FIRST AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDED AND RESTATED CREDIT AGREEMENT, dated as of the 14th day
of November, 1996 (this "Agreement"), is made among CHARTWELL RE HOLDINGS
CORPORATION, a Delaware corporation with its principal offices in Stamford,
Connecticut (the "Borrower"), the banks and financial institutions listed on the
signature pages hereof or that become parties hereto after the date hereof
(each, a "Lender" and collectively, the "Lenders"), FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, a national banking association ("First Union"), as agent for the
Lenders (in such capacity, the "Agent") and as an Issuing Bank hereunder (in
such capacity, an "Issuing Bank"), and FIRST UNION NATIONAL BANK (LONDON
BRANCH), a national banking association with offices in London, England ("First
Union (London)"), as an Issuing Bank hereunder (in such capacity, an "Issuing
Bank").
RECITALS
A. The Borrower is the sole shareholder of Chartwell Reinsurance Company,
which in turn is a shareholder of Chartwell Holdings Limited formerly known as
Beechwood Holdings Limited, an English company ("Beechwood").
B. Through Beechwood, the Borrower proposes to acquire the stock of Xxxxxx
Group Holdings plc, pursuant to a tender offer. In order to finance the tender
offer and to refinance certain existing indebtedness, the Borrower has requested
that the Lenders make available to the Borrower credit facilities in the
aggregate principal amount of $55,000,000 and (pound)12,850,000, all as more
fully described herein.
C. The Lenders and the Issuing Banks are willing to make available to the
Borrower the credit facilities described herein subject to and on the terms and
conditions set forth in this Agreement.
D. This Agreement amends and restates the Credit Agreement, dated as of
the 13th day of October, 1996, among the Borrower, the Lender and the Agent.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual provisions, covenants and
agreements herein contained, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. For purposes of this Agreement, in addition to the
terms defined elsewhere herein, the following terms shall have the meanings set
forth below (such meanings to be equally applicable to the singular and plural
forms thereof):
"Account Designation Letter" shall mean a letter from the Borrower to the
Agent, duly completed and signed by an Authorized Officer of the Borrower and in
form and substance satisfactory to the Agent, listing any one or more accounts
to which the Borrower may from time to time request the Agent to forward the
proceeds of any Loans made hereunder.
"Acquisition" shall mean the tender offer and acquisition by the Borrower
or Beechwood of the outstanding capital stock of Xxxxxx, the issuance of the
Loan Notes Instrument and the issuance of Loan Notes thereunder, as effected
pursuant to the Acquisition Documents.
"Acquisition Closing Date" shall mean the date which is the earlier of the
first funding with respect to the Acquisition or the issuance of the Loan Notes
in accordance with the Acquisition Documents.
"Acquisition Documents" shall mean the Announcement, the Tender Offer, the
Loan Notes Instrument, the Loan Notes, the Loan Notes Guaranty, and all other
documents and instruments executed or delivered in connection therewith.
"Adjusted LIBOR Rate" shall mean, at any time with respect to any LIBOR
Loan, a rate per annum equal to the LIBOR Rate as in effect at such time plus
the Applicable Margin Percentage as in effect at such time.
"Affiliate" shall mean, as to any Person, each other Person that directly,
or indirectly through one or more intermediaries, owns or controls, is
controlled by or under common control with, such Person or is a director or
officer of such Person. For purposes of this definition, with respect to any
Person, "control" shall mean (i) the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise, or (ii) the beneficial ownership of securities or other ownership
interests of such Person having 15% or more of the combined voting power of the
then outstanding securities or other ownership interests of such Person
ordinarily (and apart from rights accruing under special circumstances) having
the right to vote in the election of directors or other governing body of such
Person.
"Agent" shall mean First Union, in its capacity as Agent appointed under
Article X, and its successors and permitted assigns in such capacity.
"Aggregate Loan Notes Guaranty Principal Amount" shall mean the maximum
Stated Amount of Loan Notes that, pursuant to the Loan Notes Instrument, could
be guaranteed by the Issuing Bank under the Loan Notes Guaranty (provided that,
upon the provision of a certification executed by an Authorized Officer of the
Borrower in form reasonably satisfactory to the Agent certifying (i) the amount
of the Fixed Guaranty Principal Exposure as of the date of such certification,
(ii) that the Tender Offer has been terminated (including the lapse of all
periods during which such offer must remain open) and all acceptances of such
offer have been closed, (iii) that the Statutory Merger Proceedings, if any,
have been consummated and (iv) that no further Loan Notes may be issued pursuant
to the Loan Notes Instrument, then such maximum Stated Amount of Loan Notes
shall be the amount of such Fixed Guaranty Principal Exposure) less, from time
to time after such certification, the aggregate principal amount of Loan Notes
that have theretofore been retired, cancelled or paid in full or part.
"Agreement" shall mean this Credit Agreement, as amended, modified or
supplemented from time to time.
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"Announcement" shall mean the press release announcing the Tender Offer.
"Announcement Date" shall mean the date on which the Announcement is
issued.
"Annual Statement" shall mean, with respect to any Insurance Subsidiary
for any fiscal year, the annual financial statements of such Insurance
Subsidiary as required to be filed with the Insurance Regulatory Authority of
its jurisdiction of domicile and in accordance with the laws of such
jurisdiction, together with all exhibits, schedules, certificates and actuarial
opinions required to be filed or delivered therewith.
"Applicable Accounting Principles" shall mean, as applicable, Generally
Accepted Accounting Principles, Statutory Accounting Principles, and Companies
Act Principles.
"Applicable Currency" shall mean Dollars in the case of Dollar Facilities
and Pounds Sterling in the case of Sterling Facilities.
"Applicable Margin Percentage" shall mean, at any time, the applicable
percentage (a) to be added to the LIBOR Rate for purposes of determining the
Adjusted LIBOR Rate, (b) to be used in calculating the Sterling Base Rate, and
(c) to be used in calculating the Letter of Credit Fee payable pursuant to
Section 2.9(d), in each case as determined under the following matrix with
reference to the ratings given to the Borrower's senior unsecured long-term
publicly traded Indebtedness without third party credit enhancement:
Applicable Margin
Rating Status Percentage for LIBOR Loans
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Level I Status 0.500%
Level II Status 0.625%
Level III Status 0.750%
Level IV Status 0.875%
For purposes of determining any Applicable Margin Percentage at any date:
(i) "Level I Status" exists at such date if, as of such date, the
Borrower has senior unsecured long-term publicly traded Indebtedness
without third party credit enhancement that is rated (y) Baa1 or higher by
Xxxxx'x or (z) BBB+ or higher by Standard & Poor's;
(ii) "Level II Status" exists at such date if, as of such date, the
Borrower has senior unsecured long-term publicly traded Indebtedness
without third party credit enhancement that is rated (y) Baa2 by Xxxxx'x
or (z) BBB by Standard & Poor's;
(iii) "Level III Status" exists at such date if, as of such date,
the Borrower has senior unsecured long-term publicly traded Indebtedness
without third party credit enhancement that is rated (y) Baa3 by Xxxxx'x
or (z) BBB- by Standard & Poor's; and
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(iv) "Level IV Status" exists at such date if, as of such date,
neither Level I Status, Level II Status nor Level III Status exists
(whether because the applicable ratings are not provided at such time by
Xxxxx'x and Standard & Poor's or are lower in each instance than the
respective minimum ratings required for Level III Status);
provided, however, that if at any time the difference between the Xxxxx'x and
Standard & Poor's ratings at such time is more than one "Rating Grade," then for
purposes of determining the Applicable Margin Percentages at such time, the
higher of such two ratings shall be reduced to the rating that is the median
between the higher rating and the lower rating (or its equivalent); or, if the
median is not mathematically determinable, then the higher of such two ratings
shall be reduced to the rating that would have been the median if the higher of
such two ratings were actually one Rating Grade higher. For purposes of the
foregoing sentence, the term "Rating Grade" shall mean and refer to the
different debt ratings (for example, A1, A2, A3 for Xxxxx'x and A+, A and A- for
Standard & Poor's) within any particular debt rating category (in the foregoing
example, the rating category of "A" for both Xxxxx'x and Standard & Poor's).
Within ten (10) Business Days of the Borrower's attaining knowledge of a change
in either Xxxxx'x or Standard & Poor's rating of the Borrower's senior unsecured
long-term publicly traded Indebtedness, the Borrower shall notify the Agent, and
any adjustment required in the Applicable Margin Percentages as a result of a
change in such ratings shall be effective as of the earlier of the date such
notice is received by the Agent or the 10th Business Day after the effective
date of such change.
"Applicable Number of Business Days" shall mean (i) in the case of LIBOR
Loans denominated in Pounds Sterling, four (4) Business Days, (ii) in the case
of LIBOR Loans denominated in Dollars, three (3) Business Days, (iii) in the
case of Base Rate Loans denominated in Pounds Sterling, two (2) Business Days,
and (iv) in the case of Base Rate Loans denominated in Dollars, one (1) Business
Day.
"Xxxxxx" shall mean Xxxxxx Group Holdings plc, a corporation organized
under the laws of England.
"Xxxxxx Facilities" shall mean the Tranche A-2 Term Loans, Tranche B Term
Loans, the portion of the Revolving Loans necessary to consummate the
Acquisition, and the Loan Notes Guaranty.
"Assignee" shall have the meaning given to such term in Section 12.7(a).
"Assignment and Acceptance" shall mean an Assignment and Acceptance
entered into between a Lender and an Assignee and accepted by the Agent and the
Borrower, in substantially the form of Exhibit C.
"Authorized Officer" shall mean any officer of the Borrower authorized by
resolution of the board of directors of the Borrower to take the action
specified herein with respect to such officer and whose signature and incumbency
shall have been certified to the Agent by the secretary or an assistant
secretary of the Borrower.
"Available Dividend Amount" shall mean, with respect to any Insurance
Subsidiary for any period of four consecutive fiscal quarters, the aggregate
maximum amount of dividends that is or would be permitted by the Insurance
Regulatory Authority of its jurisdiction of domicile, under applicable
Requirements of Law (without the necessity of any consent, approval or other
action of such Insurance Regulatory Authority involving the granting of
permission or the exercise of discretion by such Insurance Regulatory
Authority), to be paid by such Insurance Subsidiary to the Borrower or another
Subsidiary of
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the Borrower in respect of such four-quarter period as if such period were a
fiscal year (whether or not any such dividends are actually paid).
"Bankruptcy Code" shall mean 11 U.S.C. xx.xx. 101 et seq., as amended from
time to time, and any successor statute.
"Base Rate" shall mean the higher of (i) the per annum interest rate
publicly announced from time to time by First Union in Charlotte, North
Carolina, to be its prime or base rate (which may not necessarily be its best
lending rate), as adjusted to conform to changes as of the opening of business
on the date of any such change in such prime or base rate, or (ii) 0.5% per
annum plus the Federal Funds Rate, as adjusted to conform to changes as of the
opening of business on the date of any such change in the Federal Funds Rate.
"Base Rate Loan" shall mean, at any time, (i) each Loan denominated in
Dollars and bearing interest at the Base Rate and (ii) each Loan denominated in
Pounds Sterling and bearing interest at the Sterling Base Rate.
"Beechwood" shall mean Chartwell Holdings Limited, formerly known as
Beechwood Holdings Limited, a corporation organized under the laws of England
and an indirect Wholly Owned Subsidiary of the Parent.
"Beechwood Escrow and Security Agreement" shall mean a Charge over Cash
Deposit agreement made by Beechwood in favor of the Agent, in substantially the
form of Exhibit F-1, as amended, modified or supplemented from time to time,
pursuant to which the Sinking Fund Account shall be created and a security
interest in favor of the Agent granted therein.
"Borrower Escrow and Security Agreement" shall mean an Escrow and Security
Agreement made by the Borrower in favor of the Agent, in substantially the form
of Exhibit F-2, as amended, modified or supplemented from time to time pursuant
to which the L/C Cash Collateral Accounts shall be created and a security
interest in favor of the Agent granted therein.
"Borrowing" shall mean the incurrence by the Borrower (including as a
result of conversions and continuations of outstanding Loans pursuant to Section
2.11) on a single date of a group of Loans of a single Class and Type and, in
the case of LIBOR Loans, as to which a single Interest Period is in effect.
"Borrowing Date" shall mean, with respect to any Borrowing, the date upon
which such Borrowing is made.
"Business Day" shall mean (i) any day other than a Saturday or Sunday, a
legal holiday or a day on which financial institutions in either Charlotte,
North Carolina or in Stamford, Connecticut are authorized or required by law or
other government action to be closed, (ii) in respect of any determination
relevant to a LIBOR Loan, any day which is a Business Day described in clause
(i) above and which is also a day on which tradings are conducted in the London
interbank Eurodollar market, and (iii) in respect of any determination relevant
to a Loan under the Sterling Facilities, any day which is a Business Day
described in clauses (i) and (ii) above and which shall not be a legal holiday
or a day on which banking institutions are authorized or required by law or
other government action to close in the city where the applicable Payment Office
of the Agent is located.
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"Capitalization Ratio" shall mean, as of the last day of any fiscal
quarter, the ratio of (i) Consolidated Indebtedness as of such date to (ii) the
sum of Consolidated Indebtedness and Consolidated Net Worth, each as of such
date.
"Cash Collateral Accounts" shall mean the Sinking Fund Account and the L/C
Cash Collateral Accounts established by Beechwood and the Borrower,
respectively, with the Escrow Agent pursuant to the Escrow and Security
Agreements.
"Cash Equivalents" shall mean (i) securities issued or unconditionally
guaranteed by the United States of America or any agency or instrumentality
thereof, backed by the full faith and credit of the United States of America and
maturing within 90 days from the date of acquisition, (ii) commercial paper
issued by any Person organized under the laws of the United States of America,
maturing within 90 days from the date of acquisition and, at the time of
acquisition, having a rating of at least A-1 or the equivalent thereof by
Standard & Poor's or at least P-1 or the equivalent thereof by Xxxxx'x, (iii)
time deposits and certificates of deposit maturing within 90 days from the date
of issuance and issued by a bank or trust company organized under the laws of
the United States of America or any state thereof that has combined capital and
surplus of at least $500,000,000 and that has (or is a subsidiary of a bank
holding company that has) a long-term unsecured debt rating of at least A or the
equivalent thereof by Standard & Poor's or at least A2 or the equivalent thereof
by Xxxxx'x, (iv) repurchase obligations with a term not exceeding seven (7) days
with respect to underlying securities of the types described in clause (i) above
entered into with any bank or trust company meeting the qualifications specified
in clause (iii) above, and (v) money market funds substantially all of whose
assets are comprised of securities of the types described in clauses (i) through
(iv) above.
"Class" shall have the meaning given to such term in Section 2.2(a).
"Closing Date" shall mean the date upon which the initial extensions of
credit are made pursuant to this Agreement.
"Commitment" shall mean, with respect to any Lender, the sum of such
Lender's Tranche A Commitment, Tranche B Commitment and Revolving Credit
Commitment.
"Companies Act Principles" shall mean the principles of accounting
encompassed in the Companies Xxx 0000 under the laws of England and any
amendments thereto.
"Compliance Certificate" shall mean a fully completed and duly executed
certificate in the form of Exhibit D-1 or D-2, as applicable, together with a
Covenant Compliance Worksheet.
"Consolidated Indebtedness" shall mean, as of the last day of any fiscal
quarter, the aggregate (without duplication) of all Indebtedness of the Parent
and its Subsidiaries as of such date, determined on a consolidated basis in
accordance with Generally Accepted Accounting Principles.
"Consolidated Interest Expense" shall mean, for any period, the sum
(without duplication) of total interest expense of the Borrower and its
Subsidiaries for such period in respect of Indebtedness of the Borrower and its
Subsidiaries (including, without limitation, all such interest expense accrued
or capitalized during such period, whether or not actually paid during such
period, and including all net amounts paid or accrued by the Borrower and its
Subsidiaries during such period under or in respect of Hedge Agreements and all
commitment fees and other ongoing fees in respect of Indebtedness (including
fees payable under Sections 2.9(b), (c), (d) and (e)) paid or accrued by the
Borrower and its Subsidiaries
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during such period), determined on a consolidated basis in accordance with
Generally Accepted Accounting Principles.
"Consolidated Net Worth" shall mean, at any time, the net worth of the
Parent and its Subsidiaries at such time, determined on a consolidated basis in
accordance with Generally Accepted Accounting Principles (x) including the
amount of the Contingent Interest Notes as reported on the Parent's most recent
balance sheet, but (y) excluding any preferred stock or other class of equity
securities that, by its stated terms (or by the terms of any class of equity
securities issuable upon conversion thereof or in exchange therefor), or upon
the occurrence of any event, matures or is mandatorily redeemable, or is
redeemable at the option of the holders thereof, in whole or in part, at any
time prior to the Tranche A Maturity Date, and (z) without regard to the
requirements of Statement of Financial Accounting Standards No. 115 issued by
the Financial Accounting Standards Board.
"Consolidated Net Written Premiums" shall mean, as to the Insurance
Subsidiaries, for any period, the sum (without duplication) of the Net Written
Premiums of all the Insurance Subsidiaries for such period.
"Contingent Interest Notes" shall mean those certain unsecured contingent
interest notes maturing on June 30, 2006 issued by Piedmont Management Company
Inc. ("Piedmont") on December 11, 1995 to its shareholders, the liabilities for
which became liabilities of Parent as a result of the merger of Piedmont with
and into Parent on December 13, 1995.
"Contingent Interest Note Indenture" means the Indenture dated as of
December 1, 1995 between Piedmont Management Company Inc. and Fleet, as trustee,
as supplemented.
"Contingent Obligation" shall mean, with respect to any Person, any direct
or indirect liability of such Person with respect to any Indebtedness, liability
or other obligation (the "primary obligation") of another Person (the "primary
obligor"), whether or not contingent, (a) to purchase, repurchase or otherwise
acquire such primary obligation or any property constituting direct or indirect
security therefor, (b) to advance or provide funds (i) for the payment or
discharge of any such primary obligation or (ii) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency or any balance sheet item, level of income or financial condition of
the primary obligor, (c) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor in respect thereof to make payment of such
primary obligation or (d) otherwise to assure or hold harmless the owner of any
such primary obligation against loss or failure or inability to perform in
respect thereof; provided, however, that, with respect to the Borrower and its
Subsidiaries, the term Contingent Obligation shall not include endorsements for
collection or deposit in the ordinary course of business or any other
obligations to the extent such obligations are secured with cash or Cash
Equivalents.
"Covenant Compliance Worksheet" shall mean a fully completed worksheet in
the form of Attachment A to Exhibit D.
"Credit Documents" shall mean this Agreement, the Notes, the Fee Letter,
the Guaranty, the Escrow and Security Agreement, any Hedge Agreement to which
the Borrower and any Lender are parties and that is entered into by the Borrower
pursuant to, and as required by, Section 7.8, and all other agreements,
instruments, documents and certificates now or hereafter executed and delivered
to the Agent or any Lender by or on behalf of the Parent, Borrower or any of its
Subsidiaries with respect to this
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Agreement and the transactions contemplated hereby, in each case as amended,
modified, supplemented or restated from time to time.
"Debt Service" shall mean, for any period, the aggregate (without
duplication) of all principal and Consolidated Interest paid or payable by the
Borrower and its Subsidiaries during such period in respect of Indebtedness
(including the Loans and the Senior Notes but excluding Indebtedness owed by any
Subsidiary to the Borrower) other than mandatory and voluntary principal
prepayments made pursuant to Sections 2.5(b), 2.5(c), or 2.6(a).
"Default" shall mean any event or condition that, with the passage of time
or giving of notice, or both, would constitute an Event of Default.
"Determination Date" shall mean, with respect to setting the spot exchange
rate:
(a) in connection with the origination of any Revolving Loan or the
issuance of any Letter of Credit or the Loan Notes Guaranty, the Business
Day which is three (3) Business Days prior to the date such credit is
extended or such instrument is issued;
(b) in connection with any conversion or continuation of any
Revolving Loans, three (3) Business Days prior to the date such Loan is
converted or continued;
(c) the last Business Day of each quarter; or
(d) the date of any reduction of the Total Revolving Credit
Commitments pursuant to the terms of Section 2.5.
"Dollar Amount" shall mean (a) with respect to Dollars or an amount
denominated in Dollars, such amount, and (b) with respect to an amount
denominated in Pounds Sterling, the Dollar Equivalent of such amount on the date
contemplated by the applicable section of this Agreement.
"Dollar Equivalent" shall mean, on any Business Day, with respect to an
amount denominated in Pounds Sterling, the amount of Dollars into which the
Agent could, in accordance with its customary commercial practice from time to
time in the interbank foreign exchange market, convert such amount of Pounds
Sterling at the most favorable spot rate of exchange determined by the Agent to
be available to it (inclusive of all reasonable and related costs of conversion,
if any are actually incurred) at or about 10:00 a.m., Charlotte time, on such
date.
"Dollar Facilities" shall mean the Tranche A Term Loans, the Dollar
Revolving Loans and any Letters of Credit denominated in Dollars.
"Dollar Revolving Loans" shall mean Revolving Loans denominated in
Dollars.
"Dollars" or "$" shall mean dollars of the United States of America.
"EBITDA" shall mean, with respect to the Borrower and its Non-Insurance
Subsidiaries for any period, the sum (without duplication) of (a) net income (or
loss) for such period determined on a consolidated basis in accordance with
Generally Accepted Accounting Principles, (b) Consolidated Interest Expense for
such period, (c) federal, state and local income and franchise taxes deducted in
determining such income, (d) depreciation and amortization deducted in
determining such income, and (e) all other
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non-cash expenses which reduce such net income, less (f) to the extent included
in such net income, the sum of (i) all income of such Person attributable to
dividends from an Insurance Subsidiary and (ii) all non-cash items which
increase net income (provided that all such items shall be included as income in
the period in which the cash therefor is received).
"ERISA" shall mean 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" shall mean 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" shall mean any of the following with respect to a Plan or
Multiemployer Plan, as applicable: (i) a Reportable Event with respect to a Plan
or a Multiemployer Plan, (ii) a complete or partial withdrawal by the Borrower
or any ERISA Affiliate from a Multiemployer Plan that results in material
liability of the Borrower or any of its Material Subsidiaries 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 in either case solely where such event
or termination could reasonably be expected to result in the Borrower or any of
its Material Subsidiaries incurring material liability, (iii) 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, other than pursuant to Section 4041(b) of ERISA, (iv) 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,
(v) 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 with
respect to a material amount of unpaid contributions, which proceeding is not
dismissed within thirty (30) days, (vi) the imposition upon the Borrower or any
ERISA Affiliate of any material 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 on a material amount of the
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, (vii)
the engaging in or otherwise becoming liable for a nonexempt Prohibited
Transaction which could reasonably be expected to result in the imposition of a
material penalty on the Borrower or any ERISA Affiliate, or (viii) the adoption
of an amendment to any Plan that, pursuant to Section 401(a)(29) of the Internal
Revenue Code or Section 307 of ERISA, would result in the loss of tax-exempt
status of the trust of which such Plan is a part if the Borrower or an ERISA
Affiliate fails to timely provide security to such Plan in accordance with the
provisions of such sections.
"Eligible Assignee" shall mean (i) a commercial bank organized under the
laws of the United States or any state thereof and having total assets in excess
of $1,000,000,000, (ii) a commercial bank organized under the laws of any other
country that is a member of the Organization for Economic Cooperation and
Development or any successor thereto (the "OECD") or a political subdivision of
any such country and having total assets in excess of $1,000,000,000; provided
that such bank or other financial institution is acting through a branch or
agency located in the United States, in the country under the laws of which it
is organized or in another country that is also a member of the OECD, (iii) the
central bank of any country that is a member of the OECD, (iv) a finance
company, insurance company or other
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financial institution or fund that is engaged in making, purchasing or otherwise
investing in loans in the ordinary course of its business and having total
assets in excess of $500,000,000, (v) any Affiliate of an existing Lender or
(vi) any other Person approved by the Required Lenders, which approval shall not
be unreasonably withheld.
"Environmental Claims" shall mean any and all administrative, regulatory
or judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations (other than internal reports prepared
by any Person in the ordinary course of its business and not in response to any
third party action or request of any kind) or proceedings relating in any way to
any Environmental Law or any permit issued, or any approval given, under any
such Environmental Law (collectively, "Claims"), including, without limitation,
(i) any and all Claims by Governmental Authorities for enforcement, cleanup,
removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law and (ii) any and all Claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Substances or arising from alleged
injury or threat of injury to human health or the environment.
"Environmental Laws" shall mean any and all federal, state and local laws,
statutes, ordinances, rules, regulations, permits, licenses, approvals,
interpretations, rules of common law and orders of courts or Governmental
Authorities, relating to the protection of human health or occupational safety
or the environment, now or hereafter in effect and in each case as amended from
time to time, including, without limitation, requirements pertaining to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transportation, handling, reporting, licensing, permitting, investigation or
remediation of Hazardous Substances.
"Escrow and Security Agreements" shall mean the Beechwood Escrow and
Security Agreement and the Borrower Escrow and Security Agreement.
"Event of Default" shall have the meaning given to such term in Section
10.1.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute, and all rules and regulations from
time to time promulgated thereunder.
"Execution Date" shall mean October 13, 1996.
"Executive Officers" shall mean Xxxxxxx X. Xxxx, Chairman and Chief
Executive Officer, Xxxxxx X. Xxxxxxxxx, President, Xxxxxxx X. Xxxxx, Executive
Vice President, and Xxxxxxx X. Xxxxxx, Senior Vice President and Chief Financial
Officer.
"Federal Funds Rate" shall mean, for any period, a fluctuating per annum
interest rate (rounded upwards, if necessary, to the nearest 1/100 of one
percentage point) 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 the Agent.
"Federal Reserve Board" shall mean the Board of Governors of the Federal
Reserve System or any successor thereto.
-10-
"Fee Letter" shall mean the letter from First Union to the Borrower, dated
October 3, 1996, relating to certain fees payable by the Borrower in respect of
the transactions contemplated by this Agreement, as amended, modified or
supplemented from time to time.
"Fixed Charge Coverage Ratio" shall mean, as of the last day of, and with
respect to, any period of four consecutive fiscal quarters (the "Measurement
Period"), the ratio of:
(i) the aggregate (without duplication) of (w) the Available
Dividend Amount for Reinsurance and other Insurance Subsidiaries that are
direct Subsidiaries of the Borrower, plus (x) the Net Tax Sharing
Payments, plus (y) principal and interest payments received by the
Borrower from Beechwood in respect of loans made by the Borrower to
Beechwood to effect the Acquisition, plus (z) EBITDA, to
(ii) the aggregate of (y) the Debt Service reasonably determined by
the Borrower (and as set forth in the relevant Covenant Compliance
Worksheet) to be required to be paid or accrued by the Borrower during the
period of four consecutive fiscal quarters immediately following the
Measurement Period (the "Pro Forma Period"), including capital lease
obligations to the extent reasonably expected not to be reimbursed by one
or more Subsidiaries, based on the amount of the Loans, Senior Notes and
other Indebtedness outstanding at the beginning of such period and
assuming that the rates in effect at the beginning of such period, taking
into account the benefit and costs of any Hedge Agreement with respect to
the Loans, will remain in effect throughout such period, plus (z) four (4)
times the amount of dividends paid by the Parent during the last quarter
of the Measurement Period.
