative Agent shall have received such Currency Valuation Notice prior to
11:00 a.m. New York time (or, if received by the Administrative Agent after such
time on any' Business Day, as of the next succeeding Business Day) or as of such
Quarterly Date, as the case may be, of the amount in the Foreign Currency of
such Loan). Upon making such determination, the Administrative Agent shall
promptly notify the Banks and the Company thereof.
(b) If, on the date of such determination the aggregate outstanding
principal amount of all Loans exceeds 105% of the aggregate amount of the
Commitments as then in effect, the Company shall, if requested by the Majority
Banks (through the Administrative Agent), prepay the Loans in an amount so that
after giving effect thereto the aggregate
Credit Agreement
----------------
-19-
outstanding principal amount of the Loans does not exceed the Commitments:
provided that any such payment shall be accompanied by any amounts payable
--------
under Sections 3.02 and 5.04 hereof.
For purposes of this Section 2.09, "Currency Valuation Notice" shall
-------------------------
mean a notice given by the Majority Banks to the Administrative Agent stating
that such notice is a "Currency Valuation Notice" and requesting that the
Administrative Agent determine the aggregate outstanding principal amount of all
Loans.
Anything in this Section 2.09 to the contrary notwithstanding. The
Administrative Agent shall not be required to make more than one valuation
determination pursuant to Currency Valuation Notices within any rolling three
month period.
Section 3.01 Payments of Principal and Interest.
----------------------------------
3.01 Repayment of Loans. The Company hereby promises to pay to
------------------
the Administrative Agent for account of each Bank the principal of each Loan
made by such Bank to the Company, and each Loan shall mature, on the last day of
the Interest Period therefor.
3.02 Interest. The Company hereby promises to pay to the
--------
Administrative Agent for account of each Bank interest on the unpaid principal
amount of each Loan made by such Bank to the Company for the period from and
including the date of such Loan to but excluding the date such Loan shall be
paid in full, at the following rates per annum:
(a) if such Loan is a Base Rate Loan, the Base Rate (as in effect from
time to time);
(b) if such Loan is a Eurocurrency Loan, the Eurocurrency Rate for
such Loan for the Interest Period therefor plus the Applicable Margin.
Notwithstanding the foregoing, the Company hereby promises to pay to the
Administrative Agent for account of each Bank interest at the applicable
Post-Default Rate on any principal of any Loan made by such Bank and on any
other amount payable by the Company hereunder to or for account of such Bank
that shall not be paid in full when due (whether at stated maturity, by
acceleration, by mandatory prepayment or otherwise), for the period from and
including the due date thereof to but excluding the date the same is paid in
full. Accrued interest on each Loan shall be payable (i) on the last day of the
Interest Period therefor and, if such Interest Period is longer than three
months (in the case of a Eurocurrency Loan), at three-month intervals following
the first day of such Interest Period, and (ii) in the case of
Credit Agreement
----------------
-20-
any Loan. upon the payment or prepayment thereof (but only on the principal
amount so paid or prepaid), except that interest payable at the Post-Default
Rate shall be payable from time to time on demand. Promptly after the
determination of any interest rate provided for herein or any change therein,
the Administrative Agent shall give notice thereof to the Banks to which such
interest is payable and to the Company.
Section 4. Payments: Pro Rata Treatment: Computations: Etc.
-----------------------------------------------
4.01 Payments.
--------
(a) Except to the extent otherwise provided herein, all
payments of principal and interest on any Loan and other amounts to be paid by
the Company under this Agreement shall be made in the Currency in which such
Loan or other amount is denominated, in immediately available funds, without
deduction, set-off or counterclaim, to the Administrative Agent at the
Administrative Agent's Account for the Currency in which such Loan or other
amount is denominated, not later than 11:00 a.m. Local Time on the date on which
such payment shall become due (each such payment made after such time on such
due date to be deemed to have been made on the next succeeding Business Day),
provided that if a new Loan is to be made by any Bank to the Company on a date
--------
the Company is to repay any principal of an outstanding Loan of such Bank and in
the same Currency, such Bank shall apply the proceeds of such new Loan to the
payment of the principal to be repaid and only an amount equal to the difference
between the principal to be borrowed and the principal to be repaid shall be
made available by such Bank to the Administrative Agent as provided in Section
2.02 hereof or paid by the Company to the Administrative Agent pursuant to this
Section 4.01. as the case may be. All amounts owing under this Agreement
(including facility fees and utilization fees, but not including principal of,
and interest on. Loans denominated in any Foreign Currency) are payable in
Dollars. Notwithstanding the foregoing, if the Company shall fail to pay any
principal of any Loan when due (whether at stated maturity, by acceleration, by
mandatory prepayment or otherwise), the unpaid portion of such Loan shall, if
such Loan is not denominated in Dollars, automatically be redenominated in
Dollars on the due date thereof (or, if such due date is a day other than the
last day of the Interest Period therefor. on the last day of such lnterest
Period) in an amount equal to the Dollar Equivalent thereof on the date of such
redenomination and such principal shall be payable on demand; and if the Company
shall fail to pay any interest on any Loan that is not denominated in Dollars,
such interest shall automatically be redenominated in Dollars on the due date
thereof (or, if such due date is a day other than the last day of the Interest
Period therefor. on the last day of such Interest Period) in an amount equal to
the Dollar Equivalent thereof on the date of such redenomination and such
interest shall be payable on demand.
(b) Subject to the proviso to the first sentence of Section 4.01(a)
above, any Bank for whose account any such payment is to be made may (but shall
not be obligated to)
Credit Agreement
----------------
-21-
debit the amount of any such payment that is not made by such time to any
ordinary deposit account of the Company with such Bank (with notice to the
Company and the Administrative Agent).
(c) The Company shall, at the time of making each payment
under this Agreement for account of any Bank, specify to the Administrative
Agent (which shall so notify the intended recipient(s) thereof) the Loans or
other amounts payable by the Company hereunder to which such payment is to be
applied (and in the event that the Company fails to so specify, or if an Event
of Default has occurred and is continuing, the Administrative Agent may
distribute such payment to the Banks for application in such manner as it or the
Majority Banks, subject to Section 4.02 hereof, may determine to be
appropriate).
(d) Each payment received by the Administrative Agent under this
Agreement for account of any Bank shall be paid by the Administrative Agent
promptly to such Bank, in immediately available funds, for account of such
Bank's Applicable Lending Office for the Loan or other obligation in respect of
which such payment is made.
(e) If the due date of any payment under this Agreement would
otherwise fall on a day that is not a Business Day, such date shall be extended
to the next succeeding Business Day, and interest shall be payable for any
principal so extended for the period of such extension.
4.02 Pro Rata Treatment. Except to the extent otherwise provided
------------------
herein:
(a) each borrowing under Section 2.01 hereof shall be made from the
Banks pro rata according to their respective Commitments;
(b) each payment of facility fee under Section 2.04(a) hereof shall be
made for account of the Banks, and each termination or reduction of the
amount of the Commitments under Section 2.03 hereof shall be applied to the
respective Commitments of the Banks, pro rata according to the amounts of
their respective Commitments;
(c) Eurocurrency Loans denominated in the same Currency and having the
same Interest Period shall (other than as provided in Section 5.03 hereof)
be allocated pro rata among the Banks according to their respective
Commitments;
(d) each payment or prepayment by the Company of principal of Loans of
any Type and denominated in any Currency shall be made for account of the
Banks pro rata in accordance with the respective unpaid principal amounts
of the Loans of such Type and denominated in such Currency held by them;
and
Credit Agreement
----------------
-22-
(e) each payment by the Company of interest and utilization fees on
Loans of any Type and denominated in any Currency shall be made for account
of the Banks pro rata in accordance with the amounts of interest and
utilization fees on Loans of such Type and denominated in such Currency
then due and payable to them.
4.03 Computations. Interest on Eurocurrency Loans (other than Loans in
------------
English Pounds Sterling), facility fee and utilization fee shall be computed on
the basis of a year of 360 days and actual days elapsed (including the first day
but excluding the last day) occurring in the period for which payable and
interest on Base Rate Loans and Eurocurrencv Loans in English Pounds Sterling
shall be computed on the basis of a year of 365 or 366 days, as the case may be,
and actual days elapsed (including the first day but excluding the last day)
occurring in the period for which payable. Notwithstanding the foregoing, for
each day that the Base Rate is calculated by reference to the Federal Funds
Rate, interest on Base Rate Loans shall be computed on the basis of a year of
360 days and actual days elapsed.
4.04 Minimum Amounts. Except for mandatory prepayments made pursuant
---------------
to Section 2.09 hereof, each borrowing and partial prepayment of principal of
Loans shall be in an aggregate amount at least equal to $5,000,000 or a larger
integral multiple of $1,000,000 or, in the case of Eurocurrency Loans
denominated in any Agreed Foreign Currency. the Foreign Currency Equivalent
thereof (rounded downwards to the nearest 1.000 units of such Foreign Currency).
Borrowings or prepayments of Loans of different Types or denominated in
different Currencies or, in the case of Eurocurrency Loans, having different
Interest Periods at the same time hereunder shall be deemed separate borrowings
and prepayments for purposes of this Section 4.04, one for each Type. Currency
or Interest Period. In addition, the aggregate principal amount of Eurocurrency
Loans having the same Interest Period shall be in an amount at least equal to
$5,000,000 or a larger integral multiple of $1,000,000 or, in the case of
Eurocurrency Loans denominated in any Agreed Foreign Currency. the Foreign
Currency Equivalent thereof (rounded downwards to the nearest 1,000 units of
such Foreign Currency) and, if (i) any Eurocurrency Loans denominated in Dollars
would otherwise be in a lesser principal amount for any period, such Loans shall
be Base Rate Loans during such period and (ii) any Eurocurrency Loans
denominated in any Foreign Currency would otherwise be in a lesser principal
amount for any period, such Loans shall be unavailable hereunder.
4.05 Certain Notices. Notices by the Company to the Administrative
---------------
Agent of terminations or reductions of the Commitments, of reductions of
borrowings and optional prepayments of Loans, of Types and Currencies of Loans
and of the duration of Interest Periods shall be irrevocable and shall be
effective only if received by the Administrative Agent not later than 10:00 a.m.
New York time (or. in the case of borrowings or prepayment of, or duration of
Interest Periods for, Eurocurrency Loans denominated in a Foreign Currency,
London time) on the number of Business Days prior to the date of the relevant
Credit Agreement
----------------
-23-
termination, reduction, borrowing or prepayment or the first day of such
Interest Period specified below:
Number of
Business
Notice Days Prior
------ ----------
Borrowing or prepayment of
Base Rate Loans same day
Borrowing or prepayment of
or duration of Interest
Period for, Eurocurrency Loans
denominated in Dollars 3
Borrowing or prepayment of,
or duration of Interest
Period for, Eurocurrency Loans
denominated in a Foreign
Currency 5
Each such notice of termination or reduction of the Commitments shall specify
the amount of the Commitments to be terminated or reduced. Each such notice of
borrowing or optional prepayment shall specify the Loans to be borrowed or
prepaid and the amount (subject to Section 4.04 hereof), Type and Currency of
each Loan to be borrowed or prepaid, the date of borrowing or optional
prepayment (which shall be a Business Day), the Interest Period of the Loans to
be borrowed or prepaid. The Administrative Agent shall promptly notify the Banks
of the contents of each such notice.
