Exhibit 10.1
EXECUTION COPY
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of April 5, 2006
Among
DAVINCIRE HOLDINGS LTD.
as Borrower
and
THE INITIAL LENDERS NAMED HEREIN
as Initial Lenders
and
CITIGROUP GLOBAL MARKETS INC.
as Sole Lead Arranger, Book Manager and Co-Syndication Agent
and
CITIBANK, N.A.
as Administrative Agent
and
WACHOVIA BANK, NATIONAL ASSOCIATION
as Co-Syndication Agent
TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS........................................................................1
SECTION 1.01. Certain Defined Terms..............................................................1
SECTION 1.02. Computation of Time Periods.......................................................12
SECTION 1.03. Accounting Terms..................................................................12
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES.....................................................................13
SECTION 2.01. The Advances......................................................................13
SECTION 2.02. Making the Advances...............................................................13
SECTION 2.03. Fees .............................................................................14
SECTION 2.04. Termination or Reduction of the Commitments.......................................14
SECTION 2.05. Repayment of Advances.............................................................14
SECTION 2.06. Interest on Advances..............................................................14
SECTION 2.07. Interest Rate Determination.......................................................15
SECTION 2.08. Optional Conversion of Advances...................................................16
SECTION 2.09. Prepayments of Advances...........................................................16
SECTION 2.10. Increased Costs...................................................................16
SECTION 2.11. Illegality........................................................................17
SECTION 2.12. Payments and Computations.........................................................17
SECTION 2.13. Taxes.............................................................................17
SECTION 2.14. Sharing of Payments, Etc..........................................................19
SECTION 2.15. Evidence of Debt..................................................................19
SECTION 2.16. Use of Proceeds...................................................................20
SECTION 2.17. Increase in the Aggregate Commitments.............................................20
SECTION 2.18. Extension of Termination Date.....................................................21
ARTICLE III CONDITIONS TO EFFECTIVENESS AND LENDING..............................................................22
SECTION 3.01. Conditions Precedent to Effectiveness of Section 2.01.............................22
SECTION 3.02. Conditions Precedent to Each Borrowing, Commitment Increase and Extension Date....24
SECTION 3.03. Determinations Under Section 3.01.................................................24
ARTICLE IV REPRESENTATIONS AND WARRANTIES........................................................................25
SECTION 4.01. Representations and Warranties of the Borrower....................................25
ARTICLE V COVENANTS OF THE BORROWER..............................................................................28
SECTION 5.01. Affirmative Covenants.............................................................28
SECTION 5.02. Negative Covenants................................................................32
ARTICLE VI EVENTS OF DEFAULT.....................................................................................34
SECTION 6.01. Events of Default.................................................................34
ARTICLE VII THE AGENT............................................................................................36
SECTION 7.01. Authorization and Action..........................................................36
SECTION 7.02. Agent's Reliance, Etc.............................................................36
SECTION 7.03. Citibank and Affiliates...........................................................37
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SECTION 7.04. Lender Credit Decision............................................................37
SECTION 7.05. Indemnification...................................................................37
SECTION 7.06. Successor Agent...................................................................37
ARTICLE VIII MISCELLANEOUS.......................................................................................38
SECTION 8.01. Amendments, Etc...................................................................38
SECTION 8.02. Notices, Etc......................................................................38
SECTION 8.03. No Waiver; Remedies...............................................................39
SECTION 8.04. Costs and Expenses................................................................39
SECTION 8.05. Right of Set-off..................................................................40
SECTION 8.06. Binding Effect....................................................................40
SECTION 8.07. Assignments and Participations....................................................40
SECTION 8.08. Confidentiality...................................................................42
SECTION 8.09. Governing Law.....................................................................42
SECTION 8.10. Execution in Counterparts.........................................................42
SECTION 8.11. Jurisdiction, Etc.................................................................42
SECTION 8.12. Judgment..........................................................................43
SECTION 8.13. Waiver of Jury Trial..............................................................44
iii
Schedules
---------
Schedule I - List of Applicable Lending Offices
Schedule 4.01(a) Jurisdictions
Schedule 4.01(c)(ii) Adverse Changes
Schedule 4.01(d) Litigation and Contingent Liabilities
Schedule 4.01(l) Subsidiaries
Schedule 4.01(m) Insurance Licenses
Schedule 4.01(n) Taxes
Schedule 5.02(g) Liens
Exhibits
--------
Exhibit A - Form of Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Pledge Agreement
Exhibit E - Form of Opinion of Counsel for the Borrower
Exhibit F - Form of Compliance Certificate
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of April 5, 2006
DAVINCIRE HOLDINGS LTD., a company organized under the laws of
Bermuda (the "Borrower"), the banks, financial institutions and other
institutional lenders (the "Initial Lenders") listed on the signature pages
hereof, CITIGROUP GLOBAL MARKETS INC., as sole lead arranger, book manager and
syndication agent, and CITIBANK, N.A. ("Citibank"), as administrative agent (the
"Agent") for the Lenders (as hereinafter defined), agree as follows:
PRELIMINARY STATEMENT. The Borrower, the lenders party thereto
and Citibank, as agent, are parties to a Credit Agreement dated as of April 19,
2002, as amended and restated as of May 25, 2004 and as amended and restated as
of May 25, 2005 (the "Existing Credit Agreement"). Subject to the satisfaction
of the conditions set forth in Section 3.01, the Borrower, the Lenders party
hereto and Citibank, as Agent, desire to amend and restate the Existing Credit
Agreement as herein set forth.
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Advance" means an advance by a Lender to the Borrower as part
of a Borrowing and refers to a Base Rate Advance or a Eurodollar Rate
Advance (each of which shall be a "Type" of Advance).
"Affiliate" of any Person means any other Person which,
directly or indirectly, controls or is controlled by or is under common
control with such Person (excluding any trustee under, or any committee
with responsibility for administering, any Plan). A Person shall be
deemed to be:
(a) "controlled by" any other Person if such other
Person possesses, directly or indirectly, power: (i) to vote
20% or more of the securities having at the time of any
determination hereunder voting power for the election of
directors of such Person; or (ii) to direct or cause the
direction of the management and policies of such Person
whether by contract or otherwise; or
(b) "controlled by" or "under common control with"
such other Person if such other Person is the executor,
administrator, or other personal representative of such
Person.
"Agent's Account" means the account of the Agent maintained by
the Agent at Citibank at its office at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Account No. 00000000, Attention: Bank Loan
Syndications.
"Annual Statement" means the annual financial statement of an
Insurance Subsidiary as required to be filed with the Authority (or
similar Governmental Authority) of such Insurance Subsidiary's
domicile, together with all exhibits or schedules filed therewith,
prepared in conformity with SAP.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a Base
Rate Advance and such Lender's Eurodollar Lending Office in the case of
a Eurodollar Rate Advance.
"Applicable Margin" means (a) for Base Rate Advances, 0% per
annum and (b) for Eurodollar Rate Advances, as of any date, a
percentage per annum determined by reference to the Public Debt Rating
in effect on such date as set forth below:
---------------------------- --------------------------------
Public Debt Rating Applicable Margin for
S&P/Xxxxx'x Eurodollar Rate Advances
---------------------------- --------------------------------
Level 1
A/A2 or above 0.375%
---------------------------- --------------------------------
Xxxxx 0
X-/X0 0.500%
---------------------------- --------------------------------
Xxxxx 0
BBB+/Baa1 0.625%
---------------------------- --------------------------------
Xxxxx 0
BBB/Baa2 0.750%
---------------------------- --------------------------------
Xxxxx 0
XXX-/Xxx0 or below 1.000%
---------------------------- --------------------------------
"Applicable Commitment Fee Rate" means, as of any date a
percentage per annum determined by reference to the Public Debt Rating
in effect on such date as set forth below:
-------------------------------- ----------------------------
Public Debt Rating Applicable
S&P/Xxxxx'x Percentage
-------------------------------- ----------------------------
Level 1
A/A2 or above 0.070%
-------------------------------- ----------------------------
Xxxxx 0
X-/X0 0.085%
-------------------------------- ----------------------------
Xxxxx 0
BBB+/Baa1 0.100%
-------------------------------- ----------------------------
Xxxxx 0
BBB/Baa2 0.125%
-------------------------------- ----------------------------
Xxxxx 0
XXX-/Xxx0 or below 0.200%
-------------------------------- ----------------------------
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the
Agent, in substantially the form of Exhibit C hereto.
"Assuming Lender" has the meaning specified in Section
2.17(d).
"Assumption Agreement" has the meaning specified in Section
2.17(d)(ii).
"Authority" means the Bermuda Monetary Authority or similar
Governmental Authority in the applicable jurisdiction.
"Base Rate" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times be
equal to the highest of:
(a) the rate of interest announced publicly by
Citibank in New York, New York, from time to time, as
Citibank's base rate;
(b) the sum (adjusted to the nearest 1/4 of 1% or, if
there is no nearest 1/4 of 1%, to the next higher 1/4 of 1%)
of (i) 1/2 of 1% per annum, plus (ii) the rate obtained by
dividing (A) the latest three-week moving average of secondary
market morning offering rates in the United States for
three-month certificates of deposit of major United States
money market banks, such three-week moving average (adjusted
to the basis of a year of 360 days) being determined weekly on
each Monday (or, if such day is not a Business Day, on the
next succeeding Business Day) for the three-week period ending
on the previous Friday by Citibank on the basis of such rates
reported by certificate of deposit dealers to and published by
the Federal Reserve Bank of New York or, if such publication
shall be suspended or terminated, on the basis of quotations
for such rates
2
received by Citibank from three New York certificate of
deposit dealers of recognized standing selected by Citibank,
by (B) a percentage equal to 100% minus the average of the
daily percentages specified during such three-week period by
the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement
(including, but not limited to, any emergency, supplemental or
other marginal reserve requirement) for Citibank with respect
to liabilities consisting of or including (among other
liabilities) three-month U.S. dollar non-personal time
deposits in the United States, plus (iii) the average during
such three-week period of the annual assessment rates
estimated by Citibank for determining the then current annual
assessment payable by Citibank to the Federal Deposit
Insurance Corporation (or any successor) for insuring U.S.
dollar deposits of Citibank in the United States; and
(c) 1/2 of one percent per annum above the Federal
Funds Rate.
"Base Rate Advance" means an Advance that bears interest as
provided in Section 2.06(a)(i).
"Borrowing" means a borrowing consisting of simultaneous
Advances of the same Type made by each of the Lenders pursuant to
Section 2.01.
"Business Day" means a day of the year on which banks are not
required or authorized by law to close in New York City or Xxxxxxxx,
Bermuda and, if the applicable Business Day relates to any Eurodollar
Rate Advances, on which dealings are carried on in the London interbank
market, provided that for purposes of determining the Eurodollar Rate
for any Interest Period, such rate may be determined without regard
whether banks are required or authorized to close in Xxxxxxxx, Bermuda.
"Capitalized Lease" means, as to any Person, any lease which
is or should be capitalized on the balance sheet of such Person in
accordance with GAAP, together with any other lease which is in
substance a financing lease, including, without limitation, any lease
under which (a) such Person has or will have an option to purchase the
property subject thereto at a nominal amount or an amount less than a
reasonable estimate of the fair market value of such property as of the
date the lease is entered into or (b) the term of the lease
approximates or exceeds the expected useful life of the property leased
thereunder.
"Catastrophe Bond" means (a) any note, bond or other Debt
instrument or any swap or other similar agreement which has a
catastrophe, weather or other risk feature linked to payments
thereunder and (b) any equity interest in a Person that is not a
Subsidiary controlled, directly or indirectly, by the Borrower for the
sole purpose of investing in Debt of the type described in clause (a),
which, in the case of Catastrophe Bonds purchased by the Borrower or
any of its Subsidiaries, are purchased in accordance with its customary
reinsurance underwriting procedures.
"Change in Control" shall be deemed to have occurred if (a)
any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all, or substantially all, of the
assets of the Borrower occurs; (b) any "person" as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") other than RenaissanceRe Holdings Ltd., is
or becomes, directly or indirectly, the "beneficial owner," as defined
in Rule 13d-3 under the Exchange Act, of securities of the Borrower
that represent 51% or more of the combined voting power of the
Borrower's then outstanding securities; (c) during any period of two
consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of the Borrower (together with any
new directors whose nomination by the Board of Directors or whose
election by the stockholders of the Borrower was approved by a vote of
the directors of the Borrower then still in office who are either
directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any
reason to constitute a majority of the Borrower's Board of Directors
then in office; or (d) Renaissance Re Holdings Ltd. shall cease for any
reason to own, directly or indirectly, the power to exercise voting
control of the Borrower.
"Commitment" means as to any Lender (a) the amount set forth
opposite such Lender's name on the signature pages hereof, (b) if such
Lender has become a Lender hereunder pursuant to an Assumption
Agreement, the amount set forth in such Assumption Agreement or (c) if
such Lender has entered into any
3
Assignment and Acceptance, the amount set forth for such Lender in the
Register maintained by the Agent pursuant to Section 8.07(d), as such
amount may be reduced pursuant to Section 2.04 or increased pursuant to
Section 2.17.
"Commitment Date" has the meaning specified in Section
2.17(b).
"Commitment Increase" has the meaning specified in Section
2.17(a).
"Compliance Certificate" means a certificate substantially in
the form of Exhibit F but with such changes as the Agent may from time
to time request for purposes of monitoring the Borrower's compliance
herewith.
"Consenting Lender" has the meaning specified in Section
2.18(b).
"Consolidated" refers to the consolidation of accounts in
accordance with GAAP.
"Consolidated Debt" means the consolidated Debt of the
Borrower and its Subsidiaries, including without limitation the
principal amount of the Advances.
"Contingent Liability" means any agreement, undertaking or
arrangement by which any Person (outside the ordinary course of
business) guarantees, endorses, acts as surety for or otherwise becomes
or is contingently liable for (by direct or indirect agreement,
contingent or otherwise, to provide funds for payment by, to supply
funds to, or otherwise to invest in, a debtor, or otherwise to assure a
creditor against loss) the Debt, obligation or other liability of any
other Person (other than by endorsements of instruments in the course
of collection), or for the payment of dividends or other distributions
upon the shares of any other Person or undertakes or agrees
(contingently or otherwise) to purchase, repurchase, or otherwise
acquire or become responsible for any Debt, obligation or liability or
any security therefor, or to provide funds for the payment or discharge
thereof (whether in the form of loans, advances, stock purchases,
capital contributions or otherwise), or to maintain solvency, assets,
level of income, or other financial condition of any other Person, or
to make payment or transfer property to any other Person other than for
fair value received; provided, however, that obligations of the
Borrower or any of its Subsidiaries under Primary Policies or
Reinsurance Agreements which are entered into in the ordinary course of
business (including security posted to secure obligations thereunder)
shall not be deemed to be Contingent Liabilities of such Person for the
purposes of this Agreement. The amount of any Person's obligation under
any Contingent Liability shall (subject to any limitation set forth
therein) be deemed to be the lesser of (i) the outstanding principal
amount (or maximum permitted principal amount, if larger) of the Debt,
obligation or other liability guaranteed or supported thereby or (ii)
the maximum stated amount so guaranteed or supported.
"Contractual Obligation" means, relative to any Person, any
obligation, commitment or undertaking under any agreement or other
instrument to which such Person is a party or by which it or any of its
property is bound or subject.
"Convert", "Conversion" and "Converted" each refers to a
conversion of Advances of one Type into Advances of the other Type
pursuant to Section 2.07 or 2.08.
"DaVinciRe Catastrophe-Linked Security" means any Catastrophe
Bond (of the type described in clause (a) of the definition of
Catastrophe Bond) issued or otherwise entered into by the Borrower or
any of its Insurance Subsidiaries to cede risk which (a) has a
scheduled maturity date after the Termination Date and (b) upon the
occurrence of catastrophe claims under the terms thereof in excess of a
predefined level that is no more remote than a one in 100 (or 1.00%)
year or event, is subject to either (i) mandatory forgiveness of
repayment at least to the extent of such excess or (ii) mandatory
conversion into equity of the Borrower or such Subsidiary at least to
the extent of such excess. The occurrence of forgiveness or conversion
prior to the Termination Date shall not be deemed to violate clause (a)
of the preceding sentence.
4
"Debt" means, with respect to any Person, at any date, without
duplication, (a) all obligations of such Person for borrowed money or
in respect of loans or advances (including, without limitation, any
such obligation issued by such Person that qualify as Catastrophe Bonds
described in clause (a) of the definition thereof net of any escrow
established (whether directly or to secure any letter of credit issued
to back such Catastrophe Bonds) in connection with such Catastrophe
Bonds); (b) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments; (c) all obligations in
respect of letters of credit which have been drawn but not reimbursed
by the Person for whose account such letter of credit was issued, and
bankers' acceptances issued for the account of such Person; (d) all
obligations in respect of Capitalized Leases of such Person; (e) all
net Hedging Obligations of such Person; (f) whether or not so included
as liabilities in accordance with GAAP, all obligations of such Person
to pay the deferred purchase price of property or services; (g) Debt of
such Person secured by a Lien on property owned or being purchased by
such Person (including Debt arising under conditional sales or other
title retention agreements) whether or not such Debt is limited in
recourse (it being understood, however, that if recourse is limited to
such property, the amount of such Debt shall be limited to the lesser
of the face amount of such Debt and the fair market value of all
property of such Person securing such Debt); (h) any Debt of another
Person secured by a Lien on any assets of such first Person, whether or
not such Debt is assumed by such first Person (it being understood that
if such Person has not assumed or otherwise become personally liable
for any such Debt, the amount of the Debt of such person in connection
therewith shall be limited to the lesser of the face amount of such
Debt and the fair market value of all property of such Person securing
such Debt); and (i) any Debt of a partnership in which such Person is a
general partner unless such Debt is nonrecourse to such Person;
provided that, notwithstanding anything to contrary contained herein,
Debt shall not include (w) Contingent Liabilities, (x) issued, but
undrawn, letters of credit which have been issued to reinsurance
cedents in the ordinary course of business, (y) unsecured current
liabilities incurred in the ordinary course of business and paid within
90 days after the due date (unless contested diligently in good faith
by appropriate proceedings and, if requested by the Agent, reserved
against in conformity with GAAP) other than liabilities that are for
money borrowed or are evidenced by bonds, debentures, notes or other
similar instruments (except as described in clauses (w) or (x) above)
or (z) any obligations of such Person under any Reinsurance Agreement
or any Primary Policy.