For purposes of calculating this ratio, any payments made or received in Pounds
Sterling shall be converted to their Dollar Equivalents.
"Fixed Guaranty Principal Exposure" shall mean the Stated Amount of the
Loan Notes issued and outstanding as of the date of certification thereof by an
Authorized Officer of the Borrower, immediately after consummation of all
purchases of the shares of Xxxxxx pursuant to the Tender Offer and the Statutory
Merger Proceedings, if any.
"Fleet" shall mean Fleet National Bank of Connecticut.
"Fleet Indebtedness" shall mean the term loan Indebtedness of the Borrower
to Fleet under a credit agreement between the Borrower and Fleet dated as of
December 13, 1995, and the revolving credit Indebtedness of the Borrower, Parent
and Reinsurance to Fleet under a credit agreement among such parties dated as of
December 13, 1995.
"Guaranty" shall mean the guaranty made by the Parent in favor of the
Agent, on behalf of the Lenders, in substantially the form of Exhibit G, as
amended, modified or supplemented from time to time.
"Generally Accepted Accounting Principles" shall mean generally accepted
accounting principles, as set forth in the statements, opinions and
pronouncements of the Accounting Principles Board, the American Institute of
Certified Public Accountants and the Financial Accounting Standards Board (or,
to the extent not so set forth in such statements, opinions and pronouncements,
as generally followed by entities similar in size to the Borrower and engaged in
generally similar lines of business), consistently applied and maintained and in
conformity with those used in the preparation of the most recent financial
statements of the Borrower referred to in Section 6.11(b).
-11-
"Governmental Authority" shall mean any nation or government, any state or
other political subdivision thereof and any central bank thereof, any municipal,
local, city or county government, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Hazardous Substances" shall mean any substances or materials (i) that are
or become defined as hazardous wastes, hazardous substances, pollutants,
contaminants or toxic substances under any Environmental Law, (ii) that are
defined by any Environmental Law as toxic, explosive, corrosive, ignitable,
infectious, radioactive, mutagenic or otherwise hazardous, (iii) the presence of
which require investigation or response under any Environmental Law, (iv) that
constitute a nuisance, trespass or health or safety hazard to Persons or
neighboring properties, (v) that consist of underground or aboveground storage
tanks, whether empty, filled or partially filled with any substance or (vi) that
contain, without limitation, asbestos, polychlorinated biphenyls, urea
formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived
substances or wastes, crude oil, nuclear fuel, natural gas or synthetic gas.
"Hedge Agreement" shall mean any interest or foreign currency rate swap,
cap, collar, option, hedge, forward rate or other similar agreement or
arrangement designed to protect against fluctuations in interest rates or
currency exchange rates.
"Historical Statutory Statements" shall have the meaning given to such
term in Section 6.11(c).
"Indebtedness" shall mean, with respect to any Person (without
duplication), (i) all indebtedness of such Person for borrowed money or in
respect of loans or advances, (ii) all obligations of such Person evidenced by
notes, bonds, debentures or similar instruments, (iii) all reimbursement
obligations of such Person with respect to surety bonds, letters of credit and
bankers' acceptances (in each case, whether or not drawn or matured and in the
stated amount thereof), (iv) all obligations of such Person to pay the deferred
purchase price of property or services, (v) all indebtedness created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person, (vi) all obligations of such Person as lessee
under leases that are or should be, in accordance with Generally Accepted
Accounting Principles, recorded as capital leases, to the extent such
obligations are required to be so recorded, (vii) all obligations of such Person
to purchase, redeem, retire, defease or otherwise make any payment in respect of
any capital stock or other equity securities that, by their stated terms (or by
the terms of any equity securities issuable upon conversion thereof or in
exchange therefor), or upon the occurrence of any event, mature or are
mandatorily redeemable, or are redeemable at the option of the holder thereof,
in whole or in part, at any time prior to the Tranche A Maturity Date, (viii)
the net termination obligations of such Person under any Hedge Agreements (other
than any Hedge Agreements in respect of the Loans), calculated as of any date as
if such agreement or arrangement were terminated as of such date, (ix) all
Contingent Obligations of such Person and (x) all indebtedness referred to in
clauses (i) through (ix) above secured by any Lien on any property or asset
owned or held by such Person regardless of whether the indebtedness secured
thereby shall have been assumed by such Person or is nonrecourse to the credit
of such Person; it being understood that obligations of any Insurance Subsidiary
incurred under insurance and reinsurance agreements entered into in the ordinary
course of its business are not Indebtedness.
"INSCORP" shall mean Insurance Corporation of New York, a New York
insurance company and Wholly Owned Subsidiary of Reinsurance.
-12-
"Insurance Regulatory Authority" shall mean, with respect to any Insurance
Subsidiary, the insurance department or similar Governmental Authority charged
with regulating insurance companies or insurance holding companies, in its state
of domicile and, to the extent that it has regulatory authority over such
Insurance Subsidiary, in each other jurisdiction in which such Insurance
Subsidiary conducts business or is licensed to conduct business.
"Insurance Subsidiary" shall mean Reinsurance, INSCORP, and any other
Material Subsidiary of the Borrower the ability of which to pay dividends is
regulated by an Insurance Regulatory Authority or that is otherwise required to
be regulated thereby in accordance with the applicable Requirements of Law of
its state of domicile.
"Interest Period" shall have the meaning given to such term in Section
2.10.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and any successor statute, and all rules and
regulations from time to time promulgated thereunder.
"Invested Assets" means, with respect to any Person, the amount, on a
consolidated basis, of its investments, cash and cash equivalents as reflected
on such Person's most recent balance sheet.
"Investment Grade Securities" means (i) obligations of or guaranteed as to
principal and interest by the United States Government or (ii) debt securities,
debt instruments or redeemable preferred stock with a rating of BBB- or higher
by Standard & Poor's, Baa3 or higher by Moody's, Class (2) or higher by the NAIC
or the equivalent of such rating by Standard & Poor's, Moody's or NAIC or, if
none of Standard & Poor's, Moody's or NAIC shall then exist (or, in the case of
the Securities, shall not then be making a rating on the Securities publicly
available), the equivalent of such rating by any other "nationally recognized
statistical rating organization" (as defined in Rule 436 under the Securities
Act of 1933).
"Issuing Bank" shall mean (i) in respect of the issuer of the Loan Notes
Guaranty in accordance with Article III and the issuer of the Letters of Credit
denominated in Pounds Sterling in accordance with Article IV, First Union
(London) and its successors in such capacity, and (ii) in respect of the issuer
of the Letters of Credit denominated in Dollars in accordance with Article IV,
First Union and its successors in such capacity.
"L/C Cash Collateral Accounts" shall have the meaning given such term in
Section 4.8.
"LIBOR Loan" shall mean, at any time, any Loan that bears interest at such
time at the Adjusted LIBOR Rate.
"LIBOR Dollar Rate" shall mean, with respect to each LIBOR Loan
denominated in Dollars and comprising part of the same Borrowing for any
Interest Period, an interest rate per annum obtained by dividing (i) (y) the
rate of interest appearing on Telerate Page 3750 (or any successor page) or (z)
if no such rate is available, or at the option of the Agent pursuant to
reasonable commercial practice applicable to borrowers similarly situated to the
Borrower, the rate of interest determined by the Agent to be the rate or the
arithmetic mean of rates (rounded upward, if necessary, to the nearest 1/16 of
one percentage point) at which Dollar deposits in immediately available funds
are offered by First Union to first-tier banks in the London interbank
Eurodollar market, in each case under (y) and (z) above at approximately 11:00
a.m., London time, two (2) Business Days prior to the first day of such Interest
Period for a period substantially equal to such Interest Period and in an amount
substantially equal to the amount of First Union's LIBOR
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Loan comprising part of such Borrowing, by (ii) the amount equal to 1.00 minus
the Reserve Requirement (expressed as a decimal) for such Interest Period.
"LIBOR Rate" shall mean and include each of the LIBOR Dollar Rate and the
LIBOR Sterling Rate.
"LIBOR Sterling Rate" shall mean, with respect to each LIBOR Loan
denominated in Pounds Sterling and comprising part of the same Borrowing for any
Interest Period, an interest rate per annum obtained by dividing (i) the rate of
interest appearing on Reuters Monitor Page LIBP (or any successor page)
representing the rate of interest at which Pounds Sterling deposits in
immediately available funds are offered by First Union to first-tier banks in
the London interbank Eurodollar market at approximately 11:00 a.m., London time,
three (3) Business Days prior to the first day of such Interest Period, for a
period substantially equal to such Interest Period and in an amount
substantially equal to the amount of First Union's LIBOR Loan comprising part of
such Borrowing, by (ii) the amount equal to 1.00 minus the Reserve Requirement
(expressed as a decimal) for such Interest Period.
"Lender" shall mean each financial institution signatory hereto and each
other financial institution that becomes a "Lender" hereunder pursuant to
Section 12.7, and their respective successors and assigns.
"Lending Office" shall mean, with respect to any Lender, (i) for all
purposes other than as specified in clause (ii), the office of such Lender
designated as its "Lending Office for Dollar Facilities" on its signature page
hereto or in an Assignment and Acceptance, and (ii) in the case of Loans under
the Sterling Facilities, the office of such Lender designated as its "Lending
Office for Sterling Facilities" on its signature page hereto or in an Assignment
and Acceptance, or such other office as may be otherwise designated in writing
from time to time by such Lender to the Borrower and the Agent. A Lender may
designate separate Lending Offices as provided in the foregoing sentence for the
purposes of making or maintaining different Types of Loans, and, with respect to
LIBOR Loans and any Loans under the Sterling Facilities, such office may be a
domestic or foreign branch or Affiliate of such Lender.
"Letter of Credit Exposure" shall mean, with respect to any Revolving
Lender at any time, such Lender's Revolving Commitment Percentage of (x) the sum
of (i) the aggregate Stated Amount of all Letters of Credit outstanding at such
time and (ii) the aggregate amount of all Reimbursement Obligations outstanding
at such time.
"Letter of Credit Fee" shall have the meaning provided in Section 2.9(d).
"Letter of Credit Notice" shall have the meaning given to such term in
Section 4.2.
"Letters of Credit" shall have the meaning given to such term in Section
4.1.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
security interest, lien (statutory or otherwise), preference, priority, charge
or other encumbrance of any nature, whether voluntary or involuntary, including,
without limitation, the interest of any vendor or lessor under any conditional
sale agreement, title retention agreement, capital lease or any other lease or
arrangement having substantially the same effect as any of the foregoing.
"Loan Notes" shall mean the Floating Rate Guaranteed Unsecured Loan Notes
2002, to be issued by Beechwood under and pursuant to the Loan Note Instrument
and having a final maturity of June 30, 2002.
-14-
"Loan Notes Guaranty" shall mean the guaranty of the Issuing Bank, in the
form of the guaranty incorporated in the Loan Notes Instrument, in form and
substance satisfactory to the Issuing Bank, pursuant to which the Issuing Bank
guarantees the payment of the principal and interest on the Loan Notes.
"Loan Notes Guaranty Exposure" shall mean, with respect to any Lender,
such Lender's Tranche B Guaranty Exposure and Revolver Guaranty Exposure.
"Loan Notes Guaranty Fee" shall have the meaning given to such term in
Section 2.9(c).
"Loan Notes Instrument" shall mean the loan note instrument to be executed
by Beechwood pursuant to and in accordance with the Tender Offer.
"Loan Notes Maturity Date" shall mean September 29, 2002.
"Loan Notes Reimbursement Obligation" shall have the meaning given to such
term in Section 3.4.
"Loans" shall mean any or all of the Tranche A Term Loans, the Tranche B
Term Loans, and the Revolving Loans.
"Local Time" shall mean the local time in effect at (x) the applicable
Notice Office (in the case of Notices of Revolving Borrowings, Notices of
Conversions/Continuations, and Letter of Credit Notices) and (y) the applicable
Payment Office in the case of all payments and disbursements of Loans under
Letters of Credit or the Loan Notes Guaranty.
"Margin Stock" shall have the meaning given to such term in Regulation U.
"Material Adverse Change" shall mean a material adverse change in the
condition (financial or otherwise), operations, business, properties or
financial prospects of the Borrower or the Borrower and its Subsidiaries, taken
as a whole.
"Material Adverse Effect" shall mean a material adverse effect upon (i)
the condition (financial or otherwise), operations, business, properties or
financial prospects of the Borrower or the Borrower and its Subsidiaries, taken
as a whole, (ii) the ability of the Borrower or any Subsidiary to perform its
obligations under this Agreement or any of the other Credit Documents or (iii)
the legality, validity or enforceability of this Agreement or any of the other
Credit Documents or the rights and remedies of the Agent and the Lenders
hereunder and thereunder.
"Material Asset" shall mean, at any time, any asset or group of assets to
which 10% or more of the gross revenues of the Borrower and its Subsidiaries are
attributable, or whose book value exceeds ten percent (10%) of the total assets
of the Borrower and its Subsidiaries, in each case on a consolidated basis for
the most recent four quarter period and as of the most recent fiscal quarter
end, respectively, determined in accordance with Generally Accepted Accounting
Principles.
"Material Subsidiary" shall mean any Subsidiary of the Borrower whose
total assets or total revenues exceed ten percent (10%) of the total assets or
gross revenues, respectively, of the Borrower and its Subsidiaries on a
consolidated basis as of the most recent fiscal quarter end and for the most
recent four-quarter period, respectively, determined in accordance with
Generally Accepted Accounting Principles.
-15-
"Moody's" shall mean Xxxxx'x Investors Service, Inc., its successors and
assigns.
"Multiemployer Plan" shall mean, as of any given date, any "multiemployer
plan" within the meaning of Section 4001(a)(3) of ERISA to which the Borrower or
any ERISA Affiliate makes, is making or is obligated to make contributions or
has made or been obligated to make contributions during the 5-year period
immediately preceding such date.
"NAIC" shall mean the National Association of Insurance Commissioners and
any successor thereto.
"Net Tax Sharing Payments" shall mean, for any period, the excess of (i)
the aggregate (without duplication) of all payments made or reasonably estimated
by Borrower to be made to the Borrower by its Subsidiaries pursuant to tax
sharing or tax allocation agreements or arrangements or otherwise in respect of
taxable income realized during such period, over (ii) the aggregate of all
foreign, federal, state or local income, franchise and other tax payments made
or reasonably estimated by Borrower to be made by the Borrower in respect of
taxable income realized during such period.
"Non-Insurance Subsidiary" shall mean any Subsidiary of Borrower that is
neither an Insurance Subsidiary nor a Subsidiary of an Insurance Subsidiary.
"Notes" shall mean any or all of the Tranche A Term Notes, the Tranche B
Term Notes, and the Revolving Credit Notes.
"Notice of Conversion/Continuation" shall have the meaning given to such
term in Section 2.11(b).
"Notice of Revolving Borrowing" shall have the meaning given to such term
in Section 2.2(b).
"Notice Office" shall mean (i) in respect of any notice not referred to in
clause (ii) below, the offices of the Agent at Xxx Xxxxx Xxxxx Xxxxxx, XX-00,
000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, Attention:
Syndication Agency Services, Telecopy No. (000) 000-0000, and (ii) in respect of
notices for Letters of Credit to the Issuing Bank (whether denominated in Pounds
Sterling or Dollars), the address for notices for First Union as a Lender on its
signature page hereto, with a copy to the Agent at the Notice Office set forth
in the foregoing clause (i).
"Obligations" shall mean all principal of and interest (including, to the
greatest extent permitted by law, post-petition interest) on the Loans, all
Reimbursement Obligations and all fees, expenses, indemnities and other
obligations owing, due or payable at any time by the Borrower to the Agent, any
Lender, the Issuing Bank or any other Person entitled thereto, under this
Agreement or any of the other Credit Documents.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
successor thereto.
"Parent" shall mean Chartwell Re Corporation, a Delaware corporation and
the sole shareholder of the Borrower.
"Participant" shall have the meaning given to such term in Section
12.7(d).
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"Payment Office" shall mean, with respect to the Agent, (i) for all
purposes other than as specified in clause (ii), the office of the Agent
designated as its "Payment Office for Dollar Facilities" on its signature page
hereto, and (ii) in the case of Loans under the Sterling Facilities, the office
of the Agent designated as its "Payment Office for Sterling Facilities" on it
signature page hereto, or, in either case, such other offices as the Agent may
designate to the Borrower and the Lenders from time to time.
"Permitted Liens" shall have the meaning given to such term in Section
9.3.
"Person" shall mean any corporation, association, joint venture,
partnership, limited liability company, organization, business, individual,
trust, government or agency or political subdivision thereof or any other legal
entity.
"Plan" shall mean, as of any given date, 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) maintained or
contributed to by the Borrower or any ERISA Affiliate at any time within the
6-year period immediately preceding such date.
"Pounds Sterling" or "(pound)" shall mean freely transferable lawful money
of the United Kingdom.
"Pounds Sterling Revolving Loans" shall mean Revolving Loans denominated
in Pounds Sterling.
"Pro Forma Balance Sheet" shall have the meaning given to such term in
Section 6.11(d).
"Prohibited Transaction" shall mean any transaction described in (i)
Section 406 of ERISA that is not exempt by reason of Section 408 of ERISA or by
reason of a Department of Labor prohibited transaction individual or class
exemption or (ii) Section 4975(c) of the Internal Revenue Code that is not
exempt by reason of Section 4975(c)(2) or 4975(d) of the Internal Revenue Code.
"Projections" shall have the meaning given to such term in Section
6.11(e).
"Quarterly Statement" shall mean, with respect to any Insurance Subsidiary
for any fiscal quarter, the quarterly financial statements of such Insurance
Subsidiary as required to be filed with the Insurance Regulatory Authority of
its jurisdiction of domicile, together with all exhibits, schedules,
certificates and actuarial opinions required to be filed or delivered therewith.
"Register" shall have the meaning given to such term in Section 12.7(b).
"Regulations D, G, T, U and X" shall mean Regulations D, G, T, U and X,
respectively, of the Federal Reserve Board, and any successor regulations.
"Reimbursement Obligation" shall have the meaning given to such term in
Section 4.4.
"Reinsurance" shall mean Chartwell Reinsurance Company, a Minnesota
insurance company and Wholly Owned Subsidiary of the Borrower.
"Reportable Event" shall mean (i) 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 Internal Revenue Code or Section 302 of ERISA, regardless of
the issuance of
-17-
any waivers in accordance with Section 412(d) of the Internal Revenue Code),
(ii) any such "reportable event" subject to advance notice to the PBGC under
Section 4043(b)(3) of ERISA, (iii) any application for a funding waiver or an
extension of any amortization period pursuant to Section 412 of the Internal
Revenue Code, and (iv) a cessation of operations described in Section 4062(e) of
ERISA.
"Required Lenders" shall mean the Lenders holding outstanding Loans and
Commitments (or, after the termination of the Revolving Credit Commitments,
outstanding Loans and Letter of Credit Exposure) representing more than
sixty-six and two-thirds percent (66-2/3%) of the aggregate at such time of all
outstanding Loans and Commitments (or, after the termination of the Revolving
Credit Commitments, the aggregate at such time of all outstanding Loans and
Letter of Credit Exposure).
"Requirement of Law" shall mean, with respect to any Person, the charter,
articles or certificate of organization or incorporation and bylaws or other
organizational or governing documents of such Person, and any statute, law,
treaty, rule, regulation, order, decree, writ, injunction or determination of
any arbitrator or 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 or otherwise pertaining to any or all of the
transactions contemplated by this Agreement and the other Credit Documents.
"Reserve Requirement" shall mean, with respect to any Interest Period, the
reserve percentage (expressed as a decimal) in effect from time to time during
such Interest Period, as provided by the Federal Reserve Board, the Bank of
England, or any other Governmental Authority, applied for determining the
maximum reserve requirements (including, without limitation, basic,
supplemental, marginal and emergency reserves) applicable to First Union under
Regulation D with respect to "Eurocurrency liabilities" within the meaning of
Regulation D, or under any similar or successor regulation with respect to
Eurocurrency liabilities or Eurocurrency funding.
"Revolver Xxxxxx Loan Notes" shall have the meaning given to such term in
Section 3.9(a).
"Revolver Guaranty Exposure" shall mean, with respect to any Revolving
Lender, at any time, its Revolving Commitment Percentage of the following
amount: (i) the Aggregate Loan Notes Guaranty Principal Amount, minus (ii) the
Tranche B Guaranty Exposure, plus (iii) accrued interest on all the Loan Notes
outstanding at such time through and including the next succeeding interest
payment date therefor, plus (iv) the aggregate amount of all Loan Notes
Reimbursement Obligations outstanding at such time.
"Revolving Commitment Percentage" shall mean, for each Revolving Lender at
any time, a fraction the numerator of which is the Revolving Credit Commitment
of such Lender at such time and the denominator of which is the Total Revolving
Credit Commitments at such time.
"Revolving Commitment Worksheet" shall mean the worksheet in the form of
Exhibit H.
"Revolving Credit Commitment" shall mean, with respect to any Lender at
any time, the amount set forth opposite such Lender's name on its signature page
hereto under the caption "Revolving Credit Commitment" or, if such Lender has
entered into one or more Assignment and Acceptances, the amount set forth for
such Lender at such time in the Register maintained by the Agent pursuant to
Section 12.7(b) as such Lender's "Revolving Credit Commitment," as such amount
may be reduced at or prior to such time pursuant to the terms hereof.
"Revolving Credit Commitment Fee" shall have the meaning given to such
term in Section 2.9(b).
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"Revolving Credit Maturity Date" shall mean December 31, 2001, or such
later time not later than December 31, 2002, if so requested by the Borrower on
or before the second anniversary of the Execution Date and approved in writing
by all the Lenders in their sole and absolute discretion; provided that, if, on
December 30, 2001, (i) any Loan Notes are then outstanding, (ii) the Revolver
Guaranty Exposure is greater than zero, and (iii) the Borrower deposits, or
causes Beechwood to deposit, cash in the Sinking Fund in an amount at least
equal to such Revolver Guaranty Exposure in addition to such other amounts
required under this Agreement to be held in the Sinking Fund Account, then the
Revolving Credit Maturity Date shall be the earlier of September 29, 2002, or
the date all obligations of Beechwood under the Loan Notes to which the Loan
Notes Guaranty applies have been satisfied in full.
"Revolving Credit Notes" shall mean the promissory notes of the Borrower
in substantially the form of Exhibit A-4, together with any amendments,
modifications and supplements thereto, substitutions therefor and restatements
thereof.
"Revolving Credit Termination Date" shall mean the Revolving Credit
Maturity Date or such earlier date of termination of the Revolving Credit
Commitments pursuant to Section 2.5 or Section 10.2.
"Revolving Lender" shall mean any Lender having a Revolving Credit
Commitment, holding outstanding Revolving Loans or having Revolver Guaranty
Exposure.
"Revolving Loans" shall have the meaning given to such term in Section
2.1(c) and shall include, collectively, Dollar Revolving Loans and Pounds
Sterling Revolving Loans.
"Security Documents" shall mean the Escrow and Security Agreements and the
UCC-1 financing statements executed in connection therewith.
"Senior Note Indenture" means the Indenture dated as of March 17, 1994
between Parent and Bankers Trust Company, as Trustee, relating to the Senior
Notes, as supplemented and assumed by the Borrower.
"Senior Notes" means the 10-1/4% Senior Notes Due 2004 of Parent, assumed
by the Borrower, in the original aggregate principal amount not exceeding
$75,000,000.
"Sinking Fund Account" shall have the meaning given such term in Section
3.8.
"Standard & Poor's" shall mean Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, its successors and assigns.
"Stated Amount" shall mean, with respect to any Letter of Credit or the
Loan Notes Guaranty at any time, the aggregate amount available to be drawn
thereunder at such time (regardless of whether any conditions for drawing could
then be met and regardless of any cash or Cash Equivalents in the Cash
Collateral Accounts) and, with respect to Loan Notes at any time, the principal
amount outstanding thereunder at such time.
"Statutory Accounting Principles" shall mean, with respect to any
Insurance Subsidiary, the statutory accounting practices prescribed or permitted
by the relevant Insurance Regulatory Authority of its state of domicile,
consistently applied and maintained and in conformity with those used in the
preparation of the most recent Historical Statutory Statements.
-19-
"Statutory Merger Proceedings" shall mean the legal proceedings to effect
the elimination of minority shareholders of Xxxxxx pursuant to Section 428 et
seq. of the Companies Xxx 0000 in effect under the laws of England.
"Statutory Surplus" shall mean, with respect to any Insurance Subsidiary
at any time, the amount shown on line 25, page 3, column 1 of the Annual
Statement of such Insurance Subsidiary, or the amount determined in a consistent
manner for any date other than a date as of which an Annual Statement of such
Insurance Subsidiary is prepared.
"Sterling Base Rate" shall mean, at any time, that rate per annum
announced by Midland Bank plc to be its Sterling base rate (which may not
necessarily be its best rate), as adjusted to conform to changes as of the
opening of business on the date of any such change in such rate, plus the
Applicable Margin Percentage as in effect at such time.
"Sterling Facilities" shall mean the Tranche B Term Loans, the Pounds
Sterling Revolving Loans, the Loan Notes Guaranty and any Letters of Credit
denominated in Pounds Sterling.
"Subsidiary" shall mean, with respect to any Person, any corporation or
other Person of which more than fifty percent (50%) of the outstanding capital
stock having ordinary voting power to elect a majority of the board of
directors, in the case of a corporation, or of the ownership or beneficial
interests, in the case of a Person not a corporation, is at the time, directly
or indirectly, owned or controlled by such Person and one or more of its other
Subsidiaries or a combination thereof (irrespective of whether, at the time,
securities of any other class or classes of any such corporation or other Person
shall or might have voting power by reason of the happening of any contingency).
When used without reference to a parent entity, the term "Subsidiary" shall be
deemed to refer to a Subsidiary of the Borrower.
"Syndication Completion Date" shall have the meaning given to such term in
Section 2.2(a).
"Tender Offer" shall mean the Recommended Cash Offer by Salomon Brothers
International Limited on behalf of Beechwood for the whole of the issued share
capital of Xxxxxx.
"Term Loans" shall mean, collectively, the Tranche A Term Loans and the
Tranche B Term Loans.
"Total Loan Notes Guaranty Exposure" shall mean, at any time, the
aggregate amount of the Loan Notes Guaranty Exposures for all the Lenders.
"Total Revolving Credit Commitments" shall mean at any time the aggregate
amount of Revolving Credit Commitments of all Revolving Lenders at such time,
being initially Twenty-Five Million Dollars ($25,000,000).
"Total Tranche B Commitments" shall mean at any time the aggregate amount
of all Lenders' Tranche B Commitments at such time.
"Total Unutilized Revolving Credit Commitment" shall mean, at any time,
the aggregate amount of Unutilized Revolving Credit Commitments of all Revolving
Lenders at such time.
"Tranche A Commitment" shall mean, with respect to any Lender at any time,
the amount set forth opposite such Lender's name on its signature page hereto
under the caption "Tranche A
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Commitment" or, if such Lender has entered into one or more Assignment and
Acceptances, the amount set forth for such Lender at such time in the Register
maintained by the Agent pursuant to Section 12.7(b) as such Lender's "Tranche A
Commitment," as such amount may be reduced at or prior to such time pursuant to
the terms hereof.