4.06 Non-Receipt of Funds by the Administrative Agent. Unless the
------------------------------------------------
Administrative Agent shall have been notified by a Bank or the Company (the
"Payor") prior to the date on which the Payor is to make payment to the
Administrative Agent of (in the case of a Bank) the proceeds of a Loan to be
made by such Bank hereunder or (in the case of the Company) a payment to the
Administrative Agent for account of one or more of the Banks hereunder (such
payment being herein called the "Required Payment"), which notice shall be
effective upon receipt, that the Payor does not intend to make the Required
Payment to the Administrative Agent, the Administrative Agent may assume that
the Required Payment has been made and may, in reliance upon such assumption
(but shall not be required to), make the amount thereof available to the
intended recipient(s) on such date; and, if the Payor has not in fact made the
Required Payment to the Administrative Agent, the recipient(s) of such payment
shall, on demand, repay to the Administrative Agent the amount so made
Credit Agreement
----------------
-24-
available together with interest thereon in respect of each day during the
period commencing on the date (the "Advance Date") such amount was so made
------------
available by the Administrative Agent until but not including the date the
Administrative Agent recovers such amount at a rate per annum equal to the
greater of (a) the Federal Funds Rate for such day and (b) a rate determined by
the Administrative Agent in accordance with banking industry rules on interbank
compensation and, if such recipient(s) shall fail promptly to make such payment,
the Administrative Agent shall be entitled to recover such amount, on demand,
from the-Payor. together with interest as aforesaid, provided that if neither
--------
the recipient(s) nor the Payor shall return the Required Payment to the
Administrative Agent within three Business Days of the Advance Date, then,
retroactively to the Advance Date, the Payor and the recipient(s) shall each be
obligated to pay interest on the Required Payment as follows:
(i) if the Required Payment shall represent a payment to be made by
the Company to the Banks, the Company and the recipient(s) shall each be
obligated retroactively to the Advance Date to pay (without duplication)
interest in respect of the Required Payment at the Post-Default Rate
(without duplication of the obligation of such Company under Section 3.02
hereof to pay interest on the Required Payment at the Post-Default Rate),
it being understood that the return by the recipient(s) of the Required
Payment to the Administrative Agent shall not limit such obligation of the
Company under said Section 3.02 to pay interest at the Post-Default Rate in
respect of the Required Payment; and
(ii) if the Required Payment shall represent proceeds of a Loan to be
made by the Banks to the Company, the Payor and the Company shall each be
obligated retroactively to the Advance Date to pay (without duplication)
interest in respect of the Required Payment at the rate applicable to such
Loan pursuant to Section 3.02 hereof. it being understood that the return
by the Company of the Required Payment to the Administrative Agent shall
not limit any claim the Company may have against the Payor in respect of
such Required Payment.
4.07 Sharing of Payments. Etc.
------------------------
(a) The Company agrees that, in addition to (and without limitation
of) any right of set-off, banker's lien or counterclaim a Bank may otherwise
have, each Bank shall be entitled, at its option (to the fullest extent
permitted by law), to set-off and apply any deposit (general or special, time or
demand, provisional or final), or other indebtedness, held by it for the credit
or account of the Company at any of such Bank's offices, in Dollars or in any
other currency, against any principal of or interest on any of such Bank's Loans
or any other amount payable to such Bank hereunder, that is not paid when due
(regardless of whether such deposit or other indebtedness is then due to the
Company), in which case it shall
Credit Agreement
----------------
-25-
promptly notify the Company and the Administrative Agent thereof, provided that
--------
such Bank's failure to give such notice shall not affect the validity thereof.
(b) If any Bank shall obtain from the Company payment of any principal
of or interest on any Loan and denominated in any Currency owing to it or
payment of any other amount under this Agreement through the exercise of any
right of set-off, banker's lien or counterclaim or similar right or otherwise
(other than from the Administrative Agent, as provided herein), and, as a result
of such payment, such Bank shall have received a greater percentage of the
principal of or interest on the Loans denominated in such Currency (the
"Applicable Loans") or such other amounts then due hereunder by the Company' to
----------------
such Bank than the percentage received by any other Bank to which principal of
or interest on the Applicable Loans or such other amounts is then due hereunder
by the Company. it shall promptly purchase from such other Banks participations
in (or. if and to the extent specified by such Bank, direct interests in) the
Applicable Loans or such other amounts, respectively. owing to such other Banks
(or in interest due thereon, as the case may be) in such amounts. and make such
other adjustments from time to time as shall be equitable, to the end that all
such Banks shall share the benefit of such excess payment (net of any expenses
that may be incurred by such Bank in obtaining or preserving such excess
payment) pro rata in accordance with the unpaid principal of and/or interest on
the Applicable Loans or such other amounts, respectively, owing to each of such
Banks. To such end all such Banks shall make appropriate adjustments among
themselves (by the resale of participations sold or otherwise) if such payment
is rescinded or must otherwise be restored.
(c) The Company agrees that any Bank so purchasing such a
participation (or direct interest) may exercise all rights of set-off, banker's
lien, counterclaim or similar rights with respect to such participation as fully
as if such Bank were a direct holder of Loans or other amounts (as the case may
be) owing to such Bank in the amount of such participation (or direct interest).
(d) Nothing contained herein shall require any Bank to exercise any
such right or shall affect the right of any Bank to exercise, and retain the
benefits of exercising, any such right with respect to any other indebtedness or
obligation of the Company. If, under any applicable bankruptcy, insolvency or
other similar law, any Bank receives a secured claim in lieu of a set-off to
which this Section 4.07 applies, such Bank shall, to the extent practicable,
exercise its rights in respect of such secured claim in a manner consistent with
the rights of the Banks entitled under this Section 4.07 to share in the
benefits of any recovery on such secured claim.
Credit Agreement
----------------
-26-
Section 5. Yield Protection. Etc.
----------------------
5.01 Additional Costs.
----------------
(a) The Company shall pay (but without duplication, including by
reason of Section 5.05(a) hereof) directly to each Bank from time to time such
amounts as such Bank may reasonably determine to be necessary to compensate
such Bank for any costs incurred by such Bank that such Bank reasonably
determines are attributable to its making or maintaining of any Eurocurrency
Loans to the Company or its obligation to make any Eurocurrencv Loans to the
Company hereunder, or any reduction in any amount receivable by such Bank
hereunder in respect of any of such Loans or such obligation resulting from any
Regulatory Change that:
(i) shall subject such Bank (or its Applicable Lending Office for any
of such Loans) to any tax, duty or other charge in respect of such Loans or
changes the basis of taxation of any amounts payable to such Bank under
this Agreement in respect of any of such Loans (excluding changes in the
rate of tax on the net income of such Bank or of such Applicable Lending
Office by any jurisdiction in which such Bank is organized or has its
principal office or in which such Applicable Lending Office is located or
carrying on business); or
(ii) imposes or increases any reserve, special deposit or similar
requirements (other than the reserve requirement utilized in the
determination of the Eurocurrency Rate for such Loan) relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities of, such Bank (including, without limitation, any of such Loans
or any deposits referred to in the definition of "Eurocurrency Base Rate"
in Section 1.01 hereof), or any commitment of such Bank (including, without
limitation, the Commitment of such Bank hereunder); or
(iii) imposes any other material condition affecting this Agreement
(or any of such extensions of credit or liabilities) or its Commitment
(such increases in costs and reductions in amounts receivable being herein
called "Additional Costs").
----------------
If any Bank requests compensation from any Company under this Section 5.01(a),
the Company may, by notice to such Bank (with a copy to the Administrative
Agent), suspend the obligation of such Bank thereafter to make Eurocurrency
Loans to such Company until the Regulatory Change giving rise to such request
ceases to be in effect (in which case the provisions of Section 5.03 hereof
shall be applicable), provided that such suspension shall not affect the right
--------
of such Bank to receive the compensation so requested.
Credit Agreement
----------------
-27-
(b) Without limiting the effect of the provisions of paragraph (a) of
this Section 5.01, in the event that, by reason of any Regulatory Change any
Bank either (i) incurs Additional Costs based on or measured by the excess
above a specified level of the amount of a category of deposits or other
liabilities of such Bank that includes deposits by reference to which the
interest rate on Eurocurrency Loans denominated in an Currency as determined as
provided in this Agreement or a category of extensions of credit or other assets
of such Bank that includes Eurocurrency Loans denominated in such Currency or
(ii) becomes subject to restrictions on the amount of such a category of
liabilities or assets that it may hold then, if such Bank so elects by notice
to the Company (with a copy to the Administrative Agent), the obligation of such
Bank to make Eurocurrency Loans in such Currency hereunder shall be suspended
until such Regulatory Change ceases to be in effect (in which case the
provisions of Section 5.03 hereof shall be applicable).
(c) Without limiting the effect of the foregoing provisions of this
Section 5.01 (but without duplication), the Company shall pay directly to each
Bank from time to time on request such amounts as such Bank may reasonably
determine to be necessary to compensate such Bank (or, without duplication, the
bank holding company of which such Bank is a subsidiary) for any costs that it
reasonably determines are attributable to the maintenance by such Bank (or any
Applicable Lending Office or such bank holding company) of capital in respect of
its Commitment or Loans pursuant to any law or regulation or any interpretation,
directive or request (whether or not having the force of law and whether or not
failure to comply therewith would be unlawful) of any court or governmental or
monetary authority (i) following any Regulatory Change or (ii) implementing any
risk-based capital guideline or other requirement (whether or not having the
force of law and whether or not the failure to comply therewith would be
unlawful) hereafter issued by any government or governmental or supervisory
authority implementing at the national level the BasIc Accord (such compensation
to include, without limitation, an amount equal to any reduction of the rate of
return on assets or equity of such Bank (or any Applicable Lending Office or
such bank holding company) to a level below that which such Bank (or any
Applicable Lending Office or such bank holding company) could have achieved but
for such law, regulation, interpretation, directive or request).
(d) Each Bank shall notify the Company of any event occurring after
the date hereof entitling such Bank to compensation under paragraph (a) or (c)
of this Section 5.01 as promptly as practicable, but in any event within 90
days, after such Bank obtains actual knowledge thereof; provided that (i) if any
--------
Bank fails to give such notice within 90 days after it obtains actual knowledge
of such an event, such Bank shall, with respect to compensation payable pursuant
to this Section 5.01 in respect of any costs resulting from such event, only be
entitled to payment under this Section 5.01 for costs incurred from and after
the date 90 days prior to the date that such Bank does give such notice and (ii)
each Bank will designate a different Applicable Lending Office for the Loans of
such Bank affected by such
Credit Agreement
----------------
-28-
event if such designation will avoid the need for, or reduce the amount of such
compensation and will not, in the sole opinion of such Bank, be disadvantageous
to such Bank. except that such Bank shall have no obligation to designate an
Applicable Lending Office located in the United States of America. Each Bank
will furnish to the Company a certificate setting forth in reasonable detail the
basis and amount of each request by such Bank for compensation under paragraph
(a) or (c) of this Section 5.01. Determinations and allocations by any Bank for
purposes of this Section 5.01 of the effect of any Regulatory Change pursuant
to paragraph (a) or (b) of this Section 5.01, or of the effect of capital
maintained pursuant to paragraph (c) of this Section 5.01, on its costs or rate
of return of maintaining Loans or its obligation to make Loans, or on amounts
receivable by it in respect of Loans. and of the amounts required to compensate
such Bank under this Section 5.01. shall be conclusive absent manifest error, so
long as such determinations and allocations are made on a reasonable basis.