"Debt to Capital Ratio" means the ratio of (a) Consolidated
Debt to (b) the sum of Net Worth plus Consolidated Debt.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
"Domestic Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Domestic Lending Office"
opposite its name on Schedule I hereto or in the Assumption Agreement
or the Assignment and Acceptance pursuant to which it became a Lender,
or such other office of such Lender as such Lender may from time to
time specify to the Borrower and the Agent.
"Effective Date" has the meaning specified in Section 3.01.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a
Lender; (iii) a commercial bank organized under the laws of the United
States, or any State thereof, and having total assets in excess of
$500,000,000; (iv) a savings and loan association or savings bank
organized under the laws of the United States, or any State thereof,
and having total assets in excess of $500,000,000; (v) a commercial
bank organized under the laws of any other country that is a member of
the Organization for Economic Cooperation and Development or has
concluded special lending arrangements with the International Monetary
Fund associated with its General Arrangements to Borrow, or a political
subdivision of any such country, and having total assets in excess of
$500,000,000, so long as such bank is acting through a branch or agency
located in the country in which it is organized or another country that
is described in this clause (v); (vi) the central bank of any country
that is a member of the Organization for Economic Cooperation and
Development; (vii) a finance company, insurance company or other
financial institution or fund (whether a corporation, partnership,
trust or other entity) that is engaged in making, purchasing or
otherwise investing in commercial loans in the ordinary course of its
business and having total assets in excess of $500,000,000; and (viii)
any other Person approved by the Agent and, unless an Event of Default
5
has occurred and is continuing at the time any assignment is effected
in accordance with Section 8.07, the Borrower, such approval not to be
unreasonably withheld or delayed; provided, however, that neither the
Borrower nor an Affiliate of the Borrower shall qualify as an Eligible
Assignee.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute, and all
rules and regulations from time to time promulgated thereunder.
"ERISA Affiliate" means any Person (including any trade or
business, whether or not incorporated) that would be deemed to be under
"common control" with, or a member of the same "controlled group" as,
the Borrower or any of its Subsidiaries, within the meaning of Sections
414(b), (c), (m) or (o) of the Internal Revenue Code or Section 4001 of
ERISA.
"ERISA Event" means any of the following with respect to a
Plan or Multiemployer Plan, as applicable: (a) a Reportable Event with
respect to a Plan or a Multiemployer Plan, (b) a complete or partial
withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer
Plan that results in liability under Section 4201 or 4204 of ERISA, or
the receipt by the Borrower or any ERISA Affiliate of notice from a
Multiemployer Plan that it is in reorganization or insolvency pursuant
to Section 4241 or 4245 of ERISA or that it intends to terminate or has
terminated under Section 4041A of ERISA, (c) the distribution by the
Borrower or any ERISA Affiliate under Section 4041 or 4041A of ERISA of
a notice of intent to terminate any Plan or the taking of any action to
terminate any Plan, (d) the commencement of proceedings by the PBGC
under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan, or the receipt by the Borrower or
any ERISA Affiliate of a notice from any Multiemployer Plan that such
action has been taken by the PBGC with respect to such Multiemployer
Plan, (e) the institution of a proceeding by any fiduciary of any
Multiemployer Plan against the Borrower or any ERISA Affiliate to
enforce Section 515 of ERISA, which is not dismissed within thirty (30)
days, or (f) the imposition upon the Borrower or any ERISA Affiliate of
any liability under Title IV of ERISA, other than for PBGC premiums due
but not delinquent under Section 4007 of ERISA, or the imposition or
threatened imposition of any Lien upon any assets of the Borrower or
any ERISA Affiliate as a result of any alleged failure to comply with
the Internal Revenue Code or ERISA in respect of any Plan.
"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Eurodollar Lending Office"
opposite its name on Schedule I hereto or in the Assumption Agreement
or the Assignment and Acceptance pursuant to which it became a Lender
(or, if no such office is specified, its Domestic Lending Office), or
such other office of such Lender as such Lender may from time to time
specify to the Borrower and the Agent.
"Eurodollar Rate" means, for any Interest Period for each
Eurodollar Rate Advance comprising part of the same Borrowing, an
interest rate per annum equal to the rate per annum obtained by
dividing (a) the rate per annum (rounded upward to the nearest whole
multiple of 1/16 of 1% per annum) appearing on Moneyline Telerate
Markets Page 3750 (or any successor page) as the London interbank
offered rate for deposits in U.S. dollars at approximately 11:00 A.M.
(London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period or, if for any
reason such rate is not available, the rate per annum at which deposits
in U.S. dollars are offered by the principal office of Citibank in
London, England to prime banks in the London interbank market at 11:00
A.M. (London time) two Business Days before the first day of such
Interest Period in an amount substantially equal to Citibank's
Eurodollar Rate Advance comprising part of such Borrowing to be
outstanding during such Interest Period and for a period equal to such
Interest Period by (b) a percentage equal to 100% minus the Eurodollar
Rate Reserve Percentage for such Interest Period. If the Moneyline
Telerate Markets Page 3750 (or any successor page) is unavailable, the
Eurodollar Rate for any Interest Period for each Eurodollar Rate
Advance comprising part of the same Borrowing shall be determined by
the Agent on the basis of the applicable rate furnished to and received
by the Agent from Citibank two Business Days before the first day of
such Interest Period, subject, however, to the provisions of Section
2.07.
6
"Eurodollar Rate Advance" means an Advance that bears interest
as provided in Section 2.06(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest Period
for all Eurodollar Rate Advances comprising part of the same Borrowing
means the reserve percentage applicable two Business Days before the
first day of such Interest Period under regulations issued from time to
time by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal
reserve requirement) for a member bank of the Federal Reserve System in
New York City with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to any other
category of liabilities that includes deposits by reference to which
the interest rate on Eurodollar Rate Advances is determined) having a
term equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Executive Officer" means, as to any Person, the president,
the chief financial officer, the chief executive officer, the general
counsel, the treasurer or the secretary.
"Existing Credit Agreement" has the meaning specified in the
Preliminary Statement.
"Extension Date" has the meaning specified in Section 2.18(b).
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means any period of twelve consecutive calendar
months ending on the last day of December.
"Foreign Plan" has the meaning specified in Section
4.01(e)(ii).
"FRB" means the Board of Governors of the Federal Reserve
System, and any Governmental Authority succeeding to any of its
principal functions.
"GAAP" means generally accepted accounting principles in the
United States set forth from time to time in the opinions and
pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies
with similar functions of comparable stature and authority within the
U.S. accounting profession), which are applicable to the circumstances
as of the date of determination.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative powers
or functions of or pertaining to government.
"Hedging Obligations" means, with respect to any Person, the
net liability of such Person under any futures contract or options
contract (including property catastrophe futures and options), interest
rate swap agreements and interest rate collar agreements and all other
agreements or arrangements (other than Retrocession Agreements and
Catastrophe Bonds) designed to protect such Person against catastrophic
events, fluctuations in interest rates or currency exchange rates.
7
"Increase Date" has the meaning specified in Section 2.17(a).
"Increasing Lender" has the meaning specified in Section
2.17(b).
"Insurance Code" means, with respect to any Insurance
Subsidiary, the Insurance Code or law of such Insurance Subsidiary's
domicile and any successor statute of similar import, together with the
regulations thereunder, as amended or otherwise modified and in effect
from time to time. References to sections of the Insurance Code shall
be construed to also refer to successor sections.
"Insurance Policies" means policies purchased from insurance
companies by the Borrower or any of its Subsidiaries, for its own
account to insure against its own liability and property loss
(including, without limitation, casualty, liability and workers'
compensation insurance), other than Retrocession Agreements.
"Interest Period" means, for each Eurodollar Rate Advance
comprising part of the same Borrowing, the period commencing on the
date of such Eurodollar Rate Advance or the date of the Conversion of
any Base Rate Advance into such Eurodollar Rate Advance and ending on
the last day of the period selected by the Borrower pursuant to the
provisions below and, thereafter, with respect to Eurodollar Rate
Advances, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day of the
period selected by the Borrower pursuant to the provisions below. The
duration of each such Interest Period shall be one, two, three or six
months, as the Borrower may, upon notice received by the Agent not
later than 11:00 A.M. (New York City time) on the third Business Day
prior to the first day of such Interest Period, select; provided,
however, that:
(a) the Borrower may not select any Interest Period
with respect to any Eurodollar Rate Advance that ends after
any principal repayment installment date unless, after giving
effect to such selection, the aggregate principal amount of
Base Rate Advances and of Eurodollar Rate Advances having
Interest Periods that end on or prior to such principal
repayment installment date shall be at least equal to the
aggregate principal amount of Advances due and payable on or
prior to such date;
(b) Interest Periods commencing on the same date for
Eurodollar Rate Advances comprising part of the same Borrowing
shall be of the same duration;
(c) whenever the last day of any Interest Period
would otherwise occur on a day other than a Business Day, the
last day of such Interest Period shall be extended to occur on
the next succeeding Business Day, provided, however, that, if
such extension would cause the last day of such Interest
Period to occur in the next following calendar month, the last
day of such Interest Period shall occur on the next preceding
Business Day; and
(d) whenever the first day of any Interest Period
occurs on a day of an initial calendar month for which there
is no numerically corresponding day in the calendar month that
succeeds such initial calendar month by the number of months
equal to the number of months in such Interest Period, such
Interest Period shall end on the last Business Day of such
succeeding calendar month.
"Insurance Subsidiary" means any Subsidiary of the Borrower
which is licensed by any Governmental Authority to engage in the
insurance business by issuing Primary Policies or entering into
Reinsurance Agreements.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
8
"Invested Assets" means cash, cash equivalents, short term
investments, investments held for sale and any other assets which are
treated as investments under GAAP, provided that Catastrophe Bonds
shall not be deemed to be Invested Assets.
"Lenders" means the Initial Lenders, each Assuming Lender that
shall become a party hereto pursuant to Section 2.17 and each Person
that shall become a party hereto pursuant to Section 8.07.
"Lien" means, when used with respect to any Person, any
interest in any real or personal property, asset or other right held,
owned or being purchased or acquired by such Person for its own use,
consumption or enjoyment which secures payment or performance of any
obligation and shall include any mortgage, lien, pledge, encumbrance,
charge, retained title of a conditional vendor or lessor, or other
security agreement, mortgage, deed of trust, chattel mortgage,
assignment, pledge, retention of title, financing or similar statement
or notice, or other encumbrance arising as a matter of law, judicial
process or otherwise.
"Loan Documents" means this Agreement, each Note, the Pledge
Agreement and all other agreements, instruments, certificates,
documents, schedules or other written indicia delivered by the Borrower
or any of its Subsidiaries in connection with any of the foregoing.
"Material Adverse Effect" means the occurrence of an event
(including any adverse determination in any litigation, arbitration, or
governmental investigation or proceeding) which has or could reasonably
be expected to have a materially adverse effect on (a) the assets,
business, financial condition or operations of the Borrower and its
Subsidiaries taken as a whole; or (b) the ability of the Borrower to
perform any of its payment or other material obligations under any of
the Loan Documents; or (c) the legality, validity, binding effect or
enforceability against the Borrower of any Loan Document that by its
terms purports to bind the Borrower.
"Material Insurance Subsidiary" means an Insurance Subsidiary
that is also a Material Subsidiary.
"Material Subsidiary" means (a) DaVinci Reinsurance Ltd. and
(b) each other Subsidiary of the Borrower that either (i) as of the end
of the most recently completed Fiscal Year of the Borrower for which
audited financial statements are available, has assets that exceed 10%
of the total consolidated assets of the Borrower and all its
Subsidiaries as of the last day of such period or (ii) for the most
recently completed Fiscal Year of the Borrower for which audited
financial statements are available, has revenues that exceed 10% of the
consolidated revenue of the Borrower and all of its Subsidiaries for
such period.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan as defined in
section 4001(a)(3) of ERISA, to which the Borrower or any ERISA
Affiliate is making or accruing an obligation to make, contributions,
or has within any of the preceding five plan years made or accrued an
obligation to make, contributions.
"Net Worth" means, as to any Person, the sum (without
duplication) of (a) the shareholders equity, calculated in accordance
with GAAP, plus (b) any preferred shares of such Person and its
consolidated Subsidiaries which shall not be redeemable before the
Termination Date.
"Non-Consenting Lender" has the meaning specified in Section
2.18(b).
"Note" means a promissory note of the Borrower payable to the
order of any Lender, delivered pursuant to a request made under Section
2.15 in substantially the form of Exhibit A hereto, evidencing the
aggregate indebtedness of the Borrower to such Lender resulting from
the Advances made by such Lender.
"Notice of Borrowing" has the meaning specified in Section
2.02(a).
"Ordinary Course Litigation" is defined in Section 4.01(d).
9
"Organization Documents" means, (a) with respect to any
company or corporation, the certificate or articles of incorporation,
and the bylaws (or equivalent of comparable constitutive documents with
respect to any non-U.S. jurisdiction), any certificate of determination
or instrument relating to the rights of preferred shareholders of such
company or corporation, and any shareholder rights agreement; (b) with
respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with
respect to any partnership, joint venture, trust or other form of
business entity, the partnership, joint venture or other applicable
agreement of formation or organization and any agreement, instrument,
filing or notice with respect thereto filed in connection with its
formation or organization with the applicable Governmental Authority in
the jurisdiction of its formation or organization and, if applicable,
any certificate or articles of formation or organization of such
entity.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"Permitted Investment" means, at any time:
(a) any evidence of Debt issued or guaranteed by the
United States Government;
(b) commercial paper, maturing not more than one year
from the date of issue, which is issued by (i) a corporation
(except an Affiliate of the Borrower) rated at least A-2 by
S&P, P-2 by Moody's or D-2 by Duff & Xxxxxx Credit Rating
Company, or (ii) any Lender (or its holding company);
(c) any certificate of deposit or bankers' acceptance
or eurodollar time deposit, maturing not more than one year
after the date of issue, which is issued by either (i) a
financial institution which is rated at least BBB- by S&P or
Duff & Xxxxxx Credit Rating Company or Baa3 by Moody's or 2 or
above by the National Association of Insurance Commissioners,
or (ii) any Lender;
(d) any repurchase agreement with a term of one year
or less which (i) is entered into with (A) any Lender, or (B)
any other commercial banking institution of the stature
referred to in clause (c)(i), and (ii) is secured by a fully
perfected Lien in any obligation of the type described in any
of clauses (a) through (c) that has a market value at the time
such repurchase agreement is entered into of not less than
100% of the repurchase obligation of such Lender (or other
commercial banking institution) thereunder;
(e) investments in money market funds that invest
solely in Permitted Investments described in clauses (a)
through (d);
(f) investments in short-term asset management
accounts offered by any Lender for the purpose of investing in
loans to any corporation (other than an Affiliate of the
Borrower) organized under the laws of any state of the United
States or of the District of Columbia and rated at least A-1
by S&P or P-1 by Moody's;
(g) investments in non-equity securities which are
rated at least BBB- by S&P or Duff & Xxxxxx Credit Rating
Company or Baa3 by Moody's or 2 or above by the National
Association of Insurance Commissioners;
(h) investments in non-equity securities which are
not rated but are determined by the Borrower's investment
managers to be of comparable quality to investments permitted
under clause (g); provided, however, that as promptly as
practicable upon receipt of a written notice from the Agent or
the Required Lenders stating that an investment is not
permitted under this clause (h), the Borrower shall sell such
investment; and
10
(i) investments in preferred equity interests issued
by Renaissance Investment Holdings Ltd., provided that the
assets thereof are invested solely in Permitted Investments
described in clauses (a) through (h).
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture, limited liability company or
other entity, or a government or any political subdivision or agency
thereof.
"Plan" means any "employee pension benefit plan", within the
meaning of Section 3(2) of ERISA that is subject to the provisions of
Title IV of ERISA (other than a Multiemployer Plan) and to which the
Borrower or any ERISA Affiliate may have any liability.
"Pledge Agreement" has the meaning specified in Section 3.01.
"Primary Policies" means any insurance policies issued by an
Insurance Subsidiary.
"Public Debt Rating" means, as of any date, the rating that
has been most recently announced by either S&P or Moody's, as the case
may be, for any class of non-credit enhanced long-term senior unsecured
debt issued by the Borrower. For purposes of the foregoing, (a) if only
one of S&P and Moody's shall have in effect a Public Debt Rating, the
Applicable Margin and the Applicable Commitment Fee Rate shall be
determined by reference to the available rating; (b) if neither S&P nor
Moody's shall have in effect a Public Debt Rating, the Applicable
Margin and the Applicable Commitment Fee Rate will be set two levels
below the Financial Strength Rating for DaVinci Reinsurance Ltd. issued
by either S&P or Moody's (e.g., a Financial Strength Rating of "A"
issued by S&P would equate to an implied senior unsecured debt rating
of BBB+ ); (c) if the ratings established by S&P and Moody's shall fall
within different levels, the Applicable Margin and the Applicable
Commitment Fee Rate shall be based upon the higher rating, unless the
difference between such ratings is two or more levels, in which case
the Applicable Margin and the Applicable Commitment Fee Rate shall be
based upon the rating that is one level below the higher of such
ratings; (d) if any rating established by S&P or Moody's shall be
changed, such change shall be effective as of the date on which such
change is first announced publicly by the rating agency making such
change; and (e) if S&P or Moody's shall change the basis on which
ratings are established, each reference to the Public Debt Rating
announced by S&P or Moody's, as the case may be, shall refer to the
then equivalent rating by S&P or Moody's, as the case may be.
"Register" has the meaning specified in Section 8.07(d).
"Regulator" means (a) with respect to Bermuda, the Bermuda
Monetary Authority and (b) with respect to any other jurisdiction, the
similar Governmental Authority in the applicable jurisdiction.
"Reinsurance Agreements" means any agreement, contract,
treaty, certificate or other arrangement whereby the Borrower or any
Subsidiary agrees to assume from or reinsure an insurer or reinsurer
all or part of the liability of such insurer or reinsurer under a
policy or policies of insurance issued by such insurer or reinsurer,
including (for purposes of this Agreement) Catastrophe Bonds.