"Tranche A Lender" shall mean (i) prior to the Closing Date, any Lender
having a Tranche A Commitment, and (ii) on and after the Closing Date, any
Lender holding outstanding Tranche A Term Loans.
"Tranche A Maturity Date" shall mean December 31, 2002.
"Tranche A Term Loans," "Tranche A-1 Term Loans" and "Tranche A-2 Term
Loans " shall have the meaning given to each of such terms in Section 2.1(a).
"Tranche A Term Notes" shall mean the Tranche A-1 Term Notes and the
Tranche A-2 Term Notes.
"Tranche A-1 Term Notes" shall mean the promissory notes of the Borrower
in substantially the form of Exhibit A-1, together with any amendments,
modifications and supplements thereto, substitutions therefor and restatements
thereof.
"Tranche A-2 Term Notes" shall mean the promissory notes of the Borrower
in substantially the form of Exhibit A-2, together with any amendments,
notifications and supplements thereto, substitutions therefor and restatements
thereof.
"Tranche B Xxxxxx Loan Notes" shall have the meaning given to such term in
Section 3.9(a).
"Tranche B Commitment" shall mean, with respect to any Lender at any time,
the amount set forth opposite such Lender's name on its signature page hereto
under the caption "Tranche B Commitment" or, if such Lender has entered into one
or more Assignment and Acceptances, the amount set forth for such Lender at such
time in the Register maintained by the Agent pursuant to Section 12.7(b) as such
Lender's "Tranche B Commitment," as such amount may be reduced at or prior to
such time pursuant to the terms hereof.
"Tranche B Commitment Percentage" shall mean, for each Tranche B Lender at
any time, a fraction, the numerator of which is the Tranche B Commitment of such
Lender at such time and the denominator of which is the Total Tranche B
Commitments at such time.
"Tranche B Guaranty Exposure" shall mean, with respect to any Tranche B
Lender at any time, its Tranche B Commitment Percentage of (i) the Aggregate
Loan Notes Guaranty Principal Amount not exceeding (pound)12,850,000 less (ii)
the amounts of principal theretofore paid on Loan Notes designated by the
Borrower pursuant to Section 3.9(b) as repayments of the Tranche B Xxxxxx Loan
Notes.
"Tranche B Lender" shall mean (i) prior to the Closing Date, any Lender
having a Tranche B Commitment, and (ii) on and after the Closing Date, any
Lender holding outstanding Tranche B Term Loans or having Tranche B Guaranty
Exposure.
"Tranche B Maturity Date" shall mean December 31, 2002.
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"Tranche B Term Loans" shall have the meaning given to such term in
Section 2.1(b).
"Tranche B Term Notes" shall mean the promissory notes of the Borrower in
substantially the form of Exhibit A-3, together with any amendments,
modifications and supplements thereto, substitutions therefor and restatements
thereof.
"Transactions" shall mean, collectively, the transactions contemplated by
the Transaction Documents, including (i) the initial extensions of credit under
this Agreement on the Closing Date, (ii) the Acquisition, (iii) the issuance of
the Loan Notes and (iv) the extinguishment of the Fleet Indebtedness.
"Transaction Documents" shall mean, collectively, the Credit Documents and
the Acquisition Documents, and all other agreements, instruments, certificates
and documents executed and delivered by the Parent, Borrower or any of its
Subsidiaries in connection with the Transactions, in each case as amended,
modified or supplemented from time to time in accordance with the terms of this
Agreement.
"Type" shall have the meaning given to such term in Section 2.2(a).
"Unutilized Revolving Credit Commitment" shall mean, with respect to any
Revolving Lender at any time, such Lender's Revolving Credit Commitment at such
time less the sum of the Dollar Amounts of (i) the aggregate principal amount of
all Revolving Loans made by such Lender that are outstanding at such time, and
(ii) such Lender's Letter of Credit Exposure and Revolver Guaranty Exposure at
such time.
"Wholly Owned" shall mean, with respect to any Subsidiary of any Person,
that 100% of the outstanding capital stock or other ownership interests of such
Subsidiary is owned, directly or indirectly, by such Person.
1.2 Accounting Terms. Except as specifically provided otherwise in this
Agreement, all accounting terms used herein that are not specifically defined
shall have the meanings customarily given them, and all financial computations
hereunder shall be made, in accordance with Generally Accepted Accounting
Principles (or, to the extent that such terms apply solely to any Insurance
Subsidiary or if otherwise expressly required, Statutory Accounting Principles).
Notwithstanding the foregoing, in the event that any changes in Generally
Accepted Accounting Principles or Statutory Accounting Principles after the date
hereof are required to be applied to the transactions described herein and would
affect the computation of the financial covenants contained in Article VIII, as
applicable, such changes shall be applied in the computation of such covenants
only from and after the date this Agreement shall have been amended to take into
account any such changes or the Required Lenders shall have otherwise agreed
that an amendment is not necessary. References to amounts on particular
exhibits, schedules, lines, pages and columns of any Annual Statement or
Quarterly Statement are based on the format promulgated by the NAIC for the 1995
Annual Statements and Quarterly Statements. In the event such format is changed
in future years so that different information is contained in such items or they
no longer exist, or if the Annual Statement or Quarterly Statement is replaced
by the NAIC or by any Insurance Regulatory Authority after the date hereof such
that different forms of financial statements are required to be furnished by the
Insurance Subsidiaries in lieu thereof, such references shall be to information
consistent with that reported in the referenced item in the 1995 Annual
Statements or Quarterly Statements, as the case may be.
1.3 Other Terms; Construction. Unless otherwise specified or unless the
context otherwise requires, all references herein to sections, annexes,
schedules and exhibits are references to sections, annexes, schedules and
exhibits in and to this Agreement, and all terms defined in this Agreement shall
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have the defined meanings when used in any other Credit Document or any
certificate or other document made or delivered pursuant hereto. All references
herein to the Lenders or any of them shall be deemed to include the Issuing Bank
unless specifically provided otherwise or unless the context otherwise requires.
ARTICLE II
AMOUNT AND TERMS OF THE LOANS
2.1 Commitments; Loans. (a) Each Tranche A Lender severally agrees,
subject to and on the terms and conditions of this Agreement, to make a term
loan in a maximum of two portions as hereinafter described (each, a "Tranche A
Term Loan," and collectively, the "Tranche A Term Loans") to the Borrower on the
Closing Date in a principal amount not to exceed its Tranche A Commitment. The
first portion of the Tranche A Term Loans shall be in an aggregate amount equal
to Twenty Million Dollars ($20,000,000) (each Tranche A Lender's pro rata
portion, a "Tranche A-1 Term Loan," and collectively, the "Tranche A-1 Term
Loans") and shall be made on the Closing Date. The second portion of the Tranche
A Term Loans shall be in an aggregate amount equal to Ten Million Dollars
($10,000,000) (each Tranche A Lender's pro rata portion, a "Tranche A-2 Term
Loan," and collectively, the "Tranche A-2 Term Loans") and shall be made on the
Acquisition Closing Date. All Tranche A Term Loans shall be made, maintained and
repaid in Dollars. To the extent repaid, Tranche A Term Loans may not be
reborrowed.
(b) Each Tranche B Lender severally agrees, subject to and on the terms
and conditions of this Agreement, to make a term loan (each, a "Tranche B Term
Loan," and collectively, the "Tranche B Term Loans") to the Borrower on the
Acquisition Closing Date in a principal amount not greater than the excess, if
any, of its Tranche B Commitment over its Tranche B Guaranty Exposure
immediately after the Acquisition. All Tranche B Term Loans shall be made,
maintained and repaid in Pounds Sterling. Except as provided in Section 2.2(d),
no Tranche B Term Loans shall be made at any time after the Acquisition Closing
Date. To the extent repaid, Tranche B Term Loans may not be reborrowed.
Notwithstanding any provision in this Agreement to the contrary, the principal
amount of outstanding Tranche B Term Loans owed to any Lender shall not at any
time exceed the amount of such Lender's Tranche B Commitment, less the sum of
(i) such Lender's pro rata share of payments or deposits required or caused to
be made by the Borrower pursuant to Section 2.6(b) and (ii) such Lender's
Tranche B Guaranty Exposure.
(c) Each Revolving Lender severally agrees, subject to and on the terms
and conditions of this Agreement, to make revolving credit loans (each, a
"Revolving Loan," and collectively, the "Revolving Loans") to the Borrower, from
time to time on any Business Day during the period from and including the
Closing Date to but not including the Revolving Credit Termination Date, in an
aggregate principal amount (measured in Dollar Equivalents) at any time
outstanding not greater than the excess, if any, of its Revolving Credit
Commitment at such time over the sum of the Dollar Amounts of its Letter of
Credit Exposure and its Revolver Guaranty Exposure at such time; provided that
no Borrowing of Revolving Loans shall be made if, on the Determination Date with
respect to such Borrowing, the Dollar Amount of such Borrowing would exceed the
Total Unutilized Revolving Credit Commitment at such time. Subject to and on the
terms and conditions of this Agreement, the Borrower may borrow, repay and
reborrow Revolving Loans. All Dollar Revolving Loans shall be made, maintained
and repaid in Dollars. All Pounds Sterling Revolving Loans shall be made,
maintained and repaid in Pounds Sterling.
2.2 Borrowings. (a) The Tranche A Term Loans, the Tranche B Term Loans and
the Revolving Loans (each, a "Class" of Loan) shall, at the option of the
Borrower and subject to the terms
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and conditions of this Agreement, be either Base Rate Loans or LIBOR Loans
(each, a "Type" of Loan); provided that (i) all Loans comprising the same
Borrowing shall, unless otherwise specifically provided herein, be of the same
Type, and (ii) notwithstanding any other provision of this Agreement, the Term
Loans and any Revolving Loans made on the Closing Date or on the Acquisition
Closing Date shall be made initially as Base Rate Loans, and (iii)
notwithstanding any other provision of this Agreement, no LIBOR Loans having an
Interest Period of longer than one month may be borrowed at any time prior to
the earlier of the 90th day after the Acquisition Closing Date and the date upon
which the Agent determines in its sole discretion, and notifies the Borrower,
that the primary syndication of the Facilities has been completed (the earlier
of such dates, the "Syndication Completion Date"). Nothing in this Section
2.2(a) shall be construed to prevent the Borrower from obtaining more than one
Borrowing on a single day.
(b) In order to make a Borrowing of the Term Loans (other than Borrowings
involving continuations or conversions of outstanding Term Loans, which shall be
made pursuant to Section 2.11), the Borrower hereby requests (i) on the Closing
Date, a Borrowing of Tranche A-1 Term Loans in an amount equal to Twenty Million
Dollars ($20,000,000), and (ii) beginning on the Acquisition Closing Date, a
Borrowing of Tranche A-2 Term Loans in the aggregate amount of Ten Million
Dollars ($10,000,000) and a Borrowing of Tranche B Term Loans in an amount equal
to (x) the Total Tranche B Commitments less (y) the amount of the aggregate
Tranche B Guaranty Exposure on the Acquisition Closing Date (after issuance of
the Loan Notes Guaranty).
(c) In order to make a Borrowing of Revolving Loans (other than Borrowings
involving continuations or conversions of outstanding Revolving Loans, which
shall be made pursuant to Section 2.11), the Borrower will give the Agent
written notice not later than 11:00 a.m., Charlotte Time, the Applicable Number
of Business Days prior to each such Borrowing; provided, however, that a request
for a Borrowing of any Revolving Loans to be made on the Closing Date or the
Acquisition Closing Date may, at the discretion of the Agent, be given later
than the times specified hereinabove. Each such notice (each, a "Notice of
Revolving Borrowing") shall be irrevocable, shall be given in the form of
Exhibit B-1, including a duly completed Revolving Commitment Worksheet attached
thereto, and shall specify (v) the amount of the Total Unutilized Revolving
Credit Commitment immediately before giving effect to the requested Borrowing,
(w) the aggregate principal amount and initial Type of the Revolving Loans to be
made pursuant to such Borrowing, (x) the Applicable Currency in which such Loans
shall be denominated, (y) in the case of a Borrowing of LIBOR Loans, the initial
Interest Period to be applicable thereto, and (z) the requested Borrowing Date,
which shall be a Business Day. Upon its receipt of a Notice of Revolving
Borrowing, the Agent will promptly notify each Revolving Lender of the proposed
Borrowing and the contents of the Notice of Revolving Borrowing.
(d) If, on the Acquisition Closing Date, the amount of Tranche B Term
Loans made is less than the full amount of the Total Tranche B Commitments
because of the issuance of the Loan Notes Guaranty, the Borrower may, subject to
Section 2.1(b), at any time until one (1) day immediately preceding the Tranche
B Maturity Date, make Borrowings of Tranche B Term Loans in order to satisfy
Beechwood's obligations under the Loan Notes. Further, if, after the completion
of all purchases of Xxxxxx shares under the Tender Offer and the Statutory
Merger Proceedings, if any, the Fixed Guaranty Principal Exposure is less than
(x) the Stated Amount of the Loan Notes Guaranty upon its issuance, and is less
than (y) (pound)12,850,000, then the Borrower shall be entitled to make an
additional Borrowing of Tranche B Term Loans up to an amount equal to
(pound)12,850,000 minus the Fixed Guaranty Principal Exposure. In order to make
a Borrowing of Tranche B Term Loans to satisfy Loan Notes obligations, or to
make an additional Borrowing in accordance with the foregoing sentence, the
Borrower will give the Agent written notice not later than 11:00 a.m., Charlotte
time, the Applicable Number of Days prior to each such
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Borrowing. Each such notice (each, a "Notice of Tranche B Borrowing") shall be
irrevocable, shall be given in the form of Exhibit B-4, and shall specify (x)
the aggregate principal amount and initial Type of the Tranche B Term Loans to
be made pursuant to such Borrowing, (y) in the case of a Borrowing of LIBOR
Loans, the initial Interest Period to be applicable thereto, and (z) the
requested Borrowing Date, which shall be a Business Day. Upon its receipt of a
Notice of Tranche B Borrowing, the Agent will promptly notify each Tranche B
Lender of the proposed Borrowing and the contents of the Notice of Tranche B
Borrowing.
(e) Notwithstanding anything to the contrary contained herein:
(i) the aggregate principal amount of Borrowings of Tranche A Term
Loans shall be in the amount of the aggregate Tranche A Commitments, and
the aggregate principal amount of the Borrowings of Tranche B Term Loans
shall be in the amount of the Total Tranche B Commitments less the amount
of the aggregate Tranche B Guaranty Exposure of all Lenders;
(ii) the aggregate principal amount of each Borrowing of Dollar
Revolving Loans or Sterling Revolving Loans that is comprised of Base Rate
Loans shall not be less than $1,000,000 or (pound)1,000,000, respectively,
or, if greater, an integral multiple of $500,000 or (pound)500,000,
respectively, in excess thereof (or, if less, in the amount of the Total
Unutilized Revolving Credit Commitment);
(iii) the aggregate principal amount of each Borrowing of Dollar
Revolving Loans or Pounds Sterling Revolving Loans that is comprised of
LIBOR Loans shall not be less than $3,000,000 or (pound)3,000,000,
respectively, or, if greater, an integral multiple of $1,000,000 or
(pound)1,000,000, respectively, i any Borrowing of LIBOR Loans, then the
Borrower shall be deemed to have selected an Interest Period with a
duration of one month.
(f) Not later than 11:00 a.m., Local Time, on the requested Borrowing
Date, each Lender will make available to the Agent at its Payment Office an
amount, in the Applicable Currency and in immediately available funds, equal to
the amount of the Loan or Loans to be made by such Lender. To the extent the
relevant Lenders have made such amounts available to the Agent as provided
hereinabove, the Agent will make the aggregate of such amounts available to the
Borrower in accordance with Section 2.3(a) and in like funds as received by the
Agent.
2.3 Disbursements; Funding Reliance; Domicile of Loans. (a) The Borrower
hereby authorizes the Agent to disburse the proceeds of each Borrowing in
accordance with the terms of any written instructions from any of the Authorized
Officers; provided that the Agent shall not be obligated under any circumstances
to forward amounts to any account not listed in an Account Designation Letter.
The Borrower may at any time deliver to the Agent an Account Designation Letter
listing any additional accounts or deleting any accounts listed in a previous
Account Designation Letter.
(b) Unless the Agent has received, prior to 11:00 a.m., Local Time, on the
relevant Borrowing Date, written notice from a Lender that such Lender will not
make available to the Agent such Lender's ratable portion, if any, of the
relevant Borrowing, the Agent may assume that such Lender has made such portion
available to the Agent in immediately available funds on such Borrowing Date in
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accordance with the applicable provisions of Section 2.2, and the Agent may, in
reliance upon such assumption, but shall not be obligated to, make a
corresponding amount available to the Borrower on such Borrowing Date. If and to
the extent that such Lender shall not have made such portion available to the
Agent, and the Agent shall have made such corresponding amount available to the
Borrower, such Lender, on the one hand, and the Borrower, on the other,
severally agree to pay 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, (i) in the case of such Lender, at the Federal Funds Rate with respect to
Loans under the Dollar Facilities and, with respect to Loans under the Sterling
Facilities, at the rate per annum certified by the Agent to represent the cost
to the Agent of funding such amount for such period, and (ii) in the case of the
Borrower, at the rate of interest applicable at such time to the Class and Type
of Loans comprising such Borrowing, as determined under the provisions of
Section 2.8. If such Lender shall repay to the Agent such corresponding amount,
such amount shall constitute such Lender's Loan as part of such Borrowing for
purposes of this Agreement. The failure of any Lender to make any Loan required
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 Loan as part of such Borrowing,
but no Lender shall be responsible for the failure of any other Lender to make
the Loan to be made by such other Lender as part of any Borrowing.
(c) Subject to Section 2.19(c), each Lender may, at its option, make and
maintain any Loan at, to or for the account of any of its Lending Offices;
provided that any exercise of such option shall not affect the obligation of the
Borrower to repay such Loan to or for the account of such Lender in accordance
with the terms of this Agreement.
2.4 Notes. (a) The Loans made by each Lender shall be evidenced (i) in the
case of Tranche A-1 Term Loans, by a Tranche A-1 of Term Note appropriately
completed in substantially the form of Exhibit A-1, (ii) in the case of Tranche
A-2 Term Loans, by a Tranche A-2 Term Note appropriately completed in
substantially the form of Exhibit A-2, (iii) in the case of Tranche B Term
Loans, by a Tranche B Term Note appropriately completed in substantially the
form of Exhibit A-3, and (iv) in the case of Revolving Loans, by a Revolving
Credit Note appropriately completed in substantially the form of Exhibit A-4.
(b) Each Tranche A Term Note issued to a Tranche A Lender shall (i) be
executed by the Borrower, (ii) be payable to the order of such Lender, (iii) be
dated in the case of the Tranche A-1 Note as of the Closing Date and, in the
case of the Tranche A-2 Note, as of the Acquisition Closing Date, (iv) be in a
stated principal amount equal to, in the case of the Tranche A-1 Note,
two-thirds of such Lender's Tranche A Commitment, and, in the case of the
Tranche A-2 Note, one-third of such Lender's Tranche A Commitment, (v) bear
interest in accordance with the provisions of Section 2.8, as the same may be
applicable from time to time to the Tranche A Term Loan made by such Lender, and
(vi) be entitled to all of the benefits of this Agreement and the other Credit
Documents and subject to the provisions hereof and thereof.
(c) Each Tranche B Term Note issued to a Tranche B Lender shall (i) be
executed by the Borrower, (ii) be payable to the order of such Lender, (iii) be
dated as of the Acquisition Closing Date, (iv) be in a stated principal amount
equal to such Lender's Tranche B Commitment, (v) bear interest in accordance
with the provisions of Section 2.8, as the same may be applicable from time to
time to the Tranche B Term Loan made by such Lender, and (vi) be entitled to all
of the benefits of this Agreement and the other Credit Documents and subject to
the provisions hereof and thereof.
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(d) Each Revolving Credit Note issued to a Revolving Lender shall (i) be
executed by the Borrower, (ii) be payable to the order of such Lender, (iii) be
dated as of the Closing Date, (iv) be in a stated principal amount equal to such
Lender's Revolving Credit Commitment, (v) bear interest in accordance with the
provisions of Section 2.8, as the same may be applicable to the Revolving Loans
made by such Lender from time to time, and (vi) be entitled to all of the
benefits of this Agreement and the other Credit Documents and subject to the
provisions hereof and thereof.
(e) Each Lender will record on its internal records the amount and Type of
each Loan made by it and each payment received by it in respect thereof and
will, in the event of any transfer of any of its Notes, either endorse on the
reverse side thereof or on a schedule attached thereto (or any continuation
thereof) the outstanding principal amount and Type of the Loans evidenced
thereby as of the date of transfer or provide such information on a schedule to
the Assignment and Acceptance relating to such transfer; provided, however, that
the failure of any Lender to make any such recordation or provide any such
information, or any error therein, shall not affect the Borrower's obligations
under this Agreement or the Notes.
2.5 Termination and Reduction of Commitments. (a) The Tranche A
Commitments with respect to Tranche A-1 Loans shall be automatically and
permanently terminated at 5:00 p.m., Charlotte time, on the earlier of (i)
December 31, 1996 and (ii) the Closing Date. The Tranche A Commitments with
respect to Tranche A-2 Loans and the Tranche B Commitments shall be
automatically and permanently terminated at 5:00 p.m., London time, on the
earlier of (i) December 31, 1996 and (ii) the Acquisition Closing Date; provided
however that if, on or before December 31, 1996, Beechwood has obtained
acceptances to the Tender Offer representing at least ninety percent (90%) of
the outstanding shares of Xxxxxx, such date of termination shall be extended to
February 28, 1997; provided further that, if the Loan Notes Guaranty is issued
by the Issuing Bank on or prior to such date of termination, then, to the extent
of each Tranche B Lender's Tranche B Guaranty Exposure, such Lender's Tranche B
Commitments shall not be terminated until the termination of the Loan Notes
Guaranty. The Revolving Credit Commitments shall be automatically and
permanently terminated on the earlier of (i) if the Closing Date shall not have
occurred on or prior to such date, December 31, 1996 and (ii) otherwise, the
Revolving Credit Maturity Date (unless sooner terminated pursuant to subsections
(b) below or Section 10.2).
(b) At any time and from time to time after the date hereof, upon not less
than five (5) Business Days' prior written notice to the Agent, such notice to
be accompanied by a Revolving Commitment Worksheet, the Borrower may terminate
in whole or reduce in part the Total Unutilized Revolving Credit Commitments;
provided that any such partial reduction shall be in an aggregate amount of not
less than $3,000,000 or, if greater, an integral multiple thereof. The amount of
any termination or reduction made under this subsection (b) may not thereafter
be reinstated. Each reduction of the Revolving Credit Commitments pursuant to
this Section 2.5 shall be applied ratably among the Revolving Lenders according
to their respective Revolving Credit Commitments.
2.6 Mandatory Repayments and Prepayments. (a) Except to the extent due or
made sooner pursuant to the provisions of this Agreement, the Borrower will
repay the aggregate outstanding principal of the Tranche A Term Loans in the
amounts and on the dates set forth below:
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Date Payment Amount
---- --------------
March 31, 1999 $1,500,000
June 30, 1999 $1,500,000
September 30, 1999 $1,500,000
December 31, 1999 $1,500,000
March 31, 2000 $1,875,000
June 30, 2000 $1,875,000
September 30, 2000 $1,875,000
December 31, 2000 $1,875,000
March 31, 2001 $1,875,000
June 30, 2001 $1,875,000
September 30, 2001 $1,875,000
December 31, 2001 $1,875,000
March 31, 2002 $2,250,000
June 30, 2002 $2,250,000
September 30, 2002 $2,250,000
December 31, 2002 $2,250,000
In the event the Tranche A-2 Term Loans are not extended, the payment
amounts set forth in this Section 2.6(a) shall be reduced in the aggregate by
$10,000,000 applied on a pro rata basis on the relative amounts of such payment
amounts.
(b) Except to the extent due or made sooner pursuant to the provisions of
this Agreement, the Borrower will, at its option, either repay the aggregate
outstanding principal of the Tranche B Term Loans or deposit, or cause Beechwood
to deposit, cash in Pounds Sterling in the Sinking Fund Account, in the amounts
and on the dates set forth below (and each Lender's Tranche B Commitment shall
be reduced by such Lender's Tranche B Commitment Percentage of each of the
following payment amounts as of the following dates):
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Date Payment Amount
---- --------------
March 31, 1999 (pound)642,500
June 30, 1999 (pound)642,500
September 30, 1999 (pound)642,500
December 31, 1999 (pound)642,500
March 31, 2000 (pound)803,125
June 30, 2000 (pound)803,125
September 30, 2000 (pound)803,125
December 31, 2000 (pound)803,125
March 31, 2001 (pound)803,125
June 30, 2001 (pound)803,125
September 30, 2001 (pound)803,125
December 31, 2001 (pound)803,125
March 31, 2002 (pound)963,750
June 30, 2002 (pound)963,750
September 30, 2002 (pound)963,750
December 31, 2002 (pound)963,750
(c) To the extent not previously paid, and except to the extent due or
made sooner pursuant to the provisions of this Agreement, (i) the aggregate
outstanding principal of the Tranche A Term Loans shall be due and payable on
the Tranche A Maturity Date, (ii) the aggregate outstanding principal of the
Tranche B Term Loans shall be due and payable on the Tranche B Maturity Date,
and (iii) the aggregate outstanding principal of the Revolving Loans shall be
due and payable on the Revolving Credit Maturity Date.
(d) In the event that, on any Determination Date, (i) the sum of (x) the
aggregate principal amount of Tranche B Term Loans outstanding at such time and
(y) the aggregate Tranche B Guaranty Exposure of all Tranche B Lenders at such
time, reduced by the amount of cash in the Sinking Fund Account, shall exceed
(ii) the Total Tranche B Commitments at such time (after giving effect to the
payments required to be made pursuant to Section 2.6(b)), the Borrower will
immediately either prepay the outstanding principal amount of the Tranche B Term
Loans or deposit or cause Beechwood to deposit cash in Pounds Sterling in the
Sinking Fund Account in the amount of such excess.
(e) In the event that, on any Determination Date, the sum of the Dollar
Amounts of (x) the aggregate principal amount of Revolving Loans outstanding at
such time, and (y) the aggregate Letter of Credit Exposure and the aggregate
Revolver Guaranty Exposure of all Revolving Lenders, shall exceed the Total
Revolving Credit Commitments at such time (after giving effect to any concurrent
termination or reduction thereof), the Borrower will immediately prepay the
outstanding principal amount of the Revolving Loans in the amount of such
excess; provided that, to the extent such excess amount is greater than the
aggregate principal amount of Revolving Loans outstanding immediately prior to
the application of such prepayment, the Borrower shall deposit in the Dollar
denominated L/C Cash Collateral Account an amount of cash or Cash Equivalents
(in Dollars) equal to such amount in excess of such Revolving Loans as security
for the Borrower's potential Reimbursement Obligations and, to the extent
related to the Revolver Xxxxxx Loan Notes, potential Loan Notes Reimbursement
Obligations, as more particularly described in Sections 3.4 and 4.4, and
thereupon, solely for purposes of this Section 2.6(e), such cash shall be deemed
to reduce by an equivalent amount, first, the aggregate Letter of Credit
Exposure and, second, the Revolver Guaranty Exposure.