5.02 Limitation on Types and Currencies of Loans. Anything herein to
-------------------------------------------
the contrary notwithstanding, if, on or prior to the determination of any
Eurocurrency Base Rate for any Interest Period pursuant to clause (b) of the
definition of "Eurocurrency Base Rate" in Section 1.01 hereof:
(a) the Administrative Agent determines, which determination shall be
conclusive, that quotations of interest rates for the relevant deposits
referred to in clause (b) of the definition of "Eurocurrency Base Rate" in
Section 1.01 hereof are not being provided by the Reference Bank in the
relevant amounts or Currencies or for the relevant maturities for purposes
of determining rates of interest for Eurocurrency Loans referred to in said
clause (b) as provided herein; or
(b) the Majority Banks determine, which determination shall be
conclusive, and notify (or notifies, as the case may be) the Administrative
Agent that the relevant rates of interest referred to in clause (b) of the
definition of "Eurocurrency Base Rate" in Section 1.01 hereof upon the
basis of which the rate of interest for Eurocurrency Loans denominated in
any Currency for such Interest Period is to be determined are not likely
adequately to cover the cost to such Banks (or to such quoting Bank) of
making or maintaining Eurocurrency Loans denominated in such Currency for
such Interest Period;
then the Administrative Agent shall give the Company and each Bank prompt notice
thereof and, so long as such condition remains in effect, the Banks shall be
under no obligation to make additional Eurocurrency Loans denominated in such
Currency.
5.03 Treatment of Affected Loans. If the obligation of any Bank to
---------------------------
make Eurocurrency Loans denominated in Dollars shall be suspended pursuant to
Section 5.01 hereof, then, unless and until such Bank gives notice as provided
below that the circumstances
Credit Agreement
----------------
-29-
specified in Section 5.01 hereof that gave rise to such suspension no longer
exist, all Loans that would otherwise be made by such Bank as Eurocurrency Loans
denominated in Dollars shall be made instead as Base Rate Loans. If the
obligation of any Bank to make Eurocurrency Loans denominated in any Agreed
Foreign Currency to the Company shall be suspended pursuant to Section 5.01
hereof, then, unless and until such Bank gives notice as provided below that the
circumstances specified in Section 5.01 hereof that gave rise to such suspension
no longer exist, all Loans that would otherwise be made by such Bank to the
Company as Eurocurrency Loans denominated in such Agreed Foreign Currency
shall, except as provided in the immediately preceding sentence, be made instead
as Eurocurrency Loans denominated in Dollars.
5.04 Compensation. The Company shall pay to the Administrative Agent
------------
for account of each Bank, upon the request of such Bank through the
Administrative Agent. such amount or amounts as shall be sufficient (in the
reasonable opinion of such Bank) to compensate it for any loss, cost or expense
that such Bank reasonably determines is attributable to:
(a) any payment or mandatory or optional prepayment, of a Eurocurrency
Loan to such Bank for any reason (including, without limitation, the
acceleration of the Loans pursuant to Section 9 hereof) on a date other
than the last day of the Interest Period for such Loan; or
(b) any failure by the Company for any reason (including, without
limitation. the failure of any of the conditions precedent specified in
Section 6 hereof to be satisfied) to borrow a Eurocurrency Loan from such
Bank on the date for such borrowing specified in the relevant notice of
borrowing given pursuant to Section 2.02 hereof.
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
that otherwise would have accrued on the principal amount so paid, prepaid or
not borrowed for the period ("Relevant Period") from the date of such payment,
---------------
prepayment or failure to borrow to the last day of the then current Interest
Period for such Loan (or, in the case of a failure to borrow, the Interest
Period for such Loan that would have commenced on the date specified for such
borrowing) at the applicable rate of interest for such Loan provided for herein
over (ii) the amount of interest that otherwise would have accrued on such
principal amount at a rate equal to the arithmetic mean, as reasonably
determined by such Bank, of the respective rates per annum (rounded upward, if
necessary, to the nearest 1/16 of 1%) of the bid rates for deposits in the
Currency in which such Loan is denominated for the period approximately equal to
the Relevant Period appearing on the Screen or other publicly available source
(as described in the definition of the term "Eurocurrency Base Rate" in Section
1.01 hereof); provided that if
--------
Credit Agreement
----------------
-30-
the Screen is not publicly available, then the provisions of paragraph (b) of
the definition of the term "Eurocurrency Base Rate" in Section 1.01 hereof shall
apply herein mutatis mutandis.
------- --------
5.05 Taxes.
-----
(a) The Company agrees to pay to each Bank such additional amounts as
are necessary in order that the net payment of any amount due to such Bank
hereunder, after deduction for or withholding in respect of any Taxes imposed
with respect to such payment (or in lieu thereof, payment of such Taxes by such
Bank) will not be less than the amount stated herein to be then due and payable,
provided that the foregoing obligation to pay such additional amounts shall not
--------
apply:
(i) to any payment to any Bank hereunder unless such Bank is, on the
date hereof (or on the date it becomes a Bank hereunder as provided in
Section 11.06(b) hereof) and on the date of any change in the Applicable
Lending Office of such Bank. entitled to a complete (or, in the case of an
assignee or participant pursuant to paragraph (b) or (e) of Section 11.06
hereof, at least to the extent of the assignor or applicable Bank at the
time of such assignment or participation) exemption from withholding or
deduction by the Company of Taxes on all amounts to be received by such
Bank hereunder in respect of the Loans made by such Bank to the Company, or
(ii) to any Taxes required to be deducted or withheld solely by reason
of the failure by such Bank, after being requested by the Company, to
comply with applicable certification, information, documentation or other
reporting requirements specifically identified by the Company in such
request concerning the nationality, residence, identity or connections with
any Company Jurisdiction if such compliance is required by treaty, statute
or regulation as a precondition to relief or exemption from such Taxes.
For the purposes of this Section 5.05(a), "Taxes" shall mean with respect to the
-----
Company all present or future income, franchise and other taxes and levies,
imposts, deductions, charges, and withholdings whatsoever, and all interest,
penalties or similar amounts with respect thereto, now or hereafter imposed,
assessed, levied or collected by any Governmental Authority of any Company
Jurisdiction on or in respect of payments of principal, interest, fees or other
amounts payable under this Agreement, or any promissory notes evidencing the
Loans made hereunder, including (without limitation) payments under this Section
5.05(a) Provided, however, that Taxes shall not include (x) income or franchise
-------- -------
taxes imposed on or measured by the net income or capital of a Bank (or its
Applicable Lending Office) by any Company Jurisdiction as a result of (i) such
Bank being organized under the laws of such Company Jurisdiction, (ii) such Bank
having its chief executive office in such Company Jurisdiction or (iii) its
Applicable Lending Office being located or carrying on business in
Credit Agreement
----------------
-31-
such Company Jurisdiction (v) interest, penalties or additions to tax not
attributable to any act, failure to act or misrepresentation of the Company
(other than any act or failure to act permitted or contemplated hereunder) and
(z) any tax other than a withholding tax unless the Bank's interest in the Loan
became subject thereto solely by reason of such Bank's participation in the
transactions contemplated hereby.
(b) Within 30 days after paying any amount to the Administrative Agent
or any Bank from which it is required by law to make any deduction or
withholding and within 30 days after it is required by law to remit such
deduction or withholding to any relevant taxing or other authority, the Company
shall deliver to the Administrative Agent for delivery to such Bank evidence
satisfactory to such Bank of such deduction, withholding or payment (as the case
may be).
5.06 Replacement of Banks. If any Bank requests compensation pursuant
--------------------
to Section 5.01 or 5.05 hereof, or any Bank's obligation to make Loans of any
Type or denominated in any Currency shall be suspended pursuant to Section 5.01
hereof (any such Bank requesting such compensation, or whose obligations are so
suspended, being herein called a "Requesting Bank"), the Company, upon three
---------------
Business Days' notice to the Administrative Agent, may require that such
Requesting Bank transfer all of its right, title and interest under this
Agreement to any bank or other financial institution identified by the Company
that is satisfactory to the Administrative Agent in its reasonable determination
(a) if such bank or other financial institution (a "Proposed Bank") agrees to
-------------
assume all of the obligations of such Requesting Bank hereunder, and to purchase
all of such Requesting Bank's Loans hereunder for consideration equal to the
aggregate outstanding principal amount of such Requesting Bank's Loans, together
with interest thereon to the date of such purchase and (b) if such Requesting
Bank has requested compensation pursuant to Section 5.01 or 5.05 hereof, such
Proposed Bank's aggregate requested compensation, if any, pursuant to said
Section 5.01 or 5.05 with respect to such Requesting Bank's Loans is lower than
that of the Requesting Bank. Subject to the provisions of Section 11.06(b)
hereof, such Proposed Bank shall be a "Bank" for all purposes hereunder.
Without prejudice to the survival of any other agreement of the Company
hereunder the agreements of the Company contained in Sections 5.01, 5.05 and
11.03 (without duplication of any payments made to such Requesting Bank by the
Company or the Proposed Bank) shall survive for the benefit of such Requesting
Bank under this Section 5.06 with respect to the time prior to such replacement.
Section 6. Conditions Precedent.
--------------------
6.01 Initial Loan. The obligation of any Bank to make its
------------
initial Loan hereunder is subject to the condition precedent that the
Administrative Agent shall have received the following documents (with
sufficient copies for each Bank), each of which shall
Credit Agreement
-32-
be satisfactory to the Administrative Agent (and to the extent specified below,
to each Bank) in form and substance:
(a) Corporate Documents. Certified copies of the organizational
-------------------
documents of the Company and of all corporate authority for the Company
(including, without limitation, board of director resolutions and evidence
of the incumbency and specimen signature of officers) with respect to the
execution, delivery and performance of this Agreement and each other
document to be delivered by the Company from time to time in connection
herewith and with the Loans hereunder (and each of the Administrative Agent
and each Bank may conclusively rely on such certificate of incumbency
until it receives notice in writing from the Company to the contrary).
(b) Opinions of Counsel to the Company. An opinion, dated the date
----------------------------------
hereof of (i) ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇, Cayman Islands counsel to the
Company, substantially in the form of Exhibit A-I hereto and covering such
other matters as the Administrative Agent or any Bank may reasonably
request, (ii) ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇, Bermuda counsel to the Company,
substantially in the form of Exhibit A-2 hereto and covering such other
matters as the Administrative Agent or any Bank may reasonably request and
(iii) ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special New York counsel to the Company,
substantially in the form of Exhibit A-3 hereto and covering such other
matters as the Administrative Agent or any Bank may reasonably request (and
the Company hereby instructs each such counsel to deliver such opinions to
the Banks and the Administrative Agent).
(c) Opinion of Special New York Counsel to Chase. An opinion, dated
--------------------------------------------
the date hereof, of Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ special New York
counsel to Chase substantially in the form of Exhibit B hereto (and Chase
hereby instructs such counsel to deliver such opinion to the Banks).
(d) Other Documents. Such other documents as the Administrative Agent
---------------
or any Bank or special New York counsel to Chase may reasonably request.
The obligation of any Bank to make its initial extension of credit hereunder is
also subject to the payment or delivery by the Company of such fees as the
Company shall have agreed to pay or deliver to any Bank or an affiliate thereof
or the Administrative Agent in connection herewith, including, without
limitation, the reasonable fees and expenses of Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇.
special New York counsel to Chase. in connection with the negotiation,
preparation, execution and delivery of this Agreement and each other document to
be delivered by the Company and the extensions of credit hereunder (to the
extent that statements for such fees and expenses have been delivered to the
Company).