"Reportable Event" means (a) any "reportable event" within the
meaning of Section 4043(c) of ERISA for which the 30-day notice under
Section 4043(a) of ERISA has not been waived by the PBGC (including any
failure to meet the minimum funding standard of, or timely make any
required installment under, Section 412 of the Code or Section 302 of
ERISA, regardless of the issuance of any waivers in accordance with
Section 412(d) of the Internal Revenue Code), (b) any such "reportable
event" subject to advance notice to the PBGC under Section 4043(b)(3)
of ERISA, (c) any application for a funding waiver or an extension of
any amortization period pursuant to Section 412 of the Code, and (d) a
cessation of operations described in Section 4062(e) of ERISA.
11
"Required Lenders" means at any time Lenders owed at least a
majority in interest of the then aggregate unpaid principal amount of
the Advances owing to Lenders, or, if no such principal amount is then
outstanding, Lenders having at least a majority in interest of the
Commitments.
"Requirement of Law" for any Person means the Organization
Documents of such Person, and any law, treaty, rule, ordinance or
regulation or determination of an arbitrator or a court or other
governmental authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its
property is subject.
"Retrocession Agreement" means any agreement, treaty,
certificate or other arrangement whereby any Insurance Subsidiary cedes
to another insurer all or part of such Insurance Subsidiary's liability
under a policy or policies of insurance reinsured by such Insurance
Subsidiary.
"S&P" means Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc.
"SAP" means, as to each Insurance Subsidiary, the statutory
accounting practices prescribed or permitted by the Authority (or other
similar authority) in such Insurance Subsidiary's domicile for the
preparation of Annual Statements and other financial reports by
insurance corporations of the same type as such Insurance Subsidiary.
"Shareholders Agreement" means the Second Amended and Restated
Shareholders Agreement dated as of December 15, 2005 among the
Borrower, DaVinci Reinsurance Ltd. and the shareholders listed from
time to time on Schedule I thereto.
"Statutory Financial Statements" is defined in Section
4.01(b).
"Subsidiary" means a Person of which the indicated Person
and/or its other Subsidiaries, individually or in the aggregate, own,
directly or indirectly, such number of outstanding shares or other
equity interests as have at the time of any determination hereunder
more than 50% of the ordinary voting power. Unless otherwise specified,
"Subsidiary" means a Subsidiary of the Borrower.
"Termination Date" means the earlier of April 5, 2011, as such
date may be extended pursuant to Section 2.18 and the date of
termination in whole of the Commitments pursuant to Section 2.04 or
6.01; provided, however, that the Termination Date of any Lender that
is a Non-Consenting Lender to any requested extension pursuant to
Section 2.18 shall be the Termination Date in effect immediately prior
to the applicable Extension Date for all purposes of this Agreement.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding".
SECTION 1.03. Accounting Terms. Unless otherwise defined or the context
otherwise requires, all financial and accounting terms used herein or in any of
the Loan Documents or any certificate or other document made or delivered
pursuant hereto shall be defined in accordance with GAAP or SAP, as the context
may require. When used in this Agreement, the term "financial statements" shall
include the notes and schedules thereto. In addition, when used herein, the
terms "best knowledge of" or "to the best knowledge of" any Person shall mean
matters within the actual knowledge of such Person (or an Executive Officer or
general partner of such Person) or which should have been known by such Person
after reasonable inquiry.
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ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances. Each Lender severally agrees, on the terms and
conditions hereinafter set forth, to make Advances to the Borrower from time to
time on any Business Day during the period from the Effective Date until the
Termination Date in an aggregate amount not to exceed at any time outstanding
such Lender's Commitment. Each Borrowing shall be in an aggregate amount of
$5,000,000 or an integral multiple of $1,000,000 in excess thereof and shall
consist of Advances of the same Type made on the same day by the Lenders ratably
according to their respective Commitments. Within the limits of each Lender's
Commitment, the Borrower may borrow under this Section 2.01, prepay pursuant to
Section 2.09 and reborrow under this Section 2.01.
SECTION 2.02. Making the Advances. (a) Each Borrowing shall be made on
notice, given not later than (x) 11:00 A.M. (New York City time) on the third
Business Day prior to the date of the proposed Borrowing in the case of a
Borrowing consisting of Eurodollar Rate Advances or (y) 11:00 A.M. (New York
City time) on the first Business Day prior to the date of the proposed Borrowing
in the case of a Borrowing consisting of Base Rate Advances, by the Borrower to
the Agent, which shall give to each Lender prompt notice thereof by telecopier
or telex. Each such notice of a Borrowing (a "Notice of Borrowing") shall be by
telephone, confirmed immediately in writing, or telecopier or telex in
substantially the form of Exhibit B hereto, specifying therein the requested (i)
date of such Borrowing, (ii) Type of Advances comprising such Borrowing, (iii)
aggregate amount of such Borrowing, and (iv) in the case of a Borrowing
consisting of Eurodollar Rate Advances, initial Interest Period for each such
Advance. Each Lender shall, before 11:00 A.M. (New York City time) on the date
of such Borrowing make available for the account of its Applicable Lending
Office to the Agent at the Agent's Account, in same day funds, such Lender's
ratable portion of such Borrowing. After the Agent's receipt of such funds and
upon fulfillment of the applicable conditions set forth in Article III, the
Agent will make such funds available to the Borrower at the Agent's address
referred to in Section 8.02.
(b) Anything in subsection (a) above to the contrary notwithstanding,
(i) the Borrower may not select Eurodollar Rate Advances for any Borrowing if
the aggregate amount of such Borrowing is less than $5,000,000 or if the
obligation of the Lenders to make Eurodollar Rate Advances shall then be
suspended pursuant to Section 2.07 or 2.11 and (ii) the Eurodollar Rate Advances
may not be outstanding as part of more than six separate Borrowings.
(c) Each Notice of Borrowing shall be irrevocable and binding on the
Borrower. In the case of any Borrowing that the related Notice of Borrowing
specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall
indemnify each Lender against any loss, cost or expense incurred by such Lender
as a result of any failure to fulfill on or before the date specified in such
Notice of Borrowing for such Borrowing the applicable conditions set forth in
Article III, including, without limitation, any loss (excluding loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund the
Advance to be made by such Lender as part of such Borrowing when such Advance,
as a result of such failure, is not made on such date.
(d) Unless the Agent shall have received notice from a Lender prior to
the date of any Borrowing that such Lender will not make available to the Agent
such Lender's ratable portion of such Borrowing, the Agent may assume that such
Lender has made such portion available to the Agent on the date of such
Borrowing in accordance with subsection (a) of this Section 2.02 and the Agent
may, in reliance upon such assumption, make available to the Borrower on such
date a corresponding amount. If and to the extent that such Lender shall not
have so made such ratable portion available to the Agent, such Lender and the
Borrower severally agree to repay to the Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Agent, at (i) in the case of the Borrower, the interest rate
applicable at the time to Advances comprising such Borrowing and (ii) in the
case of such Lender, the Federal Funds Rate. If such Lender shall repay to the
Agent such corresponding amount, such amount so repaid shall constitute such
Lender's Advance as part of such Borrowing for purposes of this Agreement and
the Borrower shall be under no further obligation under this Section 2.02(d) to
repay such corresponding amount or interest thereon.
13
(e) The failure of any Lender to make the Advance to be made by it as
part of any Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its Advance on the date of such Borrowing, but no Lender
shall be responsible for the failure of any other Lender to make the Advance to
be made by such other Lender on the date of any Borrowing.
SECTION 2.03. Fees. (a) Commitment Fee. The Borrower agrees to pay to the
Agent for the account of each Lender a commitment fee on the aggregate amount of
such Lender's unused Commitment from the date hereof in the case of each Initial
Lender and from the effective date specified in the Assumption Agreement or in
the Assignment and Acceptance pursuant to which it became a Lender in the case
of each other Lender until the Termination Date at a rate per annum equal to the
Applicable Commitment Fee Rate in effect from time to time, payable in arrears
quarterly on the last day of each March, June, September and December,
commencing June 30, 2006, and on the Termination Date.
(b) Agent's Fees. The Borrower shall pay to the Agent for its own
account such fees as may from time to time be agreed between the Borrower and
the Agent.
SECTION 2.04. Termination or Reduction of the Commitments. (a) Optional.
The Borrower shall have the right, upon at least three Business Days' notice to
the Agent, to terminate in whole or permanently reduce ratably in part the
unused portions of the respective Commitments of the Lenders, provided that each
partial reduction shall be in the aggregate amount of $5,000,000 or an integral
multiple of $1,000,000 in excess thereof.
(b) Mandatory. On the fourth anniversary of the Effective Date, if the
Required Lenders have made the amortization election in accordance with Section
2.05 prior to such date, and on each date that is three months or a multiple of
three months after such fourth anniversary, the Commitments of the Lenders shall
be automatically and permanently reduced on a pro rata basis by $5,000,000 on
each such date.
SECTION 2.05. Repayment of Advances. The Borrower shall repay to the Agent
for the ratable account of the Lenders on the Termination Date the aggregate
principal amount of the Advances then outstanding. In addition, if the Agent, at
the direction of the Required Lenders, gives the Borrower notice not later than
60 days prior to the fourth anniversary of the Effective Date that the
Commitments of the Lenders will amortize as set forth in Section 2.04(b), the
Borrower shall, on each such Business Day, repay to the Agent for the ratable
account of the Lenders the amount by which the aggregate principal amount of the
Advances exceeds the aggregate Commitments after giving effect to such reduction
on such day, together with accrued interest to the date of such payment on the
principal amount so repaid.
SECTION 2.06. Interest on Advances. (a) Scheduled Interest. The Borrower
shall pay interest on the unpaid principal amount of each Advance owing to each
Lender from the date of such Advance until such principal amount shall be paid
in full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such Advance is a Base
Rate Advance, a rate per annum equal at all times to the sum of (x) the Base
Rate in effect from time to time plus (y) the Applicable Margin in effect
from time to time, payable in arrears quarterly on the last day of each
March, June, September and December during such periods and on the date such
Base Rate Advance shall be Converted or paid in full.
(ii) Eurodollar Rate Advances. During such periods as such Advance is a
Eurodollar Rate Advance, a rate per annum equal at all times during each
Interest Period for such Advance to the sum of (x) the Eurodollar Rate for
such Interest Period for such Advance plus (y) the Applicable Margin in
effect from time to time, payable in arrears on the last day of such
Interest Period and, if such Interest Period has a duration of more than
three months, on each day that occurs during such Interest Period every
three months from the first day of such Interest Period and on the date such
Eurodollar Rate Advance shall be Converted or paid in full.
(b) Default Interest. Upon the occurrence and during the continuance of
an Event of Default, the Agent may, and upon the request of the Required Lenders
shall, require the Borrower to pay interest ("Default Interest") on (i) the
unpaid principal amount of each Advance owing to each Lender, payable in arrears
on the dates referred to in clause (a)(i) or (a)(ii) above, at a rate per annum
equal at all times to 2% per annum above the rate per
14
annum required to be paid on such Advance pursuant to clause (a)(i) or (a)(ii)
above and (ii) to the fullest extent permitted by law, the amount of any
interest, fee or other amount payable hereunder that is not paid when due, from
the date such amount shall be due until such amount shall be paid in full,
payable in arrears on the date such amount shall be paid in full and on demand,
at a rate per annum equal at all times to 2% per annum above the rate per annum
required to be paid on Base Rate Advances pursuant to clause (a)(i) above,
provided, however, that following acceleration of the Advances pursuant to
Section 6.01, Default Interest shall accrue and be payable hereunder whether or
not previously required by the Agent.
SECTION 2.07. Interest Rate Determination. (a) Citibank agrees to furnish
to the Agent timely information for the purpose of determining each Eurodollar
Rate. The Agent shall give prompt notice to the Borrower and the Lenders of the
applicable interest rate determined by the Agent for purposes of Section
2.06(a)(i) or (ii), and the rate, if any, furnished by Citibank for the purpose
of determining the interest rate under Section 2.06(a)(ii).
(b) If, with respect to any Eurodollar Rate Advances, the Required
Lenders notify the Agent that the Eurodollar Rate for any Interest Period for
such Advances will not adequately reflect the cost to such Required Lenders of
making, funding or maintaining their respective Eurodollar Rate Advances for
such Interest Period, the Agent shall forthwith so notify the Borrower and the
Lenders, whereupon (i) each Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a Base Rate
Advance, and (ii) the obligation of the Lenders to make, or to Convert Advances
into, Eurodollar Rate Advances shall be suspended until the Agent shall notify
the Borrower and the Lenders that the circumstances causing such suspension no
longer exist.
(c) If the Borrower shall fail to select the duration of any Interest
Period for any Eurodollar Rate Advances in accordance with the provisions
contained in the definition of "Interest Period" in Section 1.01, the Agent will
forthwith so notify the Borrower and the Lenders and such Advances will
automatically, on the last day of the then existing Interest Period therefor,
Convert into Base Rate Advances.
(d) On the date on which the aggregate unpaid principal amount of
Eurodollar Rate Advances comprising any Borrowing shall be reduced, by payment
or prepayment or otherwise, to less than $5,000,000, such Advances shall
automatically Convert into Base Rate Advances.
(e) Upon the occurrence and during the continuance of any Event of
Default, (i) each Eurodollar Rate Advance will automatically, on the last day of
the then existing Interest Period therefor, Convert into a Base Rate Advance and
(ii) the obligation of the Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended.
(f) If Moneyline Telerate Markets Page 3750 (or any successor page) is
unavailable and Citibank shall fail to furnish timely information to the Agent
for determining the Eurodollar Rate for any Eurodollar Rate Advances,
(i) the Agent shall forthwith notify the Borrower and the Lenders that
the interest rate cannot be determined for such Eurodollar Rate Advances,
(ii) each such Eurodollar Rate Advance will automatically, on the last
day of the then existing Interest Period therefor, Convert into a Base Rate
Advance (or if any Advance is then a Base Rate Advance, will continue as a
Base Rate Advance), and
(iii) the obligation of the Lenders to make Eurodollar Rate Advances or
to Convert Advances into Eurodollar Rate Advances shall be suspended until
the Agent shall notify the Borrower and the Lenders that the circumstances
causing such suspension no longer exist.
SECTION 2.08. Optional Conversion of Advances. The Borrower may on any
Business Day, upon notice given to the Agent not later than 11:00 A.M. (New York
City time) on the third Business Day prior to the date of the proposed
Conversion and subject to the provisions of Sections 2.07 and 2.11, Convert all
Advances of one Type comprising the same Borrowing into Advances of the other
Type; provided, however, that any Conversion of Eurodollar Rate Advances
15
into Base Rate Advances shall be made only on the last day of an Interest Period
for such Eurodollar Rate Advances, any Conversion of Base Rate Advances into
Eurodollar Rate Advances shall be in an amount not less than the minimum amount
specified in Section 2.02(b) and no Conversion of any Advances shall result in
more separate Borrowings than permitted under Section 2.02(b). Each such notice
of a Conversion shall, within the restrictions specified above, specify (i) the
date of such Conversion, (ii) the Advances to be Converted, and (iii) if such
Conversion is into Eurodollar Rate Advances, the duration of the initial
Interest Period for each such Advance. Each notice of Conversion shall be
irrevocable and binding on the Borrower.
SECTION 2.09. Prepayments of Advances. The Borrower may, upon notice at
least two Business Days' prior to the date of such prepayment, in the case of
Eurodollar Rate Advances, and not later than 11:00 A.M. (New York City time) on
the date of such prepayment, in the case of Base Rate Advances, to the Agent
stating the proposed date and aggregate principal amount of the prepayment, and
if such notice is given the Borrower shall, prepay the outstanding principal
amount of the Advances comprising part of the same Borrowing in whole or ratably
in part, together with accrued interest to the date of such prepayment on the
principal amount prepaid; provided, however, that (x) each partial prepayment
shall be in an aggregate principal amount of $5,000,000 or an integral multiple
of $1,000,000 in excess thereof and (y) in the event of any such prepayment of a
Eurodollar Rate Advance, the Borrower shall be obligated to reimburse the
Lenders in respect thereof pursuant to Section 8.04(c).
SECTION 2.10. Increased Costs. (a) If, after the Effective Date, due to
either (i) the introduction of or any change in or in the interpretation of any
law or regulation or (ii) the compliance with any guideline or request from any
central bank or other governmental authority (whether or not having the force of
law), there shall be any increase in the cost to any Lender of agreeing to make
or making, funding or maintaining Eurodollar Rate Advances (excluding for
purposes of this Section 2.10 any such increased costs resulting from (i) Taxes
or Other Taxes (as to which Section 2.13 shall govern) and (ii) changes in the
basis of taxation of overall net income or overall gross income by the United
States or by the foreign jurisdiction or state under the laws of which such
Lender is organized or has its Applicable Lending Office or any political
subdivision thereof), then the Borrower shall from time to time, upon demand by
such Lender (with a copy of such demand to the Agent), pay to the Agent for the
account of such Lender additional amounts sufficient to compensate such Lender
for such increased cost. A certificate as to the amount of such increased cost,
submitted to the Borrower and the Agent by such Lender, shall be conclusive and
binding for all purposes, absent manifest error.
(b) If any Lender determines that compliance with any law or regulation
or any guideline or request from any central bank or other governmental
authority (whether or not having the force of law) introduced after the
Effective Date affects or would affect the amount of capital required or
expected to be maintained by such Lender or any corporation controlling such
Lender and that the amount of such capital is increased by or based upon the
existence of such Lender's commitment to lend hereunder and other commitments of
this type, then, upon demand by such Lender (with a copy of such demand to the
Agent), the Borrower shall pay to the Agent for the account of such Lender, from
time to time as specified by such Lender, additional amounts sufficient to
compensate such Lender or such corporation in the light of such circumstances,
to the extent that such Lender reasonably determines such increase in capital to
be allocable to the existence of such Lender's commitment to lend hereunder. A
certificate as to such amounts submitted to the Borrower and the Agent by such
Lender shall be conclusive and binding for all purposes, absent manifest error.