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(f) Each payment or prepayment of a LIBOR Loan made pursuant to the
provisions of this Section 2.6 on a day other than the last day of the Interest
Period applicable thereto shall be made together with all amounts required under
Section 2.18 to be paid as a consequence thereof.
2.7 Voluntary Prepayments. (a) At any time and from time to time, the
Borrower shall have the right to prepay the Loans, in whole or in part, without
premium or penalty (except as provided in clause (iii) below), upon written
notice to the Agent given not later than 11:00 a.m., Charlotte time, the
Applicable Number of Business Days prior to each intended prepayment of Loans;
provided that (i) each partial prepayment shall be in an aggregate principal
amount of not less than $1,000,000 or, if greater, an integral multiple of
$500,000 in excess thereof (or, in the case of the Sterling Facilities,
(pound)1,000,000 and (pound)500,000, respectively), (ii) no partial prepayment
of LIBOR Loans made pursuant to any single Borrowing shall reduce the aggregate
outstanding principal amount of the remaining LIBOR Loans under such Borrowing
to less than $3,000,000 or to any greater amount not an integral multiple of
$1,000,000 in excess thereof (or, in the case of the Sterling Facilities,
(pound)3,000,000 and (pound)1,000,000, respectively), and (iii) unless made
together with all amounts required under Section 2.18 to be paid as a
consequence of such prepayment, a prepayment of a LIBOR Loan may be made only on
the last day of the Interest Period applicable thereto. Each such notice shall
specify the proposed date of such prepayment and the aggregate principal amount,
Class, Type and Applicable Currency of the Loans to be prepaid (and, in the case
of LIBOR Loans, the Interest Period of the Borrowing pursuant to which made) and
shall be irrevocable and shall bind the Borrower to make such prepayment on the
terms specified therein. Revolving Loans (but not Term Loans) prepaid pursuant
to this subsection (a) may be reborrowed, subject to the terms and conditions of
this Agreement.
(b) Each prepayment of the Term Loans made pursuant to subsection (a)
above shall be applied to reduce the outstanding principal amount of the Tranche
A Term Loans or the Tranche B Term Loans, respectively, with each such reduction
to be applied to the scheduled principal payments on the Tranche A Term Loans
and the Tranche B Term Loans (as set forth in Sections 2.6(a) and 2.6(b)) in the
scheduled order of maturity. Each such prepayment shall be applied ratably among
the Lenders holding the Loans being prepaid, in proportion to the principal
amount held by each.
2.8 Interest. (a) The Borrower will pay interest in respect of the unpaid
principal amount of each Loan, from the date of Borrowing thereof until such
principal amount shall be paid in full, (i) at the Base Rate applicable to the
Class of such Loan, as in effect from time to time during such periods as such
Loan is a Base Rate Loan, and (ii) at the Adjusted LIBOR Rate applicable to the
Class of such Loan, as in effect from time to time during such periods as such
Loan is a LIBOR Loan. Payments of interest with respect to each Loan shall be
made in the same currency in which the principal of such Loan is required to be
repaid hereunder.
(b) Upon the occurrence and during the continuance of an Event of Default
as the result of failure by the Borrower to pay any principal of or interest on
any Loan, any fees or other amount hereunder when due (whether at maturity,
pursuant to acceleration or otherwise), and (at the election of the Required
Lenders) upon the occurrence and during the continuance of any other Event of
Default, all outstanding principal amounts of the Loans and, to the greatest
extent permitted by law, all interest accrued on the Loans and all other accrued
and outstanding fees and other amounts hereunder, shall bear interest at a rate
per annum equal to the interest rate applicable from time to time thereafter to
such Loans (whether the Base Rate or the Adjusted LIBOR Rate) plus 2% (or, in
the case of fees and other amounts, at the Base Rate plus 2%), and, in each
case, such default interest shall be payable on demand. To the greatest extent
permitted by law, interest shall continue to accrue after the filing by or
against the Borrower of any petition seeking any relief in bankruptcy or under
any law pertaining to insolvency or debtor relief.
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(c) Accrued (and theretofore unpaid) interest shall be payable as follows:
(i) in respect of each Base Rate Loan (including any Base Rate Loan
or portion thereof paid or prepaid pursuant to the provisions of Section
2.6, except as provided hereinbelow), in arrears on the last Business Day
of each calendar quarter, beginning with the first such day to occur after
the Closing Date; provided, that in the event the Loans are repaid or
prepaid in full and the Commitments have been terminated, then accrued
interest in respect of all Base Rate Loans shall be payable together with
such repayment or prepayment on the date thereof;
(ii) in respect of each LIBOR Loan (including any LIBOR Loan or
portion thereof paid or prepaid pursuant to the provisions of Section 2.6,
except as provided hereinbelow), in arrears (y) on the last Business Day
of the Interest Period applicable thereto (subject to the provisions of
clause (iv) in Section 2.10) and (z) in addition, in the case of a LIBOR
Loan with an Interest Period having a duration of six months, on the date
three months after the first day of such Interest Period; provided, that
in the event all LIBOR Loans made pursuant to a single Borrowing are
repaid or prepaid in full, then accrued interest in respect of such LIBOR
Loans shall be payable together with such repayment or prepayment on the
date thereof; and
(iii) in respect of any Loan, at maturity (whether pursuant to
acceleration or otherwise) and, after maturity, on demand.
(d) Nothing contained in this Agreement or in any other Credit Document
shall be deemed to establish or require the payment of interest to any Lender at
a rate in excess of the maximum rate permitted by applicable law. If the amount
of interest payable for the account of any Lender on any interest payment date
would exceed the maximum amount permitted by applicable law to be charged by
such Lender, the amount of interest payable for its account on such interest
payment date shall be automatically reduced to such maximum permissible amount
(such reduction hereinafter "the reduced amount of interest"). In the event of
any such reduction affecting any Lender, if from time to time thereafter the
amount of interest payable for the account of such Lender on any interest
payment date would be less than the maximum amount permitted by applicable law
to be charged by such Lender, then the amount of interest payable for its
account on such subsequent interest payment date shall be automatically
increased to such maximum permissible amount, for so long as is necessary to
compensate for such reduction, but in no event shall such increased amount of
interest with respect to any Lender exceed the reduced amount of interest with
respect to such Lender.
(e) The Agent shall promptly notify the Borrower and the Lenders upon
determining the interest rate for each Borrowing of LIBOR Loans after its
receipt of the relevant Notice of Revolving Borrowing or Notice of
Conversion/Continuation, and upon each change in the Base Rate; provided,
however, that the failure of the Agent to provide the Borrower or the Lenders
with any such notice shall neither affect any obligations of the Borrower or the
Lenders hereunder nor result in any liability on the part of the Agent to the
Borrower or any Lender. Each such determination (including each determination of
the Reserve Requirement) shall, absent manifest error, be conclusive and binding
on all parties hereto.
2.9 Fees. The Borrower agrees to pay, at the applicable Payment Office and
in Dollars except as otherwise specifically provided:
(a) To First Union, for its own account, the fees described in paragraphs
(a) and (b) of the Fee Letter, on the terms, in the amounts and at the times set
forth therein;
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(b) To the Agent, for the account of each Revolving Lender, a commitment
fee (the "Revolving Credit Commitment Fee") for the period from the Execution
Date to the Revolving Credit Termination Date, at a per annum rate equal 0.25%,
on such Lender's Revolving Commitment Percentage of the average daily aggregate
Unutilized Revolving Credit Commitments, payable in arrears (i) on the last
Business Day of each calendar quarter, beginning with the first such day to
occur after the Closing Date, and (ii) on the Revolving Credit Termination Date;
(c) To the Agent, for the account of each Tranche B Lender and Revolving
Lender, a guaranty fee (the "Loan Notes Guaranty Fee"), payable in Pounds
Sterling, for each calendar quarter in respect of its Loan Notes Guaranty
Exposure, (x) at a per annum rate equal to 0.375% on such Lender's Loan Notes
Guaranty Exposure to the extent secured by cash, denominated in Pounds Sterling,
deposited in the Sinking Fund Account, and (y) at a per annum rate equal to the
Applicable Margin Percentage in effect from time to time during such quarter on
such Lender's Loan Notes Guaranty Exposure in excess of such security, in each
case payable in arrears (i) on the last Business Day of each calendar quarter,
beginning with the first such day to occur after the Acquisition Closing Date,
and (ii) on the later of the Tranche B Maturity Date and the date of termination
of the Issuing Bank's obligations under the Loan Notes Guaranty;
(d) To the Agent, for the account of each Revolving Lender, a letter of
credit fee (the "Letter of Credit Fee"), payable in the Applicable Currency of
the respective Letters of Credit, for each calendar quarter in respect of all
Letters of Credit outstanding during such quarter, (x) at a per annum rate equal
to 0.375% on such Lender's Letters of Credit Exposure to the extent secured by
cash or Cash Equivalents deposited in the respective L/C Cash Collateral
Accounts, pursuant to Section 4.8(b), and (y) at a per annum rate equal to the
Applicable Margin Percentage in effect from time to time during such quarter on
such Lender's Letters of Credit Exposure in excess of such security, payable in
arrears (i) on the last Business Day of each calendar quarter, beginning with
the first such day to occur after the Closing Date, and (ii) on the later of the
Revolving Credit Termination Date and the date of termination of the last
outstanding Letter of Credit;
(e) To the Issuing Banks, the facing fees described in the Fee Letter, on
the terms, in the amounts and at the times set for therein; and
(f) To the Agent, for its own account, the annual administrative fee
described in paragraph (c) of the Fee Letter, on the terms, in the amount and at
the times set forth therein.
2.10 Interest Periods. Concurrently with the giving of a Notice of
Revolving Borrowing or Notice of Conversion/Continuation in respect of any
Borrowing comprised of LIBOR Loans, the Borrower shall have the right to elect,
pursuant to such notice, the interest period (each, an "Interest Period") to be
applicable to such LIBOR Loans, which Interest Period shall, at the option of
the Borrower, be a one, two, three or six-month period; provided, however, that:
(i) all LIBOR Loans comprising a single Borrowing shall at all times
have the same Interest Period;
(ii) the initial Interest Period for any LIBOR Loan shall commence
on the date of the Borrowing of such LIBOR Loan (including the date of any
continuation of, or conversion into, such LIBOR Loan), and each successive
Interest Period applicable to such LIBOR Loan shall commence on the day on
which the next preceding Interest Period applicable thereto expires;
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(iii) LIBOR Loans may not be outstanding under more than seven (7)
separate Interest Periods at any one time (for which purpose Interest
Periods shall be deemed to be separate even if they are coterminous);
(iv) if any Interest Period otherwise would expire on a day that is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day unless such next succeeding Business Day falls in
another calendar month, in which case such Interest Period shall expire on
the next preceding Business Day;
(v) the Borrower may not select any Interest Period that begins
prior to the day which is the Applicable Number of Business Days after the
Closing Date or, in the case of the Tranche A-2 Term Loans or the Tranche
B Term Loans, the day which is the Applicable Number of Business Days
after the Acquisition Closing Date, or that expires (x) after the Tranche
A Maturity Date, with respect to Tranche A Term Loans that are to be
maintained as LIBOR Loans, (y) after the Tranche B Maturity Date, with
respect to Tranche B Term Loans that are to be maintained as LIBOR Loans,
or (z) after the Revolving Credit Maturity Date, with respect to Revolving
Loans that are to be maintained as LIBOR Loans;
(vi) the Borrower may not select any Interest Period having a
duration longer than one month at any time prior to the Syndication
Completion Date;
(vii) no Interest Period may be selected for any Borrowing of
Tranche A Term Loans that would end after a scheduled date for repayment
of principal of the Tranche A Term Loans occurring on or after the first
day of such Interest Period unless, immediately after giving effect to
such selection, the aggregate principal amount of Tranche A Term Loans
that are Base Rate Loans or that have Interest Periods expiring on or
before such principal repayment date equals or exceeds the principal
amount required to be paid on such principal repayment date;
(viii) no Interest Period may be selected for any Borrowing of
Tranche B Term Loans that would end after a scheduled date for repayment
of principal of the Tranche B Term Loans occurring on or after the first
day of such Interest Period unless, immediately after giving effect to
such selection, the aggregate principal amount of Tranche B Term Loans
that are Base Rate Loans or that have Interest Periods expiring on or
before such principal repayment date equals or exceeds the principal
amount required to be paid on such principal repayment date;
(ix) if any Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month during which such
Interest Period would otherwise expire, such Interest Period shall expire
on the last Business Day of such calendar month; and
(x) if, upon the expiration of any Interest Period applicable to a
Borrowing of LIBOR Loans, the Borrower shall have failed to elect a new
Interest Period to be applicable to such LIBOR Loans, then the Borrower
shall be deemed to have elected to convert such LIBOR Loans into Base Rate
Loans as of the expiration of the then current Interest Period applicable
thereto.
2.11 Conversions and Continuations. (a) The Borrower shall have the right,
on any Business Day occurring on or after the Closing Date, to elect (i) to
convert all or a portion of the outstanding principal amount of any Base Rate
Loans of any Class into LIBOR Loans of the same Class, or to convert any LIBOR
Loans of any Class the Interest Periods for which end on the same day into Base
Rate Loans of the same Class, or (ii) to continue all or a portion of the
outstanding principal amount of any LIBOR Loans
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of any Class the Interest Periods for which end on the same day for an
additional Interest Period, provided that (w) any such conversion of LIBOR Loans
into Base Rate Loans shall involve an aggregate principal amount of not less
than $1,000,000 or, if greater, an integral multiple of $500,000 in excess
thereof (or, in the case of the Sterling Facilities, (pound)1,000,000 or, if
greater, an integral multiple of (pound)500,000, respectively); any such
conversion of Base Rate Loans into, or continuation of, LIBOR Loans shall
involve an aggregate principal amount of not less than $3,000,000 or, if
greater, an integral multiple of $1,000,000 in excess thereof (or, in the case
of the Sterling Facilities, (pound)3,000,000 and (pound)1,000,000,
respectively); and no partial conversion of LIBOR Loans made pursuant to a
single Borrowing shall reduce the outstanding principal amount of such LIBOR
Loans to less than $3,000,000 or to any greater amount not an integral multiple
of $1,000,000 in excess thereof (or, in the case of the Sterling Facilities,
(pound)3,000,000 and (pound)1,000,000, respectively), (x) except as otherwise
provided in Section 2.16(d), LIBOR Loans may be converted into Base Rate Loans
only on the last day of the Interest Period applicable thereto (and, in any
event, if a LIBOR Loan is converted into a Base Rate Loan on any day other than
the last day of the Interest Period applicable thereto, the Borrower will pay,
upon such conversion, all amounts required under Section 2.18 to be paid as a
consequence thereof), and (y) no conversion of Base Rate Loans into LIBOR Loans
or continuation of LIBOR Loans shall be permitted during the continuance of a
Default or Event of Default.
(b) The Borrower shall make each such election by giving the Agent written
notice not later than 11:00 a.m., Local Time, the Applicable Number of Business
Days (based on the Type of Loan continued or into which the Loan will be
converted) prior to the intended effective date of any conversion or
continuation of Loans. Each such notice (each, a "Notice of
Conversion/Continuation") shall be irrevocable, shall be given in the form of
Exhibit B-2, including in the case of a conversion or continuation of any
Revolving Loans a duly completed Revolving Commitment Worksheet attached
thereto, and shall specify (v) the amount of the Total Unutilized Revolving
Credit Commitment as of the intended effective date, (w) the date of such
conversion or continuation (which shall be a Business Day), (x) the Applicable
Currency in which such Loans shall be denominated, (y) in the case of a
conversion into, or a continuation of, LIBOR Loans, the Interest Period to be
applicable thereto, and (z) the aggregate amount, Class and Type of the Loans
being converted or continued. Upon the receipt of a Notice of
Conversion/Continuation, the Agent will promptly notify each Lender having a
Commitment for Loans of the relevant Class (or having outstanding Loans of the
relevant Class) of the proposed conversion or continuation. In the event that
the Borrower shall fail to deliver a Notice of Conversion/Continuation as
provided herein with respect to any outstanding LIBOR Loans, such LIBOR Loans
shall automatically be converted to Base Rate Loans upon the expiration of the
then current Interest Period applicable thereto (unless repaid pursuant to the
terms hereof).
2.12 Method of Payments; Computations. (a) All payments by the Borrower
hereunder shall be made without setoff, counterclaim or other defense, in
Dollars with respect to the Dollar Facilities and in Pounds Sterling with
respect to the Sterling Facilities, and in each case in immediately available
funds to the Agent, for the account of the Lenders entitled to such payment
(except as otherwise expressly provided herein as to payments required to be
made directly to the Issuing Bank and the Lenders), at the Agent's Payment
Office, prior to 11:00 a.m., Local Time, on the date payment is due. Any payment
made as required hereinabove, but after 11:00 a.m., Local Time, shall be deemed
to have been made on the next succeeding Business Day. If any payment falls due
on a day that is not a Business Day, then such due date shall be extended to the
next succeeding Business Day (except that in the case of LIBOR Loans to which
the proviso of clause (iv) in Section 2.10 is applicable, such due date shall be
the next preceding Business Day), and such extension of time shall then be
included in the computation of payment of interest, fees or other applicable
amounts.
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(b) The Agent will distribute to the Lenders like amounts in the
Applicable Currency relating to payments made to the Agent for the account of
the Lenders as follows: (i) if the payment is received by 11:00 a.m., Local
Time, in immediately available funds, the Agent will make available to each
relevant Lender on the same date, by wire transfer of immediately available
funds, such Lender's ratable share of such payment (based on the percentage that
the amount of the relevant payment owing to such Lender with respect to the
Class of Loans for which payment is received bears to the total amount of such
payment owing to all Lenders relevant to such Class), and (ii) if such payment
is received after 11:00 a.m., Local Time, or in other than immediately available
funds, the Agent will make available to each such Lender its ratable share of
such payment by wire transfer of immediately available funds on the next
succeeding Business Day (or in the case of uncollected funds, as soon as
practicable after collected). If the Agent shall not have made a required
distribution to the appropriate Lenders as required hereinabove after receiving
a payment for the account of such Lenders, the Agent will pay to each such
Lender, on demand, its ratable share of such payment with interest thereon at
the Federal Funds Rate for each day from the date such amount was required to be
disbursed by the Agent until the date repaid to such Lender. The Agent will
distribute to the Issuing Bank like amounts relating to payments made to the
Agent for the account of the Issuing Bank in the same manner, and subject to the
same terms and conditions, as set forth hereinabove with respect to
distributions of amounts to the Lenders.
(c) Unless the Agent shall have received written notice from the Borrower
prior to the date on which any payment is due to any Lender hereunder that such
payment will not be made 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 on such assumption, but shall not be obligated to, cause to be
distributed to such Lender on such due date an amount equal to the amount then
due to such Lender. If and to the extent the Borrower shall not have so made
such payment in full to the Agent, and without limiting the obligation of the
Borrower to make such payment in accordance with the terms hereof, such Lender
shall repay to the Agent forthwith on demand such amount so distributed to such
Lender, together with interest thereon for each day from the date such amount is
so distributed to such Lender until the date repaid to the Agent, at the Federal
Funds Rate.
(d) If any payment required hereunder is not made as and when required
hereunder, each Lender for whose account any payment is to be made hereunder
may, but shall not be obligated to, debit the amount of any such payment to any
ordinary deposit account of the Borrower with such Lender (with prompt notice to
the Agent and the Borrower); provided, however, that the failure to give such
notice shall not affect the validity of such debit by such Lender.
(e) All computations of interest and fees hereunder (including
computations of the Reserve Requirement) shall be made on the basis of a year
consisting of (i) in the case of interest on Base Rate Loans (other than Loans
under the Sterling Facilities), 365 or 366 days, as the case may be, (ii) in the
case of interest or fees on Sterling Facilities, 365 days, or (iii) in all other
instances, 360 days; and in each instance under (i), (ii) or (iii) above, with
regard to the actual number of days (including the first day, but excluding the
last day) elapsed.
2.13 Recovery of Payments. (a) The Borrower agrees that to the extent the
Borrower makes a payment or payments to or for the account of the Agent, the
Issuing Bank or any Lender, which payment or payments or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party under any
bankruptcy, insolvency or similar state or federal law, common law or equitable
cause, then, to the extent of such payment or repayment, the Obligation intended
to be satisfied shall be revived and continued in full force and effect as if
such payment had not been received.
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(b) If any amounts distributed by the Agent to any Lender are subsequently
returned or repaid by the Agent to the Borrower or its representative or
successor in interest, whether by court order or by settlement approved by the
Lender in question, such Lender will, promptly upon receipt of notice thereof
from the Agent, pay the Agent such amount. If any such amounts are recovered by
the Agent from the Borrower or its representative or successor in interest, the
Agent will redistribute such amounts to the Lenders on the same basis as such
amounts were originally distributed.
2.14 Use of Proceeds. (a) The proceeds of the Tranche A-1 Term Loans shall
be used solely to extinguish in full the Fleet Indebtedness.
(b) In addition to the Loan Note Guaranty, the proceeds of the Tranche A-2
Term Loans and the Tranche B Term Loans shall be used solely to finance a
portion of the purchase price of the Acquisition, to pay principal on the Loan
Notes, and to pay or reimburse reasonable transaction fees and expenses in
connection with the consummation of the Acquisition and the other Transactions;
provided that, pending final closing of purchases of shares of Xxxxxx pursuant
to the Tender Offer, or, after the close of such Tender Offer, pursuant to the
Statutory Merger Proceedings (the later of which herein referred to as "the
Final Xxxxxx Closing"), proceeds of any such Term Loans advanced on the
Acquisition Closing Date that are not immediately used to acquire Xxxxxx Shares
may be held by the Borrower in cash or Cash Equivalents, and if, after the Final
Xxxxxx Closing, less than all of such Loans advanced on the Acquisition Closing
Date have been used in the Acquisition, such deficiency will be repaid by the
Borrower to the Lenders and applied in the manner described in Section 2.7(b);
provided further that, in the case of Tranche B Term Loans, the Borrower shall
be entitled to reborrow any such repaid amount pursuant to Section 2.2(d).
(c) In addition to using the Loan Note Guaranty to finance a portion of
the purchase price of the Acquisition, the proceeds of the Revolving Loans and
the Letters of Credit may be used for working capital and general corporate
purposes, and the proceeds of the Revolving Loans may be used to pay interest
and principal on Indebtedness.
2.15 Pro Rata Treatment; Sharing of Payments. (a) All fundings,
continuations and conversions of Loans of any Class shall be made by the Lenders
pro rata on the basis of their respective Commitments to provide Loans of such
Class (in the case of the initial funding of Loans of such Class pursuant to
Section 2.2) or on the basis of their respective outstanding Loans of such Class
(in the case of continuations and conversions of Loans of such Class pursuant to
Section 2.11, and additionally in all cases in the event the Commitments have
expired or have been terminated), as the case may be from time to time. All
payments on account of principal of or interest on any Loans, fees or any other
Obligations owing to or for the account of any one or more Lenders shall be
apportioned ratably among such Lenders in proportion to the amounts of such
principal, interest, fees or other Obligations owed to them with respect to each
Class, respectively.
(b) Each Lender agrees that if it shall receive any amount hereunder
(whether by voluntary payment, realization upon security, exercise of the right
of setoff or banker's lien, counterclaim or cross action, or otherwise, other
than pursuant to Section 12.7) applicable to the payment of any of the
Obligations that exceeds its ratable share (according to the proportion of (i)
the amount of such Obligations due and payable to such Lender at such time to
(ii) the aggregate amount of such Obligations due and payable to all Lenders at
such time) of payments on account of such Obligations then or therewith obtained
by all the Lenders to which such payments are required to have been made, such
Lender shall forthwith purchase from the other Lenders the amount of such
Obligations as shall be necessary to cause such purchasing Lender to share the
excess payment or other recovery ratably with each of them; provided,
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however, that if all or any portion of such excess payment is thereafter
recovered from such purchasing Lender, such purchase from each such other Lender
shall be rescinded and each such other Lender shall repay to the purchasing
Lender the purchase price to the extent of such recovery, together with an
amount equal to such other Lender's ratable share (according to the proportion
of (i) the amount of such other 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 portion of the
Obligations from another Lender pursuant to the provisions of this subsection
may, to the fullest extent permitted by law, exercise any and all rights of
payment (including, without limitation, setoff, banker's lien or counterclaim)
with respect to such participation as fully as if such participant were a direct
creditor of the Borrower in the amount of such participation. If under any
applicable bankruptcy, insolvency or similar law, any Lender receives a secured
claim in lieu of a setoff to which this subsection applies, such Lender shall,
to the extent practicable, exercise its rights in respect of such secured claim
in a manner consistent with the rights of the Lenders entitled under this
subsection to share in the benefits of any recovery on such secured claim.
2.16 Increased Costs; Change in Circumstances; Illegality; etc. (a) If, at
any time after the date hereof and from time to time, the introduction of or any
change in any applicable law, rule or regulation or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or compliance by any Lender with any
guideline or request from any such Governmental Authority (whether or not having
the force of law), shall (i) subject such Lender to any tax or other charge, or
change the basis of taxation of payments to such Lender, in respect of any of
its LIBOR Loans or any other amounts payable hereunder or its obligation to
make, fund or maintain any LIBOR Loans (other than any change in the rate or
basis of tax on the overall net income of such Lender or its applicable Lending
Office), (ii) impose, modify or deem applicable any reserve, special deposit or
similar requirement (other than as a result of any change in the Reserve
Requirement) against assets of, deposits with or for the account of, or credit
extended by, such Lender or its applicable Lending Office, or (iii) impose on
such Lender or its applicable Lending Office any other condition, and the result
of any of the foregoing shall be to increase the cost to such Lender of making
or maintaining any LIBOR Loans or issuing or participating in Letters of Credit
or the Loan Notes Guaranty or to reduce the amount of any sum received or
receivable by such Lender hereunder (including in respect of Letters of Credit
or the Loan Notes Guaranty), the Borrower will, promptly upon demand therefor by
such Lender, pay to such Lender such additional amounts as shall compensate such
Lender for such increase in costs or reduction in return.
(b) If, at any time after the date hereof and from time to time, any
Lender shall have reasonably determined that the introduction of or any change
in any applicable law, rule or regulation regarding capital adequacy or in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof, or compliance by such Lender
with any guideline or request from any such Governmental Authority (whether or
not having the force of law), has or would have the effect, as a consequence of
such Lender's Commitment, Loans or issuance of or participations in Letters of
Credit or the Loan Notes Guaranty hereunder, of reducing the rate of return on
the capital of such Lender or any Person controlling such Lender to a level
below that which such Lender or controlling Person could have achieved but for
such introduction, change or compliance (taking into account such Lender's or
controlling Person's policies with respect to capital adequacy), the Borrower
will, promptly upon demand therefor by such Lender therefor, pay to such Lender
such additional amounts as will compensate such Lender or controlling Person for
such reduction in return.