Credit Agreement
-----------------
-33-
6.02 Initial and Subsequent Loans. The obligation of any Bank
----------------------------
to make any Loan hereunder (including such Bank's initial Loan) is subject to
the further conditions precedent that, both immediately prior to the making of
such Loan and also after giving effect thereto and to the intended use thereof:
(a) if such borrowing will increase the Dollar Equivalent of the
aggregate outstanding principal amount of the Loans of the Banks hereunder,
no Default shall have occurred and be continuing; and
(b) if such borrowing will increase the Dollar Equivalent of the
aggregate outstanding principal amount of the Loans of the Banks hereunder,
the representations and warranties made by the Company in Section 7 hereof
(other than the last sentence of Section 7.02 (a) hereof) shall be true and
complete in all material respects on and as of the date of the making of
such Loan with the same force and effect as if made on and as of such date
(or, if any such representation or warranty is expressly stated to have
been made as of a specific date, as of such specific date).
Each notice of borrowing by the Company hereunder shall constitute a
certification by the Company to the effect set forth in the preceding sentence
(both as of the date of such notice and as of the date of such borrowing).
Section 7. Representations and Warranties. The Company represents and
------------------------------
warrants to the Administrative Agent and the Banks that:
7.01 Corporate Existence. Each of the Company and its Material
-------------------
Subsidiaries: (a) is a corporation, partnership or other entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization; (b) has all requisite corporate or other power, and has all
material governmental licenses, authorizations, consents and approvals necessary
to own its assets and carry on its business as now being or as proposed to be
conducted; and (c) is qualified to do business and is in good standing in all
jurisdictions in which the nature of the business conducted by it makes such
qualification necessary and where failure so to qualify would have (either
individually or in the aggregate) a Material Adverse Effect.
7.02 Financial Condition.
-------------------
(a) The Company has heretofore furnished to each of the Banks
(a) the consolidated balance sheet of the Company and its Subsidiaries as at
October 31, 1996 and the related consolidated statements of operations and cash
flows of the Company and its Subsidiaries for the fiscal year ended on said
date, with the opinion thereon of KPMG Peat Marwick and (b) the unaudited
consolidated balance sheet of the Company and its
Credit Agreement
---------------
-34-
Subsidiaries as at April 30, 1997 and the related consolidated statements of
operations and cash flows of the Company and its Subsidiaries for the three-
month period ended on said date, All such financial statements present fairly,
in all material respects. the financial position of the Company and its
Subsidiaries as at said dates and the results of their operations for the fiscal
year and three-month period ended on said dates (subject in the case of such
financial statements as at April 30, 1997 to normal year-end audit adjustments),
all in conformity with generally accepted accounting principles in the United
States of America. None of the Company nor any of its Subsidiaries has on the
date hereof any material contingent liabilities, liabilities for taxes, unusual
forward or long-term commitments or unrealized or anticipated losses from any
unfavorable commitments, except as referred to or reflected or provided for in
said financial statements (or in the notes thereto) as at said dates. Since
October 31, 1996, there has been no material adverse change in the consolidated
business, operations or financial condition of the Company and its Subsidiaries
taken as a whole from that set forth in said financial statements as at said
dates.
(b) The Company has heretofore furnished to each of the Banks the
annual and quarterly Statutory Statements of each of its Material Insurance
Subsidiaries for the fiscal year ended October 31, 1996 and for the quarterly
fiscal period ended April 30, 1997 as filed with the Applicable Insurance
Regulatory Authority. All such Statutory Statements present fairly, in all
material respects, the financial condition of each Insurance Subsidiary.
respectively, as at the respective dates thereof and its results of operations
through fiscal year ended on October 31, 1996 and the quarterly fiscal period
ended April 30, 1997, in accordance with statutory accounting practices
prescribed or permitted by the Applicable Insurance Regulatory Authority.
7.03 Litigation. There are no legal or arbitral proceedings, or any
----------
proceedings by or before any Governmental Authority, now pending or (to the
knowledge of the Company) threatened against the Company or any of its
Subsidiaries that, either individually or in the aggregate, is reasonably likely
to have a Material Adverse Effect.
7.04 No Breach. None of the execution and delivery of this Agreement
---------
and each other document to be delivered by the Company from time to time in
connection herewith and with the Loans hereunder, the consummation of the
transactions herein contemplated or compliance with the terms and provisions
hereof will conflict with or result in a breach of, or require any consent
(other than action by the board of directors of the Company that has already
been taken) under, (a) the charter or by-laws of the Company, (b) any applicable
law or regulation, (c) any agreement or instrument to which the Company or any
of its Material Subsidiaries is a party' or by which any of them or any of their
Property is bound or to which any of them is subject, or constitute a default
under any such agreement or instrument or (d) any judgment, order, injunction or
decree of any
Credit Agreement
----------------
-35-
Governmental Authority by which the Company or any of its Material Subsidiaries
or any of their Property is bound or to which any of them is subject.
7.05 Action. The Company has all necessary corporate power, authority
------
and legal right to execute, deliver and perform its obligations under this
Agreement and each other document to be delivered by the Company from time to
time in connection herewith and with the Loans hereunder; the execution,
delivery and performance by the Company of this Agreement have been duly
authorized by all necessary corporate action on its part; and this Agreement has
been duly and validly executed and delivered by the Company and constitutes its
legal, valid and binding obligation, enforceable under the law of the State of
New York against the Company in accordance with its terms, except as such
enforceability may be limited (a) by bankruptcy, insolvency, reorganization,
moratorium or similar laws of general applicability affecting the enforcement of
creditors' rights or (b) the application of general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or law).
7.06 Approvals. No authorizations, approvals or consents of,
---------
and no filings or registrations with, any Governmental Authority are necessary
for the execution, delivery or performance by the Company of this Agreement or
for the legality, validity or enforceability hereof.
7.07 Use of Credit. No part of the proceeds of the Loans hereunder
-------------
will be used to buy or carry any Margin Stock.
7.08 ERISA. Neither the Company nor any of its Subsidiaries
-----
maintains, or has incurred any material obligation in connection with, an ERISA
Plan. Neither the Company nor any of its Subsidiaries is, or has been within the
preceding five years, an ERISA Affiliate of any Person. All contributions
required to be made by the Company or any of its Subsidiaries with respect to a
Foreign Benefit Plan have been timely made. Each Foreign Benefit Plan has been
maintained in substantial compliance with its terms and with the requirements of
any and all applicable laws and has been maintained, where required, in good
standing with applicable Governmental Authorities. Neither the Company nor any
of its Subsidiaries has incurred any material obligation in connection with the
termination, withdrawal from, or payment of benefits under any Foreign Benefit
Plan.
7.09 Taxes. The Company and its Subsidiaries have filed all income tax
-----
returns and all other material tax returns that are required to be filed by them
and have paid all taxes due pursuant to such returns or pursuant to any
assessment received by the Company or any of its Subsidiaries, except for any
such tax being contested in good faith and by proper proceedings and against
which adequate reserves are being maintained. The charges, accruals
Credit Agreement
----------------
-36-
and reserves on the books of the Company and its Subsidiaries in respect of
taxes and other governmental charges are, in the opinion of the Company
adequate.
7.10 Investment Company Act. Neither the Company 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.
7.11 Public Utility Holding Company Act. Neither the Company
----------------------------------
nor any of its Subsidiaries is a "holding company", or an "affiliate" of a
"holding company" or a "subsidiary company" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
7.12 Environmental Matters. Each of the Company and its
---------------------
Material Subsidiaries has obtained all environmental, health and safety permits,
licenses and other authorizations required under all Environmental Laws from
time to time in effect to carry on its business as now being or as proposed to
be conducted, except to the extent failure to have any such permit, license or
authorization would not (either individually or in the aggregate) have a
Material Adverse Effect.
7.13 Subsidiaries. Etc.
-----------------
(a) Set forth in Schedule I hereto is a complete and correct list, as
of the date of this Agreement of all of the Material Subsidiaries of the
Company, together with, for each such Subsidiary, (i) the jurisdiction of
organization of such Subsidiary, (ii) each Person holding ownership interests in
such Subsidiary and (iii) the nature of the ownership interests held by each
such Person and the percentage of ownership of such Subsidiary represented by
such ownership interests. Except as disclosed in Schedule I hereto, as of the
date of this Agreement (x) each of the Company and its Subsidiaries owns, free
and clear of Liens, and has the unencumbered right to vote, all outstanding
ownership interests in each Person shown to be held by it in Schedule I hereto,
(y) all of the issued and outstanding capital stock of each such Person
organized as a corporation is validly issued, fully paid and nonassessable and
(z) there are no outstanding Equity Rights with respect to such Person.
(b) None of the Subsidiaries of the Company is, on the date hereof,
subject to any indenture, agreement instrument or other arrangement that,
directly or indirectly, prohibits or restrains, or has the effect of prohibiting
or restraining, or imposes materially adverse conditions upon, the incurrence or
payment of Indebtedness, the declaration or payment of dividends, or the making
of loans, advances or investments.
7.14 Stamp Taxes. To ensure the legality, validity, enforceability or
-----------
admissibility in evidence of this Agreement or any promissory notes evidencing
Loans made
Credit Agreement
----------------
-37-
(or to be made), it is not necessary that this Agreement or such promissory
notes or any other document be filed or recorded with any Governmental Authority
or that any stamp or similar tax be paid on or in respect of this Agreement or
such promissory notes or any other document other than such filings and
recordations that have already been made and such stamp or similar taxes that
have already been paid.
7.15 Legal Form. Each of this Agreement and any promissory
----------
notes evidencing Loans made (or to be made) is in proper legal form under the
laws of any Company Jurisdiction for the admissibility thereof in the courts of
such Company Jurisdiction.
7.16 True and Complete Disclosure. The information reports financial
----------------------------
statements, exhibits and schedules furnished in writing by or on behalf of the
Company to the Administrative Agent or any Bank in connection with the
negotiation preparation or delivers of this Agreement or included herein or
delivered pursuant hereto, when taken as a whole do not contain any statement of
material fact that is materially untrue or omit to state any material fact
necessary to make the statements herein, in light of the circumstances under
which they were made, not materially misleading.
7.17 Withholding of Taxes. As of the date of this Agreement the
--------------------
payments of the principal of and interest of the Loans, the fees under Section
2.04 hereof and all other amounts payable hereunder will not be subject by
withholding or deduction, to any Taxes imposed by any Company Jurisdiction.