(c) Failure or delay on the part of any Lender to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender's right to
demand such compensation; provided that the Borrower shall not be required to
compensate a Lender pursuant to this Section for any increased costs incurred
more than 90 days prior to the date that such Lender notifies the Borrower and
the Agent of any event described in paragraph (a) or (b) of this Section (a
"Change in Law") which gives rise to such increased costs and of such Lender's
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs is retroactive, then the 90-day
period referred to above shall be extended to include the period of retroactive
effect thereof.
SECTION 2.11. Illegality. Notwithstanding any other provision of this
Agreement, if any Lender shall notify the Agent that the introduction of or any
change in or in the interpretation of any law or regulation makes it unlawful,
or any central bank or other governmental authority asserts that it is unlawful,
for any Lender or its Eurodollar Lending Office to perform its obligations
hereunder to make Eurodollar Rate Advances or to fund or maintain Eurodollar
Rate Advances hereunder, (a) each Eurodollar Rate Advance of such Lender will
automatically, upon such demand,
16
Convert into a Base Rate Advance and (b) the obligation of such Lender to make
Eurodollar Rate Advances or to Convert Advances into Eurodollar Rate Advances
shall be suspended until the Agent shall notify the Borrower and such Lender
that the circumstances causing such suspension no longer exist.
SECTION 2.12. Payments and Computations. (a) The Borrower shall make each
payment hereunder, irrespective of any right of counterclaim or set-off, not
later than 1:00 P.M. (New York City time) on the day when due in U.S. dollars to
the Agent at the Agent's Account in same day funds. The Agent will promptly
thereafter cause to be distributed like funds relating to the payment of
principal or interest or fees ratably (other than amounts payable pursuant to
Section 2.10, 2.11, 2.13 or 8.04(c)) to the Lenders for the account of their
respective Applicable Lending Offices, and like funds relating to the payment of
any other amount payable to any Lender to such Lender for the account of its
Applicable Lending Office, in each case to be applied in accordance with the
terms of this Agreement. Upon any Assuming Lender becoming a Lender hereunder as
a result of a Commitment Increase pursuant to Section 2.17 or an extension of
the Termination Date pursuant to Section 2.18, and upon the Agent's receipt of
such Lender's Assumption Agreement and recording of the information contained
therein in the Register, from and after the applicable Increase Date or
Extension Date, as the case may be, the Agent shall make all payments hereunder
and under any Notes issued in connection therewith in respect of the interest
assumed thereby to the Assuming Lender. Upon its acceptance of an Assignment and
Acceptance and recording of the information contained therein in the Register
pursuant to Section 8.07(c), from and after the effective date specified in such
Assignment and Acceptance, the Agent shall make all payments hereunder and under
the Notes in respect of the interest assigned thereby to the Lender assignee
thereunder, and the parties to such Assignment and Acceptance shall make all
appropriate adjustments in such payments for periods prior to such effective
date directly between themselves.
(b) The Borrower hereby authorizes each Lender, if and to the extent
payment owed to such Lender is not made when due hereunder or under the Note
held by such Lender, to charge from time to time against any or all of the
Borrower's accounts with such Lender any amount so due.
(c) All computations of interest based on the Base Rate shall be made
by the Agent on the basis of a year of 365 or 366 days, as the case may be, and
all computations of interest based on the Eurodollar Rate or the Federal Funds
Rate and of fees shall be made by the Agent on the basis of a year of 360 days,
in each case for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest or fees
are payable. Each determination by the Agent of an interest rate hereunder shall
be conclusive and binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or fee, as the case may be;
provided, however, that, if such extension would cause payment of interest on or
principal of Eurodollar Rate Advances to be made in the next following calendar
month, such payment shall be made on the next preceding Business Day.
(e) Unless the Agent shall have received notice from the Borrower prior
to the date on which any payment is due to the Lenders hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to each Lender on
such due date an amount equal to the amount then due such Lender. If and to the
extent the Borrower shall not have so made such payment in full to the Agent,
each Lender shall repay to the Agent forthwith on demand such amount distributed
to such Lender together with interest thereon, for each day from the date such
amount is distributed to such Lender until the date such Lender repays such
amount to the Agent, at the Federal Funds Rate.
SECTION 2.13. Taxes. (a) Any and all payments by the Borrower to or for the
account of any Lender or the Agent hereunder or under the Notes or any other
documents to be delivered hereunder shall be made, in accordance with Section
2.12 or the applicable provisions of such other documents, free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender and the Agent, taxes imposed on its
overall net income, and taxes imposed on it in lieu of net income taxes, by the
jurisdiction under the laws of which such Lender or the Agent (as the case may
be) is organized or any political subdivision thereof and, in the case of each
Lender, taxes imposed on its overall net income, and taxes imposed on it in lieu
of net income taxes, by the jurisdiction of such Lender's Applicable Lending
17
Office or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities in respect of
payments hereunder or under the Notes being hereinafter referred to as "Taxes").
If the Borrower shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder or under any Note or any other documents to be
delivered hereunder to any Lender or the Agent, (i) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.13) such Lender or the Agent (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) In addition, the Borrower shall pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies that arise from any payment made hereunder or under the Notes or any
other documents to be delivered hereunder or from the execution, delivery or
registration of, performing under, or otherwise with respect to, this Agreement
or the Notes or any other documents to be delivered hereunder (hereinafter
referred to as "Other Taxes").
(c) The Borrower shall indemnify each Lender and the Agent for and hold
it harmless against the full amount of Taxes or Other Taxes (including, without
limitation, taxes of any kind imposed or asserted by any jurisdiction on amounts
payable under this Section 2.13) imposed on or paid by such Lender or the Agent
(as the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto. This indemnification shall
be made within 30 days from the date such Lender or the Agent (as the case may
be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower shall furnish to the Agent, at its address referred to in Section 8.02,
the original or a certified copy of a receipt evidencing such payment to the
extent such a receipt is issued therefor, or other written proof of payment
thereof that is reasonably satisfactory to the Agent.
(e) Each Lender organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Initial Lender and on the date of the Assumption
Agreement or the Assignment and Acceptance pursuant to which it becomes a Lender
in the case of each other Lender, and from time to time thereafter as reasonably
requested in writing by the Borrower (but only so long as such Lender remains
lawfully able to do so), shall provide each of the Agent and the Borrower with
two original Internal Revenue Service forms W-8BEN or W-8ECI, as appropriate, or
any successor or other form prescribed by the Internal Revenue Service,
certifying that such Lender is exempt from or entitled to a reduced rate of
United States withholding tax on payments pursuant to this Agreement or the
Notes. If the form provided by a Lender at the time such Lender first becomes a
party to this Agreement indicates a United States interest withholding tax rate
in excess of zero, withholding tax at such rate shall be considered excluded
from Taxes unless and until such Lender provides the appropriate forms
certifying that a lesser rate applies, whereupon withholding tax at such lesser
rate only shall be considered excluded from Taxes for periods governed by such
form; provided, however, that, if at the date of the Assignment and Acceptance
pursuant to which a Lender assignee becomes a party to this Agreement, the
Lender assignor was entitled to payments under subsection (a) in respect of
United States withholding tax with respect to interest paid at such date, then,
to such extent, the term Taxes shall include (in addition to withholding taxes
that may be imposed in the future or other amounts otherwise includable in
Taxes) United States withholding tax, if any, applicable with respect to the
Lender assignee on such date. If any form or document referred to in this
subsection (e) requires the disclosure of information, other than information
necessary to compute the tax payable and information required on the date hereof
by Internal Revenue Service form W-8BEN or W-8ECI, that the Lender reasonably
considers to be confidential, the Lender shall give notice thereof to the
Borrower and shall not be obligated to include in such form or document such
confidential information.
(f) For any period with respect to which a Lender has failed to
provide the Borrower with the appropriate form, certificate or other document
described in Section 2.13(e) (other than if such failure is due to a change in
law, or in the interpretation or application thereof, occurring subsequent to
the date on which a form, certificate or other document originally was required
to be provided, or if such form, certificate or other document otherwise is not
required under subsection (e) above), such Lender shall not be entitled to
indemnification under Section 2.13(a) or (c) with respect to Taxes imposed by
the United States by reason of such failure; provided,
18
however, that should a Lender become subject to Taxes because of its failure to
deliver a form, certificate or other document required hereunder, the Borrower
shall take such steps as the Lender shall reasonably request to assist the
Lender to recover such Taxes.
(g) Any Lender claiming any additional amounts payable pursuant to this
Section 2.13 agrees to use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of its
Eurodollar Lending Office if the making of such a change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.
SECTION 2.14. Sharing of Payments, Etc. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Advances owing to it (other than
pursuant to Section 2.10, 2.11, 2.13 or 8.04(c)) in excess of its ratable share
of payments on account of the Advances obtained by all the Lenders, such Lender
shall forthwith purchase from the other Lenders such participations in the
Advances owing to them as shall be necessary to cause such purchasing Lender to
share the excess payment ratably with each of them; provided, however, that if
all or any portion of such excess payment is thereafter recovered from such
purchasing Lender, such purchase from each Lender shall be rescinded and such
Lender shall repay to the purchasing Lender the purchase price to the extent of
such recovery together with an amount equal to such Lender's ratable share
(according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 2.14
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrower in the amount of such
participation.
SECTION 2.15. Evidence of Debt. (a) Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from each Advance owing to
such Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder in respect of
Advances. The Borrower agrees that upon notice by any Lender to the Borrower
(with a copy of such notice to the Agent) to the effect that a Note is required
or appropriate in order for such Lender to evidence (whether for purposes of
pledge, enforcement or otherwise) the Advances owing to, or to be made by, such
Lender, the Borrower shall promptly execute and deliver to such Lender a Note
payable to the order of such Lender in a principal amount up to the Commitment
of such Lender.
(b) The Register maintained by the Agent pursuant to Section 8.07(d)
shall include a control account, and a subsidiary account for each Lender, in
which accounts (taken together) shall be recorded (i) the date and amount of
each Borrowing made hereunder, the Type of Advances comprising such Borrowing
and, if appropriate, the Interest Period applicable thereto, (ii) the terms of
each Assumption Agreement and each Assignment and Acceptance delivered to and
accepted by it, (iii) the amount of any principal or interest due and payable or
to become due and payable from the Borrower to each Lender hereunder and (iv)
the amount of any sum received by the Agent from the Borrower hereunder and each
Lender's share thereof.
(c) Entries made in good faith by the Agent in the Register pursuant
to subsection (b) above, and by each Lender in its account or accounts pursuant
to subsection (a) above, shall be prima facie evidence of the amount of
principal and interest due and payable or to become due and payable from the
Borrower to, in the case of the Register, each Lender and, in the case of such
account or accounts, such Lender, under this Agreement, absent manifest error;
provided, however, that the failure of the Agent or such Lender to make an
entry, or any finding that an entry is incorrect, in the Register or such
account or accounts shall not limit or otherwise affect the obligations of the
Borrower under this Agreement.
SECTION 2.16. Use of Proceeds. The proceeds of the Advances shall be
available (and the Borrower agrees that it shall use such proceeds) solely for
general corporate purposes of the Borrower and its Subsidiaries.
SECTION 2.17. Increase in the Aggregate Commitments. (a) The Borrower may,
at any time but in any event not more than once, by notice to the Agent, request
that the aggregate amount of the Commitment be increased by an amount of not
less than $10,000,000 (a "Commitment Increase") to be effective as of a date
(the "Increase Date")
19
that is at least 90 days prior to the scheduled Termination Date then in effect,
as specified in the related notice to the Agent; provided, however that (i) in
no event shall the aggregate amount of the Commitments at any time exceed
$250,000,000 and (ii) on the date of any request by the Borrower for a
Commitment Increase and on the related Increase Date, (A) the conditions set
forth in Section 3.02 shall be satisfied and either (B) the Borrower's Public
Debt Rating shall be not lower than BBB+ from S&P or, if S&P shall not have a
Public Debt Rating in effect, the Financial Strength Rating for DaVinci
Reinsurance Ltd. shall be not lower than A from S&P or (C) the Borrower's Public
Debt Rating shall be not lower than Baa1 from Xxxxx'x or, if Xxxxx'x shall not
have in effect a Public Debt Rating, the Financial Strength Rating for DaVinci
Reinsurance Ltd. shall be not lower than A2 from Xxxxx'x.
(b) The Agent shall promptly notify the Lenders of a request by the
Borrower for a Commitment Increase, which notice shall include (i) the proposed
amount of such requested Commitment Increase, (ii) the proposed Increase Date
and (iii) the date (the "Commitment Date") by which Lenders wishing to
participate in the Commitment Increase must commit to an increase in the amount
of their respective Commitments. Each Lender that is willing to participate in
such requested Commitment Increase (each an "Increasing Lender") shall, in its
sole discretion, give written notice to the Agent on or prior to the Commitment
Date of the amount by which it is willing to increase its Commitment. If the
Lenders notify the Agent that they are willing to increase the amount of their
respective Commitments by an aggregate amount that exceeds the amount of the
requested Commitment Increase, the requested Commitment Increase shall be
allocated among the Lenders willing to participate therein in such amounts as
are agreed between the Borrower and the Agent; provided, however, that in no
event shall the commitment of any Lender be increased by an amount greater than
the amount of increase such Lender has notified the Agent is acceptable to such
Lender.
(c) Promptly following the Commitment Date, the Agent shall notify the
Borrower as to the amount, if any, by which the Lenders are willing to
participate in the requested Commitment Increase. If the aggregate amount by
which the Lenders are willing to participate in any requested Commitment
Increase on any such Commitment Date is less than the requested Commitment
Increase, then the Borrower may extend offers to one or more Eligible Assignees
to participate in any portion of the requested Commitment Increase that has not
been committed to by the Lenders as of the Commitment Date; provided, however,
that the Commitment of each such Eligible Assignee shall be in an amount of
$10,000,000 or more.
(d) On the Increase Date, each Eligible Assignee that accepts an offer
to participate in a requested Commitment Increase in accordance with Section
2.17(c) (each such Eligible Assignee and each Eligible Assignee that agrees to
an extension of the Termination Date in accordance with Section 2.18(c), an
"Assuming Lender") shall become a Lender party to this Agreement as of the
Increase Date and the Commitment of each Increasing Lender for such requested
Commitment Increase shall be so increased by such amount (or by the amount
allocated to such Lender pursuant to the last sentence of Section 2.17(b)) as of
the Increase Date; provided, however, that the Agent shall have received on or
before the Increase Date the following, each dated such date:
(i) (A) certified copies of resolutions of the Board of Directors of
the Borrower or the Executive Committee of such Board approving the
Commitment Increase and the corresponding modifications to this Agreement
and (B) an opinion of counsel for the Borrower (which may be in-house
counsel), in substantially the form of Exhibit E hereto;
(ii) an assumption agreement from each Assuming Lender, if any, in form
and substance satisfactory to the Borrower and the Agent (each an
"Assumption Agreement"), duly executed by such Eligible Assignee, the Agent
and the Borrower; and
(iii) confirmation from each Increasing Lender of the increase in the
amount of its Commitment in a writing satisfactory to the Borrower and the
Agent.
On the Increase Date, upon fulfillment of the conditions set forth in
the immediately preceding sentence of this Section 2.17(d), the Agent shall
notify the Lenders (including, without limitation, each Assuming Lender) and the
Borrower, on or before 1:00 P.M. (New York City time), by telecopier or telex,
of the occurrence of the Commitment Increase to be effected on the Increase Date
and shall record in the Register the relevant information with respect to each
Increasing Lender and each Assuming Lender on such date.
20
SECTION 2.18. Extension of Termination Date. (a) At least 35 days but not
more than 50 days prior to each anniversary of the Effective Date, the Borrower,
by written notice to the Agent, may request an extension of the Termination Date
in effect at such time by one year from its then scheduled expiration. The Agent
shall promptly notify each Lender of such request, and each Lender shall in
turn, in its sole discretion, not later than 20 days prior to such anniversary
date, notify the Borrower and the Agent in writing as to whether such Lender
will consent to such extension. If any Lender shall fail to notify the Agent and
the Borrower in writing of its consent to any such request for extension of the
Termination Date at least 20 days prior to the applicable anniversary date, such
Lender shall be deemed to be a Non-Consenting Lender with respect to such
request. The Agent shall notify the Borrower not later than 15 days prior to the
applicable anniversary date of the decision of the Lenders regarding the
Borrower's request for an extension of the Termination Date.
(b) If all the Lenders consent in writing to any such request
in accordance with subsection (a) of this Section 2.18, the Termination Date in
effect at such time shall, effective as at the applicable anniversary of the
Effective Date (the "Extension Date"), be extended for one year; provided that
on each Extension Date the applicable conditions set forth in Section 3.02 shall
be satisfied. If less than all of the Lenders consent in writing to any such
request in accordance with subsection (a) of this Section 2.18, the Termination
Date in effect at such time shall, effective as at the applicable Extension Date
and subject to subsection (d) of this Section 2.18, be extended as to those
Lenders that so consented (each a "Consenting Lender") but shall not be extended
as to any other Lender (each a "Non-Consenting Lender"). To the extent that the
Termination Date is not extended as to any Lender pursuant to this Section 2.18
and the Commitment of such Lender is not assumed in accordance with subsection
(c) of this Section 2.18 on or prior to the applicable Extension Date, the
Commitment of such Non-Consenting Lender shall automatically terminate in whole
on such unextended Termination Date without any further notice or other action
by the Borrower, such Lender or any other Person; provided that such
Non-Consenting Lender's rights under Sections 2.11, 2.14 and 8.04, and its
obligations under Section 7.05, shall survive the Termination Date for such
Lender as to matters occurring prior to such date. It is understood and agreed
that no Lender shall have any obligation whatsoever to agree to any request made
by the Borrower for any requested extension of the Termination Date.