(c) If, on or prior to the first day of any Interest Period, (y) the Agent
shall have determined that adequate and reasonable means do not exist for
ascertaining the applicable LIBOR Rate for such
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Interest Period or (z) the Agent shall have received written notice from the
Required Lenders of their determination that the rate of interest referred to in
the definition of "LIBOR Rate" upon the basis of which the Adjusted LIBOR Rate
for LIBOR Loans for such Interest Period is to be determined will not adequately
and fairly reflect the cost to such Lenders of making or maintaining LIBOR Loans
during such Interest Period, the Agent will forthwith so notify the Borrower and
the Lenders. Upon such notice, (i) all then outstanding LIBOR Loans shall
automatically, on the expiration date of the respective Interest Periods
applicable thereto (unless then repaid in full), be converted into Base Rate
Loans, (ii) the obligation of the Lenders to make, to convert Base Rate Loans
into, or to continue, LIBOR Loans shall be suspended (including pursuant to the
Borrowing to which such Interest Period applies), and (iii) any Notice of
Revolving Borrowing or Notice of Conversion/Continuation given at any time
thereafter with respect to LIBOR Loans shall be deemed to be a request for Base
Rate Loans, in each case until the Agent or the Required Lenders, as the case
may be, shall have determined that the circumstances giving rise to such
suspension no longer exist (and the Required Lenders, if making such
determination, shall have so notified the Agent), and the Agent shall have so
notified the Borrower and the Lenders, which notification shall be made
reasonably promptly.
(d) Notwithstanding any other provision in this Agreement, if, at any time
after the date hereof and from time to time, any Lender shall have determined in
good faith that the introduction of or any change in any applicable law, rule or
regulation or in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration
thereof, or compliance with any guideline or request from any such Governmental
Authority (whether or not having the force of law), has or would have the effect
of making it unlawful for such Lender to make or to continue to make or maintain
LIBOR Loans, such Lender will forthwith so notify the Agent and the Borrower.
Upon such notice, (i) each of such Lender's then outstanding LIBOR Loans shall
automatically, on the expiration date of the respective Interest Period
applicable thereto (or, to the extent any such LIBOR Loan may not lawfully be
maintained as a LIBOR Loan until such expiration date, upon such notice on the
latest date such LIBOR Loan may be lawfully maintained), be converted into a
Base Rate Loan, (ii) the obligation of such Lender to make, to convert Base Rate
Loans into, or to continue, LIBOR Loans shall be suspended (including pursuant
to any Borrowing of Revolving Loans for which the Agent has received a Notice of
Revolving Borrowing but for which the Borrowing Date has not arrived), and (iii)
any Notice of Revolving Borrowing or Notice of Conversion/Continuation given at
any time thereafter with respect to LIBOR Loans shall, as to such Lender, be
deemed to be a request for a Base Rate Loan, in each case until such Lender
shall have determined that the circumstances giving rise to such suspension no
longer exist and shall have so notified the Agent, and the Agent shall have so
notified the Borrower, which notification shall be made reasonably promptly.
(e) Determinations by the Agent or any Lender for purposes of this Section
2.16 of any increased costs, reduction in return, market contingencies,
illegality or any other matter shall, absent manifest error, be conclusive,
provided that such determinations are made in good faith. Except as set forth in
Section 2.19(b), no failure by the Agent or any Lender at any time to demand
payment of any amounts payable under this Section 2.16 shall constitute a waiver
of its right to demand payment of any additional amounts arising at any
subsequent time. Nothing in this Section 2.16 shall require or be construed to
require the Borrower to pay any interest, fees, costs or other amounts in excess
of that permitted by applicable law.
2.17 Taxes. (a) Any and all payments by the Borrower hereunder or under
any Note shall be made, in accordance with the terms hereof and thereof, 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, other than net income and franchise taxes imposed on the Agent
or any Lender by the
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United States or by the jurisdiction under the laws of which the Agent or such
Lender, as the case may be, is organized or in which its principal office or (in
the case of a Lender) its applicable Lending Office is located, or any political
subdivision or taxing authority thereof (all such nonexcluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities 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 to the
Agent or any Lender, (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 2.17), the Agent or such Lender, 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 will make such deductions, (iii)
the Borrower will pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law and (iv) the
Borrower will deliver to the Agent or such Lender, as the case may be, evidence
of such payment.
(b) The Borrower will indemnify the Agent and each Lender for the full
amount of Taxes (including, without limitation, any Taxes imposed by any
jurisdiction on amounts payable under this Section 2.17) paid by the Agent or
such Lender, as the case may be, and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto, whether or not
such Taxes were correctly or legally asserted. This indemnification shall be
made within thirty (30) days from the date the Agent or such Lender, as the case
may be, makes written demand therefor.
(c) Each of the Agent and the Lenders agrees that if it subsequently
recovers, or receives a permanent net tax benefit with respect to, any amount of
Taxes (i) previously paid by it and as to which it has been indemnified by or on
behalf of the Borrower or (ii) previously deducted by the Borrower (including,
without limitation, any Taxes deducted from any additional sums payable under
clause (i) of subsection (a) above), the Agent or such Lender, as the case may
be, shall reimburse the Borrower to the extent of the amount of any such
recovery or permanent net tax benefit (but only to the extent of indemnity
payments made, or additional amounts paid, by or on behalf of the Borrower under
this Section 2.17 with respect to the Taxes giving rise to such recovery or tax
benefit); provided, however, that each of the Agent and the Lenders shall use
reasonable efforts to file for or otherwise take actions to obtain any such tax
benefit or recovery that may be available to it; and provided, further, that the
Borrower, upon the request of the Agent or such Lender, agrees to repay to the
Agent or such Lender, as the case may be, the amount paid over to the Borrower
(together with any penalties, interest or other charges), in the event the Agent
or such Lender is required to repay such amount to the relevant taxing authority
or other Governmental Authority. The determination by the Agent or any Lender of
the amount of any such recovery or permanent net tax benefit shall, in the
absence of manifest error, be conclusive and binding.
(d) If any Lender is incorporated or organized under the laws of a
jurisdiction other than the United States of America or any state thereof (a
"Non-U.S. Lender") and claims exemption from United States withholding tax
pursuant to the Internal Revenue Code, such Non-U.S. Lender will deliver to each
of the Agent and the Borrower, on or prior to the Closing Date (or, in the case
of a Non-U.S. Lender that becomes a party to this Agreement as a result of an
assignment after the Closing Date, on the effective date of such assignment),
(i) in the case of a Non-U.S. Lender that is a "bank" for purposes of Section
881(c)(3)(A) of the Internal Revenue Code, a properly completed Internal Revenue
Service Form 4224 or 1001, as applicable (or successor forms), certifying that
such Non-U.S. Lender is entitled to an exemption from or a reduction of
withholding or deduction for or on account of United States federal income taxes
in connection with payments under this Agreement or any of the Notes, together
with a properly completed Internal Revenue Service Form W-8 or W-9, as
applicable (or successor forms), and (ii) in the case of a Non-U.S. Lender that
is not a "bank" for purposes of Section 881(c)(3)(A) of the Internal Revenue
Code, a certificate in form and substance reasonably satisfactory to the Agent
and the
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Borrower and to the effect that (x) such Non-U.S. Lender is not a "bank" for
purposes of Section 881(c)(3)(A) of the Internal Revenue Code, is not subject to
regulatory or other legal requirements as a bank in any jurisdiction, and has
not been treated as a bank for purposes of any tax, securities law or other
filing or submission made to any governmental authority, any application made to
a rating agency or qualification for any exemption from any tax, securities law
or other legal requirements, (y) is not a 10-percent shareholder for purposes
of Section 881(c)(3)(B) of the Internal Revenue Code and (z) is not a controlled
foreign corporation receiving interest from a related person for purposes of
Section 881(c)(3)(C) of the Internal Revenue Code, together with a properly
completed Internal Revenue Service Form W-8 or W-9, as applicable (or successor
forms). Each such Non-U.S. Lender further agrees to deliver to each of the Agent
and the Borrower an additional copy of each such relevant form on or before the
date that such form expires or becomes obsolete or after the occurrence of any
event (including a change in its applicable Lending Office) requiring a change
in the most recent forms so delivered by it, in each case certifying that such
Non-U.S. Lender is entitled to an exemption from or a reduction of withholding
or deduction for or on account of United States federal income taxes in
connection with payments under this Agreement or any of the Notes, unless an
event (including, without limitation, any change in treaty, law or regulation)
has occurred prior to the date on which any such delivery would otherwise be
required, which event renders all such forms inapplicable or the exemption to
which such forms relate unavailable and such Non-U.S. Lender notifies the Agent
and the Borrower that it is not entitled to receive payments without deduction
or withholding of United States federal income taxes. Each such Non-U.S. Lender
will promptly notify the Agent and the Borrower of any changes in circumstances
that would modify or render invalid any claimed exemption or reduction.
(e) If any Lender is entitled to a reduction in (and not a complete
exemption from) the applicable withholding tax, the Borrower and the Agent may
withhold from any interest payment to such Lender an amount equivalent to the
applicable withholding tax after taking into account such reduction. If any of
the forms or other documentation required under subsection (d) above are not
delivered to the Agent as therein required, then the Borrower and the Agent may
withhold from any interest payment to such Lender not providing such forms or
other documentation an amount equivalent to the applicable withholding tax.
2.18 Compensation. The Borrower will compensate each Lender upon demand
for all losses, expenses and liabilities (including, without limitation, any
loss, expense or liability incurred by reason of the liquidation or reemployment
of deposits or other funds required by such Lender to fund or maintain LIBOR
Loans) that such Lender may incur or sustain (i) if for any reason (other than a
default by such Lender) a borrowing or continuation of, or conversion into, a
LIBOR Loan does not occur on a date specified therefor in a Notice of Revolving
Borrowing or Notice of Conversion/Continuation, (ii) if any repayment,
prepayment or conversion of any LIBOR Loan occurs on a date other than the last
day of an Interest Period applicable thereto (including as a consequence of
acceleration of the maturity of the Loans pursuant to Section 10.2), (iii) if
any prepayment of any LIBOR Loan is not made on any date specified in a notice
of prepayment given by the Borrower or (iv) as a consequence of any other
failure by the Borrower to make any payments with respect to any LIBOR Loan when
due hereunder. Calculation of all amounts payable to a Lender under this Section
2.18 shall be made as though such Lender had actually funded its relevant LIBOR
Loan through the purchase of a Eurodollar deposit bearing interest at the LIBOR
Rate in an amount equal to the amount of such LIBOR Loan, having a maturity
comparable to the relevant Interest Period and such amount payable by the
Borrower shall be reduced by the amount of interest that would have accrued to
such Lender on such LIBOR Loan amount by reemploying such amount for a
comparable period in the London interbank market; provided, however, that each
Lender may fund its LIBOR Loans in any manner it sees fit and the foregoing
assumption shall be utilized only for the calculation of amounts payable under
this Section 2.18. Determinations by any Lender for purposes of
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this Section 2.18 of any such losses, expenses or liabilities shall, absent
manifest error, be conclusive, provided that such determinations are made in
good faith.
2.19 Replacement of Lenders; Mitigation, Notice Requirements. (a) The
Borrower may, at any time and so long as no Default or Event of Default has then
occurred and is continuing, replace any Lender that (i) has requested
compensation from the Borrower under Section 2.16(a), 2.16(b), or 2.17 or (ii)
the obligation of which to make or maintain LIBOR Loans has been suspended under
Section 2.16(c), by written notice to such Lender and the Agent given not more
than thirty (30) days after any such event and identifying one or more Persons
each of which shall be reasonably acceptable to the Agent (each, a "Replacement
Lender," and collectively, the "Replacement Lenders") to replace such Lender
(the "Replaced Lender"); provided that (i) the notice from the Borrower to the
Replaced Lender and the Agent provided for hereinabove shall specify an
effective date for such replacement (the "Replacement Effective Date"), which
shall be at least five (5) Business Days after such notice is given, (ii) as of
the relevant Replacement Effective Date, each Replacement Lender shall enter
into an Assignment and Acceptance with the Replaced Lender pursuant to Section
12.7(a), pursuant to which such Replacement Lenders collectively shall acquire,
in such proportion among them as they may agree with the Borrower and the Agent,
all (but not less than all) of the Revolving Credit Commitment and outstanding
Loans of the Replaced Lender, and, in connection therewith, shall pay to the
Replaced Lender, as the purchase price in respect thereof, an amount equal to
the sum as of the Replacement Effective Date (without duplication) of the unpaid
principal amount of, and all accrued but unpaid interest on, all outstanding
Loans of the Replaced Lender, such purchase price to be paid in the Applicable
Currencies, and (iii) all other obligations of the Borrower owing to the
Replaced Lender (other than those specifically described in clause (ii) above in
respect of which the assignment purchase price has been, or is concurrently
being, paid), including amounts payable under Section 2.16(a), 2.16(b) or 2.17
or under Section 2.18 (to the extent actually incurred by the Replaced Lender as
of the Replacement Effective Date) whether as a result of the actions required
to be taken under this Section 2.19(a) or otherwise, shall be paid in full by
the Borrower to the Replaced Lender on or prior to the Replacement Effective
Date.
(b) Notwithstanding Sections 2.16(a), 2.16(b) or 2.17, the Borrower shall
not be obligated to compensate a Lender if such Lender fails to give notice to
the Borrower, within ninety (90) days after such Lender has, or with reasonable
diligence should have had, knowledge that such increased cost or reduction would
apply, that it intends to request compensation; and provided, further, that the
Borrower shall not be obligated to compensate such Lender for increased cost or
reduction attributable to a date more than one hundred and eighty (180) days
prior to the date such Lender submits and has requested compensation from the
Borrower under such Sections, as applicable.
(c) Each Lender agrees that as promptly as practicable after it becomes
aware of the occurrence of an event that would entitle it to request
compensation under Sections 2.16(a), 2.16(b) or 2.17, or give notice under
Section 2.16(c) and in any event if so requested by the Borrower, each Lender
shall use reasonable efforts to make, fund or maintain its affected Loans
through another Lending Office if, as a result thereof, the reserves, increased
costs or any other amount payable by the Borrower to such Lender would be
avoided or materially reduced or the illegality would thereby cease to exist and
if, in the reasonable opinion of such Lender, the making, funding or maintaining
of such Loans through such other Lending Office would not in any material
respect be disadvantageous to such Lender or contrary to such Bank's normal
banking practices.
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ARTICLE III
LOAN NOTES GUARANTY
3.1 Issuance. Subject to and upon the terms and conditions herein set
forth, the Issuing Bank will issue on the Acquisition Closing Date, for the
account of Beechwood, the Loan Notes Guaranty denominated in Pounds Sterling and
in a form approved by the Issuing Bank and will maintain the Loan Notes Guaranty
thereafter until the earlier of (i) the payment in full of all obligations of
Beechwood under the Loan Notes to the extent guaranteed by the Issuing Bank
under the Loan Note Guaranty or (ii) the Loan Notes Maturity Date. The Stated
Amount of the Loan Notes Guaranty shall not be less than the aggregate Stated
Amount of the Loan Notes issued in connection with the Acquisition and the
Statutory Merger Proceedings; provided that the Dollar Equivalent of the excess
of (x) the Stated Amount of the Loan Notes Guaranty on the date of its issuance
over (y) (pound)12,850,000, shall not exceed the Total Unutilized Revolving
Credit Commitment immediately prior to the issuance of the Loan Notes Guaranty.
Notwithstanding the foregoing, the Issuing Bank shall be under no obligation to
issue any Loan Notes Guaranty until all of the conditions precedent set forth in
Sections 5.2 and 5.3 (with the limitations and qualifications set forth therein)
have been satisfied or waived by the Agent or Lenders, as applicable.
3.2 Notices. If the Borrower desires the issuance of the Loan Notes
Guaranty, the Borrower will give the Issuing Bank written notice (with a copy to
the Agent) not later than 11:00 a.m., London time, three (3) Business Days (or
such shorter period as is acceptable to the Issuing Bank in any given case)
prior to the requested date of issuance thereof. Such notice shall be
irrevocable and shall specify the requested date of issuance, which shall be a
Business Day. Upon its issuance of the Loan Notes Guaranty, the Issuing Bank
will promptly notify the Agent of such issuance, and the Agent will give prompt
notice thereof to each Lender.
3.3 Participations. Immediately upon the issuance of the Loan Notes
Guaranty, the Issuing Bank shall be deemed to have sold and transferred to each
Tranche B Lender, and, to the extent the Stated Amount of the Loan Notes as of
the Acquisition Closing Date or on any date thereafter exceeds
(pound)12,850,000, to each Revolving Lender, and each Tranche B Lender and, if
applicable, each Revolving Lender shall be deemed irrevocably and
unconditionally to have purchased and received from the Issuing Bank, without
recourse or warranty, (i) an undivided interest and participation, pro rata
(based on such Lender's Tranche B Commitment Percentage), in such Loan Notes
Guaranty to the extent of such Lender's Tranche B Guaranty Exposure, (ii) an
undivided interest and participation, pro rata (based on such Lender's Revolving
Commitment Percentage), in such Loan Notes Guaranty to the extent of such
Lender's Revolver Guaranty Exposure, (iii) each drawing made thereunder and the
obligations of the Borrower under this Agreement with respect thereto, and (iv)
any collateral or other security therefor or guaranty pertaining thereto;
provided, however, that the fee relating to the Loan Notes Guaranty described in
Section 2.9(e) shall be payable directly to the Issuing Bank as provided
therein, and the Lenders shall have no right to receive any portion thereof.
Upon any change in the Tranche B Commitment or the Revolving Credit Commitment
of any of the Lenders pursuant to Section 12.7(a), with respect to the Loan
Notes Guaranty outstanding and Loan Notes Reimbursement Obligations, there shall
be an automatic adjustment to the participations pursuant to this Section to
reflect the new pro rata shares of the assigning Lender and the Assignee.
3.4 Reimbursement. The Borrower hereby agrees to reimburse the Issuing
Bank by making payment to the Agent, for the account of the Issuing Bank, in
immediately available funds, for any payment made by the Issuing Bank under the
Loan Notes Guaranty (each such amount so paid until reimbursed, together with
interest thereon payable as provided hereinbelow, a "Loan Notes
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Reimbursement Obligation") immediately after, and in any event within one (1)
Business Day after its receipt of notice of, such payment, together with
interest on the amount so paid by the Issuing Bank, to the extent not reimbursed
prior to 1:00 p.m., London time, on the date of such payment or disbursement,
for the period from the date of the respective payment to the date the Loan Note
Reimbursement Obligation created thereby is satisfied, at the Sterling Base Rate
applicable to the Loans as in effect from time to time during such period, such
interest also to be payable on demand. The Issuing Bank will provide the Agent
and the Borrower with prompt notice of any payment or disbursement made under
the Loan Notes Guaranty, although the failure to give, or any delay in giving,
any such notice shall not release, diminish or otherwise affect the Borrower's
obligations under this Section or any other provision of this Agreement. The
Agent will promptly pay to the Issuing Bank any such amounts received by it
under this Section.
3.5 Payment by Tranche B Term and Revolving Loans. (a) In the event that
the Issuing Bank makes any payment under the Loan Notes Guaranty and the
Borrower shall not have timely satisfied in full its Loan Note Reimbursement
Obligation to the Issuing Bank pursuant to Section 3.4, and to the extent of any
Revolver Guaranty Exposure at such time, the Issuing Bank will promptly notify
the Agent, and the Agent will promptly notify each Revolving Lender, of such
failure. If the Agent gives such notice prior to 11:00 a.m., Local Time, on any
Business Day, each Revolving Lender will make available to the Agent, for the
account of the Issuing Bank, its Revolving Commitment Percentage of the amount
of such payment on such Business Day in immediately available funds. If the
Agent gives such notice after 11:00 a.m., Local Time, on any Business Day, each
such Lender shall make its pro rata share of such amount available to the Agent
on the next succeeding Business Day.
(b) In the event, after application of Section 3.5(a), that (i) the
Issuing Bank makes any payment under the Loan Notes Guaranty, (ii) the Borrower
shall not have timely satisfied in full its Loan Notes Reimbursement Obligation
to the Issuing Bank pursuant to Sections 3.4 and 3.5(a), and (iii) the Revolver
Guaranty Exposure is zero, and to the extent that any amounts then held in the
Sinking Fund Account established pursuant to Section 3.8 shall be insufficient
to satisfy such Loan Notes Reimbursement Obligation in full, the Issuing Bank
will promptly notify the Agent, and the Agent will promptly notify each Tranche
B Lender, of such failure. If the Agent gives such notice prior to 11:00 a.m.,
Local Time, on any Business Day, each Tranche B Lender will make available to
the Agent, for the account of the Issuing Bank, its Tranche B Commitment
Percentage of the amount of such payment on such Business Day in immediately
available funds. If the Agent gives such notice after 11:00 a.m., Local Time, on
any Business Day, each such Lender shall make its pro rata share of such amount
available to the Agent on the next succeeding Business Day.
(c) Upon receipt of the Agent's notice in accordance with either Section
3.5(a) or 3.5(b), the Tranche B Lenders or the Revolving Lenders, or both, as
the case may be, shall be required to provide to the Agent, for the account of
the Issuing Bank, such Lender's pro rata share of the amounts required under
such sections, notwithstanding that (i) the amount of such Borrowing may not
comply with the minimum amount for advances of Revolving Loans otherwise
required hereunder, (ii) no request or deemed request for Borrowings under the
Revolving Loans shall have been timely made, (iii) the date of such Borrowing is
on a date that is not permitted hereunder, or (iv) such Lender's Revolving
Credit Commitment has been terminated. If and to the extent any Lender shall not
have so made available to the Agent its payments as required under Sections
3.5(a) or 3.5(b), such Lender agrees to pay to the Agent, for the account of the
Issuing Bank, forthwith on demand such amount, together with interest thereon at
the Federal Funds Rate for each day from such date until the date such amount is
paid to the Agent. The failure of any Lender to make available to the Agent its
pro rata share of any payment under the Loan Notes Guaranty shall not relieve
any other Lender of its obligation hereunder to make available to the Agent its
pro rata share of any payment under the Loan Notes Guaranty on the date
required, as specified
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above, but no Lender shall be responsible for the failure of any other Lender to
make available to the Agent such other Lender's pro rata share of any such
payment. Each such payment by a Tranche B Lender or a Revolving Lender under
this Section 3.5 of its pro rata share of an amount paid by the Issuing Bank
shall constitute first, a Revolving Loan by a Revolving Lender to the extent of
such Lender's Revolver Guaranty Exposure, and second, a Tranche B Term Loan by
such Tranche B Lender (the Borrower being deemed to have given a timely Notice
of Revolving Borrowing and Notice of Tranche B Borrowing, as the case may be,
therefor) and shall be treated as such for all purposes of this Agreement;
provided, however, that if (x) the sum of (i) the outstanding principal amount
of Tranche B Term Loans outstanding and (ii) the amount of the Tranche B
Guaranty Exposure immediately after any payment in respect of the Loan Notes,
minus the balance of amounts in the Sinking Fund Account at such time, exceeds
(y) the Total Tranche B Commitments less the amount of principal payments (or
deposits in the Sinking Fund Account) theretofore required to be made pursuant
to Section 2.6(b), such excess shall be immediately due and payable by the
Borrower to the Tranche B Lenders without notice or presentment.
(d) Notwithstanding any provisions in this Agreement or any other Credit
Document to the contrary, if the Revolver Guaranty Exposure is zero, and if any
payment, principal, interest or otherwise, is required to be made in respect of
the Loan Notes pursuant to the Loan Notes Guaranty, the Issuing Bank shall be
entitled to utilize the cash held in the Sinking Fund Account established
pursuant to Section 3.8 to make such payment or to reimburse the Issuing Bank
for any payments made by the Issuing Bank on the Loan Notes.
(e) All Tranche B Term or Revolving Loans made under this Section 3.5
shall be deemed to be Base Rate Loans at the Sterling Base Rate until the
Borrower provides a proper Notice of Conversion/Continuation in accordance with
Section 2.11.
3.6 Payment to Lenders. Whenever the Issuing Bank receives a payment in
respect of a Loan Note Reimbursement Obligation as to which the Agent has
received, for the account of the Issuing Bank, any payments from the Tranche B
Lenders or Revolving Lenders pursuant to Section 3.5, the Issuing Bank will
promptly pay to the Agent, and the Agent will promptly pay to each Lender that
has paid its pro rata share thereof, in immediately available funds, an amount
equal to such Lender's ratable share of its Tranche B Commitment Percentage and
such Lender's Revolving Commitment Percentage of such Loan Note Reimbursement
Obligation.
3.7 Obligations Absolute. The Loan Note Reimbursement Obligations of the
Borrower, and the obligations of the Tranche B and Revolving Lenders under
Section 3.5 to make payments to the Agent, for the account of the Issuing Bank,
with respect to the Loan Notes Guaranty, shall be irrevocable, shall remain in
effect until the Issuing Bank shall have no further obligations to make any
payments or disbursements under any circumstances with respect to the Loan Notes
Guaranty, and, except to the extent resulting from any gross negligence or
willful misconduct on the part of the Issuing Bank, shall be absolute and
unconditional, shall not be subject to counterclaim, setoff or other defense or
any other qualification or exception whatsoever and shall be made in accordance
with the terms and conditions of this Agreement under all circumstances,
including, without limitation, any of the following circumstances:
(a) Any lack of validity or enforceability of this Agreement, any of the
other Credit Documents or any documents or instruments relating to the Loan
Notes Guaranty;
(b) Any change in the time, manner or place of payment of, or in any other
term of, all or any of the Obligations in respect of the Loan Note Guaranty, or
any other amendment, modification or waiver of or any consent to departure from
the Loan Note Guaranty or any documents or instruments
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relating thereto, in each case without the consents required under Section 9.9
and whether or not the Borrower has notice or knowledge thereof;
(c) The existence of any claim, setoff, defense or other right that the
Borrower may have at any time against a beneficiary named in the Loan Note
Guaranty, any transferee of any Letter of Credit (or any Person for whom any
such transferee may be acting), the Agent, the Issuing Bank, any Lender or other
Person, whether in connection with this Agreement, the Loan Note Guaranty, the
transactions contemplated hereby or any unrelated transactions (including any
underlying transaction between the Borrower and the beneficiary named in the
Loan Note Guaranty);
(d) Any draft, certificate or any other document presented under the Loan
Note Guaranty proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect, any
errors, omissions, interruptions or delays in transmission or delivery of any
messages, by mail, telecopier or otherwise, or any errors in translation or in
interpretation of technical terms;
(e) Any defense based upon the failure of any drawing under the Loan Note
Guaranty to conform to the terms of the Loan Note Guaranty, any nonapplication
or misapplication by the beneficiary or any transferee of the proceeds of such
drawing or any other act or omission of such beneficiary or transferee in
connection with the Loan Note Guaranty;
(f) The exchange, release, surrender or impairment of any collateral or
other security for the Obligations;
(g) The occurrence of any Default or Event of Default; or
(h) Any other circumstance or event whatsoever, including, without
limitation, any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Borrower or a guarantor.