Section 8. Covenants of the Company. The Company covenants and
------------------------
agrees with the Banks and the Administrative Agent that so long as any
Commitment is outstanding and until payment in full of all of the principal of
and interest on each Loan and all fees payable under Section 2.04 hereof;
8.01 Financial Statements. Etc. The Company shall deliver to each of
-------------------------
the Banks:
(a) as soon as available and in any event within 50 days after the end
of each of the first three quarterly fiscal periods of each fiscal year of the
Company, consolidated statements of operations and cash flows of the Company and
its Subsidiaries for such period and for the period from the beginning of the
respective fiscal year to the end of such period, and the related consolidated
balance sheet of the Company and its Subsidiaries as at the end of such period,
setting forth in each case in comparative form the corresponding consolidated
and consolidating figures for the corresponding period (except in the case of
the balance sheet to the last day of) in the preceding fiscal year (it being
understood that delivery to the Banks of the Company's Report on Form 10-Q filed
with the SEC shall satisfy the financial statement delivery requirements of this
Section 8.01(a) so long as the financial information
Credit Agreement
----------------
-38-
required to be contained in such Report is substantially' the same as the
financial information required under this Section 8.01(a)), accompanied by an
Officer's Certificate, which certificate shall state that said consolidated
financial statements present fairly, in all material respects, the consolidated
financial condition and results of operations of the Company and its
Subsidiaries in accordance with generally accepted accounting principles (except
for the absence of footnotes), consistently applied, as at the end of, and for,
such period (subject to normal year-end audit adjustments);
(b) as soon as available and in any event within 95 days after
the end of each fiscal year of the Company, consolidated statements of
operations and cash flows of the Company and its Subsidiaries for such fiscal
year and the related consolidated balance sheet of the Company and its
Subsidiaries as at the end of such fiscal year, setting forth in each case in
comparative form the corresponding consolidated figures for the preceding fiscal
year (it being understood that delivery to the Banks of the Company's Report on
Form 10-K filed with the SEC shall satisfy the financial statement delivery
requirements of this Section 8.01(b) so long as the financial information
required to be contained in such Report is substantially the same as the
financial information required under this Section 8.01(b)), and accompanied by a
report thereon of KPMG Peat Marwick or any other independent certified public
accountants of recognized national standing, which report shall state (without a
"going concern" or like qualification or exception and without qualification or
exception as to the scope of its audit) that said consolidated financial
statements present fairly, in all material respects, the consolidated financial
condition and results of operations of the Company and its Subsidiaries as at
the end of, and for, such fiscal year in accordance with generally accepted
accounting principles in the United States of America, and a certificate of such
accountants addressed to the Banks stating that, in making the examination
necessary for their opinion, nothing came to their attention that caused them to
believe that the Company had failed to comply with any of its obligations under
Sections 8.04 to 8.07 (inclusive) or that any Default specified in paragraph (b)
or (e) through (i), inclusive, of Section 9 hereof had occurred, except as
specifically stated (which certificate may be limited to the extent required by
accounting rules and guidelines);
(c) within 5 days after filing with the Applicable lnsurance
Regulatory Authority and in any event within 55 days after the end of each of
the first three quarterly fiscal periods of each fiscal year of the Company the
quarterly Statutory Statement of each Material Insurance Subsidiary for such
fiscal period, together with a certificate of a senior financial officer of the
Company or of such Subsidiary stating that such Statutory Statement fairly
presents, in all Material respects, the financial condition of each Material
Insurance Subsidiary, respectively, for such quarterly fiscal period in
accordance with statutory accounting practices required or permitted by the
Applicable Insurance Regulatory Authority.
Credit Agreement
----------------
-39-
(d) within 5 days after filing with the Applicable Insurance
Regulatory Authority and in any event within 55 days after the end of each
fiscal year of the Company the annual Statutory Statement of each Material
Insurance Subsidiary for such year, together with an Officer's Certificate
stating that such annual Statutory Statement fairly presents, in all material
respects, the financial condition of each Material Insurance Subsidiary,
respectively, for such fiscal year in accordance with statutory accounting
practices required or permitted by the Applicable Insurance Regulatory
Authority.
(e) promptly upon their becoming available, copies of all
registration statements (other than those on Form S-8) and regular periodic
reports, if any, which the Company shall have filed with the SEC or any national
securities exchange;
(f) promptly upon the mailing thereof to the shareholders of
the Company generally, copies of all financial statements, reports and proxy
statements so mailed:
(g) promptly after the Company knows that any Default has
occurred and is continuing, a notice of such Default specifying that such notice
is a "Notice of Default" and describing the same in reasonable detail and,
together with such notice or as soon thereafter as possible, a description of
the action that the Company has taken or proposes to take with respect thereto;
(h) the Company will promptly give to each Bank notice of any legal or
arbitral proceedings, or any proceedings before any Governmental Authority,
pending or (to the knowledge of the Company) threatened, against the Company or
any of its Subsidiaries that either individually or in the aggregate, is
reasonably likely to have a Material Adverse Effect; and
(i) from time to time such other information regarding the
financial condition, operations or business of the Company or any of its
Subsidiaries as the Administrative Agent may reasonably request.
The Company will furnish to each Bank, at the time it furnishes each set of
financial statements pursuant to paragraph (a) or (b) above, an Officer's
Certificate (i) to the effect that no Default has occurred and is continuing
(or, if any Default has occurred and is continuing, describing the same in
reasonable detail and describing the action that the Company has taken or
proposes to take with respect thereto) and (ii) setting forth in reasonable
detail the computations necessary to determine whether the Company is in
compliance with Sections 8.05(g), 8.05(h) and 8.06 hereof as of the end of the
respective quarterly fiscal period or fiscal year.
Credit Agreement
----------------
-40-
8.02 Existence Etc. The Company will, and will cause each of its
--------------
Material Subsidiaries to:
(a) preserve and maintain its legal existence and all of its
material rights. privileges, licenses and franchises (Drovided that
nothing in this Section 8.02 shall prohibit any transaction permitted
under Section 8.04 hereof);
(b) comply with the requirements of all applicable laws,
rules, regulations and orders of governmental or regulatory authorities
if failure to comply with such requirements is reasonably likely
(either individually or in the aggregate) to have a Material Adverse
Effect;
(c) pay and discharge all taxes, assessments and governmental
charges or levies imposed on it or on its income or profits or on any
of its Property prior to the date on which penalties attach thereto,
except for any such tax, assessment, charge or levy the payment of
which is being contested in good faith and by proper proceedings and
against which, in the opinion of the Company, adequate reserves are
being maintained in accordance with GAAP;
(d) keep adequate records and books of account, in which
complete entries will be made in accordance with generally accepted
accounting principles consistently applied;
(e) maintain all of its material Properties used or useful in
its business in good working order and condition, ordinary wear and
tear excepted; and
(f) permit representatives of any Bank of the Administrative
Agent during normal business hours to examine or inspect any of its
Properties, and to discuss its business and affairs with its officers,
all to the extent reasonably requested by such Bank of the
Administrative Agent (as the case may be).
8.03 Insurance. The Company will, and will cause each of its
---------
Material Subsidiaries to, (a) maintain fidelity and liability insurance with
financially sound and reputable insurance companies (or through self-insurance
programs so long as such self-insurance is administered in accordance with sound
business practices), and with respect to risks of a character (other than
insurance written or reinsurance assumed by the Company or its Subsidiaries)
usually maintained by corporations engaged in the same or similar business
similarly situated, against loss, damage and liability of the kinds and in the
amounts customarily maintained by such corporations and carry such other
insurance as is usually carried by such corporations and (b) furnish to the
Administrative Agent, upon written request full information as to such
insurance carried.
Credit Agreement
----------------
-41-
8.04 Prohibition of Fundamental Changes. The Company will
----------------------------------
not, nor will it permit any of its Material Subsidiaries to, enter into any
transaction of merger or consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution).
The Company will not, nor will it permit any of its Material
Subsidiaries to convey, sell, lease, transfer or otherwise dispose of any
capital stock of any of its Material Insurance Subsidiaries, whether now owned
or hereafter acquired, unless, after giving effect to such Disposition at least
95% of the capital stock of such Material Insurance Subsidiary is directly or
indirectly owned and controlled by the Company.
Notwithstanding the foregoing provisions of this Section 8.04:
(a) any Material Subsidiary may be merged or consolidated with
or into: (i) the Company if the Company shall be the continuing or
surviving corporation or (ii) any other Subsidiary of the Company;
provided that (x) if any such transaction shall be between a Subsidiary
--------
and a Wholly-Owned Subsidiary, the Wholly-Owned Subsidiary shall be the
continuing or surviving corporation; and
(b) the Company or any Material Subsidiary may merge or
consolidate with any other Person if (i) in the case of a merger or
consolidation of the Company, the Company is the surviving corporation
and, in any other case, the surviving corporation is after giving
effect to such merger or consolidation, a Wholly-Owned Subsidiary of
the Company and (ii) after giving effect thereto no Default would exist
hereunder.
8.05 Limitation on Liens.
-------------------
The Company will not, nor will it permit Mid Ocean Reinsurance, any
Affiliate or Subsidiary of the Company having direct or indirect ownership of
Mid Ocean Reinsurance or any Subsidiary of Mid Ocean Reinsurance to create,
incur, assume or suffer to exist any Lien upon any of their respective
Properties, whether now owned or hereafter acquired, except:
(a) Liens in existence on the date hereof and listed on Schedule III
hereto;
(b) Liens imposed by any Governmental Authority for taxes, assessments
or charges not yet due or which are being contested in good faith and by
appropriate proceedings, unless the amount thereof is material with respect to
it or its financial condition, if adequate reserves with respect thereto are
maintained on the books of the Company in accordance with GAAP;
Credit Agreement
----------------
-42-
(c) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary' course of business which are not
overdue for a period of more than 30 days or which are being contested in good
faith and by appropriate proceedings and Liens securing judgments but only to
the extent for an amount and for a period not resulting in an Event of Default
under Section 9(h) hereof;
(d) pledges or deposits under worker's compensation unemployment
insurance and other social security legislation;
(e) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in the
ordinary course of business:
(f) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and encumbrances
consisting of zoning restrictions, easements, licenses, restrictions on the use
of Property or minor imperfections in title thereto which, in the aggregate, are
not material in amount, and which do not in any case materially detract from the
value of the Property subject thereto or interfere with the ordinary conduct of
the business of the Company;
(g) Liens upon real and/or tangfble personal Property acquired after
the date hereof (by purchase, construction or otherwise) by the Company, each of
which Liens either existed on such Property before the time of its acquisition
and was not created in anticipation thereof or was created solely for the
purpose of securing Indebtedness incurred to finance, refinance, or refund the
cost (including the cost of construction) of such Property; provided that (i) no
--------
such Lien shall extend to or cover any Property of the Company other than the
Property so acquired and improvements thereon and (ii) the principal amount of
Indebtedness secured by any such Lien shall not exceed 80% of the fair market
value (as determined in good faith by a senior financial officer of the Company)
of such Property at the time it was acquired (by purchase, construction or
otherwise);
(h) Liens to secure reimbursement obligations of Mid Ocean Reinsurance
or any such Subsidiary or Affiliate of the Company or any Subsidiary of Mid
Ocean Reinsurance in respect of letters of credit caused to be issued in the
ordinary course of business;
(i) additional Liens created after the date hereof so long as
the Indebtedness secured thereby and incurred after the date hereof does not
exceed $5,000,000 in the aggregate at any one time outstanding; and
Credit Agreement
----------------
-43-
(j) any extension, renewal or replacement of the foregoing: provided
--------
that the Liens permitted by this paragraph shall not extend to or cover any
additional lndebtedness or Property (other than a substitution of like
Property).
Notwithstanding anything contained herein to the contrary the Company will not,
and will not permit any of its Subsidiaries to, create, incur, assume or suffer
to exist any Lien on any of the capital stock of Mid Ocean Reinsurance or any
Subsidiary of Mid Ocean Reinsurance.
8.06 Certain Financial Covenants.
---------------------------
(a) Tangible Net Worth. The Company will not, at any time, permit
------------------
Tangible Net Worth to be less than $800,000,000.
(b) Total Debt to Total Capital. The Company shall, at all
---------------------------
times, maintain a ratio of Total Debt to Total Capital of not more than
0.30 to 1.
80.7 Ratings. The Company will not allow the Standard and Poor's
-------
Rating or the Best Rating to be less than A.