(c) If less than all of the Lenders consent to any such
request pursuant to subsection (a) of this Section 2.18, the Agent shall
promptly so notify the Consenting Lenders, and each Consenting Lender may, in
its sole discretion, give written notice to the Agent not later than 10 days
prior to the applicable anniversary of the Effective Date of the amount of the
Non-Consenting Lenders' Commitments for which it is willing to accept an
assignment. If the Consenting Lenders notify the Agent that they are willing to
accept assignments of Commitments in an aggregate amount that exceeds the amount
of the Commitments of the Non-Consenting Lenders, such Commitments shall be
allocated among the Consenting Lenders willing to accept such assignments in
such amounts as are agreed between the Borrower and the Agent. If after giving
effect to the assignments of Commitments described above there remains any
Commitments of Non-Consenting Lenders, the Borrower may arrange for one or more
Consenting Lenders or other Eligible Assignees as Assuming Lenders to assume,
effective as of the Extension Date, any Non-Consenting Lender's Commitment and
all of the obligations of such Non-Consenting Lender under this Agreement
thereafter arising, without recourse to or warranty by, or expense to, such
Non-Consenting Lender; provided, however, that the amount of the Commitment of
any such Assuming Lender as a result of such substitution shall in no event be
less than $5,000,000 unless the amount of the Commitment of such Non-Consenting
Lender is less than $5,000,000, in which case such Assuming Lender shall assume
all of such lesser amount; and provided further that:
(i) any such Consenting Lender or Assuming Lender shall have
paid to such Non-Consenting Lender (A) the aggregate principal amount
of, and any interest accrued and unpaid to the effective date of the
assignment on, the outstanding Advances, if any, of such Non-Consenting
Lender plus (B) any accrued but unpaid facility fees owing to such
Non-Consenting Lender as of the effective date of such assignment;
(ii) all additional costs reimbursements, expense
reimbursements and indemnities payable to such Non-Consenting Lender,
and all other accrued and unpaid amounts owing to such Non-Consenting
Lender hereunder, as of the effective date of such assignment shall
have been paid to such Non-Consenting Lender; and
21
(iii) with respect to any such Assuming Lender, the applicable
processing and recordation fee required under Section 8.07(a) for such
assignment shall have been paid;
provided further that such Non-Consenting Lender's rights under Sections 2.11,
2.14 and 8.04, and its obligations under Section 7.05, shall survive such
substitution as to matters occurring prior to the date of substitution. At least
three Business Days prior to any Extension Date, (A) each such Assuming Lender,
if any, shall have delivered to the Borrower and the Agent an Assumption
Agreement, duly executed by such Assuming Lender, such Non-Consenting Lender,
the Borrower and the Agent, (B) any such Consenting Lender shall have delivered
confirmation in writing satisfactory to the Borrower and the Agent as to the
increase in the amount of its Commitment and (C) each Non-Consenting Lender
being replaced pursuant to this Section 2.18 shall have delivered to the Agent
any Note or Notes held by such Non-Consenting Lender. Upon the payment or
prepayment of all amounts referred to in clauses (i), (ii) and (iii) of the
immediately preceding sentence, each such Consenting Lender or Assuming Lender,
as of the Extension Date, will be substituted for such Non-Consenting Lender
under this Agreement and shall be a Lender for all purposes of this Agreement,
without any further acknowledgment by or the consent of the other Lenders, and
the obligations of each such Non-Consenting Lender hereunder shall, by the
provisions hereof, be released and discharged.
(d) If (after giving effect to any assignments or assumptions
pursuant to subsection (c) of this Section 2.18) Lenders having Commitments
equal to at least 50% of the Commitments in effect immediately prior to the
Extension Date consent in writing to a requested extension (whether by execution
or delivery of an Assumption Agreement or otherwise) not later than one Business
Day prior to such Extension Date, the Agent shall so notify the Borrower, and,
subject to the satisfaction of the conditions in Section 3.02, the Termination
Date then in effect shall be extended for the additional one year period as
described in subsection (a) of this Section 2.18, and all references in this
Agreement, and in the Notes, if any, to the "Termination Date" shall, with
respect to each Consenting Lender and each Assuming Lender for such Extension
Date, refer to the Termination Date as so extended. Promptly following each
Extension Date, the Agent shall notify the Lenders (including, without
limitation, each Assuming Lender) of the extension of the scheduled Termination
Date in effect immediately prior thereto and shall thereupon record in the
Register the relevant information with respect to each such Consenting Lender
and each such Assuming Lender.
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01. Conditions Precedent to Effectiveness of Section 2.01.
Section 2.01 of this Agreement shall become effective on and as of the first
date (the "Effective Date") on which the following conditions precedent have
been satisfied:
(a) There shall exist no action, suit, investigation,
litigation or proceeding affecting the Borrower or any of its
Subsidiaries pending or threatened before any court, governmental
agency or arbitrator that (i) could be reasonably likely to have a
Material Adverse Effect or (ii) purports to affect the legality,
validity or enforceability of any Loan Document or the consummation of
the transactions contemplated hereby.
(b) All governmental and third party consents and approvals
necessary in connection with the transactions contemplated hereby shall
have been obtained (without the imposition of any conditions that are
not acceptable to the Lenders) and shall remain in effect, and no law
or regulation shall be applicable in the reasonable judgment of the
Lenders that restrains, prevents or imposes materially adverse
conditions upon the transactions contemplated hereby.
(c) The Borrower shall have notified each Lender and the Agent
in writing as to the proposed Effective Date.
(d) The Borrower shall have paid all accrued fees and expenses
of the Agent and the Lenders (including the accrued fees and expenses
of counsel to the Agent).
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(e) On the Effective Date, the following statements shall be
true and the Agent shall have received for the account of each Lender a
certificate signed by a duly authorized officer of the Borrower, dated
the Effective Date, stating that:
(i) The representations and warranties contained in
each Loan Document are correct on and as of the Effective Date
(except any representation that speaks as of a specified prior
date),
(ii) No event has occurred and is continuing that
constitutes a Default, and
(iii) To the best of such officer's knowledge, since
December 31, 2005, there shall not have occurred a material
adverse change in the assets, business, financial condition,
operations or prospects of the Borrower and its Subsidiaries
taken as a whole.
(f) The Agent shall have received on or before the Effective
Date the following, each dated such day, in form and substance
satisfactory to the Agent and (except for the Notes) in sufficient
copies for each Lender:
(i) The Notes to the order of the Lenders to the
extent requested by any Lender pursuant to Section 2.15.
(ii) A pledge agreement in substantially the form of
Exhibit D hereto (as amended, the "Pledge Agreement"), duly
executed by the Borrower, together with:
(A) A duly executed Control Agreement
executed by the Borrower and Mellon Bank, N.A., and
(B) evidence that all other action that the
Agent may deem necessary or desirable in order to
perfect and protect the first priority liens and
security interests created under the Pledge Agreement
has been taken.
(iii) Certified copies of the resolutions of the
Board of Directors of the Borrower approving the Loan
Documents, and of all documents evidencing other necessary
corporate action and governmental approvals, if any, with
respect to the Loan Documents.
(iv) A certificate of the Secretary or an Assistant
Secretary of the Borrower certifying the names and true
signatures of the officers of the Borrower authorized to sign
the Loan Documents and the other documents to be delivered
hereunder.
(v) A favorable opinion of Xxxxxxx Xxxx & Xxxxxxxxx
LLP, New York counsel for the Borrower and a favorable opinion
of Xxxxxxx Xxxx & Xxxxxxx, Bermuda counsel for the Borrower,
substantially in the form of Exhibit E-1 and E-2,
respectively, hereto and as to such other matters as any
Lender through the Agent may reasonably request.
(vi) A favorable opinion of Shearman & Sterling LLP,
counsel for the Agent, in form and substance satisfactory to
the Agent.
(vii) A copy of the unaudited consolidated balance
sheets of the Borrower and its Subsidiaries, as of December
31, 2005 and the related consolidated statements of income and
cash flows for the Fiscal Year then ended, all prepared in
accordance with GAAP (subject to normal year-end adjustments
and except that footnote and schedule disclosure may be
abbreviated) and the related unaudited consolidating balance
sheets and income statements for such period, accompanied by
the certification of the chief executive officer, chief
financial officer, treasurer or controller of the Borrower
that all such financial statements are complete and correct
and present fairly in accordance with GAAP (subject to normal
year-end adjustments and except that footnote
23
and schedule disclosure may be abbreviated) the consolidated
results of operations and cash flows of the Borrower as at the
end of such Fiscal Year and for the period then ended.
(g) The Borrower shall have terminated the commitments, and
arranged, contemporaneously with the initial Borrowing under this
Agreement, to have paid in full all Debt, interest, fees and other
amounts outstanding, under the Existing Credit Agreement and each of
the Lenders that is party to such credit facility hereby waives, upon
execution of this Agreement, the three Business Days' notice required
by Section 2.04 of said Credit Agreement relating to the termination of
commitments thereunder.
SECTION 3.02. Conditions Precedent to Each Borrowing, Commitment Increase
and Extension Date. The obligation of each Lender to make an Advance on the
occasion of each Borrowing, each Commitment Increase and each extension of
Commitments pursuant to Section 2.18 shall be subject to the conditions
precedent that the Effective Date shall have occurred and on the date of such
Borrowing, the applicable Increase Date or the applicable Extension Date (a) the
following statements shall be true (and each of the giving of the applicable
Notice of Borrowing and the acceptance by the Borrower of the proceeds of such
Borrowing, the request for Commitment Increase or the request for Commitment
extension shall constitute a representation and warranty by the Borrower that on
the date of such Borrowing, Increase Date or Extension Date such statements are
true):
(i) the representations and warranties contained in each Loan
Document are correct in all material respects on and as of such date
(except any representation that speaks as of a specified prior date),
before and after giving effect to such Borrowing and to the application
of proceeds therefrom or from such Commitment Increase or Extension
Date, as though made on and as of such date, and
(ii) no event has occurred and is continuing, or would result
from such Borrowing or from the application of the proceeds therefrom
or from such Commitment Increase or Extension Date, that constitutes a
Default;
and (b) the Agent shall have received such other approvals, opinions or
documents as any Lender through the Agent may reasonably request.
SECTION 3.03. Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Agent responsible for the transactions contemplated by this Agreement
shall have received notice from such Lender prior to the date that the Borrower,
by notice to the Lenders, designates as the proposed Effective Date, specifying
its objection thereto. The Agent shall promptly notify the Lenders of the
occurrence of the Effective Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The Borrower
represents and warrants as follows:
(a) Due Organization, Authorization, etc. Each of the Borrower
and each Material Subsidiary (i) is duly organized, validly existing
and (to the extent applicable) in good standing under the laws of its
jurisdiction of formation, (ii) is duly qualified to do business and
(to the extent applicable) in good standing in each jurisdiction where,
because of the nature of its activities or properties, such
qualification is required except where the failure to qualify would not
have a Material Adverse Effect, (iii) has the requisite corporate power
and authority and the right to own and operate its properties, to lease
the property it operates under lease, and to conduct its business as
now and proposed to be conducted, and (iv) has obtained all material
licenses, permits, consents or approvals from or by, and has made all
filings with, and given all notices to, all Governmental Authorities
having jurisdiction, to the extent required for such ownership,
operation and conduct (including, without limitation, the consummation
of the transactions contemplated by this Agreement) as to each of the
foregoing, except where the failure to do so would not
24
have a Material Adverse Effect. The execution, delivery and performance
by the Borrower of this Agreement and the consummation of the
transactions contemplated hereby and thereby are within its corporate
powers and have been duly authorized by all necessary corporate action
(including, without limitation, shareholder approval, if required).
Each of the Borrower and its Material Subsidiaries has received all
other material consents and approvals (if any shall be required)
necessary for such execution, delivery and performance, and such
execution, delivery and performance do not and will not contravene or
conflict with, or create a Lien or right of termination or acceleration
under, any Requirement of Law or Contractual Obligation binding upon
the Borrower or such Material Subsidiaries. This Agreement and each of
the Loan Documents is (or when executed and delivered will be) the
legal, valid, and binding obligation of the Borrower enforceable
against the Borrower in accordance with its respective terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights against the Borrower generally or by general equitable
principles; provided that the Borrower assumes for purposes of this
Section 4.01(a) that this Agreement and the other Loan Documents have
been validly executed and delivered by each of the parties thereto
other than the Borrower. Schedule 4.01(a) sets forth all the
jurisdictions in which the Borrower and each Material Subsidiary are
qualified to do business as of the Effective Date.
(b) Statutory Financial Statements. All books of account of
each Insurance Subsidiary fully and fairly disclose all of the
transactions, properties, assets, investments, liabilities and
obligations of such Insurance Subsidiary and all of such books of
account are in the possession of each Insurance Subsidiary and are
true, correct and complete in all material respects.
(c) GAAP Financial Statements. (i) With respect to any
representation and warranty which is deemed to be made after the date
hereof by the Borrower, the balance sheet and statements of operations,
of shareholders' equity and of cash flow, which as of such date shall
most recently have been furnished by or on behalf of the Borrower to
each Lender for the purposes of or in connection with this Agreement or
any transaction contemplated hereby, shall have been prepared in
accordance with GAAP consistently applied (except as disclosed therein
and, in the case of interim financial statements, for the absence of,
or abbreviated, footnote and schedule disclosures), and shall present
fairly the consolidated financial condition of the corporations covered
thereby as at the dates thereof for the periods then ended, subject, in
the case of quarterly financial statements, to normal year-end audit
adjustments.
(ii) Except as set forth on Schedule 4.01(c)(ii), there has
been no change in the business, assets, operations or financial
condition of the Borrower or any Subsidiary which has had or could
reasonably be expected to have a Material Adverse Effect since December
31, 2005.
(d) Litigation and Contingent Liabilities. (a) Except as set
forth (including estimates of the dollar amounts involved) in Schedule
4.01(d) hereto and (b) except for claims which are covered by Insurance
Policies, coverage for which has not been denied in writing, or which
relate to Primary Policies or Reinsurance Agreements issued by the
Borrower or its Subsidiaries or to which it is a party entered into by
the Borrower or its Subsidiaries in the ordinary course of business
(referred to herein as "Ordinary Course Litigation"), no claim,
litigation (including, without limitation, derivative actions),
arbitration, governmental investigation or proceeding or inquiry is
pending or, to the knowledge of the Borrower or its Subsidiaries,
threatened against the Borrower or any of its Subsidiaries (i) which
would, if adversely determined, have a Material Adverse Effect or (ii)
which relates to any of the transactions contemplated hereby, and there
is no basis known to the Borrower for any of the foregoing. Other than
any liability incident to such claims, litigation or proceedings and as
set forth on Schedule 4.01(d), the Borrower has no material Contingent
Liabilities not provided for or referred to in the financial statements
delivered pursuant to Section 5.01(a)(i).
(e) ERISA. (i) The Borrower and each Subsidiary is in
compliance in all material respects with the applicable provisions of
ERISA, and each Plan is being administered in compliance in all
material respects with all applicable Requirements of Law, including
without limitation the applicable provisions of ERISA and the Code,
except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to have in a Material Adverse Effect.
No ERISA Event (A) has occurred and is
25
continuing, or (B) to the knowledge of the Borrower, is reasonably
expected to occur with respect to any Plan or Multiemployer Plan.
(ii) With respect to each scheme or arrangement mandated by a
government other than the United States (a "Foreign Government Scheme
or Arrangement") and with respect to each employee benefit plan that is
not subject to United States law maintained or contributed to by the
Borrower or any Subsidiary or with respect to which any Subsidiary may
have liability under applicable local law (a "Foreign Plan"), (A) the
Borrower and each Subsidiary is in compliance in all material respects
with any Requirements of Law applicable to such Foreign Government
Scheme or Arrangement or Foreign Plan and (B) each such Foreign
Government Scheme or Arrangement or Foreign Plan is being administered
by the applicable Person in compliance in all material respects with
all applicable Requirements of Law, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect. No event that could reasonably be
considered the substantive equivalent of an ERISA Event with respect to
any Foreign Government Scheme or Arrangement or Foreign Plan (A) has
occurred and is continuing, or (B) to the knowledge of the Borrower, is
reasonably expected to occur.
(f) Investment Company Act. Neither the Borrower nor any of
its Subsidiaries is an "investment company" or a company "controlled by
an investment company," within the meaning of the Investment Company
Act of 1940, as amended.
(g) Regulations U and X. Neither the Borrower nor any of its
Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of
purchasing or carrying margin stock. None of the Borrower, any of its
Subsidiaries, any Affiliate of any of them or any Person acting on
their behalf has taken or will take action to cause the execution,
delivery or performance of this Agreement, the making or existence of
the Advances or the use of proceeds of Advances to violate Regulations
U or X of the FRB.
(h) Proceeds. The proceeds of the Advances will be used for
the repayment of advances under the Existing Credit Agreement and for
other general corporate purposes (including capital contributions to
Subsidiaries and acquisitions permitted under Section 5.02(c)). None of
such proceeds will be used in violation of applicable law, and none of
such proceeds will be used, directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of buying or carrying any
margin stock as defined in Regulation U of the FRB.
(i) Insurance. The Borrower and its Material Subsidiaries are
in substantial compliance with all material conditions contained in
their Insurance Policies.
(j) Ownership of Properties. On the date of any Advance, the
Borrower and its Material Subsidiaries will have good title to all of
their respective material properties and assets, real and personal, of
any nature whatsoever.
(k) Accuracy of Information. All factual written information
furnished heretofore or contemporaneously herewith by or on behalf of
the Borrower or any of its Subsidiaries to the Agent or the Lenders for
purposes of or in connection with this Agreement or any of the
transactions contemplated hereby, as supplemented to the date hereof,
is and all other such factual written information hereafter furnished
by or on behalf of the Borrower or any of its Subsidiaries to the Agent
or the Lenders will be, true and accurate in every material respect on
the date as of which such information is dated or certified and not
incomplete by omitting to state any material fact necessary to make
such information not misleading in light of the circumstances under
which such information was provided. Any projections and pro forma
financial information contained in such factual written information are
based upon good faith estimates and assumptions believed by the
Borrower and its Subsidiaries to be reasonable at the time made, it
being recognized by the Lenders that such projections as to future
events are not to be viewed as facts and that actual results during the
period or periods covered by any such projections may differ from the
projected results.
26
(l) Subsidiaries. Schedule 4.01(l) as updated from time to
time pursuant to Section 5.01(a)(xii) contains a complete list of the
Borrower's Subsidiaries indicating which Subsidiaries are Material
Subsidiaries.