Any action taken or omitted to be taken by the Issuing Bank under or in
connection with the Loan Note Guaranty, if taken or omitted in the absence of
gross negligence or willful misconduct, shall be binding upon the Borrower and
each Lender and shall not create or result in any liability of the Issuing Bank
to the Borrower or any Lender. It is expressly understood and agreed that, for
purposes of determining whether a wrongful payment under the Loan Note Guaranty
resulted from the Issuing Bank's gross negligence or willful misconduct, (i) the
Issuing Bank's acceptance of documents that appear on their face to comply with
the terms of the Loan Note Instrument, without responsibility for further
investigation, regardless of any notice or information to the contrary, (ii) the
Issuing Bank's exclusive reliance on the documents presented to it under the
Loan Note Instrument, as to any and all matters set forth therein, including the
amount of any draft presented under the Loan Note Guaranty, whether or not the
amount due to the beneficiary thereunder equals the amount of such draft and
whether or not any document presented pursuant to the Loan Note Guaranty proves
to be insufficient in any respect (so long as such document appears on its face
to comply with the terms of the Loan Note Instrument), and whether or not any
other statement or any other document presented pursuant to the Loan Note
Instrument proves to be forged or invalid or any statement therein proves to be
inaccurate or untrue in any respect whatsoever, and (iii) any noncompliance in
any immaterial respect of the documents presented under the Loan Note Guaranty
with the terms thereof shall, in each case, be deemed not to constitute gross
negligence or willful misconduct of the Issuing Bank.
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3.8 Sinking Fund Account. (a) In connection with the execution and
delivery of this Agreement and on or prior to the Acquisition Closing Date, the
Borrower shall cause Beechwood to execute and deliver the Beechwood Escrow and
Security Agreement and to grant to the Agent, for the benefit of the Tranche B
Lenders, a Lien upon and security interest in a cash collateral account to be
maintained in the London branch of a United States national banking association
selected by the Agent in its sole discretion (the "Sinking Fund Account"), and
all amounts held therein from time to time, as security for the Borrower's
Obligations in respect of the Tranche B Lenders, and, to the extent not
otherwise paid by or on behalf of the Borrower, for application to the Loan
Notes for which claims for payments have been presented to the Issuing Bank, as
and when the same shall arise. Except solely as provided in Section 3.8(b), the
Agent shall have exclusive dominion and control, including the exclusive right
of withdrawal, over such account. Other than any interest on the investment of
such amounts in time deposits and ordinary savings accounts, which investments
shall be made at the direction of the Borrower (unless a Default or Event of
Default shall have occurred and be continuing, in which case the determination
as to investments shall be made at the option and in the discretion of the
Agent), amounts in the Sinking Fund Account shall not bear interest. Interest
and profits, if any, on such investments shall accumulate in such account. All
amounts in the Sinking Fund Account shall consist of cash in Pounds Sterling. In
the event of a claim for payment, and subsequent payment by the Issuing Bank,
under the Loan Notes Guaranty at any time during which any amounts are held in
the Sinking Fund Account, the Agent will deliver to the Issuing Bank an amount
equal to the Loan Note Reimbursement Obligation created as a result of such
payment (or, if the amounts so held are less than such Loan Note Reimbursement
Obligation, all of such amounts) to reimburse the Issuing Bank therefor.
(b) At any time and from time to time so long as no Default has occurred
and is continuing, in compliance with the Beechwood Escrow and Security
Agreement, the Borrower may cause Beechwood to provide written demand to the
Agent to, and upon such demand the Agent shall, pursuant to the written
instructions set forth in such demand, withdraw funds from the Sinking Fund
Account and pay to the holders of Loan Notes on behalf of Beechwood such amounts
requested by Beechwood, provided that, after giving effect to such payment, (x)
the sum of (i) the outstanding principal amount of Tranche B Term Loans
outstanding and (ii) the amount of the Tranche B Guaranty Exposure immediately
after such payment in respect of the Loan Notes, net of the amounts that would
be remaining in the Sinking Fund Account after such payment, would not exceed
(y) the Total Tranche B Commitments less the amount of principal payments (or
deposits to the Sinking Fund Account) theretofore required to be made pursuant
to Section 2.6(b).
(c) At any time and from time to time (i) after the occurrence and during
the continuance of an Event of Default, the Agent, at the direction or with the
consent of the Required Lenders, may require the Borrower to deliver (or cause
Beechwood to deliver) to the Agent such additional amount of cash as is equal to
the Loan Notes Guaranty Exposure at any time outstanding (whether or not any
beneficiary under the Loan Notes Guaranty shall have drawn or be entitled at
such time to draw thereunder), such amounts to be held by the Agent in such cash
collateral account (the "Sinking Fund Account").
(d) Any amounts remaining in the Sinking Fund Account after the expiration
of the Loan Notes Guaranty and reimbursement in full of the Issuing Bank for all
outstanding Loan Notes Reimbursement Obligations shall be returned to the
Borrower and the Sinking Fund shall thereupon terminate and the Beechwood Escrow
and Security Agreement shall expire and be of no further force or effect,
provided that no Default shall have occurred and be continuing.
3.9 Other Provisions Relating to Loan Notes. (a) Upon the completion of
all purchases of Xxxxxx shares under the Tender Offer and, if any, the Statutory
Merger Proceedings, the first (pound)12,850,000
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of the Stated Amount of Loan Notes issued at such time and guaranteed under the
Loan Notes Guaranty shall be deemed attributable to the Tranche B Guaranty
Exposure and shall be referred to as the "Tranche B Xxxxxx Loan Notes." The
Stated Amount of Loan Notes at such time in excess of (pound)12,850,000 shall be
deemed attributable to the Revolver Guaranty Exposure and shall be referred to
as the "Revolver Xxxxxx Loan Notes."
(b) If Beechwood makes any principal payments in respect of the Loan Notes
to one or more holders thereof, the Borrower, so long as no Default shall have
occurred and be continuing, may allocate such payments between the Tranche B
Xxxxxx Loan Notes and the Revolver Xxxxxx Loan Notes in any manner, and thereby
reduce the Tranche B Guaranty Exposure or the Revolver Xxxxxx Loan Notes
Guaranty Exposure, as the case may be, by such amounts, by providing notice
thereof to the Agent within three (3) Business Days of such payment. If the
Borrower shall fail to provide such notice as required hereby, the payments
shall be deemed to be allocated entirely to the Tranche B Xxxxxx Loan Notes
until the obligations under such Loan Notes are paid in full, and thereafter to
the Revolver Xxxxxx Loan Notes.
(c) Any payment by Beechwood of principal in respect of Tranche B Xxxxxx
Loan Notes, other than payments out of the proceeds of any Tranche B Term Loans
made in connection with such principal payment, shall be deemed a voluntary
prepayment of the Tranche B Term Loans in accordance with Section 2.7.
ARTICLE IV
LETTERS OF CREDIT
4.1 Issuance. Subject to and upon the terms and conditions herein set
forth, so long as no Default or Event of Default has occurred and is continuing,
the Issuing Bank will, at any time and from time to time on and after the
Closing Date and prior to the earlier of (i) the seventh day prior to the
Revolving Credit Maturity Date and (ii) the Revolving Credit Termination Date,
and upon request by the Borrower in accordance with the provisions of Section
4.2, issue for the account of the Borrower one or more irrevocable standby
letters of credit denominated in Dollars or Pounds and in a form customarily
used or otherwise approved by the Issuing Bank (together with all amendments,
modifications and supplements thereto, substitutions therefor and renewals and
restatements thereof, collectively, the "Letters of Credit"). Notwithstanding
the foregoing:
(a) No Letter of Credit shall be issued the Stated Amount upon issuance of
which, when added to the sum of (i) the aggregate Letter of Credit Exposure and
Revolver Guaranty Exposure of all Revolving Lenders at such time and (ii) the
aggregate principal amount of all Revolving Loans then outstanding, would exceed
the Total Revolving Credit Commitments at such time;
(b) The Stated Value of each Letter of Credit, when issued, shall not be
less than $500,000 or, in the case of a Sterling denominated Letter of Credit,
(pound)500,000;
(c) No Letter of Credit shall be issued that by its terms expires later
than the seventh day prior to the Revolving Credit Maturity Date or, in any
event, more than one (1) year after its date of issuance; provided, however,
that a Letter of Credit may, if requested by the Borrower, provide by its terms,
and on terms acceptable to the Issuing Bank, for renewal for successive periods
of one year or less (but not beyond the seventh day prior to the Revolving
Credit Maturity Date), unless and until the Issuing Bank shall have delivered a
notice of nonrenewal to the beneficiary of such Letter of Credit; and
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(d) The Issuing Bank shall be under no obligation to issue any Letter of
Credit if, at the time of such proposed issuance, (i) any order, judgment or
decree of any Governmental Authority or arbitrator shall purport by its terms to
enjoin or restrain the Issuing Bank from issuing such Letter of Credit, or any
Requirement of Law applicable to the Issuing Bank or any request or directive
(whether or not having the force of law) from any Governmental Authority with
jurisdiction over the Issuing Bank shall prohibit, or request that the Issuing
Bank refrain from, the issuance of letters of credit generally or such Letter of
Credit in particular or shall impose upon the Issuing Bank with respect to such
Letter of Credit any restriction or reserve or capital requirement (for which
the Issuing Bank is not otherwise compensated) not in effect on the Closing
Date, or any unreimbursed loss, cost or expense that was not applicable, in
effect or known to the Issuing Bank as of the Closing Date and that the Issuing
Bank in good xxxxx xxxxx material to it, or (ii) the Issuing Bank shall have
actual knowledge, or shall have received notice from any Lender, prior to the
issuance of such Letter of Credit that one or more of the conditions specified
in Sections 5.1 (if applicable) or 4.2 are not then satisfied (or have not been
waived in writing as required herein) or that the issuance of such Letter of
Credit would violate the provisions of subsection (a) above.
4.2 Notices. Whenever the Borrower desires the issuance of a Letter of
Credit, the Borrower will give the Agent written notice not later than 11:00
a.m., Charlotte time, three (3) Business Days (or such shorter period as is
acceptable to the Issuing Bank in any given case) prior to the requested date of
issuance thereof. Each such notice (each, a "Letter of Credit Notice") shall be
irrevocable, shall be given in the form of Exhibit B-3 (with a duly completed
Revolving Commitment Worksheet attached) and shall specify (i) the requested
date of issuance, which shall be a Business Day, (ii) the requested Stated
Amount and expiry date of the Letter of Credit, and (iii) the name and address
of the requested beneficiary or beneficiaries of the Letter of Credit. The
Borrower will also complete any application procedures and documents required by
the Issuing Bank in connection with the issuance of any Letter of Credit. Upon
its issuance of any Letter of Credit, the Issuing Bank will promptly notify the
Agent of such issuance, and the Agent will give prompt notice thereof to each
Lender.
4.3 Participations. Immediately upon the issuance of any Letter of Credit,
the Issuing Bank shall be deemed to have sold and transferred to each Lender,
and each Revolving Lender shall be deemed irrevocably and unconditionally to
have purchased and received from the Issuing Bank, without recourse or warranty,
an undivided interest and participation, pro rata (based on the percentage of
the aggregate Revolving Credit Commitments represented by such Lender's
Revolving Credit Commitment), in such Letter of Credit, each drawing made
thereunder and the obligations of the Borrower under this Agreement with respect
thereto and any Collateral or other security therefor or guaranty pertaining
thereto; provided, however, that the fee relating to Letters of Credit described
in Section 2.9(e) shall be payable directly to the Issuing Bank as provided
therein, and the Revolving Lenders shall have no right to receive any portion
thereof. Upon any change in the Revolving Credit Commitments of any of the
Lenders pursuant to Section 12.7(a), with respect to all outstanding Letters of
Credit and Reimbursement Obligations there shall be an automatic adjustment to
the participations pursuant to this Section to reflect the new pro rata shares
of the assigning Lender and the Assignee.
4.4 Reimbursement. The Borrower hereby agrees to reimburse the Issuing
Bank by making payment to the Agent, for the account of the Issuing Bank, in
immediately available funds, in each case in the Applicable Currency (based on
the currency denomination of the relevant Letter of Credit), for any payment
made by the Issuing Bank under any Letter of Credit (each such amount so paid
until reimbursed, together with interest thereon payable as provided
hereinbelow, a "Reimbursement Obligation") immediately after, and in any event
within one (1) Business Day after its receipt of notice of, such payment,
together with interest on the amount so paid by the Issuing Bank, to the extent
not reimbursed prior to 1:00 p.m., Local Time, on the date of such payment or
disbursement, for the period from the date
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of the respective payment to the date the Reimbursement Obligation created
thereby is satisfied, the Base Rate applicable to Dollar Revolving Loans and the
Sterling Base Rate applicable to Pounds Sterling Revolving Loans, as the case
may be, as in effect from time to time during such period, such interest also to
be payable on demand. The Issuing Bank will provide the Agent and the Borrower
with prompt notice of any payment or disbursement made under any Letter of
Credit, although the failure to give, or any delay in giving, any such notice
shall not release, diminish or otherwise affect the Borrower's obligations under
this Section or any other provision of this Agreement. The Agent will promptly
pay to the Issuing Bank any such amounts received by it under this Section.
4.5 Payment by Revolving Loans. In the event that the Issuing Bank makes
any payment under any Letter of Credit and the Borrower shall not have timely
satisfied in full its Reimbursement Obligation to the Issuing Bank pursuant to
Section 4.4, and to the extent that any amounts then held in the L/C Cash
Collateral Accounts established pursuant to Section 4.8 shall be insufficient to
satisfy such Reimbursement Obligation in full, the Issuing Bank will promptly
notify the Agent, and the Agent will promptly notify each Revolving Lender, of
such failure. If the Agent gives such notice prior to 11:00 a.m., Charlotte
time, on any Business Day, each Revolving Lender will make available to the
Agent, for the account of the Issuing Bank, its pro rata share (based on the
percentage of the aggregate Revolving Credit Commitments represented by such
Lender's Revolving Credit Commitment) of the amount of such payment on such
Business Day in immediately available funds. If the Agent gives such notice
after 11:00 a.m., Charlotte time, on any Business Day, each such Lender shall
make its pro rata share of such amount available to the Agent on the next
succeeding Business Day. If and to the extent any Revolving Lender shall not
have so made its pro rata share of the amount of such payment available to the
Agent, such Lender agrees to pay to the Agent, for the account of the Issuing
Bank, forthwith on demand such amount, together with interest thereon at the
Federal Funds Rate for each day from such date until the date such amount is
paid to the Agent. The failure of any Revolving Lender to make available to the
Agent its pro rata share of any payment under any Letter of Credit shall not
relieve any other Revolving Lender of its obligation hereunder to make available
to the Agent its pro rata share of any payment under any Letter of Credit on the
date required, as specified above, but no Revolving Lender shall be responsible
for the failure of any other Revolving Lender to make available to the Agent
such other Lender's pro rata share of any such payment. Each such payment by a
Revolving Lender under this Section 4.5 of its pro rata share of an amount paid
by the Issuing Bank shall constitute a Revolving Loan by such Revolving Lender
(the Borrower being deemed to have given a timely Notice of Revolving Borrowing
therefor) and shall be treated as such for all purposes of this Agreement;
provided that for purposes of determining the aggregate Unutilized Revolving
Credit Commitments immediately prior to giving effect to the application of the
proceeds of such Revolving Loans, the Reimbursement Obligation being satisfied
thereby shall be deemed not to be outstanding at such time.
4.6 Payment to Lenders. Whenever the Issuing Bank receives a payment in
respect of a Reimbursement Obligation as to which the Agent has received, for
the account of the Issuing Bank, any payments from the Revolving Lenders
pursuant to Section 4.5, the Issuing Bank will promptly pay to the Agent, and
the Agent will promptly pay to each Revolving Lender that has paid its pro rata
share thereof, in immediately available funds, an amount equal to such Lender's
ratable share (based on the proportionate amount funded by such Lender to the
aggregate amount funded by all Revolving Lenders) of such Reimbursement
Obligation.
4.7 Obligations Absolute. The Reimbursement Obligations of the Borrower,
and the obligations of the Revolving Lenders under Section 4.5 to make payments
to the Agent, for the account of the Issuing Bank, with respect to Letters of
Credit, shall be irrevocable, shall remain in effect until the Issuing Bank
shall have no further obligations to make any payments or disbursements under
any
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circumstances with respect to any Letter of Credit, and, except to the extent
resulting from any gross negligence or willful misconduct on the part of the
Issuing Bank, shall be absolute and unconditional, shall not be subject to
counterclaim, setoff or other defense or any other qualification or exception
whatsoever and shall be made in accordance with the terms and conditions of this
Agreement under all circumstances, including, without limitation, any of the
following circumstances:
(a) Any lack of validity or enforceability of this Agreement, any of the
other Credit Documents or any documents or instruments relating to any Letter of
Credit;
(b) Any change in the time, manner or place of payment of, or in any other
term of, all or any of the Obligations in respect of any Letter of Credit or any
other amendment, modification or waiver of or any consent to departure from any
Letter of Credit or any documents or instruments relating thereto, in each case
whether or not the Borrower has notice or knowledge thereof;
(c) The existence of any claim, setoff, defense or other right that the
Borrower may have at any time against a beneficiary named in a Letter of Credit,
any transferee of any Letter of Credit (or any Person for whom any such
transferee may be acting), the Agent, the Issuing Bank, any Lender or other
Person, whether in connection with this Agreement, any Letter of Credit, the
transactions contemplated hereby or any unrelated transactions (including any
underlying transaction between the Borrower and the beneficiary named in any
such Letter of Credit);
(d) Any draft, certificate or any other document presented under the
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect,
any errors, omissions, interruptions or delays in transmission or delivery of
any messages, by mail, telecopier or otherwise, or any errors in translation or
in interpretation of technical terms;
(e) Any defense based upon the failure of any drawing under a Letter of
Credit to conform to the terms of the Letter of Credit, any nonapplication or
misapplication by the beneficiary or any transferee of the proceeds of such
drawing or any other act or omission of such beneficiary or transferee in
connection with such Letter of Credit;
(f) The exchange, release, surrender or impairment of any Collateral or
other security for the Obligations;
(g) The occurrence of any Default or Event of Default; or
(h) Any other circumstance or event whatsoever, including, without
limitation, any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Borrower or a guarantor.
Any action taken or omitted to be taken by the Issuing Bank under or in
connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence or willful misconduct, shall be binding upon the Borrower and
each Lender and shall not create or result in any liability of the Issuing Bank
to the Borrower or any Lender. It is expressly understood and agreed that, for
purposes of determining whether a wrongful payment under a Letter of Credit
resulted from the Issuing Bank's gross negligence or willful misconduct, (i) the
Issuing Bank's acceptance of documents that appear on their face to comply with
the terms of such Letter of Credit, without responsibility for further
investigation, regardless of any notice or information to the contrary, (ii) the
Issuing Bank's exclusive reliance on the documents presented to it
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under such Letter of Credit as to any and all matters set forth therein,
including the amount of any draft presented under such Letter of Credit, whether
or not the amount due to the beneficiary thereunder equals the amount of such
draft and whether or not any document presented pursuant to such Letter of
Credit proves to be insufficient in any respect (so long as such document
appears on its face to comply with the terms of such Letter of Credit), and
whether or not any other statement or any other document presented pursuant to
such Letter of Credit proves to be forged or invalid or any statement therein
proves to be inaccurate or untrue in any respect whatsoever, and (iii) any
noncompliance in any immaterial respect of the documents presented under such
Letter of Credit with the terms thereof shall, in each case, be deemed not to
constitute gross negligence or willful misconduct of the Issuing Bank.
4.8 L/C Cash Collateral Accounts. (a) At any time and from time to time
(i) after the occurrence and during the continuance of a Default, the Agent, at
the direction or with the consent of Revolving Lenders whose Revolving
Commitment Percentages in the aggregate equal or exceed sixty-six and two-thirds
percent (66 2/3%), may require the Borrower to deliver to the Agent such
additional amount of cash (in Dollars) as is equal to the Dollar Amount of the
aggregate Stated Amount of all Letters of Credit at any time outstanding
(whether or not any beneficiary under any Letter of Credit shall have drawn or
be entitled at such time to draw thereunder) and (ii) to the extent any amount
of a required prepayment under Section 2.6(e) remains after prepayment of all
outstanding Revolving Loans and Reimbursement Obligations, the Borrower shall
deliver to the Agent such additional amount of cash (in Dollars) required under
Section 2.6(e), and the Agent will retain such amount as may then be required to
be retained, such amounts in each case under clauses (i) and (ii) above to be
held by the Agent in a cash collateral account pursuant to the Borrower Escrow
and Security Agreement.
(b) At any time and from time to time, the Borrower may deliver to the
Agent cash or Cash Equivalents, in the Applicable Currency of the Letters of
Credit secured thereby, to be deposited in the cash collateral accounts
maintained by the Agent pursuant to the Borrower Escrow and Security Agreement
as security for the Borrower's Reimbursement Obligations under Section 4.4.
Separate accounts shall be maintained by the Agent in Dollars and Pounds
Sterling, respectively. The cash collateral accounts described in Section 4.8(a)
and this Section 4.8(b) shall be collectively referred to as the "L/C Cash
Collateral Accounts."
(c) The Borrower hereby grants to the Agent, for the benefit of the
Revolving Lenders, a Lien upon and security interest in the L/C Cash Collateral
Accounts and all amounts held therein from time to time as security for the
Borrower's Obligations in respect of the Revolving Lenders, and, to the extent
not otherwise paid by or on behalf of the Borrower, for application to the
Reimbursement Obligations as and when the same shall arise. At all times with
respect to amounts required to be deposited in accordance with Section 4.8(a)
and, with respect to any amounts deposited in accordance with Section 4.8(b)
after the occurrence and during the continuance of a Default, the Agent shall
have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. Other than any interest on the investment of such
amounts in Cash Equivalents, which investments shall be made at the direction of
the Borrower (unless a Default or Event of Default shall have occurred and be
continuing, in which case the determination as to investments shall be made at
the option and in the discretion of the Agent), amounts in the L/C Cash
Collateral Accounts shall not bear interest. Interest and profits, if any, on
such investments shall accumulate in such account. All amounts in the L/C Cash
Collateral Account securing potential Reimbursement Obligations under Letters of
Credit denominated in Dollars shall consist of cash in Dollars or Cash
Equivalents denominated in Dollars. All amounts in the L/C Cash Collateral
Account securing potential Reimbursement Obligations under Letters of Credit
denominated in Pounds Sterling shall consist of cash in Pounds Sterling.
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(d) In the event of a drawing, and subsequent payment by the Issuing Bank,
under any Letter of Credit at any time during which any amounts are held in the
L/C Cash Collateral Account securing such Letter of Credit, the Agent will
deliver to the relevant Issuing Bank, out of such L/C Cash Collateral Account
(based on the currency of the subject Letter of Credit), an amount equal to the
Reimbursement Obligation created as a result of such payment (or, if the amounts
so held are less than such Reimbursement Obligation, all of such amounts) to
reimburse the Issuing Bank therefor. Any amounts remaining in the L/C Cash
Collateral Accounts after the expiration of all Letters of Credit and
reimbursement in full of the Issuing Banks for all outstanding Reimbursement
Obligations shall be returned to the Borrower, provided that no Default shall
have occurred and be continuing at such time. If (i) all Letters of Credit
issued hereunder and the Issuing Banks' obligation to issue further Letters of
Credit hereunder shall have expired or terminated, (ii) no Default shall have
occurred and be continuing, and (iii) the sum of (x) the aggregate principal
amount of all Revolving Loans outstanding at such time, and (y) the aggregate
Letter of Credit Exposure and Revolving Credit Exposure of all Revolving Lenders
at such time would not exceed the Total Revolving Credit Commitments at such
time, then the L/C Cash Collateral Accounts shall thereupon terminate and the
Borrower Escrow and Security Agreement shall expire and be of no further force
or effect.
4.9 Effectiveness. Notwithstanding any termination of the Revolving Credit
Commitments or repayment of the Loans, or both, the obligations of the Borrower
under this Article III shall remain in full force and effect until the Issuing
Bank and the Lenders shall have no further obligations to make any payments or
disbursements under any circumstances with respect to any Letter of Credit.
ARTICLE V
CONDITIONS OF BORROWING
5.1 Conditions of Initial Borrowing. The obligation of each Lender to make
the Revolving Loans (other than Revolving Loans under the Xxxxxx Facilities) and
the Tranche A-1 Term Loans in connection with the initial Borrowing hereunder,
and the obligation of the Issuing Bank to issue Letters of Credit hereunder, is
subject to the satisfaction of the following conditions precedent:
(a) The Agent shall have received the following, each dated as of the
Closing Date (unless otherwise specified) and, except for the Notes and the
certificates and instruments required to be delivered under the Escrow and
Security Agreement, in sufficient copies for each Lender:
(i) (x) a Tranche A-1 Term Note for each Tranche A Lender that is a
party hereto as of the Closing Date, in an amount equal to two-thirds
(2/3) of such Lender's Tranche A Commitment, and (y) a Revolving Credit
Note for each Revolving Lender that is a party hereto as of the Closing
Date, in the amount of such Lender's Revolving Credit Commitment, in each
case duly completed in accordance with the relevant provisions of Section
2.4 and executed by the Borrower;
(ii) the Guaranty, duly completed and executed by the Parent;
(iii) the Borrower Escrow and Security Agreement, duly completed and
executed by the Borrower, together with UCC-1 financing statements duly
executed by the Borrower; and
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(iv) the favorable opinions of LeBoeuf, Lamb, Xxxxxx & XxxXxx,
L.L.P., special counsel to the Parent and the Borrower, and of Xxxxxxxx X.
Xxxxxxx, Vice President, General Counsel and Secretary of Borrower and
Parent, in substantially the form of Exhibits E-1 and E-2, respectively,
addressed to the Agent and the Lenders, and addressing such other matters
as the Agent or any Lender may reasonably request.
(b) The Agent shall have received a certificate, signed by the chief
executive officer or chief financial officer of the Borrower, in form and
substance satisfactory to the Agent, certifying that (i) all representations and
warranties of the Borrower contained in this Agreement and the other Credit
Documents are true and correct as of the Closing Date, both immediately before
and after giving effect to the extinguishment of the Fleet Indebtedness, the
making of the Tranche A-1 Term Loans hereunder and the application of the
proceeds thereof, (ii) no Default or Event of Default has occurred and is
continuing, both immediately before and after giving effect to the
extinguishment of the Fleet Indebtedness, the making of the Tranche A-1 Term
Loans hereunder and the application of the proceeds thereof, and (iii) both
immediately before and after giving effect to the extinguishment of the Fleet
Indebtedness, the making of the Tranche A-1 Term Loans hereunder and the
application of the proceeds thereof, no Material Adverse Change has occurred
since December 31, 1995, and there exists no event, condition or state of facts
that could reasonably be expected to result in a Material Adverse Change.
(c) The Agent shall have received certificates dated as of the
Announcement Date of the secretary or an assistant secretary of the Borrower and
the Parent, in form and substance satisfactory to the Agent, certifying (i) that
attached thereto is a true and complete copy of the certificate of incorporation
and all amendments thereto of each of the Borrower and the Parent, certified as
of a recent date by the Secretary of State of the State of Delaware, and that
the same has not been amended since the date of such certification, (ii) that
attached thereto is a true and complete copy of the bylaws of the Borrower and
the Parent, as then in effect and as in effect at all times from the date on
which the resolutions referred to in clause (iii) below were adopted to and
including the date of such certificate, and (iii) that attached thereto is a
true and complete copy of resolutions adopted by the board of directors of the
Borrower and the Parent authorizing the execution, delivery and performance of
this Agreement, the other Credit Documents to which it is a party, and (to the
extent necessary or appropriate as of the Closing Date) the other Transaction
Documents to which it is a party, and (iv) as to the incumbency and genuineness
of the signature of each officer of the Borrower and the Parent executing this
Agreement or any of the other Credit Documents, and attaching all such copies of
the documents described above.