8.08 Use of Proceeds. The Company will use the proceeds of the
---------------
Loans hereunder for general corporate purposes (in compliance with all
applicable legal and regulatory requirements, including, without limitation,
Regulations G, U and X and the Securities Act of 1933 and the Securities
Exchange Act of 1934 and the regulations thereunder); provided that neither the
--------
Administrative Agent nor any Bank shall have any responsibility as to the use of
any of such proceeds.
8.09 Transactions with Affiliates. The Company will not, and
----------------------------
will not permit any of its Subsidiaries to, sell, lease or otherwise transfer
any Property to, or purchase, lease or otherwise acquire any Property from, or
otherwise engage in any other transactions with, any of its Affiliates, except
at prices and on terms and conditions not less favorable to the Company or such
Subsidiary than could be obtained on an arm's-length basis from unrelated third
parties.
8.10 Compliance with Laws. The Company will, and will cause
--------------------
each of its Subsidiaries to, comply with all laws, rules, regulations and orders
of any Governmental Authority applicable to it or its Property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
8.11 Payment of Obligations. The Company will, and will cause
----------------------
each of its Subsidiaries to, pay its obligations that, if not paid, could result
in a Material Adverse Effect before the same shall become delinquent or in
default, except where (a) the validity or amount
Credit Agreement
----------------
-44-
thereof is being contested in good faith by appropriate proceedings, (b) the
Company or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
8.12 Indebtedness. The Company will not permit Mid Ocean
------------
Reinsurance any Affiliate or Subsidiary of the Company having direct or
indirect ownership of Mid Ocean Reinsurance or any Subsidiary of Mid Ocean
Reinsurance to, create, incur or suffer to exist any Debt or any Guarantee of
Indebtedness of any other Person, except for Debt or Guarantees of Indebtedness
outstanding on the date hereof and listed in Schedule IV hereto.
8.13 Capital and Surplus of Mid Ocean Reinsurance. The Company will
--------------------------------------------
not permit the Capital and Surplus of Mid Ocean Reinsurance to be less than
$800,000,000 at any time.
Section 9. Events of Default. If one or more of the following events
-----------------
(herein called "Events of Default") shall occur and be continuing:
-----------------
(a) The Company shall: (i) default in the payment of any principal of
any Loan when due (whether at stated maturity or at mandatory or
optional prepayment or otherwise); or (ii) default in the payment of
any interest on any Loan or any facility fee or utilization fee payable
under Section 2.04 hereof and such default shall continue unremedied
for two or more Business Days or (iii) default in the payment of any
other amount payable by it hereunder when due and such default shall
have continued unremedied for five or more days; or
(b) The Company or any of its Subsidiaries shall default in the
payment when due of any principal of or interest on any Indebtedness
aggregating $5,000,000 or more, or any event specified in any note,
agreement, indenture or other document evidencing or relating to any such
Indebtedness shall occur if the effect of such event is to cause, or (with
the giving of any notice or the lapse of time or both) to permit the holder
or holders of such Indebtedness (or a trustee or agent on behalf of such
holder or holders) to cause such Indebtedness to become due, or to be
prepaid in full (whether by redemption, purchase, offer to purchase or
otherwise), prior to its stated maturity or to have the interest rate
thereon reset to a level so that securities evidencing such Indebtedness
trade at a level specified in relation to the par value thereof; or any
Obligor shall default in the payment when due of any amount in excess of
$5,000,000 under any Derivative Transaction; or any event specified in any
Derivative Transaction to which any Obligor is a party shall occur if the
effect of such event is to cause, or (with the giving of any notice or the
lapse of time or both) to
Credit Agreement
----------------
-45-
permit, termination or liquidation payment or payments in excess of $5,000,000
to become due; or
(c) Any representation, warranty or certification made or deemed made
herein or in any other document to be delivered by the Company in connection
herewith and with the Loans hereunder (or in any modification or supplement
hereto or thereto) by the Company, or any certificate furnished to any Bank or
the Administrative Agent pursuant to the provisions hereof or thereof, shall
prove to have been false or misleading as of the time made or deemed made or
furnished in any material respect: or
(d) The Company shall default in the performance of its obligations
under Sections 8.01(g), 8.04 through 8.07, 8.12, or 8.13 hereof (inclusive); or
the Company shall default in the performance of any of its other obligations in
this Agreement or in any other document to be delivered by the Company in
connection herewith and with the Loans hereunder and such default shall continue
unremedied for a period of thirty or more days after notice thereof to the
Company by the Administrative Agent or any Bank (through the Administrative
Agent); or
(e) The Company or any of its Material Subsidiaries shall admit in
writing its inability to, or be generally unable to, pay its debts as such debts
become due; or
(f) The Company or any of its Material Subsidiaries shall (i) apply
for or consent to the appointment of, or the taking of possession by, a
receiver, custodian trustee, examiner or liquidator of itself or of all or a
substantial part of its Property, (ii) make a general assignment for the benefit
of its creditors, (iii) file, or consent by answer or otherwise fail to
controvert in a timely and appropriate manner the filing against it of, a
petition seeking relief or to take advantage of any law relating to bankruptcy,
insolvency, reorganization, liquidation, dissolution, arrangement or winding-up,
or composition or readjustment of debts or (iv) take any corporate action for
the purpose of effecting any of the foregoing; or
(g) A proceeding or case shall be commenced, without the application
or consent of the Company or any of its Material Subsidiaries, in any court or
governmental regulatory authority of competent jurisdiction, seeking (i) its
reorganization, liquidation, dissolution, arrangement or winding-up, or the
composition or readjustment of its debts, (ii) the appointment of a receiver,
custodian, trustee, examiner, liquidator or the like of the Company or such
Subsidiary or of all or any substantial part of its Property or (iii) similar
relief in respect of the Company or such Subsidiary under any law relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment
of debts, and such proceeding or case shall
Credit Agreement
----------------
-46-
continue undismissed for a period of 60 or more days or an order judgment
or decree approving or ordering any of the foregoing shall be entered; or
(h) A judgment or judgments for the payment of money in excess of
$5,000,000 in the aggregate (exclusive of judgment amounts fully covered by
insurance where the insurer has admitted liability in respect of such
judgment) shall be rendered by one or more courts, administrative tribunals
or other bodies having jurisdiction against the Company or any of its
Subsidiaries and the same shall not be discharged (or provision shall not
be made for such discharge), or a stay of execution thereof shall not be
procured, within 60 days from the date of entry thereof and the Company or
the relevant Subsidiary shall not, within said period of 60 days, or such
longer period during which execution of the same shall have been stayed,
appeal therefrom and cause the execution thereof to be stayed during such
appeal: or
(i) A Change of Control shall occur;
THEREUPON: (1) in the case of an Event of Default other than one referred to in
clause (f) or (g) of this Section 9 with respect to the Company (A) the
Administrative Agent may and, upon request of the Majority Banks, shall, by
notice to the Company, terminate the Commitments and they shall thereupon
terminate, and (B) the Administrative Agent may and, upon request of Banks
holding more than 50% of the aggregate unpaid principal amount of the Loans,
shall, by notice to the Company declare the principal amount then outstanding
of, and the accrued interest on, the Loans and all other amounts payable by the
Company hereunder (including, without limitation, any amounts payable under
Section 5.04 hereof) to be forthwith due and payable, whereupon such amounts
shall be immediately due and payable without presentment, demand, protest or
other formalities of any kind, all of which are hereby expressly waived by the
Company: and (2) in the case of the occurrence of an Event of Default referred
to in clause (f) or (g) of this Section 9 with respect to the Company, the
Commitments shall automatically be terminated and the principal amount then
outstanding of and the accrued interest on, the Loans and all other amounts
payable by the Company hereunder (including, without limitation, any amounts
payable under Section 5.04 hereof) shall automatically become immediately due
and payable without notice, presentment, demand, protest or other formalities of
any kind, all of which are hereby expressly waived by the Company.
Section 10. The Administrative Agent.
------------------------
10.01 Appointment Powers and Immunities. Each Bank hereby appoints and
---------------------------------
authorizes the Administrative Agent to act as its agent hereunder with such
powers as are specifically delegated to the Administrative Agent by the terms of
this Agreement, together with such other powers as are reasonably incidental
thereto. The Administrative Agent
Credit Agreement
----------------
-47-
(which term as used in this sentence and in Section 10.05 and the first sentence
of Section 10.06 hereof shall include reference to its affiliates and its own
and its affiliates' officers, directors, employees and agents):
(a) shall have no duties or responsibilities except those expressly
set forth in this Agreement, and shall not by reason of this Agreement be a
trustee for any Bank.
(b) shall not be responsible to the Banks for any recitals,
statements. representations or warranties contained in this Agreement, or
in any certificate or other document referred to or provided for in, or
received by any of them under, this Agreement. or for the value, validity,
effectiveness, genuineness. enforceability or sufficiency of this Agreement
or any other document referred to or provided for herein or for any failure
by the Company to perform any of its obligations hereunder or thereunder;
(c) shall not be required to initiate or conduct any litigation or
collection proceedings hereunder; and
(d) shall not be responsible for any action taken or omitted to be
taken by it hereunder or under any other document or instrument referred to
or provided for herein or in connection herewith, except for its own gross
negligence or willful misconduct.
The Administrative Agent may employ agents and attorneys-in-fact and shall not
be responsible for the negligence or misconduct of any such agents or attorneys-
in-fact selected by it in good faith. The Administrative Agent may deem and
treat the payee of any promissory note evidencing any Loans hereunder as the
holder thereof for all purposes hereof unless and until an Assignment and
Acceptance relating to such Loans shall have been filed with the Administrative
Agent. together with the consent of the Company thereto (to the extent provided
in Section 11.06(b) hereof).
10.02 Reliance by Administrative Agent. The Administrative Agent
--------------------------------
shall be entitled to rely upon any certification, notice or other communication
(including, without limitation, any thereof by telephone. telecopy, telegram or
cable) believed by it to be genuine and correct and to have been signed or sent
by or on behalf of the proper Person or Persons, and upon advice and statements
of legal counsel, independent accountants and other experts selected by the
Administrative Agent. As to any matters not expressly provided for by this
Agreement, the Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder in accordance with instructions
given by the Majority Banks (or. if so provided in Section 11.04 hereof, all of
the Banks), and such instructions of the
Credit Agreement
----------------
-48-
Majority Banks (or all of the Banks as the case may be) and any action taken or
failure to act pursuant thereto shall be binding on all of the Banks.
10.03 Defaults. The Administrative Agent shall not be deemed to have
--------
knowledge or notice of the occurrence of a Default unless the Administrative
Agent has received notice from a Bank or the Company specifying such Default and
stating that such notice is a "Notice of Default". In the event that the
Administrative Agent receives such a notice of the occurrence of a Default the
Administrative Agent shall give prompt notice thereof to the Banks. The
Administrative Agent shall (subject to Sections 10.01 and 10.07 hereof) take
such action with respect to such Default as shall be directed by the Majority
Banks, provided that, unless and until the Administrative Agent shall have
--------
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action or refrain from taking such action, with respect
to such Default as it shall deem advisable in the best interest of the Banks
except to the extent that this Agreement expressly requires that such action be
taken, or not be taken, only with the consent or upon the authorization of the
Majority Banks or all of the Banks.