(m) Insurance Licenses. Schedule 4.01(m) lists all of the
jurisdictions in which any of the Insurance Subsidiaries hold licenses
(including, without limitation, licenses or certificates of authority
from applicable insurance departments), permits or authorizations to
transact insurance and reinsurance business (collectively, the
"Licenses") and indicates the line or lines of insurance which each
such Insurance Subsidiary is permitted to be engaged in with respect to
each License therein listed as of the Effective Date. Each Material
Insurance Subsidiary has all necessary Licenses to transact insurance
business or reinsurance business, directly or indirectly, in each
jurisdiction, where such business requires any such Material Insurance
Subsidiary to obtain a License. Except as set forth on Schedule
4.01(m), to the best of the Borrower's knowledge, no such License is
the subject of a proceeding for suspension or revocation or any similar
proceedings, there is no sustainable basis for such a suspension or
revocation, and no such suspension or revocation is threatened by the
applicable insurance department where such suspension or revocation
would have a Material Adverse Effect.
(n) Taxes. The Borrower and each of its Subsidiaries has filed
all tax returns that are required to be filed by it, and has paid or
provided adequate reserves for the payment of all material taxes,
including, without limitation, all payroll taxes and federal and state
withholding taxes, and all assessments payable by it that have become
due, other than (a) those that are not yet delinquent or that are
disclosed on Schedule 4.01(n) and are being contested in good faith by
appropriate proceedings and with respect to which reserves have been
established, and are being maintained, in accordance with GAAP or (b)
those which the failure to file or pay would not have a Material
Adverse Effect. Except as set forth in Schedule 4.01(n), on the
Effective Date there is no ongoing audit or, to the Borrower's
knowledge, other governmental investigation of the tax liability of the
Borrower or any of its Subsidiaries and there is no unresolved claim by
a taxing authority concerning the Borrower's or any such Subsidiary's
tax liability, for any period for which returns have been filed or were
due. As used in this Section 4.01(n), the term "taxes" includes all
taxes of any nature whatsoever and however denominated, including,
without limitation, excise, import, governmental fees, duties and all
other charges, as well as additions to tax, penalties and interest
thereon, imposed by any Governmental Authority.
(o) Securities Laws. Neither the Borrower nor any Affiliate,
nor anyone acting on behalf of any such Person, has directly or
indirectly offered any interest in the Advances for sale to, or
solicited any offer to acquire any such interest from, or has sold any
such interest to any Person that would subject the issuance or sale of
the Advances or any other liability to registration under the
Securities Act of 1933, as amended.
(p) Compliance with Laws. Neither the Borrower nor any of its
Subsidiaries is in violation of any Requirements of Law of any
Governmental Authority, if the effect of such violation could
reasonably be expected to have a Material Adverse Effect and, to the
best of the Borrower's knowledge, no such violation has been alleged
and each of the Borrower and its Subsidiaries (i) has filed in a timely
manner all reports, documents and other materials required to be filed
by it with any Governmental Authority, if such failure to so file could
reasonably be expected to have a Material Adverse Effect; and the
information contained in each of such filings is true, correct and
complete in all material respects and (ii) has retained all records and
documents required to be retained by it pursuant to any law, ordinance,
rule, regulation, order, policy, guideline or other requirement of any
Governmental Authority, if the failure to so retain such records and
documents could reasonably be expected to have a Material Adverse
Effect.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Advance shall remain
unpaid or any Lender shall have any Commitment hereunder, the Borrower will:
27
(a) Reports, Certificates and Other Information. Furnish or
cause to be furnished to the Agent and the Lenders:
(i) GAAP Financial Statements:
(A) Within 50 days after the close of each of the
first three Fiscal Quarters of each Fiscal Year of
the Borrower, a copy of the unaudited consolidated
balance sheets of the Borrower and its Subsidiaries,
as of the close of such quarter and the related
consolidated statements of income, for that portion
of the Fiscal Year ending as of the close of such
Fiscal Quarter, all prepared in accordance with GAAP
(subject to normal year-end adjustments and except
that footnote and schedule disclosure may be
abbreviated) and the related unaudited consolidating
balance sheets and income statements for such period
and accompanied by the certification of the chief
executive officer, chief financial officer, treasurer
or controller of the Borrower that all such financial
statements are complete and correct in all material
respects and present fairly in accordance with GAAP
(subject to normal year-end adjustments and except
that footnote and schedule disclosure may be
abbreviated) the consolidated financial position and
results of operations of the Borrower as at the end
of such Fiscal Quarter and for the period then ended.
(B) Within 95 days after the close of each Fiscal
Year, a copy of the annual financial statements of
the Borrower and its Subsidiaries commencing December
31, 2005, consisting of audited consolidated and
unaudited consolidating balance sheets and statements
of income and audited consolidated changes in
shareholders' equity and cash flows, setting forth in
comparative form the consolidated figures for the
previous Fiscal Year, which financial statements
shall be prepared in accordance with GAAP, certified
without material qualification by the independent
certified public accountants regularly retained by
the Borrower, or any other firm of independent
certified public accountants of recognized national
standing selected by the Borrower and reasonably
acceptable to the Required Lenders that all such
audited financial statements are complete and correct
in all material respects and present fairly in
accordance with GAAP the consolidated financial
position and the consolidated results of operations
and cash flows of the Borrower and its Subsidiaries
as at the end of such Fiscal Year and for the period
then ended.
(C) On each date that financial statements are
delivered pursuant to Section 5.01(a)(i)(B), a
schedule in form and substance satisfactory to the
Agent setting forth claims schedule detail with
respect to claims of $5,000,000 or more under any
single policy and claims aggregating $20,000,000 or
more with respect to any single event.
(ii) Tax Returns. If requested by the Agent, copies
of all federal, state, local and foreign tax returns and
reports in respect of income, franchise or other taxes on or
measured by income (excluding sales, use or like taxes) filed
by the Borrower or any of its Subsidiaries.
(iii) SAP Financial Statements. Within 5 days after
the date filed with the Authority for each of its Fiscal
Years, but in any event within 125 days after the end of each
Fiscal Year of each Material Insurance Subsidiary, a copy of
the Annual Statement of such Material Insurance Subsidiary,
commencing December 31, 2005, for such Fiscal Year, if any,
required by the Authority to be filed, each of which
statements delivered to be prepared in accordance with SAP and
accompanied by the certification of the chief financial
officer or chief executive officer of such Material Insurance
Subsidiary that such financial statement is complete and
correct in all material respects and presents fairly in
accordance with SAP the financial position of such Material
Insurance Subsidiary for the period then ended.
(iv) Notice of Default, Etc. Immediately after an
Executive Officer of the Borrower knows or has reason to know
of the existence of any Default, or any development or other
28
information which would have a Material Adverse Effect,
telephonic or telecopier notice to the Agent specifying the
nature of such Default or development or information,
including the anticipated effect thereof, which notice shall
be promptly confirmed in writing within two (2) Business Days.
(v) Other Information. The following certificates and
other information related to the Borrower:
(A) Within five (5) Business Days of receipt, a
copy of any financial examination reports by a
Governmental Authority with respect to its Material
Insurance Subsidiaries relating to the insurance
business of its Material Insurance Subsidiaries
(when, and if, prepared); provided, the Borrower
shall only be required to deliver any interim report
hereunder at such time as Borrower has knowledge that
a final report will not be issued and delivered to
the Agent within 90 days of any such interim report.
(B) Copies of all filings (other than ordinary
course requalifications, nonmaterial tax and
insurance rate and other ministerial regulatory
filings) with Governmental Authorities by the
Borrower or any Material Insurance Subsidiary not
later than five (5) Business Days after such filings
are made, including, without limitation, filings
which seek approval of Governmental Authorities with
respect to transactions between the Borrower or such
Material Insurance Subsidiary and its Affiliates.
(C) Within five (5) Business Days of such notice,
notice of proposed or actual suspension, termination
or revocation of any material License of any Material
Insurance Subsidiary by any Governmental Authority or
of receipt of notice from any Governmental Authority
notifying the Borrower or any Material Insurance
Subsidiary of a hearing relating to such a
suspension, termination or revocation, including any
request by a Governmental Authority which commits the
Borrower or any Material Insurance Subsidiary to
take, or refrain from taking, any action or which
otherwise materially and adversely affects the
authority of the Borrower or any Material Insurance
Subsidiary to conduct its business.
(D) Within five (5) Business Days of such notice,
notice of any pending or threatened investigation or
regulatory proceeding (other than routine periodic
investigations or reviews) by any Governmental
Authority concerning the business, practices or
operations of the Borrower or any Material Insurance
Subsidiary.
(E) Simultaneously with delivery of the financial
statements provided pursuant to Section
5.01(a)(i)(B), a list of all investments (including,
without limitation, Permitted Investments) of the
Borrower and its Subsidiaries as of the end of such
Fiscal Quarter.
(F) Promptly, notice of any actual or, to the
best of the Borrower's knowledge, proposed material
changes in the Insurance Code governing the
investment or dividend practices of any Material
Insurance Subsidiary.
(G) Promptly, such additional financial and other
information as the Agent may from time to time
reasonably request.
(vi) Compliance Certificates. Concurrently with the
delivery to the Agent of the GAAP financial statements under
Sections 5.01(a)(i)(A) and 5.01(a)(i)(B), for each Fiscal
Quarter and Fiscal Year of the Borrower, and at any other time
no later than thirty (30) Business Days following a written
request of the Agent, a duly completed Compliance Certificate,
signed by the chief executive officer, chief financial
officer, treasurer or controller of the Borrower, containing,
among other things, a computation of, and showing compliance
with, each of the applicable
29
financial ratios and restrictions contained in Sections
5.02(a), 5.02(b) and 5.02(j), and to the effect that, to the
best of such officer's knowledge, as of such date no Default
has occurred and is continuing.
(vii) Reports to SEC. Promptly upon the filing
thereof copies of all registration statements (other than
exhibits thereto and any registration statements on Form S-8
or its equivalent) and annual, quarterly, monthly and current
reports filed by the Borrower or any of its Material
Subsidiaries with or to any securities exchange or the
Securities and Exchange Commission.
(viii) Notice of Litigation and ERISA. Promptly upon
learning of the occurrence of any of the following, written
notice thereof, describing the same and the steps being taken
by the Borrower with respect thereto: (A) the institution of,
or any adverse determination in, any litigation, arbitration
proceeding or governmental proceeding (including any Internal
Revenue Service or Department of Labor proceeding with respect
to any Plan) which could, if adversely determined, be
reasonably expected to have a Material Adverse Effect and
which is not Ordinary Course Litigation, (B) an ERISA Event,
and an event with respect to any Plan which could result in
the incurrence by the Borrower or any of its Material
Subsidiaries of any material liability (other than a liability
for contributions or premiums), fine or penalty, (C) the
commencement of any dispute which might lead to the
modification, transfer, revocation, suspension or termination
of this Agreement or any Loan Document or (D) any event which
could be reasonably expected to have a Material Adverse
Effect.
(ix) Insurance Reports. Within five (5) Business Days
of receipt of such notice by the Borrower or its Material
Subsidiaries, written notice of any cancellation or material
adverse change in any material Insurance Policy carried by the
Borrower or any of its Material Subsidiaries.
(x) List of Directors and Officers and Amendments.
Concurrently with the delivery of the financial statements
required pursuant to Section 5.01(a)(i)(A) and (B), (x) a list
of the Executive Officers and Directors of the Borrower and
(y) copies of any amendments to the Organization Documents or
Shareholders Agreement to the extent such information is not
included in the information provided pursuant to Section
5.01(a)(vii) and to the extent such information has changed
since the last delivery pursuant to this Section.
(xi) New Subsidiaries. Promptly (i) upon formation or
acquisition of any Subsidiary with a capitalization of
$1,000,000 or more and (ii) after the capital of a previously
unreported Subsidiary is increased above $1,000,000, written
notice of the name, purpose and capitalization of such
Subsidiary and whether such Subsidiary is a Material
Subsidiary.
(xii) Updated Schedules. From time to time, and in
any event concurrently with delivery of the financial
statements under Section 5.01(a)(i)(A) and (B), revised
Schedules 4.01(l), if applicable, showing changes from the
Schedule previously delivered.
(xiii) Other Information. From time to time such
other information concerning the Borrower or any Subsidiary as
the Agent or any Lender may reasonably request.
Delivery of the materials required to be delivered pursuant to
Section 5.01(a)(i), (ii), (iii), (vi), (vii), (x), (xi) and (xii) to the Agent
and the Lenders in an electronic medium in accordance with the manner set forth
in Section 8.02(b) shall be deemed to satisfy the Borrower's obligation with
respect to such materials under this Section 5.01(a).
(b) Corporate Existence; Foreign Qualification. Do and cause
to be done at all times all things necessary to (i) maintain and
preserve the corporate existence of the Borrower and each Material
Subsidiary of the Borrower (subject to Section 5.02(c) and except that
inactive Subsidiaries of the
30
Borrower may be merged out of existence or dissolved) and (ii) be, and
ensure that each Material Subsidiary of the Borrower is, duly qualified
to do business and (to the extent applicable) be in good standing as a
foreign corporation in each jurisdiction where the nature of its
business makes such qualification necessary unless the failure to be so
qualified would not have a Material Adverse Effect.
(c) Books, Records and Inspections. (i) Maintain, and cause
each of its Subsidiaries to maintain materially complete and accurate
books and records in accordance with GAAP and in addition, with respect
to each Insurance Subsidiary, SAP, (ii) permit, and cause each of its
Subsidiaries to permit, access at reasonable times and, except during
the continuance of an Event of Default, upon reasonable notice by the
Agent to its books and records, (iii) permit, and cause each of its
Subsidiaries to permit, the Agent or its designated representative to
inspect at reasonable times and, except during the continuance of an
Event of Default, upon reasonable notice its properties and operations,
and (iv) permit, and cause each of its Subsidiaries to permit, the
Agent to discuss its business, operations and financial condition with
its officers and its independent accountants.
(d) [Intentionally Deleted]
(e) Taxes and Liabilities. Pay, and cause each of its
Subsidiaries to pay, when due all material taxes, assessments and other
material liabilities except as contested in good faith and by
appropriate proceedings with respect to which reserves have been
established, and are being maintained, in accordance with GAAP except
where failure to pay would not have a Material Adverse Effect.
(f) Employee Benefit Plans. Maintain, and cause each of its
Subsidiaries to maintain, each Plan and Foreign Plan in compliance in
all material respects with all applicable Requirements of Law except
where failure to so comply would not have a Material Adverse Effect.
(g) Compliance with Laws. Comply, and cause each of its
Subsidiaries to comply, with all Requirements of Law related to its
businesses (including, without limitation, the establishment of all
insurance reserves required to be established under SAP and applicable
laws restricting the investments of the Borrower and its Subsidiaries),
except where failure to so comply would not in the aggregate have a
Material Adverse Effect.
(h) Maintenance of Permits. Maintain, and cause each of its
Subsidiaries to maintain, all permits, licenses and consents as may be
required for the conduct of its business by any Governmental Authority
except (x) for such permits, licenses and consents related to assets
which are sold in accordance with Section 5.02(c) or (y) where failure
to maintain the same would not have a Material Adverse Effect.
(i) Conduct of Business. Engage, and cause each Material
Subsidiary to engage, primarily in insurance and reinsurance business
and related activities.
SECTION 5.02. Negative Covenants. So long as any Advance shall remain
unpaid or any Lender shall have any Commitment hereunder, the Borrower will:
(a) Debt to Capital Ratio. Not permit the Borrower's Debt to
Capital Ratio (excluding DaVinciRe Catastrophe-Linked Securities) to
exceed .30:1.
(b) Net Worth; Minimum Capital. Not permit Net Worth of the
Borrower to be less than $350,000,000, nor permit Net Worth (as shown
on its GAAP financial statements) of DaVinci Reinsurance Ltd. to be
less than $450,000,000.
(c) Amalgamations, Mergers, Consolidations and Sales. Not, and
not permit any of its Subsidiaries to, (i) amalgamate, merge or
consolidate, or purchase or otherwise acquire all or substantially all
of the assets or stock of any class of, or any partnership or joint
venture interest in, any other Person (other than a newly formed
Subsidiary or the acquisition of a Subsidiary which complies with
clause (ii)(B) of this Section 5.02(c) or the acquisition of shares of
a Subsidiary held by minority shareholders), or
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(ii) sell, transfer, convey or lease all or any substantial part of its
assets other than any sale, transfer, conveyance or lease in the
ordinary course of business or any sale or assignment of receivables
except for (A) any such amalgamation, merger or consolidation, sale,
transfer, conveyance, lease or assignment of any wholly owned
Subsidiary into, with or to any other wholly owned Subsidiary, (B)
purchases or acquisitions which comply with Section 5.01(i) provided
(x) no Default has occurred and is continuing or would result therefrom
and (y) the purchase price for any single purchase or acquisition does
not exceed 50% of Net Worth as of the date of such purchase or
acquisition minus all amounts which in accordance with GAAP would be
characterized as intangible assets (including goodwill) as of the date
of such purchase or acquisition (calculated on a pro forma basis giving
effect to such acquisition or purchase) and (z) the aggregate purchase
price of all purchases and acquisitions after the Effective Date does
not exceed 100% of Net Worth as of the date of such purchase or
acquisition minus all amounts which in accordance with GAAP would be
characterized as intangible assets (including goodwill) and (C) sales
of assets and capital stock and other ownership or profit interests
(including, without limitation, partnership, member or trust interest
therein) of Subsidiaries that are not Material Subsidiaries, provided
that no Default has occurred and is continuing.
(d) Regulations U and X. Not, and not permit any of its
Subsidiaries to, hold margin stock (as such term is defined in
Regulation U of the FRB) having a value in excess of 20% of the value
of the assets of the Borrower and its Subsidiaries taken as a whole
after taking into account the application of the proceeds of the
Advances.
(e) Other Agreements. Not, and not permit any of its
Subsidiaries to, enter into any agreement containing any provision
which would be violated or breached by the performance of obligations
hereunder or under any instrument or document delivered or to be
delivered by it hereunder or in connection herewith.
(f) Transactions with Affiliates. Not, and not permit any
Subsidiary to, enter into, or cause, suffer or permit to exist,
directly or indirectly, any arrangement, transaction or contract with
any of its Affiliates unless such arrangement, transaction or contract
is on an arm's length basis; provided that (i) transactions between the
Borrower and any wholly-owned Subsidiary of the Borrower or between any
wholly-owned Subsidiaries of the Borrower, (ii) any transaction
expressly contemplated by the Shareholders Agreement or a management
agreement with RenaissanceRe Holdings, Ltd or any Subsidiary of
RenaissanceRe Holdings Ltd., and (iii) investments described in clause
(i) of the definition of "Permitted Investments" shall be excluded from
the restrictions set forth in this Section 5.02(f).