(d) The Agent shall have received, on or prior to the Announcement Date, a
certificate as of a recent date of the good standing of each of the Borrower and
the Parent, under the laws of the State of Delaware, from the Secretary of State
of Delaware.
(e) All approvals, permits and consents of any Governmental Authorities or
other Persons required in connection with the execution and delivery of this
Agreement and the other Credit Documents and the consummation of the
transactions contemplated herein and therein shall have been obtained (without
the imposition of conditions that are not reasonably acceptable to the Agent),
and all related filings, if any, shall have been made, and all such approvals,
permits, consents and filings shall be in full force and effect and the Agent
shall have received such copies thereof as it shall have requested; all
applicable waiting periods shall have expired without any adverse action being
taken by any Governmental Authority having jurisdiction; and no action,
proceeding, investigation, regulation or legislation shall have been instituted,
threatened or proposed before, and no order, injunction or decree shall have
been entered by, any court or other Governmental Authority, in each case to
enjoin, restrain or prohibit, to obtain substantial damages in respect of, or
that is otherwise related to or arises out of, this Agreement, any of
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the other Credit Documents or the consummation of the Transactions (other than
the Acquisition), or that, in the opinion of the Agent, would otherwise be
reasonably likely to have a Material Adverse Effect.
(f) The Agent shall have received evidence in form and substance
reasonably satisfactory to it that all filings, recordings, registrations and
other actions (including, without limitation, the filing of duly completed UCC-1
financing statements in each jurisdiction necessary or, in the reasonable
opinion of the Agent, desirable to perfect the Liens created by the Escrow and
Security Agreements) shall have been completed, or arrangements satisfactory to
the Agent for the completion thereof shall have been made.
(g) Since December 31, 1995, both immediately before and after giving
effect to the consummation of the transactions contemplated by this Agreement,
there shall not have occurred any Material Adverse Change or any event,
condition or state of facts that could reasonably be expected to result in a
Material Adverse Change.
(h) The Borrower shall have paid to First Union such fees which, by the
terms of the Fee Letter are due and payable on or prior to the Closing Date and
all other fees and expenses of the Agent and the Lenders required hereunder or
under any other Credit Document to be paid on or prior to the Closing Date
(including fees and expenses of counsel) in connection with this Agreement and
the Transactions.
(i) The Agent shall have received an Account Designation Letter, together
with written instructions from an Authorized Officer of the Borrower, including
wire transfer information, directing the payment of the proceeds of the initial
Loans to be made hereunder.
(j) The Agent shall have received evidence satisfactory to it that,
concurrently with the making of the Tranche A-1 Term Loans hereunder, all
principal, interest and other amounts outstanding with respect to the Fleet
Indebtedness shall be repaid and satisfied in full and all commitments to extend
credit under the agreements and instruments relating thereto shall be
terminated.
5.2 Conditions to Borrowings Under the Xxxxxx Facilities. The obligations
of each Lender to make any Loans under the Xxxxxx Facilities, and the obligation
of the Issuing Bank to issue the Loan Notes Guaranty, is subject to the
conditions precedent in Section 5.1 (unless the closing of the Revolving Loans
and the Tranche A-1 Term Loans has previously occurred) and Section 5.3, other
than Sections 5.1(a)(i), 5.1(a)(iii), 5.1(a)(iv), 5.1(b), 5.1(e), 5.1(f)
(insofar as it relates to the Borrower Escrow and Security Agreement), 5.1(g),
5.1(h) and 5.1(j), and the satisfaction of the following additional conditions
precedent:
(a) The Agent shall have received the following, each dated as of the
Acquisition Closing Date (unless otherwise specified) and, except for the Notes,
in sufficient copies for each Lender:
(i) a Tranche A-2 Term Note for each Tranche A Lender in an amount
equal to one-third (1/3) of such Lender's Tranche A Commitment, a Tranche
B Term Note for each Tranche B Lender in the amount of such Lender's
Tranche B Commitment and, if not previously issued, a Revolving Credit
Note for each Revolving Lender in the amount of such Lender's Revolving
Commitment; and
(ii) the Beechwood Escrow and Security Agreement, duly completed and
executed by Beechwood, together with UCC-1 financing statements duly
executed by Beechwood; and
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(iii) the favorable opinions of (x) LeBoeuf, Lamb, Xxxxxx & XxxXxx,
L.L.P., special counsel to the Borrower and Parent, in substantially the
form of Exhibit E-1, except to the extent of matters addressed in such
counsel's opinion previously delivered pursuant to Section 5.1(a)(iv) (y)
Xxxxxxxx X. Xxxxxxx, Vice President, General Counsel and Secretary of the
Borrower and Parent, in substantially the form of Exhibit E-2, and (z)
X.X. Xxxxxxx, special United Kingdom counsel to the Borrower and
Beechwood, in substantially the form of Exhibit E-3, each addressed to the
Agent and the Lenders, and in each case addressing such other matters as
the Agent may reasonably request.
(b) The Agent shall have received on or prior to the Announcement Date a
certificate, signed by the chief executive officer or chief financial officer of
the Borrower, in form and substance satisfactory to the Agent, certifying that
(i) all representations and warranties of the Borrower contained in this
Agreement and the other Credit Documents are true and correct as of the
Announcement Date, and (ii) no Default or Event of Default has occurred and is
continuing, both immediately before giving effect to the consummation of the
Transactions and as if the Transactions had been consummated.
(c) The Acquisition Documents delivered to the Agent prior to execution of
this Agreement shall not have been amended, modified or supplemented, nor any
provision thereof waived, in any material respect since the Execution Date,
except as shall have been approved in writing by First Union, which approval
shall not be unreasonably withheld or delayed; the Borrower and Beechwood shall
have duly complied with and performed in all material respects all of its
agreements and conditions set forth in the Acquisition Documents required to be
complied with or performed by it on or prior to the closing date thereunder; the
Acquisition Documents shall be in full force and effect; and the Agent shall
have received evidence satisfactory to it that, concurrently with the making of
the Tranche B Term Loans hereunder, the Tender Offer has been declared
unconditional in all respects, that all material conditions to closing the
Acquisition set forth in the Acquisition Documents have been met or waived with
the consent of First Union, and that Beechwood shall have acquired not less than
ninety percent (90%) of the "Xxxxxx Shares to which the Offer relates," as such
expression is defined in Appendix I, Part A of the Tender Offer, except with the
consent of First Union, which consent in each case shall not be unreasonably
withheld or delayed. For purposes of this Section 5.2(c), "material" shall mean
having an adverse impact, in the reasonable discretion of First Union, on the
Borrower's creditworthiness, the Borrower's and its Subsidiaries' ability to
comply with any of the covenants in this Agreement, or in the business,
financial or trading position or profits of Xxxxxx and its Subsidiaries taken as
a whole.
(d) All approvals, permits and consents of any Governmental Authorities or
other Persons required in connection with the consummation of the Acquisition
shall have been obtained (without the imposition of conditions that are not
reasonably acceptable to the Agent), and all related filings, if any, shall have
been made, and all such approvals, permits, consents and filings shall be in
full force and effect and the Agent shall have received such copies thereof as
it shall have requested; all applicable waiting periods shall have expired
without any adverse action being taken by any Governmental Authority having
jurisdiction; and no action, proceeding, investigation, regulation or
legislation shall have been instituted, threatened or proposed before, and no
order, injunction or decree shall have been entered by, any court or other
Governmental Authority, in each case to enjoin, restrain or prohibit, to obtain
substantial damages in respect of, or that is otherwise related to or arises out
of, the consummation of the Acquisition, or that, in the opinion of the Agent,
would otherwise be reasonably likely to have a Material Adverse Effect.
(e) The Agent shall have received a certificate as of a recent date of the
good standing of each of the Borrower and the Parent, under the laws of the
State of Delaware, from the Secretary of State of Delaware.
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(f) Since December 31, 1995, both immediately before giving effect to the
consummation of the transactions and as if the Transactions had been
consummated, there shall not have occurred any material adverse change in the
financial condition, operations, business, properties or financial prospects of
Xxxxxx and its Subsidiaries, taken as a whole.
(g) The Borrower shall have paid to First Union such fees which, by the
terms of the Fee Letter are due and payable on or prior to the Acquisition
Closing Date and all other fees and expenses of the Agent and the Lenders
required hereunder or under any other Credit Document to be paid on or prior to
the Acquisition Closing Date (including fees and expenses of counsel) in
connection with this Agreement and the Transactions.
Notwithstanding any provision of this Agreement to the contrary, if (i) any
failure to satisfy the requirements of Section 5.2(c) shall be deemed by First
Union to be material, or, for purposes of such Section, First Union believes
that a condition of the Tender Offer (which has not been waived) has not been
satisfied and that such condition is material, or, (ii) for purposes of Section
5.2(d) First Union believes that any conditions or restrictions imposed by any
relevant Government Authority in connection with approvals, permits and consents
of such Governmental Authority, or the failure to satisfy any other requirement
of Section 5.2(d), is material or would be reasonably likely to have a Material
Adverse Effect, or (iii) First Union believes that, for purposes of Section
5.2(f), Section 5.3(b), insofar as such Section 5.3(b) relates to
representations in Sections 6.10 and 6.11 with respect to Xxxxxx, and Section
5.3(c), insofar as such Section 5.3(c) relates to representations in the
certificate delivered pursuant to Section 5.2(b) with respect to Xxxxxx, a
material adverse change shall have occurred or, in the case of Section 6.11,
such representation shall be incorrect (any such event, the "Lenders' View"),
and the Panel on Takeovers and Mergers (the "Panel") as described in the Tender
Offer disagrees with the Lenders' View (a "Disagreement") after the best efforts
by the Borrower and Beechwood to persuade the Panel to accept the Lenders' View,
the Lenders hereby agree, subject to the satisfaction of the immediately
following sentence, to waive such conditions precedent to the Lenders'
obligations to provide the Xxxxxx Facilities. Notwithstanding the foregoing, in
the event of any Disagreement, the Borrower shall, and will cause Beechwood to,
exercise their best efforts, including all available administrative appeals, to
persuade the Panel to accept the Lenders' View and will permit and assist First
Union to exercise reasonable efforts, consistent with commercial and legal
practices in London, to persuade the Panel to accept the Lenders' View.
5.3 Conditions of All Borrowings. The obligation of each Lender to make
any Loans hereunder, including the initial Loans, and the obligation of the
Issuing Bank to issue any Letters of Credit hereunder and the Loan Notes
Guaranty, is subject to the satisfaction of the following conditions precedent
on the relevant Borrowing Date or date of issuance:
(a) With respect to any Revolving Loans, the Agent shall have received a
Notice of Revolving Borrowing in accordance with Section 2.2(c), or (together
with the Issuing Bank) a Letter of Credit Notice in accordance with Section 4.2,
as applicable;
(b) Each of the representations and warranties contained in Article VI and
in the other Credit Documents shall be true and correct on and as of such
Borrowing Date (including the Closing Date, in the case of the initial Loans
made hereunder, but only on and as of the Execution Date with respect to the
initial Borrowings under the Xxxxxx Facilities) or date of issuance with the
same effect as if made on and as of such date, both immediately before and after
giving effect to the Loans to be made or Letter of Credit or Loan Note Guaranty
to be issued on such date (except to the extent any such representation or
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warranty is expressly stated to have been made as of a specific date, in which
case such representation or warranty shall be true and correct as of such
specified date); and
(c) No Default or Event of Default shall have occurred and be continuing
on such date, both immediately before and after giving effect to the Loans to be
made or Letter of Credit or Loan Note Guaranty to be issued on such date.
Each giving of a Notice of Revolving Borrowing or a Letter of Credit
Notice (and the making of the request for the Borrowing of the Term Loans set
forth in Section 2.2(b)), and the consummation of each Borrowing or issuance of
a Letter of Credit or Loan Note Guaranty, shall be deemed to constitute a
representation by the Borrower that the statements contained in subsections (b)
and (c) above are true, both as of the date of such notice or request and as of
the relevant Borrowing Date or date of issuance.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Lenders to enter into this Agreement and to
induce the Lenders to extend the credit contemplated hereby, the Borrower
represents and warrants to the Agent and the Lenders, both before and after
giving effect to the Transactions, as follows:
6.1 Corporate Organization and Power. Each of the Borrower and its
Subsidiaries (i) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, (ii) has the
full corporate power and authority to execute, deliver and perform the
Transaction Documents to which it is or will be a party, to own and hold its
property and to engage in its business as presently conducted, and (iii) is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction where the nature of its business or the ownership of its
properties requires it to be so qualified, except where the failure to be so
qualified would not, individually or in the aggregate, be reasonably likely to
have a Material Adverse Effect.
6.2 Authorization; Enforceability. Each of the Borrower and its
Subsidiaries has taken, or on the Acquisitions Closing Date will have taken, all
necessary corporate action to execute, deliver and perform each of the
Transaction Documents to which it is or will be a party, and has, or on the
Acquisition Closing Date (or any later date of execution and delivery) will
have, validly executed and delivered each of the Transaction Documents to which
it is or will be a party. This Agreement constitutes, and each of the other
Transaction Documents upon execution and delivery will constitute, the legal,
valid and binding obligation of each of the Borrower and its Subsidiaries that
is a party hereto or thereto, enforceable against it in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally or by general equitable principles.
6.3 No Violation. The execution, delivery and performance by each of the
Borrower and its Subsidiaries of this Agreement and each of the other
Transaction Documents to which it is or will be a party, compliance by it with
the terms hereof and thereof, and the consummation of the Transactions, do not
and will not (i) violate any provision of its certificate of incorporation or
bylaws or contravene any other Requirement of Law applicable to it, (ii)
conflict with, result in a breach of or constitute (with notice, lapse of time
or both) a material default under any material indenture, material agreement or
other material instrument to which it is a party, by which it or any of its
properties is bound or to which it is
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subject, or (iii) except for the Liens granted pursuant to the Security
Documents, result in or require the creation or imposition of any Lien upon any
of its properties or assets. No Material Subsidiary is subject to any
restriction or encumbrance on its ability to make dividend payments or other
distributions in respect of its capital stock, to repay Indebtedness owed to the
Borrower or any other Subsidiary, to make loans or advances to the Borrower or
any other Subsidiary, or to transfer any of its assets or properties to the
Borrower or any other Subsidiary, in each case other than such restrictions or
encumbrances set forth in Schedule 6.3 or existing under or by reason of (i) the
Credit Documents, (ii) the Senior Notes and Senior Indenture and any other
agreement or instrument evidencing or governing any Indebtedness permitted under
clause (ii) of Section 9.2, (iii) applicable Requirements of Law and (iv)
customary non-assignment provisions in any lease governing a leasehold interest.
6.4 Governmental Authorization; Permits. (a) No consent, approval,
authorization or other action by, notice to, or registration or filing with, any
Governmental Authority or other Person is or will be required as a condition to
or otherwise in connection with the due execution, delivery and performance by
each of the Borrower and its Material Subsidiaries of this Agreement or any of
the other Transaction Documents to which it is or will be a party or the
legality, validity or enforceability hereof or thereof, other than (i) consents,
authorizations and filings in connection with the Acquisition that have been (or
on or prior to the Acquisitions Closing Date will have been) made or obtained
and that are (or on the Acquisitions Closing Date will be) in full force and
effect, which consents, authorizations and filings are listed on Schedule 6.4,
and (ii) filings of Uniform Commercial Code financing statements and other
instruments necessary to perfect the Liens created by the Security Documents.
(b) Each of the Borrower and its Material Subsidiaries has, and is in good
standing with respect to, all governmental approvals, licenses, permits and
authorizations necessary to conduct its business as presently conducted and to
own or lease and operate its properties, except for those the failure to obtain
which would not be reasonably likely, individually or in the aggregate, to have
a Material Adverse Effect.
6.5 Litigation. There are no actions, investigations, suits or proceedings
pending or, to the knowledge of the Borrower, threatened, at law, in equity or
in arbitration, before any court, other Governmental Authority or other Person,
(i) against or affecting the Borrower, any of its Subsidiaries or any of their
respective properties that would, if adversely determined, be reasonably likely
to have a Material Adverse Effect, or (ii) with respect to this Agreement, any
of the other Transaction Documents or any of the Transactions.
6.6 Taxes. Each of the Borrower and its Material Subsidiaries has timely
filed all federal and all material state and local tax returns and reports
required to be filed by it and has paid all taxes, assessments, fees and other
charges levied upon it or upon its properties that are shown thereon as due and
payable, other than those that are being contested in good faith and by proper
proceedings and for which adequate reserves have been established in accordance
with Generally Accepted Accounting Principles. Such returns accurately reflect
in all material respects all liability for taxes of the Borrower and its
Subsidiaries for the periods covered thereby. There is no ongoing audit or
examination or, to the knowledge of the Borrower, other investigation by any
Governmental Authority of the tax liability of the Borrower or any of its
Material Subsidiaries, and there is no unresolved claim by any Governmental
Authority concerning the tax liability of the Borrower or any of its Material
Subsidiaries for any period for which tax returns have been or were required to
have been filed, other than claims for which adequate reserves have been
established in accordance with Generally Accepted Accounting Principles. Neither
the Borrower nor any of its Material Subsidiaries has waived or extended or has
been requested to waive or extend the statute of limitations relating to the
payment of any taxes.
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6.7 Subsidiaries. Schedule 6.7 lists as of the Acquisition Closing Date
after giving effect to the Transactions, all of the Subsidiaries of the Borrower
and, as to each such Subsidiary, whether such Subsidiary constitutes a Material
Subsidiary and the percentage ownership (direct and indirect) of the Borrower in
each class of its capital stock and each direct owner thereof. Each Person
indicated on Schedule 6.7 as the direct owner of the outstanding shares of
capital stock of any Subsidiary of the Borrower, other than any listed Person
that is not the Borrower or a Subsidiary, is the sole legal, record and
beneficial owner of, and has good and valid title to, all such capital stock,
free and clear of all Liens. There are no shares of capital stock or warrants,
rights, options or other equity securities of any Subsidiary of the Borrower
outstanding or reserved for any purpose. All outstanding shares of capital stock
of the Borrower and each of its Subsidiaries are duly and validly issued, fully
paid and nonassessable. Neither the Borrower nor any of its Subsidiaries is a
partner or joint venturer in any partnership or joint venture.
6.8 Full Disclosure. All factual information heretofore or
contemporaneously furnished to the Agent or any Lender in writing by or on
behalf of the Borrower or any of its Subsidiaries for purposes of or in
connection with this Agreement, the transactions contemplated hereby and the
other Transactions is, and all other such factual information hereafter
furnished to the Agent or any Lender in writing by or on behalf of the Borrower
or any of its Subsidiaries will be, true and accurate in all material respects
on the date as of which such information is dated or certified (or, if such
information has been amended or supplemented, on the date as of which any such
amendment or supplement is dated or certified) and not made incomplete by
omitting to state a material fact necessary to make the statements contained
therein, in light of the circumstances under which such information was
provided, not misleading.
6.9 Margin Regulations. 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. No
proceeds of the Loans will be used, directly or indirectly, to purchase or carry
any Margin Stock, to extend credit for such purpose or for any other purpose
that would violate or be inconsistent with Regulations G, T, U or X or any
provision of the Exchange Act.
6.10 No Material Adverse Change. There has been no Material Adverse Change
since December 31, 1995, and there exists no event, condition or state of facts
that could reasonably be expected to result in a Material Adverse Change. For
purposes of this Section 6.10 only, (a) the Borrower shall be deemed to have
owned Xxxxxx since September 30, 1995, (b) as it relates to Xxxxxx for the
period from September 30, 1995, to and including the Acquisition Closing Date,
this representation shall be limited to actual knowledge of the Borrower's
Executive Officers, (c) this certification shall not include matters disclosed
to the Agent prior to the Acquisition Closing Date, and (d) as it relates to
Xxxxxx, this certification shall be limited to a material adverse change in the
financial prospects of Xxxxxx.
6.11 Financial Matters. (a) The Borrower has heretofore furnished to each
Lender copies of (i) the audited balance sheets of Xxxxxx as of September 30,
1995, 1994, and 1993, and the related statements of income and cash flows for
the fiscal years then ended, together with the opinion of KPMG Chartered
Accountants CPAs, thereon, and (ii) the unaudited balance sheet of Xxxxxx as of
March 31, 1996, and the related statements of income and cash flows for the
six-month period then ended. Except as fully reflected in the most recent
financial statements referred to above and the notes thereto, to Borrower's
knowledge, there are no material liabilities or obligations with respect to
Xxxxxx of any nature whatsoever (whether absolute, contingent or otherwise and
whether or not due) that are being assumed or acquired by the Borrower pursuant
to the Acquisition, other than liabilities that have been previously disclosed
to the Agent. Neither the Borrower nor any of its Subsidiaries has directly or
indirectly declared, ordered, paid, made or set apart any amounts or property
for any dividend, share acquisition or other distribution, or agreed to do so.
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(b) The Borrower has heretofore furnished to the Agent copies of (i) the
audited consolidated balance sheets of the Parent and its Subsidiaries, as of
December 31, 1995, 1994, and 1993, and the related statements of income,
stockholders' equity and cash flows for the fiscal years then ended, together
with the opinion of Deloitte & Touche, thereon, (ii) the audited consolidated
balance sheet of the Borrower and its Subsidiaries as of December 31, 1995, and
(iii) the unaudited consolidated balance sheet of the Borrower and its
Subsidiaries as of June 30, 1996, and the related statements of income,
stockholders' equity and cash flows for the six-month period then ended. Such
financial statements have been prepared in accordance with Generally Accepted
Accounting Principles (subject, with respect to the unaudited financial
statements, to the absence of notes required by Generally Accepted Accounting
Principles and to normal year-end audit adjustments) and present fairly the
financial condition of the Parent and its Subsidiaries and of the Borrower and
its Subsidiaries on a consolidated basis as of the respective dates thereof and
the consolidated results of operations of the Parent and its Subsidiaries and of
the Borrower and its Subsidiaries for the respective periods then ended. Except
as fully reflected in the most recent financial statements referred to above and
the notes thereto, there are no material liabilities or obligations with respect
to the Parent and its Subsidiaries and of the Borrower or any of its
Subsidiaries of any nature whatsoever (whether absolute, contingent or otherwise
and whether or not due).
(c) The Borrower has heretofore furnished to the Agent copies of (i) the
Annual Statements of each of the Insurance Subsidiaries as of December 31, 1995,
1994 and 1993, and for the fiscal years then ended, each as filed with the
relevant Insurance Regulatory Authority, and (ii) the Quarterly Statements of
each of the Insurance Subsidiaries as of June 30, 1996, and for the six-month
period then ended, each as filed with the relevant Insurance Regulatory
Authority (collectively, the "Historical Statutory Statements"). The Historical
Statutory Statements (including, without limitation, the provisions made therein
for investments and the valuation thereof, reserves, policy and contract claims
and statutory liabilities) have been prepared in accordance with Statutory
Accounting Principles (except as may be reflected in the notes thereto and
subject, with respect to the Quarterly Statements, to the absence of notes
required by Statutory Accounting Principles and to normal year-end adjustments),
were in compliance with applicable Requirements of Law when filed and present
fairly the financial condition of the respective Insurance Subsidiaries covered
thereby as of the respective dates thereof and the results of operations,
changes in capital and surplus and cash flow of the respective Insurance
Subsidiaries covered thereby for the respective periods then ended. Except for
liabilities and obligations disclosed or provided for in the Historical
Statutory Statements (including, without limitation, reserves, policy and
contract claims and statutory liabilities), no Insurance Subsidiary had, as of
the date of its respective Historical Statutory Statements, any material
liabilities or obligations of any nature whatsoever (whether absolute,
contingent or otherwise and whether or not due) that, in accordance with
Statutory Accounting Principles, would have been required to have been disclosed
or provided for in such Historical Statutory Statements. All books of account of
each Insurance Subsidiary fully and fairly disclose all of its material
transactions, properties, assets, investments, liabilities and obligations, are
in its possession and are true, correct and complete in all material respects.
(d) The Borrower has prepared, and has heretofore furnished to each Lender
a copy of, an unaudited consolidated balance sheet of the Borrower as of June
30, 1996, giving pro forma effect to the consummation of the Acquisition, the
extensions of credit under this Agreement, the payment of transaction fees and
expenses related to the foregoing, and the consummation of the other
Transactions, all as if such events had occurred on such date (the "Pro Forma
Balance Sheet"). The Pro Forma Balance Sheet has been prepared in accordance
with Generally Accepted Accounting Principles (subject to the absence of
footnotes required by Generally Accepted Accounting Principles and subject to
normal year-end adjustments) and, subject to stated assumptions made in good
faith and having a reasonable basis set forth
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therein, presents fairly the financial condition of the Borrower on an unaudited
pro forma basis as of the date set forth therein after giving effect to the
consummation of the Transactions as described above.
(e) The Borrower has prepared, and has heretofore furnished to each Lender
a copy of, annual projected balance sheets and statements of income and cash
flows of the Borrower for the five-year period beginning January 1, 1997, giving
effect to the consummation of the Acquisition, the extensions of credit made
under this Agreement, the payment of transaction fees and expenses related to
the foregoing, and the consummation of the other Transactions (the
"Projections"). In the opinion of management of the Borrower, the assumptions
used in preparation of the Projections were reasonable when made and continue to
be reasonable as of the date hereof. The Projections have been prepared in good
faith by the executive and financial personnel of the Borrower and represent a
reasonable estimate of the future performance and financial condition of the
Borrower, subject to the uncertainties and approximations inherent in any
projections.
(f) As of the Acquisition Closing Date, and after giving effect to the
consummation of the Transactions contemplated to occur on the Closing Date, each
of the Borrower and its Subsidiaries (i) will have capital sufficient to carry
on its businesses as conducted and as proposed to be conducted, (ii) will have
assets with a fair saleable value, determined on a going concern basis, (y) not
less than the amount required to pay the probable liability on its existing
debts as they become absolute and matured and (z) greater than the total amount
of its liabilities (including identified contingent liabilities, valued at the
amount that can reasonably be expected to become absolute and matured), and
(iii) will not intend to, and will not believe that it will, incur debts or
liabilities beyond its ability to pay such debts and liabilities as they mature.
6.12 Ownership of Properties. Each of the Borrower and its Material
Subsidiaries (i) holds interests as lessee under valid leases in full force and
effect with respect to all material leased real and personal property used in
connection with its business, (ii) possesses or has rights to or, in the case of
Xxxxxx, will possess or have rights to use on or prior to the Acquisition
Closing Date, licenses, patents, copyrights, trademarks, service marks, trade
names and other assets sufficient to enable it to continue to conduct its and
Xxxxxx'x business substantially as heretofore conducted and without any material
conflict with the rights of others, and (iii) after giving effect to the
Acquisition, has good title to all of its other properties and assets reflected
in the most recent financial statements referred to in Section 6.11(a) (except
as sold or otherwise disposed of since the date thereof in the ordinary course
of business), in each case under (i), (ii), (iii) and (iv) above free and clear
of all Liens other than Permitted Liens. As of the Closing Date and after giving
effect to the Transactions, neither the Borrower nor any of its Material
Subsidiaries owns any fee interest in any real property.