10.04 Rights as a Bank. With respect to its Commitment and the Loans
----------------
made by it, Chase (and any successor acting as Administrative Agent) in its
capacity as a Bank hereunder shall have the same rights and powers hereunder as
any other Bank and may exercise the same as though it were not acting as the
Administrative Agent, and the term "Bank" or "Banks" shall, unless the context
otherwise indicates, include the Administrative Agent in its individual
capacity. Chase (and any successor acting as Administrative Agent) and its
Affiliates may (without having to account therefor to any Bank) accept deposits
from, lend money to, make investments in and generally engage in any kind of
banking, trust or other business with the Company (and any of its Subsidiaries
or Affiliates) as if it were not acting as the Administrative Agent, and Chase
(and any other successor acting as Administrative Agent) and its Affiliates may
accept fees and other consideration from the Company for services in connection
with this Agreement or otherwise without having to account for the same to the
Banks.
10.05 Indemnification. The Banks agree to indemnify the
---------------
Administrative Agent (to the extent not reimbursed under Section 11.03 hereof,
but without limiting the obligations of the Company under said Section 11.03)
ratably in accordance with their respective Commitments, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever that may be
imposed on, incurred by or asserted against the Administrative Agent (including
by any Bank) arising out of or by reason of any investigation in or in any way
relating to or arising out of this Agreement or any other documents contemplated
by or referred to herein or the transactions contemplated hereby (including,
without limitation, the costs and expenses that the Company is obligated to pay
under Section 11.03 hereof but excluding (i) normal
Credit Agreement
-49-
administrative costs and expenses incident to the performance of its agency
duties hereunder and (ii) the costs and expenses of the Administrative Agent in
connection with the negotiation and preparation of this Agreement) or the
enforcement of any of the terms hereof or of any such other documents, provided
--------
that no Bank shall be liable for any of the foregoing to the extent they arise
from the gross negligence or willful misconduct of the party to be indemnified.
10.06 Non-Reliance on Administrative Agent and Other Banks. Each Bank
----------------------------------------------------
agrees that it has, independently and without reliance on the Administrative
Agent or any other Bank, and based on such documents and information as it has
deemed appropriate, made its own credit analysis of the Company and its
Subsidiaries and decision to enter into this Agreement and that it will
independently and without reliance upon the Administrative Agent or any other
Bank, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own analysis and decisions in taking or not
taking action under this Agreement. The Administrative Agent shall not be
required to keep itself informed as to the performance or observance by the
Company of this Agreement or any other document referred to or provided for
herein or to inspect the Properties or books of the Company or any of its
Subsidiaries. Except for notices, reports and other documents and information
expressly required to be furnished to the Banks by the Administrative Agent
hereunder, the Administrative Agent shall not have any duty or responsibility to
provide any Bank with any credit or other information concerning the affairs,
financial condition, operations, business, Properties, liabilities or prospects
of the Company or any of its Subsidiaries (or any of their Affiliates) that may
come into the possession of the Administrative Agent or any of its Affiliates.
10.07 Failure to Act. Except for action expressly required of the
--------------
Administrative Agent hereunder. the Administrative Agent shall in all cases be
fully justified in failing or refusing to act hereunder unless it shall receive
further assurances to its satisfaction from the Banks of their indemnification
obligations under Section 10.05 hereof against any and all liability and expense
that may be incurred by it by reason of taking or continuing to take any such
action.
10.08 Resignation of Administrative Agent. Subject to the appointment
-----------------------------------
and acceptance of a successor Administrative Agent as provided below, the
Administrative Agent may resign at any time by giving notice thereof to the
Banks and the Company. Upon any such resignation, the Majority Banks shall have
the right (with, so long as no Default shall have occurred and be continuing,
the consent of the Company, which consent shall not be unreasonably withheld or
delayed) to appoint a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by the Majority Banks and
shall have accepted such appointment within 30 days after the retiring
Administrative Agent's giving of notice of resignation of the retiring
Administrative Agent, then the retiring
Credit Agreement
----------------
-50-
Administrative Agent may, on behalf of the Banks. (with. so long as no Default
shall have occurred and be continuing, the consent of the Company, which consent
shall not be unreasonably withheld or delayed) appoint a successor
Administrative Agent. that shall be a Bank that has an office in New York, New
York with a combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights. powers, privileges and duties
of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations hereunder. After any
retiring Administrative Agent's resignation or removal hereunder as
Administrative Agent, the provisions of this Section 10 shall continue in effect
for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as the Administrative Agent.
Section 11. Miscellaneous.
-------------
11.01 Waiver. No failure on the part of the Administrative Agent or
------
any Bank to exercise and no delay in exercising. and no course of dealing with
respect to. any' right, power or privilege under this Agreement shall operate as
a waiver thereof, nor shall any single or partial exercise of any right, power
or privilege under this Agreement preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. The remedies provided
herein are cumulative and not exclusive of any remedies provided by law.
11.02 Notices. All notices, requests and other communications
-------
provided for herein (including, without limitation, any modifications of or
waivers, requests or consents under, this Agreement) shall be given or made in
writing (including, without limitation, by telecopy) to the intended recipient
at (a) if to any Company or the Administrative Agent, the "Address for Notices"
specified below its name on the signature pages hereof or (b) if to any Bank,
the address (or telecopy number) set forth in its Administrative Questionnaire;
or, as to any party, at such other address as shall be designated by such party
in a notice to each other party. Except as otherwise provided in this Agreement,
all such communications shall be deemed to have been duly given when transmitted
by telecopier or personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.
11.03 Expenses. Etc. The Company agrees to pay or reimburse each of
--------------
the Banks and the Administrative Agent for: (a) all reasonable out-of-pocket
costs and expenses of the Administrative Agent (including, without limitation,
the reasonable fees and expenses of Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇. special New
York counsel to Chase) in connection with the negotiation or preparation of any
modification, supplement or waiver of any of the terms of this Agreement
(whether or not consummated); (b) all reasonable out-of-pocket costs and
expenses of the Banks and the Administrative Agent (including, without
limitation, the reasonable fees and expenses of legal counsel) in connection
with (i) any Default and any
Credit Agreement
----------------
-51-
enforcement or collection proceedings resulting therefrom, including, without
limitation, all manner of participation in or other involvement with (x)
bankruptcy, insolvency, receivership, foreclosure, winding up or liquidation
proceedings, (y) judicial or regulatory proceedings and (z) workout,
restructuring or other negotiations or proceedings (whether or not the workout,
restructuring or transaction contemplated thereby is consummated) and (ii) the
enforcement of this Section 11.03; and (c) all transfer, stamp, documentary,
recording or other similar taxes. assessments or charges levied by any
governmental or revenue authority in respect of this Agreement or any other
document referred to herein.
The Company hereby agrees to indemnify the Administrative Agent and
each Bank and their respective directors, officers, employees, attorneys and
agents from, and hold each of them harmless against, any and all losses,
liabilities, claims, damages or expenses (without duplication of anything
covered by Section 5 hereof) incurred by any of them (including, without
limitation, any and all losses, liabilities, claims, damages or expenses
incurred by the Administrative Agent to any Bank, whether or not the
Administrative Agent or any Bank is a party thereto) arising out of or by reason
of any investigation or litigation or other proceedings (including any
threatened investigation or litigation or other proceedings) relating to the
Loans hereunder or any actual or proposed use by the Company or any of its
Subsidiaries of the proceeds of any of the Loans hereunder, including, without
limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation or litigation or other proceedings (but
excluding any such losses, liabilities, claims, damages or expenses incurred by
reason of the gross negligence or willful misconduct of the Person to be
indemnified).
11.04 Amendments. Etc. Except as otherwise expressly provided in this
---------------
Agreement, any provision of this Agreement may be modified or supplemented only
by an instrument in writing signed by the Company and the Majority Banks, or by
the Company and the Administrative Agent acting with the consent of the Majority
Banks, and any provision of this Agreement may be waived by the Majority Banks
or by the Administrative Agent acting with the consent of the Majority Banks;
provided that (a) no such modification, supplement or waiver shall: (i)
--------
increase, or extend the term of the Commitment of any Bank, or extend the time
or waive any requirement for the reduction or termination of such Commitment,
without the written consent of such Bank; (ii) extend the date fixed for the
payment of principal of or interest on any Loan or any fee hereunder, without
the written consent of each Bank affected thereby; (iii) reduce the amount of
any such payment of principal, without the written consent of each Bank affected
thereby; (iv) reduce the rate at which interest is payable thereon or any fee is
payable hereunder, without the written consent of each Bank affected thereby;
(v) alter the rights or obligations of the Company to prepay Loans, without the
written consent of each Bank affected thereby; (vi) alter the terms of Sections
4.02 or 4.07(b) hereof or this Section 11.04, without the written consent of
each Bank; or (vii) modify the definition of the terms "Agreed Foreign Currency"
or "Majority Banks" or modify in any other manner the
Credit Agreement
----------------
-52-
number or percentage of the Banks required to make any determinations or waive
any rights hereunder or to modify any provision hereof, without the written
consent of each Bank; and (b) any modification of any of the rights or
obligations of the Administrative Agent hereunder shall require the consent of
the Administrative Agent.
11.05 Successors and Assigns. This Agreement shall be binding upon
----------------------
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
11.06 Assignments and Participations.
------------------------------
(a) The Company may not assign any of its rights or obligations
hereunder without the prior consent of all of the Banks and the Administrative
Agent.
(b) Any Bank may assign to one or more assignees all or a portion of
its rights and obligations under this Agreement (including all or a portion of
its Commitment and the Loans at the time owing to it) subject to the following;
(i) except in the case of an assignment to a Bank or an affiliate of a Bank,
each of the Company and the Administrative Agent shall have given their prior
written consent to such assignment (which consent shall not be unreasonably
withheld), (ii) except in the case of an assignment to a Bank or an affiliate of
a Bank or an assignment of the entire remaining amount of the assigning Bank's
Commitment the amount of the Commitment of the assigning Bank subject to each
such assignment (determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Administrative Agent) shall not
be less than $5,000,000 unless each of the Company and the Administrative Agent
otherwise consent, (iii) each partial assignment shall be made as an assignment
of a proportionate part of all the assigning Bank's rights and obligations under
this Agreement, (iv) the parties to each assignment shall execute and deliver to
the Administrative Agent an Assignment and Acceptance, together with a
processing and recordation fee of $3,000, and (v) the assignee, if it shall not
be a Bank, shall (x) be entitled to an exemption from withholding or deduction
by the Company of Taxes on all amounts to be received by it hereunder at least
the same extent as the assignor and (y) deliver to the Administrative Agent an
Administrative Questionnaire; provided further that any consent of the Company
-------- -------
otherwise required under this Section shall not be required if an Event of
Default under paragraph (f) or (g) of Section 9 has occurred and is continuing
with respect to the Company. Subject to acceptance and recording thereof
pursuant to paragraph (d) of this Section, from and after the effective date
specified in each Assignment and Acceptance the assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Bank under this Agreement, and
the assigning Bank thereunder shall, to the extent of the interest assigned by
such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of the
assigning Bank's rights and obligations under this Agreement, such Bank shall
cease to be a party hereto but shall
Credit Agreement
----------------
-53-
continue to be entitled to the benefits of Sections 5.01. 5.04. 5.05 and 11.03).
Any assignment or transfer by a Bank of rights or obligations under this
Agreement that does not comply with this paragraph shall be treated for purposes
of this Agreement as a sale by such Bank of a participation in such rights and
obligations in accordance with paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an agent of
the Company, shall maintain at one of its offices in The City of New York a copy
of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Banks, and the Commitment of, and
principal amount of the Loans owing to each Bank pursuant to the terms hereof
from time to time (the "Register"). The entries in the Register shall be
--------
conclusive, and the Company and the Banks may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Bank hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Company and any Bank, at any
reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Bank and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Bank
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.