(g) Liens. Not, and not permit any of its Subsidiaries to,
create or permit to exist any Lien with respect to any assets now or
hereafter existing or acquired, except the following: (A) Liens for
current taxes not delinquent or for taxes being contested in good faith
and by appropriate proceedings and with respect to which adequate
reserves have been established, and are being maintained, in accordance
with GAAP, (B) easements, party wall agreements, rights of way,
restrictions, minor defects or irregularities in title and other
similar Liens not interfering in any material respect with the ordinary
course of the business of the Borrower and its Subsidiaries taken as a
whole; (C) Liens in connection with the acquisition of fixed assets
after the date hereof and attaching only to the property being
acquired, (D) Liens incurred in the ordinary course of business in
connection with workers' compensation, unemployment insurance or other
forms of governmental insurance or benefits and Liens pursuant to
letters of credit or other security arrangements in connection with
such insurance or benefits, (E) mechanics', workers', materialmen's,
landlord liens and other like Liens arising in the ordinary course of
business in respect of obligations which are not delinquent or which
are being contested in good faith and by appropriate proceedings and
with respect to which adequate reserves have been established, and are
being maintained, in accordance with GAAP, (F) liens on Invested Assets
pursuant to trust, letter of credit or other security arrangements in
connection with Reinsurance Agreements or Primary Policies or other
regulatory requirements (for insurance licensing purposes), (G) Liens
listed on Schedule 5.02(g) in effect on the date hereof; (H)
attachments, judgments and other similar Liens for sums not exceeding
$20,000,000 (excluding (x) any portion thereof which is covered by
insurance so long as the insurer is reasonably likely to be able to pay
and has accepted a tender of defense and indemnification without
reservation of rights and (y) all such Liens on assets of Subsidiaries
that are not Material Subsidiaries); (I) attachments, judgments and
other similar Liens for sums of $20,000,000 or more (excluding any
portion thereof which is covered by
32
insurance so long as the insurer is reasonably likely to be able to pay
and has accepted a tender of defense and indemnification without
reservation of rights) provided the execution or other enforcement of
such Liens is effectively stayed and claims secured thereby are being
actively contested in good faith and by appropriate proceedings and
have been bonded off; (J) Liens pursuant to the Loan Documents; and (K)
Liens not otherwise permitted under this Section 5.02(g), provided that
at any time the aggregate Fair Market Value of the property subject to
such Liens does not exceed $25,000,000.
For purposes of subsection (K) of this Section 5.02(g), the
term "Fair Market Value" means, on any day, the valuation assigned on
such day to the property subject to any such Lien by the third party
custodian with whom such property has been deposited for the benefit of
the holder of such Lien.
(h) Restrictions On Negative Pledge Agreements. Not, and not
permit any of its Subsidiaries to enter into or assume any agreement to
which it is a party, other than this Agreement and any agreement
required by applicable insurance regulations which places any
restrictions upon the right of the Borrower or any of its Subsidiaries
to sell, pledge or otherwise dispose of any material portion of its
properties now owned or hereafter acquired other than as permitted
under Section 5.02(g) (with respect to the property subject to such
Lien), except for such restrictions imposed by any senior unsecured
issuance of Debt with an original principal amount in excess of
$50,000,000, provided such restrictions are no more restrictive than
those under this Agreement.
(i) No Amendment of Certain Documents. Not enter into or
permit to exist any amendment, modification or waiver of the
Shareholders Agreement or Organization Documents which would in any
manner be materially adverse to the interests of the Lenders.
(j) Dividends, Etc. Not, and not permit its Subsidiaries to,
(i) declare or pay any cash dividends on any of its capital stock
(other than pro rata payments of dividends by a Subsidiary to the
Borrower and such Subsidiary's other shareholders), (ii) purchase or
redeem any capital stock of the Borrower or any Subsidiary or any
warrants, options or other rights in respect of such stock (other than
the pro rata purchase or redemption by a Subsidiary of its capital
stock, warrants, options or other rights in respect of such stock) or
(iii) set aside funds for any of the foregoing (collectively
"Restricted Payments"); except that so long as, after giving effect to
any such Restricted Payment (A) the Debt to Capital Ratio does not
exceed .20:1, (B) the Borrower's Net Worth exceeds $300,000,000 and (C)
no Default has occurred and is continuing on the date of such
declaration or payment, (1) the Borrower may declare or pay any
Restricted Payment (or set aside funds therefor) and (2) any Subsidiary
may declare or pay any Restricted Payment (or set aside funds therefor)
on a non pro rata basis.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events ("Events of
Default") shall occur and be continuing:
(a) Non-Payment of Advances. Default in the payment when due
of any principal on the Advances; or
(b) Non-Payment of Interest, Fees, Etc. Default, and
continuance thereof for three (3) Business Days, in the payment when
due of interest on the Advances, fees or of any other amount payable
hereunder or under the Loan Documents; or
(c) Non-Payment of Other Debt. (i) Default in the payment when
due and continuance of such default after any applicable grace period
(whether or not such Debt is accelerated) of any other Debt (or any
letter of credit facility) of, or guaranteed by, the Borrower or any of
its Material Subsidiaries if the aggregate amount of Debt (or, in the
case of any letter of credit facility, the issued letters of credit) of
the Borrower and/or any of its Material Subsidiaries which is due and
payable or which is or maybe
33
accelerated, by reason of such default or defaults is $20,000,000 or
more, or (ii) default in the performance or observance of any
obligation or condition and continuance of such default after any
applicable grace period with respect to any such other Debt (or any
letter of credit facility) of, or guaranteed by, the Borrower and/or
any of its Material Subsidiaries if the effect of such default or
defaults is to accelerate or permit the acceleration of the maturity of
any such Debt (or, in the case of any letter of credit facility, the
issued letters of credit) of $20,000,000 or more in the aggregate prior
to its expressed maturity; or
(d) Other Material Obligations. Except for obligations covered
under other provisions of this Article VI, default in the payment when
due, or in the performance or observance of, any material obligation
of, or material condition agreed to by, the Borrower or any of its
Material Subsidiaries with respect to any material purchase or lease
obligation of $20,000,000 or more (unless the existence of any such
default is being contested by the Borrower or such Material Subsidiary
in good faith and by appropriate proceedings and the Borrower or such
Material Subsidiary has established, and is maintaining, adequate
reserves therefor in accordance with GAAP) which default continues for
a period of 30 days; or
(e) Bankruptcy, Insolvency, Etc. (i) The Borrower or any
Material Subsidiary becomes insolvent or generally fails to pay, or
admits in writing its inability to pay, debts as they become due; (ii)
there shall be commenced by or against any such Person any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
supervision, conservatorship, liquidation, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, rehabilitation, conservation, supervision, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, obligations or liabilities, or
(B) seeking appointment of a receiver, trustee, custodian,
rehabilitator, conservator, supervisor, liquidator or other similar
official for it or for all or any substantial part of its assets, in
each case which (1) results in the entry of an order for relief or any
such adjudication or appointment or (2) if filed against such Person,
remains undismissed, undischarged or unstayed for a period of 90 days;
or (iii) there shall be commenced against any such Person any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial
part of its assets which results in the entry of an order for any such
relief which shall not have been vacated, discharged, or stayed or
bonded pending appeal within 90 days from the entry thereof; or (iv)
any of such Persons shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the
acts set forth in clause (ii) or (iii) above; or (v) any Governmental
Authority shall issue any order of conservation, supervision or any
other order of like effect relating to any of such Persons; or
(f) Non-Compliance with Certain Financial Covenants. Failure
by the Borrower to comply with its covenants set forth in Section
5.02(a) or 5.02(b) and continuance of such failure for two Fiscal
Quarters unless (x) with respect to Section 5.02(a), (a) during the
first Fiscal Quarter of such Default the Debt to Capital Ratio does not
exceed .40:1 and (b) during the second Fiscal Quarter of such Default
the Debt to Capital Ratio does not exceed .35:1 and (y) with respect to
Section 5.02(b), (a) such failure is cured by a capital contribution or
a permanent reduction of Debt made during such two Fiscal Quarters, (b)
during the first Fiscal Quarter of such Default, Net Worth of the
Borrower is not less than $265,000,000 and Net Worth (as shown on its
GAAP financial statements) of DaVinci Reinsurance Ltd. is not less than
$365,000,000, (c) during the second Fiscal Quarter of such Default, Net
Worth of the Borrower is not less than $310,000,000 and Net Worth (as
shown on its GAAP financial statements) of DaVinci Reinsurance Ltd. is
not less than $410,000,000 and (d) if the Borrower's Net Worth has
fallen below that required under any Requirement of Law (x) during such
cure period no Governmental Authority places restrictions on the
Borrower or any Material Insurance Subsidiary or requires the Borrower
or any Material Insurance Subsidiary to take any action beyond the
normal reporting requirements and (y) after such cure the Borrower and
its Material Insurance Subsidiaries are in compliance with all
Requirements of Law; or
(g) Non-compliance with Other Financial Conditions. Failure by
the Borrower to comply with its covenants set forth in Section 5.02(h),
5.02(i) or 5.02(j); or
(h) Non-compliance with Other Provisions. Failure by the
Borrower to comply with or to perform any provision of this Agreement
or the other Loan Documents (and not constituting an Event of
34
Default under any of the other provisions of this Article VI) and
continuance of such failure for 30 days after notice thereof from the
Agent to the Borrower; or
(i) Warranties and Representations. Any warranty or
representation made by or on behalf of the Borrower or any Subsidiary
herein is inaccurate or incorrect or is breached or false or misleading
in any material respect as of the date such warranty or representation
is made; or any schedule, certificate, financial statement, report,
notice, or other instrument furnished by or on behalf of Borrower or
any Subsidiary to the Agent or the Lenders is false or misleading in
any material respect on the date as of which the facts therein set
forth are stated or certified; or
(j) ERISA. Any ERISA Event shall occur or exist with respect
to any Plan or Multiemployer Plan of any ERISA Affiliate and, as a
result thereof, together with all other ERISA Events then existing, the
Borrower and its ERISA Affiliates have incurred or would be reasonably
likely to incur liability to any one or more Plans or Multiemployer
Plans or to the PBGC (or to any combination thereof) in excess of
$20,000,000; or
(k) Loan Documents. Any action shall be taken by or on behalf
of the Borrower or any Affiliate thereof to discontinue any of the Loan
Documents or to contest the validity, binding nature or enforceability
of any thereof; or
(l) Change in Control. A Change in Control occurs; or
(m) Judgments. A final judgment or judgments which exceed an
aggregate of $20,000,000 (excluding any portion thereof which is
covered by insurance so long as the insurer is reasonably likely to be
able to pay and has accepted a tender of defense and indemnification
without reservation of rights) shall be rendered against the Borrower
or any Material Subsidiary and shall not have been discharged or
vacated or had execution thereof stayed pending appeal within 90 days
after entry or filing of such judgment(s); or
(n) Change in Law. Any change is made in the Insurance Code
which affects the dividend practices of any Insurance Subsidiary and
which is reasonably likely to have a Material Adverse Effect on the
ability of the Borrower to perform its obligations under the Agreement
and such circumstances shall continue for 120 days; or
(o) Management Agreement. The Borrower shall cease for any
reason to have an effective management agreement with RenaissanceRe
Holdings, Ltd. or any Subsidiary of RenaissanceRe Holdings Ltd.;
then, and in any such event, the Agent (i) shall at the request, or may
with the consent, of the Required Lenders, by notice to the Borrower,
declare the obligation of each Lender to make Advances to be
terminated, whereupon the same shall forthwith terminate, and (ii)
shall at the request, or may with the consent, of the Required Lenders,
by notice to the Borrower, declare the Advances, all interest thereon
and all other amounts payable under this Agreement to be forthwith due
and payable, whereupon the Advances, all such interest and all such
amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of
which are hereby expressly waived by the Borrower; provided, however,
that upon an Event of Default with respect to the Borrower under
Section 6.01(e), (A) the obligation of each Lender to make Advances
shall automatically be terminated and (B) the Advances, all such
interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any
kind, all of which are hereby expressly waived by the Borrower.
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ARTICLE VII
THE AGENT
SECTION 7.01. Authorization and Action. Each Lender hereby appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Loan Documents as are delegated to the
Agent by the terms hereof, together with such powers and discretion as are
reasonably incidental thereto. As to any matters not expressly provided for by
the Loan Documents (including, without limitation, enforcement or collection of
the Notes), the Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding upon all Lenders
and all holders of Notes; provided, however, that the Agent shall not be
required to take any action that exposes the Agent to personal liability or that
is contrary to the Loan Documents or applicable law. The Agent agrees to give to
each Lender prompt notice of each notice given to it by the Borrower pursuant to
the terms of this Agreement.
SECTION 7.02. Agent's Reliance, Etc. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with this Agreement,
except for its or their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, the Agent: (i) may treat the
Lender that made any Advance as the holder of the Debt resulting therefrom until
the Agent receives and accepts an Assumption Agreement entered into by an
Assuming Lender as provided in Section 2.17 or 2.18 or an Assignment and
Acceptance entered into by such Lender, as assignor, and an Eligible Assignee,
as assignee, as provided in Section 8.07; (ii) may consult with legal counsel
(including counsel for the Borrower), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (iii) makes no warranty or representation to any Lender
and shall not be responsible to any Lender for any statements, warranties or
representations (whether written or oral) made in or in connection with this
Agreement; (iv) shall not have any duty to ascertain or to inquire as to the
performance, observance or satisfaction of any of the terms, covenants or
conditions of this Agreement on the part of the Borrower or the existence at any
time of any Default or to inspect the property (including the books and records)
of the Borrower; (v) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of, or the perfection or priority of any lien or security interest created or
purported to be created under or in connection with, any Loan Document or any
other instrument or document furnished pursuant hereto; and (vi) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telecopier,
telegram or telex) believed by it to be genuine and signed or sent by the proper
party or parties.
SECTION 7.03. Citibank and Affiliates. With respect to its Commitment, the
Advances made by it and the Note issued to it, Citibank shall have the same
rights and powers under the Loan Documents as any other Lender and may exercise
the same as though it were not the Agent; and the term "Lender" or "Lenders"
shall, unless otherwise expressly indicated, include Citibank in its individual
capacity. Citibank and its Affiliates may accept deposits from, lend money to,
act as trustee under indentures of, accept investment banking engagements from
and generally engage in any kind of business with, the Borrower, any of its
Subsidiaries and any Person who may do business with or own securities of the
Borrower or any such Subsidiary, all as if Citibank were not the Agent and
without any duty to account therefor to the Lenders. The Agent shall have no
duty to disclose information obtained or received by it or any of its Affiliates
relating to the Borrower or its Subsidiaries to the extent such information was
obtained or received in any capacity other than as Agent.
SECTION 7.04. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and based
on the financial statements referred to in Section 4.01 and such other documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agent or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement.
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SECTION 7.05. Indemnification. The Lenders agree to indemnify the Agent (to
the extent not reimbursed by the Borrower), ratably according to the respective
principal amounts of the Advances then owed to each of them (or if no Advances
are at the time outstanding, ratably according to the respective amounts of
their Commitments), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on, incurred
by, or asserted against the Agent in any way relating to or arising out of this
Agreement or any action taken or omitted by the Agent under this Agreement
(collectively, the "Indemnified Costs"), provided that no Lender shall be liable
for any portion of the Indemnified Costs resulting from the Agent's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Lender agrees to reimburse the Agent promptly upon demand for its ratable share
of any out-of-pocket expenses (including reasonable counsel fees) incurred by
the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, to the extent that the Agent
is not reimbursed for such expenses by the Borrower. In the case of any
investigation, litigation or proceeding giving rise to any Indemnified Costs,
this Section 7.05 applies whether any such investigation, litigation or
proceeding is brought by the Agent, any Lender or a third party.
SECTION 7.06. Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower and may be removed at any
time with or without cause by the Required Lenders. Upon any such resignation or
removal, the Required Lenders shall have the right to appoint a successor Agent,
which successor shall be approved by the Borrower unless a Default has occurred
and is continuing. If no successor Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within 30 days after
the retiring Agent's giving of notice of resignation or the Required Lenders'
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent, which shall be a commercial bank organized
under the laws of the United States of America or of any State thereof and
having a combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under this
Agreement. After any retiring Agent's resignation or removal hereunder as Agent,
the provisions of this Article VII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any provision of
any Loan Document, nor consent to any departure by the Borrower therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Required Lenders, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver or consent shall, unless in writing and
signed by all the Lenders, do any of the following: (a) waive any of the
conditions specified in Section 3.01, (b) increase the Commitments of the
Lenders (other than as provided for in Section 2.17), (c) reduce the principal
of, or interest on, the Advances or any fees or other amounts payable hereunder,
(d) postpone any date fixed for any payment of principal of, or interest on, the
Advances or any fees or other amounts payable hereunder (other than as provided
for in Section 2.18), (e) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Advances, or the number of Lenders,
that shall be required for the Lenders or any of them to take any action
hereunder, (f) release any material portion of any collateral held to secure the
obligations of the Borrower under this Agreement and the Notes or (g) amend this
Section 8.01; and provided further that no amendment, waiver or consent shall,
unless in writing and signed by the Agent in addition to the Lenders required
above to take such action, affect the rights or duties of the Agent under any
Loan Document.