(e) Any Bank may without the consent of the Company, sell
participations to one or more banks or other entities (a "Participant") in all
or a portion of such Bank's rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (i) such Bank's obligations under this Agreement shall remain
--------
unchanged, (ii) such Bank shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Company and the
other Banks shall continue to deal solely and directly with such Bank in
connection with such Bank's rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Bank sells such a participation
shall provide that such Bank 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 Bank will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the proviso to Section 11.04 that
affects such Participant. Subject to paragraph (f) of this Section the Company
agrees that each Participant shall be entitled to the benefits of Sections 5.01,
5.04 and 5.05 to the same extent as if it were a Bank and had
Credit Agreement
----------------
-54-
acquired its interest by assignment pursuant to paragraph (b) of this Section.
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 4.07(a) as though it were a Bank, provided that any exercise
by any Participant of any such benefits shall constitute the agreement of such
Participant to be subject to Section 4.07(b) as though it were a Bank.
(f) A Participant shall not be entitled to receive any greater
payment under Section 5.01 or 5.05 than the applicable Bank would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Company's prior written consent. A Participant shall not be entitled to the
benefits of Section 5.05 unless the Company is notified of the participation
sold to such Participant and such Participant agrees, for the benefit of the
Company, to bound by Section 5.05 as though it were a Bank.
(g) In addition to the assignments and participations permitted under
the foregoing provisions of this Section 11.06, any Bank may (without notice to
the Company, the Administrative Agent or any other Bank and without payment of
any fee) pledge or grant a security interest in all or any portion of its Loans
to secure any obligations of such Bank (including, without limitation, to any
Federal Reserve Bank as collateral security pursuant to Regulation A and any
Operating Circular issued by such Federal Reserve Bank). No such assignment
shall release the assigning Bank from its obligations hereunder.
(h) A Bank may furnish any information concerning the Company or any
of its Subsidiaries in the possession of such Bank from time to time to
assignees and participants (including prospective assignees and participants),
subject, however, to the provisions of Section 11.12(b) hereof.
(i) Anything in this Section 11.06 to the contrary notwithstanding,
no Bank may assign or participate any interest in any Loan held by it hereunder
to the Company or any Affiliate or Subsidiary of the Company without the prior
consent of each Bank.
11.07 Survival. The obligations of the Company to any Bank under
--------
Sections 5.01, 5.04, 5.05, and 11.03 hereof, and the obligations of any Bank
under Sections 10.05 and 11.12 hereof, shall survive the repayment of the Loans
made by such Bank and the termination of the Commitment of such Bank and, in the
case of any Bank that may assign any interest in its Commitment or Loans
hereunder, shall survive the making of such assignment, notwithstanding that
such assigning Bank may cease to be a "Bank" hereunder. In addition, each
representation and warranty made, or deemed to be made by a notice of any Loan,
herein or pursuant hereto shall survive the making of such representation and
warranty, and no Bank shall be deemed to have waived, by reason of making any
Loan, any Default that (i) may arise by reason of such representation or
warranty proving to have
Credit Agreement
----------------
-55-
been false or misleading or (ii) exists at the time such Loan was made,
notwithstanding that such Bank or the Administrative Agent may have had notice
or knowledge or reason to believe that such representation or warranty was false
or misleading, or that such Default was existing, at the time such Loan was
made.
11.08 Captions. The table of contents and captions and section
--------
headings appearing herein are included solely for convenience of reference and
are not intended to affect the interpretation of any provision of this
Agreement.
11.09 Counterparts. This Agreement may be executed in any number of
------------
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
11.10 Governing Law; Submission to Jurisdiction. This Agreement shall
-----------------------------------------
be governed by, and construed in accordance with, the law of the State of New
York. The Company hereby submits to the nonexclusive jurisdiction of the United
States District Court for the Southern District of New York and of any New York
state court sitting in New York County (and any appellate court from any
thereof) for the purposes of all legal proceedings arising out of or relating to
this Agreement or the transactions contemplated hereby. The Company irrevocably
waives, to the fullest extent permitted by applicable law, any objection that it
may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum. The Company hereby irrevocably
agrees and consents that service of process in any such legal proceeding in any
such court may be made on the Company by the mailing thereof by registered mail
postage prepaid or by transmitting the same by telecopier, to the Company in
the manner specified in Section 11.02 hereof, and any such service shall be
deemed good and effective when transmitted by telecopier or, in the case of
mail, upon receipt; provided that nothing herein will affect the right of any
Bank or the Administrative Agent to serve process in any other manner permitted
by law.
To the extent that the Company has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution or execution on the ground of sovereignty or otherwise) with respect
to itself or its Property, it hereby irrevocably waives, to the fullest extent
permitted by applicable law, such immunity in respect of its obligations under
this Agreement.
11.11 Waiver of Jury Trial. EACH OF THE COMPANY, THE ADMINISTRATIVE
--------------------
AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR
Credit Agreement
----------------
-56-
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
11.12 Confidentiality. Each of the Banks and the Administrative
---------------
Agent agrees (on behalf of itself and each of its Affiliates, directors,
officers, employees and representatives) to use reasonable precautions to keep
confidential, in accordance with its customary procedures for handling
confidential information of the same nature and in accordance with safe and
sound banking practices, any non-public information supplied to it by the
Company pursuant to this Agreement that is identified by the Company as being
confidential at the time the same is delivered to the Banks or the
Administrative Agent; provided that nothing herein shall limit the disclosure of
--------
any such non-public information (i) to the extent required by statute, rule,
regulation or judicial process, (ii) to counsel for any of the Banks or the
Administrative Agent, (iii) to bank examiners, auditors or accountants, (iv) to
the Administrative Agent or any other Bank (or to Chase Securities Inc.), (v) in
connection with any litigation to which any one or more of the Banks or the
Administrative Agent is a party, (vi) to a subsidiary or Affiliate of such Bank
as provided in paragraph (a) above or (vii) to any assignee or participant (or
prospective assignee or participant) so long as such assignee or participant (or
prospective assignee or participant) first executes and delivers to the
respective Bank a Confidentiality Agreement substantially in the form of Exhibit
C hereto; and provided, further, that in no event shall any Bank or the
--------
Administrative Agent be obligated or required to return any materials furnished
by the Company. The obligations of any assignee that has executed a
Confidentiality Agreement in the form of Exhibit C hereto shall be superseded by
this Section 11.12 upon the date upon which such assignee becomes a Bank
hereunder pursuant to Section 11.06 hereof.
11.13 Judgment Currency. This is an international loan transaction
-----------------
in which the specification of Dollars or any Foreign Currency, as the case may
be (the "Specified Currency"), and any payment in New York County or the country
------------------
of the Specified Currency as the case may be (the "Specified Place"), is of the
---------------
essence, and the Specified Currency shall be the currency of account in all
events relating to Loans denominated in the Specified Currency. The payment
obligations of the Company under this Agreement shall not be discharged by an
amount paid in another currency or in another place, whether pursuant to a
judgment or otherwise, to the extent that the amount so paid on conversion to
the Specified Currency and transfer to the Specified Place under normal banking
procedures does not yield the amount of the Specified Currency at the Specified
Place due hereunder. If for the purpose of obtaining judgment in any court it is
necessary to convert a sum due hereunder in the Specified Currency into another
currency (the "Second Currency"), the rate of exchange which shall be applied
---------------
shall be that at which in accordance with normal banking procedures the
Administrative Agent could purchase the Specified Currency with the Second
Currency on the Business Day next preceding that on which such judgment is
rendered. The obligation of the Company in respect of any such sum due from it
to the Administrative Agent or any Bank
Credit Agreement
----------------
-57-
hereunder shall, notwithstanding the rate of exchange actually applied in
rendering such judgment, be discharged only to the extent that on the Business
Day following receipt by the Administrative Agent or such Bank, as the case may
be, of any sum adjudged to be due hereunder in the Second Currency to the
Administrative Agent or such Bank, as the case may be, the Administrative Agent
or such Bank, as the case may be, may in accordance with normal banking
procedures purchase and transfer to the Specified Place the Specified Currency
with the amount of the Second Currency so adjudged to be due: and the Company
hereby, as a separate obligation and notwithstanding any such judgment, agrees
to indemnify the Administrative Agent or such Bank, as the case may be,
against, and to pay the Administrative Agent or such Bank, as the case may be,
on demand in the Specified Currency, any difference between the sum originally
due to the Administrative Agent or such Bank. as the case may be, in the
Specified Currency and the amount of the Specified Currency so purchased and
transferred.
11.14 European Monetary Union. (a) If, as a result of the
-----------------------
implementation of European monetary union, (i) any European Currency ceases to
be lawful currency of the nation issuing the same and is replaced by a European
common currency (the "Euro"), or (ii) any European Currency and the Euro are at
the same time recognized by any Governmental Authority of the nation issuing
such European Currency as lawful currency of such nation and the Administrative
Agent or the Majority Banks shall so request in a notice delivered to the
Company, then any amount payable hereunder by any party hereto in such European
Currency shall instead be payable in the Euro and the amount so payable shall be
determined by translating the amount payable in such European Currency to the
Euro at the exchange rate recognized by the European Central Bank for the
purpose of implementing European monetary union. Prior to the occurrence of the
event or events described in clause (i) or (ii) of the preceding sentence, each
amount payable hereunder in any European Currency will, except as otherwise
provided herein, continue to be payable only in that Currency.
(b) The Company agrees, at the request of any Bank, to
compensate such Bank for any loss, cost, expense or reduction in return that
such Bank shall reasonable determine shall be incurred or sustained by such Bank
as a result of the implementation of European monetary union and that would not
have been incurred or sustained but for the transactions provided for herein. A
certificate of a Bank setting forth such Bank's determination of the amount or
amounts necessary to compensate such Bank shall be delivered to the Company and
shall be conclusive absent manifest error so long as such determination is made
on a reasonable basis. The Company shall pay such Bank the amount shown as due
on any such certificate within 10 days after receipt thereof.
(c) The parties hereto agree, at the time of or at any time
following the implementation of European monetary union, to use reasonable
efforts to enter into an agreement amending this Agreement in order to reflect
the implementation of such monetary
Credit Agreement
----------------
-58-
union, to permit (if feasible) the Euro to qualify as an Agreed Foreign
Currency under the terms and conditions of the definition of such term and to
place the parties hereto in the position with respect to the settlement of
payments of the Euro as they would have been with respect to the settlement of
the Currencies it replaced.
Credit Agreement
----------------
-59-
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the day and year first above
written.
MID OCEAN LIMITED
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇,
--------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇,
Title: Senior Vice President,
Chief Financial and Administrative Officer.
Address for Notices:
Mid Ocean Limited
6th Floor, Richmond House
12 Par-La-Ville Road
▇▇▇▇▇▇▇▇, ▇▇ 08, Bermuda
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
BANKS
-----
THE CHASE MANHATTAN BANK
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------
Title: Vice President
CITIBANK N.A.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
Title: V.P
By________________________
Title:
Credit Agreement
----------------
-▇▇-
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇ AND/OR
CAYMAN ISLANDS BRANCHES
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
MELLON BANK, N.A.
By____________________________
Title:
ROYAL BANK OF CANADA
By____________________________
Title:
THE BANK OF BERMUDA LIMITED
By____________________________
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By____________________________
Title:
Credit Agreement
----------------