SECTION 8.02. Notices, Etc. (a) All notices and other communications
provided for hereunder shall be either (x) in writing (including telecopier or
telex communication) and mailed, telecopied, telexed or delivered or (y) as and
to the extent set forth in Section 8.02(b) and in the proviso to this Section
8.02(a), if to the Borrower, at its address x/x Xxxxxxxxxxx Xxxxx, 0-00 Xxxx
Xxxxxxxx, Xxxxxxxx, XX00, Xxxxxxx, Xxxxxxxxx: Corporate Secretary; if to any
Initial Lender, at its Domestic Lending Office specified opposite its name on
Schedule I hereto; if to any other
37
Lender, at its Domestic Lending Office specified in the Assumption Agreement or
the Assignment and Acceptance pursuant to which it became a Lender; and if to
the Agent, at its address at Xxx Xxxxx Xxx, Xxx Xxxxxx, Xxxxxxxx 00000,
Attention: Bank Loan Syndications Department; or, as to the Borrower or the
Agent, at such other address as shall be designated by such party in a written
notice to the other parties and, as to each other party, at such other address
as shall be designated by such party in a written notice to the Borrower and the
Agent, provided that materials required to be delivered pursuant to Section
5.01(a)(i), (ii), (iii), (vi), (vii), (x), (xi) or (xii) shall be delivered to
the Agent as specified in Section 8.02(b) or as otherwise specified to the
Borrower by the Agent. All such notices and communications shall, when mailed,
telecopied or e-mailed, be effective when deposited in the mails, telecopied or
confirmed by e-mail, respectively, except that notices and communications to the
Agent pursuant to Article II, III or VII shall not be effective until received
by the Agent. Delivery by telecopier of an executed counterpart of any amendment
or waiver of any provision of this Agreement or the Notes or of any Exhibit
hereto to be executed and delivered hereunder shall be effective as delivery of
a manually executed counterpart thereof.
(b) So long as Citibank or any of its Affiliates is the Agent,
materials required to be delivered pursuant to Section 5.01(a)(i), (ii), (iii),
(vi), (vii), (x), (xi) or (xii) shall be delivered to the Agent in an electronic
medium in a format acceptable to the Agent and the Lenders by e-mail at
xxxxxxxxxxxxxxx@xxxxxxxxx.xxx. The Borrower agrees that the Agent may make such
materials, as well as any other written information, documents, instruments and
other material relating to the Borrower, any of its Subsidiaries or any other
materials or matters relating to this Agreement, the Notes or any of the
transactions contemplated hereby (collectively, the "Communications") available
to the Lenders by posting such notices on Intralinks, "e-Disclosure", the
Agent's internet delivery system that is part of Fixed Income Direct, Global
Fixed Income's primary web portal, or a substantially similar electronic system
(the "Platform"). The Borrower acknowledges that (i) the distribution of
material through an electronic medium is not necessarily secure and that there
are confidentiality and other risks associated with such distribution, (ii) the
Platform is provided "as is" and "as available" and (iii) neither the Agent nor
any of its Affiliates warrants the accuracy, adequacy or completeness of the
Communications or the Platform and each expressly disclaims liability for errors
or omissions in the Communications or the Platform. No warranty of any kind,
express, implied or statutory, including, without limitation, any warranty of
merchantability, fitness for a particular purpose, non-infringement of third
party rights or freedom from viruses or other code defects, is made by the Agent
or any of its Affiliates in connection with the Platform.
(c) Each Lender agrees that notice to it (as provided in the
next sentence) (a "Notice") specifying that any Communications have been posted
to the Platform shall constitute effective delivery of such information,
documents or other materials to such Lender for purposes of this Agreement;
provided that if requested by any Lender, the Agent shall deliver a copy of the
Communications to such Lender by email or telecopier. Each Lender agrees (i) to
notify the Agent in writing of such Lender's e-mail address to which a Notice
may be sent by electronic transmission (including by electronic communication)
on or before the date such Lender becomes a party to this Agreement (and from
time to time thereafter to ensure that the Agent has on record an effective
e-mail address for such Lender) and (ii) that any Notice may be sent to such
e-mail address.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any Lender or
the Agent to exercise, and no delay in exercising, any right hereunder or under
any other Loan Document shall operate as a waiver thereof; nor shall any single
or partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses. (a) The Borrower agrees to pay on demand
all costs and expenses of the Agent in connection with the preparation,
execution, delivery, administration, modification and amendment of this
Agreement, the Notes and the other documents to be delivered hereunder,
including, without limitation, (A) all due diligence, syndication (including
printing, distribution and bank meetings), transportation, computer,
duplication, appraisal, consultant, and audit expenses and (B) the reasonable
fees and expenses of counsel for the Agent with respect thereto and with respect
to advising the Agent as to its rights and responsibilities under this
Agreement. The Borrower further agrees to pay on demand all costs and expenses
of the Agent and the Lenders, if any (including, without limitation, reasonable
counsel fees and expenses), in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of this Agreement, the other Loan
Documents and the other documents to be delivered hereunder, including, without
limitation, reasonable fees and expenses of counsel for the Agent and each
Lender in connection with the enforcement of rights under this Section 8.04(a).
38
(b) The Borrower agrees to indemnify and hold harmless the
Agent and each Lender and each of their Affiliates and their officers,
directors, employees, agents and advisors (each, an "Indemnified Party") from
and against any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel)
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation or proceeding or
preparation of a defense in connection therewith) the Notes, this Agreement, any
other Loan Document, any of the transactions contemplated herein or the actual
or proposed use of the proceeds of the Advances, except to the extent such
claim, damage, loss, liability or expense is found in a final, non-appealable
judgment by a court of competent jurisdiction to have resulted from such
Indemnified Party's gross negligence or willful misconduct. In the case of an
investigation, litigation or other proceeding to which the indemnity in this
Section 8.04(b) applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by the Borrower, its
directors, equityholders or creditors or an Indemnified Party or any other
Person, whether or not any Indemnified Party is otherwise a party thereto and
whether or not the transactions contemplated hereby are consummated. The
Borrower also agrees not to assert any claim for special, indirect,
consequential or punitive damages against the Agent, any Lender, any of their
Affiliates, or any of their respective directors, officers, employees, attorneys
and agents, on any theory of liability, arising out of or otherwise relating to
the Notes, this Agreement, any other Loan Document, any of the transactions
contemplated herein or the actual or proposed use of the proceeds of the
Advances.
(c) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance is made by the Borrower to or for the account of a
Lender other than on the last day of the Interest Period for such Advance, as a
result of a payment or Conversion pursuant to Section 2.07(d), 2.09 or 2.11,
acceleration of the maturity of the Advances pursuant to Section 6.01 or for any
other reason, the Borrower shall, upon demand by such Lender (with a copy of
such demand to the Agent), pay to the Agent for the account of such Lender any
amounts required to compensate such Lender for any additional losses, costs or
expenses that it may reasonably incur as a result of such payment or Conversion,
including, without limitation, any loss (excluding loss of anticipated profits),
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Lender to fund or maintain such Advance.
(d) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the Borrower
contained in Sections 2.10, 2.13 and 8.04 shall survive the payment in full of
principal, interest and all other amounts payable hereunder and under the Notes.
SECTION 8.05. Right of Set-off. Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the Agent to
declare the Notes due and payable pursuant to the provisions of Section 6.01,
each Lender and each of its Affiliates is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such Lender or such
Affiliate to or for the credit or the account of the Borrower against any and
all of the obligations of the Borrower now or hereafter existing under this
Agreement and the Note held by such Lender, whether or not such Lender shall
have made any demand under this Agreement or such Note and although such
obligations may be unmatured. Each Lender agrees promptly to notify the Borrower
after any such set-off and application, provided that the failure to give such
notice shall not affect the validity of such set-off and application. The rights
of each Lender and its Affiliates under this Section are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
that such Lender and its Affiliates may have.
SECTION 8.06. Binding Effect. This Agreement shall become effective (other
than Section 2.01, which shall only become effective upon satisfaction of the
conditions precedent set forth in Section 3.01) when it shall have been executed
by the Borrower and the Agent and when the Agent shall have been notified by
each Initial Lender that such Initial Lender has executed it and thereafter
shall be binding upon and inure to the benefit of the Borrower, the Agent and
each Lender and their respective successors and assigns, except that the
Borrower shall not have the right to assign its rights hereunder or any interest
herein without the prior written consent of the Lenders.
SECTION 8.07. Assignments and Participations. (a) Each Lender may and, if
demanded by the Borrower (following a demand by such Lender pursuant to Section
2.10, 2.11 or 2.13 or an assertion by such Lender under Section 2.11) upon at
least 5 Business Days' notice to such Lender and the Agent, will assign to one
or more Persons all or a portion of its
39
rights and obligations under this Agreement (including, without limitation, all
or a portion of its Commitment, the Advances owing to it and the Note or Notes
held by it); provided, however, that (i) each such assignment shall be of a
constant, and not a varying, percentage of all rights and obligations under this
Agreement, (ii) except in the case of an assignment to a Person that,
immediately prior to such assignment, was a Lender or an assignment of all of a
Lender's rights and obligations under this Agreement, the amount of the
Commitment of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $5,000,000 or an
integral multiple of $1,000,000 in excess thereof unless the Borrower and the
Agent otherwise agree, (iii) each such assignment shall be to an Eligible
Assignee, (iv) each such assignment made as a result of a demand by the Borrower
pursuant to this Section 8.07(a) shall be arranged by the Borrower after
consultation with the Agent and shall be either an assignment of all of the
rights and obligations of the assigning Lender under this Agreement or an
assignment of a portion of such rights and obligations made concurrently with
another such assignment or other such assignments that together cover all of the
rights and obligations of the assigning Lender under this Agreement, (v) no
Lender shall be obligated to make any such assignment as a result of a demand by
the Borrower pursuant to this Section 8.07(a) unless and until such Lender shall
have received one or more payments from either the Borrower or one or more
Eligible Assignees in an aggregate amount at least equal to the aggregate
outstanding principal amount of the Advances owing to such Lender, together with
accrued interest thereon to the date of payment of such principal amount and all
other amounts payable to such Lender under this Agreement, and (vi) the parties
to each such assignment shall execute and deliver to the Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with any Note subject to such assignment and a processing and recordation fee of
$3,500; provided, however, that in the case of each assignment made as a result
of a demand by the Borrower, such recordation fee shall be payable by the
Borrower except that no such recordation fee shall be payable in the case of an
assignment made at the request of the Borrower to an Eligible Assignee that is
an existing Lender. Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in each Assignment and Acceptance,
(x) the assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
and (y) the Lender assignor thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights (other than its rights under Sections 2.10,
2.13 and 8.04 to the extent any claim thereunder relates to an event arising
prior such assignment) and be released from its obligations (other than its
obligations under Section 7.05 to the extent any claim thereunder relates to an
event arising prior such assignment) under this Agreement (and, in the case of
an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance,
the Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with any Loan
Document or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of, or the perfection or priority of any lien or security
interest created or purported to be created under or in connection with, any
Loan Document or any other instrument or document furnished pursuant hereto;
(ii) such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under any
Loan Document or any other instrument or document furnished pursuant hereto;
(iii) such assignee confirms that it has received a copy of this Agreement,
together with copies of the financial statements referred to in Section 4.01 and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon the Agent, such
assigning Lender or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement; (v) such assignee
confirms that it is an Eligible Assignee; (vi) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Loan Documents as are delegated to the
Agent by the terms hereof, together with such powers and discretion as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all of the obligations that by the terms
of this Agreement are required to be performed by it as a Lender.
40
(c) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an assignee representing that it is an Eligible
Assignee, together with any Note or Notes subject to such assignment, the Agent
shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit C hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrower.
(d) The Agent shall maintain at its address referred to in
Section 8.02 a copy of each Assumption Agreement and each Assignment and
Acceptance delivered to and accepted by it and a register for the recordation of
the names and addresses of the Lenders and the Commitment of, and principal
amount of the Advances owing to, each Lender from time to time (the "Register").
The entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Borrower, the Agent and the Lenders may treat
each Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(e) Each Lender may sell participations to one or more banks
or other entities (other than the Borrower or any of its Affiliates) in or to
all or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment, the Advances owing to it
and any Note or Notes held by it); provided, however, that (i) such Lender's
obligations under this Agreement (including, without limitation, its Commitment
to the Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of any such Note for all
purposes of this Agreement, (iv) the Borrower, the Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and (v) no participant
under any such participation shall have any right to approve any amendment or
waiver of any provision of any Loan Document, or any consent to any departure by
the Borrower therefrom, except to the extent that such amendment, waiver or
consent would reduce the principal of, or interest on, the Notes or any fees or
other amounts payable hereunder, in each case to the extent subject to such
participation, or postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation.
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower; provided that, prior to any such disclosure,
the assignee or participant or proposed assignee or participant shall agree to
preserve the confidentiality of any Confidential Information relating to the
Borrower received by it from such Lender.
(g) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Advances owing to it and any Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System.
SECTION 8.08. Confidentiality. Each of the Lenders agrees to take and to
cause its Affiliates to take normal and reasonable precautions and exercise due
care to maintain the confidentiality of all information identified as
"confidential" or "secret" by the Borrower and provided to it by the Borrower or
any Subsidiary, or by the Agent on the Borrower's or such Subsidiary's behalf,
under this Agreement or any other Loan Document, and neither it nor any of its
Affiliates shall use any such information other than in connection with or in
enforcement of this Agreement and the other Loan Documents or in connection with
other business now or hereafter existing or contemplated with the Borrower or
any Subsidiary; except to the extent such information (i) was or becomes
generally available to the public other than as a result of disclosure by such
Lender, or (ii) was or becomes available on a non-confidential basis from a
source other than the Borrower, provided that such source is not bound by a
confidentiality agreement with the Borrower known to such Lender; provided,
however, that any Lender may disclose such information (A) at the request or
pursuant to any requirement of any Governmental Authority to which such Lender
is subject or in connection with an examination of such Lender by any such
authority; (B) pursuant to subpoena or other court process; (C) when required to
do so in accordance with the provisions of any applicable Requirement of Law;
(D) to the extent reasonably required in connection with any litigation or
proceeding to which the Agent or any Lender or their
41
respective Affiliates may be party; (E) to the extent reasonably required in
connection with the exercise of any remedy hereunder or under any other Loan
Document; (F) to such Lender's independent auditors and other professional
advisors; (G) to any assignee of a Lender, actual or potential, provided that
such Person agrees in writing to keep such information confidential to the same
extent required of the Lenders hereunder; (H) to any Lender or its Affiliate, as
expressly permitted under the terms of any other document or agreement regarding
confidentiality to which the Borrower or any Subsidiary is party or is deemed
party with such Lender or such Affiliate; and (I) to its Affiliates which are
such Lender's parent or it or its parent's wholly owned Subsidiary or, with the
prior written consent of the Borrower which shall not be unreasonably withheld,
its other Affiliates.
SECTION 8.09. Governing Law. This Agreement and the Notes shall be governed
by, and construed in accordance with, the laws of the State of New York.
SECTION 8.10. Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 8.11. Jurisdiction, Etc. (a) Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or federal court of the
United States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement or any other Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in any such New York State court or, to the extent permitted by
law, in such federal court. The Borrower hereby agrees that service of process
in any such action or proceeding brought in the any such New York State court or
in such federal court may be made upon CT Corporation System at its offices at
000 Xxxxxx Xxxxxx, 13th Floor, New York, N.Y. 10011 (the "Process Agent") and
the Borrower hereby irrevocably appoints the Process Agent its authorized agent
to accept such service of process, and agrees that the failure of the Process
Agent to give any notice of any such service shall not impair or affect the
validity of such service or of any judgment rendered in any action or proceeding
based thereon. The Borrower hereby further irrevocably consents to the service
of process in any action or proceeding in such courts by the mailing thereof by
any parties hereto by registered or certified mail, postage prepaid, to the
Borrower at its address specified pursuant to Section 8.02. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that any party may otherwise have to bring any action or proceeding
relating to this Agreement or the Notes in the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the Notes
in any New York State or federal court. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
SECTION 8.12. Judgment. (a) If for the purposes of obtaining judgment in
any court it is necessary to convert a sum due hereunder in U.S. dollars into
another currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Agent could purchase U.S. dollars
with such other currency at Citibank's principal office in London at 11:00 A.M.
(London time) on the Business Day preceding that on which final judgment is
given.
(b) The obligation of the Borrower in respect of any sum due
from it in any currency (the "Primary Currency") to any Lender or the Agent
hereunder shall, notwithstanding any judgment in any other currency, be
discharged only to the extent that on the Business Day following receipt by such
Lender or the Agent (as the case may be), of any sum adjudged to be so due in
such other currency, such Lender or the Agent (as the case may be) may in
accordance with normal banking procedures purchase the applicable Primary
Currency with such other currency; if the amount of the applicable Primary
Currency so purchased is less than such sum due to such Lender or the Agent (as
the case may be) in the applicable Primary Currency, the Borrower agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify such
Lender or the Agent (as the case may be)
42
against such loss, and if the amount of the applicable Primary Currency so
purchased exceeds such sum due to any Lender or the Agent (as the case may be)
in the applicable Primary Currency, such Lender or the Agent (as the case may
be) agrees to remit to the Borrower such excess.
43
SECTION 8.13. Waiver of Jury Trial. Each of the Borrower, the Agent and the
Lenders hereby irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to any Loan Document, the Advances or the actions of
the Agent or any Lender in the negotiation, administration, performance or
enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
DAVINCIRE HOLDINGS LTD.
By /s/ Xxxx X. Xxxxxx
-----------------------------
Title: Senior Vice President
and Treasurer
CITIBANK, N.A.,
as Agent
By /s/ Xxxxxxx X. Xxx
-----------------------------
Title: Vice President
Initial Lenders
---------------
Commitment
----------
$50,000,000 CITIBANK, N.A.
By /s/ Xxxxxxx X. Xxx
-----------------------------
Title: Vice President
$35,000,000 WACHOVIA BANK, NATIONAL ASSOCIATION
By /s/ Xxxxxxx X. Xxxxx
-----------------------------
Title: Director
$25,000,000 THE BANK OF N.T. XXXXXXXXXXX & SON
LIMITED
By /s/ Xxxx Xxx
-----------------------------
Title: Vice President
$25,000,000 BANK OF AMERICA N.A.
By /s/ Xxxxx Xxxxxx
-----------------------------
Title: Senior Vice President
44
$25,000,000 HSBC BANK USA, NATIONAL ASSOCIATION
By /s/ Xxxxxx X. Xxxxxx
-----------------------------
Title: Senior Vice President
$25,000,000 MELLON BANK, N.A.
By /s/ Xxxxxx X. Xxxxxxx
-----------------------------
Title: First Vice President
$15,000,000 THE BANK OF NEW YORK
By /s/ Xxxxxxx X. Xxxxxx
-----------------------------
Title: Vice President
$200,000,000 Total of the Commitment