6.13 ERISA. Except to the extent where one or more failures to comply,
individually or in the aggregate, would be reasonably likely to have a Material
Adverse Effect, each Plan is and has been administered in compliance in all
material respects with all applicable Requirements of Law, including, without
limitation, the applicable provisions of ERISA and the Internal Revenue Code. No
ERISA Event has occurred and is continuing or, to the knowledge of the Borrower,
is reasonably expected to occur with respect to any Plan, in either case that
would be reasonably likely, individually or in the aggregate, to have a Material
Adverse Effect. Neither the Borrower nor any ERISA Affiliate has engaged in a
transaction that could reasonably be expected to be subject to Section 4069 or
4212(c) of ERISA, in either instance where the same would be reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect. Neither the
Borrower nor any ERISA Affiliate has incurred any outstanding withdrawal
liability to a Multiemployer Plan which would be reasonably likely to have a
Material Adverse Effect.
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6.14 Environmental Matters. (a) No Hazardous Substances are or have been
generated, used, located, released, treated, disposed of or stored by the
Borrower or any of its Material Subsidiaries or, to the knowledge of the
Borrower, by any other Person or otherwise, in, on or under any portion of any
real property, leased or owned, of the Borrower or any of its Material
Subsidiaries, except in material compliance with all applicable Environmental
Laws, and to the knowledge of the Borrower, no portion of any such real property
has been contaminated by any Hazardous Substance; and no portion of any real
property, leased or owned, of the Borrower or any of its Material Subsidiaries,
to the knowledge of the Borrower, has been or is presently the subject of an
environmental audit, assessment or remedial action.
(b) To the knowledge of the Borrower, (i) no portion of any real property,
leased or owned, of the Borrower or any of its Material Subsidiaries has been
used as or for a mine, a landfill, a dump or other disposal facility, a gasoline
service station, or (other than for petroleum substances stored in the ordinary
course of business) a petroleum products storage facility, (ii) no portion of
such real property or any other real property at any time leased, owned or
operated by the Borrower or any of its Material Subsidiaries has, pursuant to
any Environmental Law, been placed on the "National Priorities List" or "CERCLIS
List" (or any similar federal, state or local list) of sites subject to possible
environmental problems, and (iii) there are not and have never been any
underground storage tanks situated on any real property, leased or owned, of the
Borrower or any of its Material Subsidiaries.
(c) All activities and operations of the Borrower and its Material
Subsidiaries are in compliance with the requirements of all applicable
Environmental Laws, except to the extent the failure so to comply, individually
or in the aggregate, would not be reasonably likely to have a Material Adverse
Effect. Neither the Borrower nor any of its Material Subsidiaries is involved in
any suit, action or proceeding, or has received any notice, complaint or other
request for information from any Governmental Authority or other Person, with
respect to any actual or alleged Environmental Claims that, if adversely
determined, would be reasonably likely, individually or in the aggregate, to
have a Material Adverse Effect; and, to the knowledge of the Borrower, there are
no threatened actions, suits, proceedings or investigations with respect to any
such Environmental Claims, nor any basis therefor.
6.15 Compliance With Laws. Each of the Borrower and its Material
Subsidiaries has timely filed all material reports, documents and other
materials required to be filed by it under all applicable Requirements of Law
with any Governmental Authority, has retained all material records and documents
required to be retained by it under all applicable Requirements of Law, and is
otherwise in compliance with all applicable Requirements of Law in respect of
the conduct of its business and the ownership and operation of its properties,
except for such Requirements of Law the failure to comply with which,
individually or in the aggregate, would not be reasonably likely to have a
Material Adverse Effect.
6.16 Labor Relations. Neither the Borrower nor any of its Material
Subsidiaries is engaged in any unfair labor practice within the meaning of the
National Labor Relations Act of 1947, as amended. There is (i) no unfair labor
practice complaint before the National Labor Relations Board, or grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement, pending or, to the knowledge of the Borrower, threatened against the
Borrower or any of its Material Subsidiaries, (ii) no strike, lock-out,
slowdown, stoppage, walkout or other labor dispute pending or, to the knowledge
of the Borrower, threatened against the Borrower or any of its Material
Subsidiaries and (iii) to the knowledge of the Borrower, no petition for
certification or union election or union organizing activities with respect to
the Borrower or any of its Material Subsidiaries.
6.17 Regulated Industries. Neither the Borrower nor any of its Material
Subsidiaries is (i) an "investment company," a company "controlled" by an
"investment company," or an "investment advisor,"
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within the meaning of the Investment Company Act of 1940, as amended, or (ii) a
"holding company," a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
6.18 Insurance. The assets, properties and business of the Borrower and
its Material Subsidiaries are insured against such hazards and liabilities,
under such coverages and in such amounts, as are customarily maintained by
prudent companies similarly situated and under policies issued by insurers of
recognized responsibility.
6.19 Certain Contracts. Schedule 6.19 lists, as of the Closing Date, each
contract, agreement or commitment, written or oral, to which the Borrower or any
of its Material Subsidiaries is a party, by which any of them or their
respective properties is bound or to which any of them is subject and that (i)
evidences or relates to Indebtedness of the Borrower, (ii) involves aggregate
consideration payable to or by any party thereto of $1,000,000 or more or (iii)
is otherwise material to the business, condition (financial or otherwise),
operations, performance or properties of the Borrower or any of its Material
Subsidiaries, in each case other than insurance and reinsurance agreements
entered into in the ordinary course of business and the Transaction Documents,
and also indicates the parties, subject matter and term thereof. As of the
Closing Date, each such contract is in full force and effect, and neither the
Borrower nor any of its Material Subsidiaries or, to the knowledge of the
Borrower, any other party thereto, is in default under any such contract.
6.20 Security Documents. The provisions of each of the Security Documents
(whether executed and delivered prior to or on the Closing Date or thereafter)
are and will be effective to create in favor of the Agent, for its benefit and
the benefit of the Lenders, upon (i) the initial extension of credit hereunder
and (ii) the filing of appropriately completed Uniform Commercial Code financing
statements and continuations thereof in all required jurisdictions, a valid and
enforceable first priority perfected security interest in and Lien upon all
right, title and interest of the Borrower and its Subsidiaries, as applicable,
in the collateral described therein, subject only to Permitted Liens.
6.21 Transaction Documents. The Borrower has heretofore furnished to each
Lender a true and complete copy of each of the Tender Offer, the Loan Notes, the
Loan Notes Guaranty and any other Acquisition Documents reasonably requested by
the Lenders, in each case together with all schedules and exhibits referred to
therein or delivered pursuant thereto and all amendments, modifications and
waivers relating thereto. As of the Acquisition Closing Date, none of such
Transaction Documents has been amended, modified or supplemented, nor have any
of the provisions thereof been waived, in any material respect other than as
approved in writing by the Agent. All representations and warranties of the
Borrower contained in any of such Transaction Documents were true and correct in
all material respects on and as of the date made and will be true and correct in
all material respects on and as of the Acquisition Closing Date with the same
effect as though made on and as of the Closing Date, except as contemplated by
the terms of such Transaction Documents.
ARTICLE VII
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that, until the termination of the
Commitments, the termination or expiration of all Letters of Credit and the Loan
Notes Guaranty, and the payment in full of
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all principal and interest with respect to the Loans and all Reimbursement
Obligations together with all other amounts then due and owing hereunder:
7.1 Financial Statements. The Borrower will deliver to each Lender:
(a) As soon as available and in any event within forty-five (45) days
after the end of each of the first three fiscal quarters of each fiscal year,
beginning with the fiscal quarter ended September 30, 1996, (i) unaudited
consolidated balance sheets of the Parent and its Subsidiaries and the Borrower
and its Subsidiaries as of the end of such fiscal quarter and unaudited
consolidated and consolidating statements of income and cash flows for the
Parent and its Subsidiaries and the Borrower and its Subsidiaries for the fiscal
quarter then ended and for that portion of the fiscal year then ended, in each
case setting forth comparative consolidated figures as of the end of and for the
corresponding period in the preceding fiscal year, all prepared in accordance
with Generally Accepted Accounting Principles (subject to the absence of notes
required by Generally Accepted Accounting Principles and subject to normal
year-end adjustments) applied on a basis consistent with that of the preceding
quarter or containing disclosure of the effect on the financial condition or
results of operations of any change in the application of accounting principles
and practices during such quarter, and (ii) an unaudited consolidating balance
sheet of the Parent and its Subsidiaries as of the end of such fiscal quarter
and unaudited consolidating statements of income and cash flows for the Parent
and its Subsidiaries for the fiscal quarter then ended, all in reasonable
details;
(b) As soon as available and in any event within ninety (90) days after
the end of each fiscal year, beginning with the fiscal year ending December 31,
1996, (i) an audited consolidated balance sheet of the Parent and its
Subsidiaries and the Borrower and its Subsidiaries as of the end of such fiscal
year and audited consolidated statements of income and cash flows for the Parent
and its Subsidiaries and the Borrower and its Subsidiaries for the fiscal year
then ended, including the applicable notes, in each case setting forth
comparative figures as of the end of and for the preceding fiscal year,
certified by Deloitte & Touche, CPAs or another independent certified public
accounting firm of recognized national standing reasonably acceptable to the
Required Lenders, together with (y) a report thereon by such accountants that is
not qualified as to going concern or scope of audit and to the effect that such
financial statements present fairly the consolidated financial condition and
results of operations of the Parent and its Subsidiaries and the Borrower and
its Subsidiaries, respectively, as of the dates and for the periods indicated in
accordance with generally accepted accounting principles applied on a basis
consistent with that of the preceding year or containing disclosure of the
effect on the financial position or results of operations of any change in the
application of accounting principles and practices during such year, and (z) a
report by such accountants to the effect that, based on and in connection with
their examination of such financial statements, they obtained no knowledge of
the occurrence or existence of any Default or Event of Default relating to
accounting or financial reporting matters, or a statement specifying the nature
and period of existence of any such Default or Event of Default disclosed by
their audit; provided, however, that such accountants shall not be liable by
reason of the failure to obtain knowledge of any Default or Event of Default
that would not be disclosed or revealed in the course of their audit
examination, and (ii) an unaudited consolidating balance sheet of the Parent and
its Subsidiaries as of the end of such fiscal year and unaudited consolidating
statements of income and cash flows for the Parent and its Subsidiaries for the
fiscal year then ended, all in reasonable detail; and
(c) As soon as available and in any event within ten (10) days of receipt
thereof by Xxxxxx, for each fiscal year of Xxxxxx beginning with the fiscal year
ending September 30, 1996, the audited consolidated financial statements of
Xxxxxx and its Subsidiaries as of the end of and for such fiscal year, including
the applicable notes and all other related reports and statements to the extent
provided and
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certified by KPMG Chartered Accountants or another independent certified public
accounting firm of recognized national standing in the United Kingdom reasonably
acceptable to the Required Lenders.
7.2 Statutory Financial Statements. The Borrower will deliver to each
Lender:
(a) As soon as available and in any event within forty-five (45) days
after the end of each of the first three fiscal quarters of each fiscal year,
beginning with the fiscal quarter ending September 30, 1996, a Quarterly
Statement of each Insurance Subsidiary as of the end of such fiscal quarter and
for that portion of the fiscal year then ended, in the form filed with the
relevant Insurance Regulatory Authority, prepared in accordance with Statutory
Accounting Principles applied on a basis consistent with that of the preceding
quarter or containing disclosure of the effect on the financial condition or
results of operations of any change in the application of accounting principles
and practices during such quarter; and
(b) As soon as available and in any event within sixty (60) days after the
end of each fiscal year, beginning with the fiscal year ending December 31,
1996, an Annual Statement of each Insurance Subsidiary as of the end of such
fiscal year and for the fiscal year then ended, in the form filed with the
relevant Insurance Regulatory Authority, prepared in accordance with Statutory
Accounting Principles applied on a basis consistent with that of the preceding
year or containing disclosure of the effect on the financial condition or
results of operations of any change in the application of accounting principles
and practices during such year;
(c) As soon as available and in any event within 120 days after the end of
each fiscal year, beginning with the fiscal year ending December 31, 1996, an
unaudited consolidated or combined Annual Statement for Insurance Subsidiaries
as of the end of such fiscal year and for the fiscal year ended, in each case
setting forth comparative consolidated figures as of the end of and for the
preceding fiscal year, all prepared in accordance with Statutory Accounting
Principles applied on a basis consistent with that of the preceding year or
containing disclosure of the effect on the financial condition or results of
operations of any change in the application of accounting principles and
practices during such year; and
(d) As soon as available and in any event within 155 days after the end of
each fiscal year, beginning with the fiscal year ending December 31, 1996 (but
only if and to the extent required by the applicable Insurance Regulatory
Authority with regard to any Insurance Subsidiary), a certification by the
independent certified public accounting firm referred to in Section 7.1(b) as to
the statutory financial statements of each such Insurance Subsidiary as of the
end of such fiscal year and for the fiscal year then ended, together with a
report thereon by such accountants that is not qualified as to going concern or
scope of audit and to the effect that such financial statements present fairly
the consolidated financial condition and results of operations of such Insurance
Subsidiary as of the date and for the period indicated in accordance with
statutory accounting principles applied on a basis consistent with that of the
preceding year or containing disclosure of the effect on the financial position
or results of operations of any change in the application of accounting
principles and practices during such year.
7.3 Other Business and Financial Information. The Borrower will deliver to
each Lender:
(a) Concurrently with each delivery of the financial statements described
in Sections 7.1(a) and (b) and 7.2, a Compliance Certificate in the form of
Exhibit D-1 (in the case of the financial statements described in Section 7.1)
or Exhibit D-2 (in the case of the financial statements described in Section
7.2) with respect to the period covered by the financial statements then being
delivered, executed by the chief financial officer, vice president - finance or
treasurer of the Borrower, together, in the case of the financial statements
described in Section 7.1, with a Covenant Compliance Worksheet reflecting the
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computation of the financial covenants set forth in Sections 8.1 and 8.2 as of
the last day of the period covered by such financial statements and a Revolving
Commitment Worksheet, and in the case of the financial statements described in
Section 7.2, with a Covenant Compliance Worksheet reflecting the computation of
the financial covenants set forth in Sections 8.3, 8.4 and 8.5 as of the last
day of the period covered by such financial statements;
(b) Promptly upon filing with the relevant Insurance Regulatory Authority
and in any event within ninety (90) days after the end of each fiscal year,
beginning with the fiscal year ended December 31, 1996, a copy of each Insurance
Subsidiary's "Statement of Actuarial Opinion" (or equivalent information should
the relevant Insurance Regulatory Authority not require such a statement) as to
the adequacy of such Insurance Subsidiary's loss reserves for such fiscal year,
together with a copy of its management discussion and analysis in connection
therewith, each in the format prescribed by the applicable insurance laws of
such Insurance Subsidiary's jurisdiction of domicile;
(c) Promptly upon the sending, filing or receipt thereof, copies of (i)
all financial statements, reports, notices and proxy statements that the Parent
or any of its Subsidiaries shall send or make available generally to its
shareholders, (ii) all reports (other than earnings press releases) on Form
10-Q, Form 10-K or Form 8-K (or their successor forms) or registration
statements and prospectuses (other than on Form S- 8 or its successor form) that
the Parent or any of its Subsidiaries shall render to or file with the
Securities and Exchange Commission, the National Association of Securities
Dealers, Inc. or any national securities exchange, (iii) all reports on Form A
or Form B (or their successor forms) that any Insurance Subsidiary shall file
with any Insurance Regulatory Authority, (iv) all significant reports on
examination or similar significant reports, financial examination reports or
market conduct examination reports by the NAIC or any Insurance Regulatory
Authority or other Governmental Authority with respect to any Insurance
Subsidiary's insurance business, and (v) all significant filings made under
applicable state insurance holding company acts by the Borrower or any of its
Material Subsidiaries, including, without limitation, filings seeking approval
of transactions with Affiliates;
(d) Promptly upon receipt thereof, copies of any "management letter"
submitted to the Parent or any of its Subsidiaries by its certified public
accountants in connection with each annual, interim or special audit, and
promptly upon completion thereof, any response reports from the Borrower or any
such Subsidiary in respect thereof;
(e) Promptly upon (and in any event within five (5) Business Days after)
obtaining knowledge thereof, written notice of any of the following:
(i) the occurrence of any Default or Event of Default, together with
a written statement of the chief executive officer or chief financial
officer of the Borrower specifying the nature of such Default or Event of
Default, the period of existence thereof and the action that the Borrower
has taken and proposes to take with respect thereto;
(ii) the institution or threatened institution of any action, suit,
investigation or proceeding against or affecting the Borrower or any of
its Material Subsidiaries, including any such investigation or proceeding
by any Governmental Authority (other than routine periodic inquiries,
investigations or reviews), that would, if adversely determined, be
reasonably likely, individually or in the aggregate, to have a Material
Adverse Effect, and any material development in any litigation or other
proceeding previously reported pursuant to this Section 7.3(e)(ii);
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(iii) the receipt by the Borrower or any of its Material
Subsidiaries from any Governmental Authority of any notice asserting any
failure by the Borrower or any of its Subsidiaries to be in compliance
with applicable Requirements of Law or that threatens the taking of any
action against the Borrower or such Subsidiary or sets forth circumstances
that, if taken or adversely determined, would be reasonably likely to have
a Material Adverse Effect;
(iv) the occurrence of any ERISA Event, together with (i) a written
statement of the chief executive officer or chief financial officer of the
Borrower specifying the details of such ERISA Event and the action that
the Borrower has taken and proposes to take with respect thereto, (ii) a
copy of any notice with respect to such ERISA Event that may be required
to be filed with the PBGC and (iii) a copy of any notice delivered by the
PBGC to the Borrower or such ERISA Affiliate with respect to such ERISA
Event;
(v) the occurrence of any decrease in (y) the rating given by either
Standard & Poor's or Xxxxx'x with respect to the Borrower's senior
publicly traded Indebtedness or (z) the rating given to any Insurance
Subsidiary by A.M. Best & Company;
(vi) the occurrence of any material default under, or any proposed
or threatened termination or cancellation of, any material contract or
agreement to which the Borrower or any of its Material Subsidiaries is a
party, the termination or cancellation of which would be reasonably likely
to have a Material Adverse Effect; and
(vii) any other matter or event that has, or would be reasonably
likely to have, a Material Adverse Effect, together with a written
statement of the chief executive officer or chief financial officer of the
Borrower setting forth the nature and period of existence thereof and the
action that the Borrower has taken and proposes to take with respect
thereto;
(f) Within five (5) Business Days after request therefor by any Lender, if
theretofore prepared and delivered to the Borrower, or within ninety (90) days
after request therefor by the Required Lenders from time to time (but not more
than once per year), if not theretofore prepared and delivered to the Borrower,
in either case at the Borrower's expense, an actuarial review and valuation
statement of, and opinion as to the adequacy of, each Insurance Subsidiary's
loss and loss adjustment expense reserve positions as of the end of such year
with respect to the insurance business then in force, and covering such other
subjects as are customary in actuarial reviews, prepared by Xxxxxxxx & Xxxxxxxxx
or another independent actuarial firm reasonably acceptable to the Required
Lenders, all in form and substance reasonably satisfactory to the Required
Lenders; and
(g) As promptly as reasonably possible, such other information about the
business, condition (financial or otherwise), operations or properties of the
Borrower or any of its Subsidiaries (including any Plan and any information
required to be filed under ERISA, and including any statements, audits or other
reports submitted by or on behalf of the Borrower or any of its Subsidiaries to
any state Governmental Authority) as the Agent or any Lender may from time to
time reasonably request.
7.4 Corporate Existence; Franchises; Maintenance of Properties. The
Borrower will, and will cause each of its Material Subsidiaries to, (i) maintain
and preserve in full force and effect its corporate existence, except as
expressly permitted otherwise by Section 9.1, (ii) obtain, maintain and preserve
in full force and effect all other rights, franchises, licenses, permits,
certifications, approvals and authorizations required by Governmental
Authorities and necessary to the ownership, occupation or use of its properties
or the conduct of its business, except to the extent the failure to do so would
not be reasonably likely to
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have a Material Adverse Effect, and (iii) keep all material properties in good
working order and condition (normal wear and tear excepted) and from time to
time make all necessary repairs to and renewals and replacements of such
properties, except to the extent that any of such properties are obsolete or are
being replaced.
7.5 Compliance with Laws. The Borrower will, and will cause each of its
Material Subsidiaries to, comply in all respects with all Requirements of Law
applicable in respect of the conduct of its business and the ownership and
operation of its properties, except to the extent the failure so to comply would
not be reasonably likely to have a Material Adverse Effect.
7.6 Payment of Obligations. The Borrower will, and will cause each of its
Material Subsidiaries to, (i) pay all liabilities and obligations as and when
due (subject to any applicable subordination provisions), except to the extent
failure to do so would not be reasonably likely to have a Material Adverse
Effect, and (ii) pay and discharge all taxes, assessments and governmental
charges or levies imposed upon it, upon its income or profits or upon any of its
properties, prior to the date on which penalties would attach thereto, and all
lawful claims that, if unpaid, might become a Lien upon any of the properties of
the Borrower or any of its Subsidiaries; provided, however, that neither the
Borrower nor any of its Subsidiaries shall be required to pay any such tax,
assessment, charge, levy or claim that is being contested in good faith and by
proper proceedings and as to which the Borrower or such Subsidiary is
maintaining adequate reserves with respect thereto in accordance with Generally
Accepted Accounting Principles.
7.7 Insurance. The Borrower will, and will cause each of its Material
Subsidiaries to, maintain with financially sound and reputable insurance
companies insurance with respect to its assets, properties and business, against
such hazards and liabilities, of such types and in such amounts, as is
customarily maintained by companies in the same or similar businesses similarly
situated, and maintain such other or additional insurance on such terms and
subject to such conditions as may be required under any Security Document.
7.8 Maintenance of Books and Records; Inspection. The Borrower will, and
will cause each of its Material Subsidiaries to, (i) maintain adequate books,
accounts and records, in which full, true and correct entries shall be made of
all material financial transactions in relation to its business and properties,
and prepare all financial statements required under this Agreement, in each case
in accordance with Applicable Accounting Principles and in compliance with the
requirements of any Governmental Authority having jurisdiction over it, and (ii)
permit employees or agents of the Agent or any Lender to inspect its properties
and examine or audit its books, records, working papers and accounts and make
copies and memoranda of them, and to discuss its affairs, finances and accounts
with its officers and employees and, upon notice to the Borrower, the
independent public accountants of the Borrower and its Subsidiaries (and by this
provision the Borrower authorizes such accountants to discuss the finances and
affairs of the Borrower and its Subsidiaries), all at such times and from time
to time, upon reasonable notice and during business hours, as may be reasonably
requested.
7.9 Further Assurances. The Borrower will, and will cause each of its
Subsidiaries to, make, execute, endorse, acknowledge and deliver any amendments,
modifications or supplements hereto and restatements hereof and any other
agreements, instruments or documents, and take any and all such other actions,
as may from time to time be reasonably requested by the Agent or the Required
Lenders to perfect and maintain the validity and priority of the Liens granted
pursuant to the Security Documents and to effect, confirm or further assure or
protect and preserve the interests, rights and remedies of the Agent and the
Lenders under this Agreement and the other Credit Documents.
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ARTICLE VIII
FINANCIAL COVENANTS
The Borrower covenants and agrees that, until the termination of the
Commitments, the termination or expiration of all Letters of Credit and the Loan
Notes Guaranty, and the payment in full of all principal and interest with
respect to the Loans and all Reimbursement Obligations and Loan Notes
Reimbursement Obligations and Loan Notes Reimbursement Obligations together with
all other amounts then due and owing hereunder:
8.1 Capitalization Ratio. The Borrower will not permit the Capitalization
Ratio to be greater than 0.375 to 1.0 as of the last day of any fiscal quarter,
beginning with the fiscal quarter ending December 31, 1996.
8.2 Fixed Charge Coverage Ratio. The Borrower will not permit the Fixed
Charge Coverage Ratio to be less than 1.4 to 1.0 as of the last day of any
fiscal quarter, beginning with the fiscal quarter ending December 31, 1996.
8.3 Operating Leverage. The Borrower will not permit the ratio of (y) the
Insurance Subsidiaries' Consolidated Net Written Premiums for any period of four
consecutive fiscal quarters beginning with the four quarters ending December 31,
1996, to (z) the Statutory Surplus of Reinsurance as of the end of such fiscal
period to exceed 2.0 to 1.0.
8.4 Statutory Surplus. The Borrower will cause the Statutory Surplus of
Reinsurance at all times from and after the Execution Date to be not less than
$180,000,000.
8.5 Risk-Based Capital. The Borrower will not permit the respective "total
adjusted Capital" (within the meaning of the Risk-Based Capital for Insurers
Model Act as promulgated by the NAIC as of the date hereof (the "Model Act")) of
Reinsurance as of the last day of any fiscal year, beginning with the fiscal
year ended December 31, 1996, to be less than 150% of the applicable "Company
Action Level RBC" (within the meaning of the Model Act) for Reinsurance as of
such date.
ARTICLE IX
NEGATIVE COVENANTS
The Borrower covenants and agrees that, until the termination of the
Commitments, the termination or expiration of all Letters of Credit and the Loan
Notes Guaranty, and the payment in full of all principal and interest with
respect to the Loans and all Reimbursement Obligations and Loan Note Obligations
together with all other amounts then due and owing hereunder:
9.1 Merger; Consolidation. The Borrower will not, and will not permit or
cause any of its Material Subsidiaries to, liquidate, wind up or dissolve, or
enter into any consolidation, merger or other combination, or agree to do any of
the foregoing; provided, however, that:
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(i) the Borrower may merge or consolidate with another Person so
long as (y) the Borrower is the surviving corporation, and (z) immediately
after giving effect thereto, no Default or Event of Default would exist;
and
(ii) any Subsidiary may merge or consolidate with another Person so
long as (y) the surviving corporation is the Borrower or a Wholly Owned
Subsidiary and (z) immediately after giving effect thereto, no Default or
Event of Default would exist.
9.2 Indebtedness. The Borrower will not create, incur, assume or suffer to
exist, any Indebtedness that ranks senior in any respect to the Indebtedness
under this Agreement (or any portion thereof) as to payment or performance or as
to dividends or distributions upon bankruptcy, insolvency, liquidation or
winding-up, and will not permit or cause any of its Material Subsidiaries to
create, incur, assume or suffer to exist any Indebtedness other than in the case
of either the Borrower or any Material Subsidiary (it being understood that this
Section 9.2 shall not apply to any Subsidiary of the Borrower for so long as
such Subsidiary is not a Material Subsidiary):
(i) accrued expenses, current trade or other accounts payable and
other current liabilities arising in the ordinary course of business and
not incurred through the borrowing of money, provided that the same shall
be paid when due except to the extent being contested in good faith and by
appropriate proceedings;
(ii) loans and advances by the Borrower and its Subsidiaries to
Material Subsidiaries that are Wholly Owned Subsidiaries of the Borrower
or by any Wholly Owned Subsidiaries to the Borrower, provided that any
such loan or advance to the Borrower is subordinated in right and time of
payment to the Obligations;
(iii) Indebtedness of the Borrower and its Subsidiaries of the type
described in, and secured by Liens of the types described in, clause (vi)
of Section 9.3, in an aggregate principal amount at all times in
compliance with the limitation set forth in such clause;
(iv) Indebtedness under reimbursement obligations in respect of
letters of credit issued for the benefit of an Insurance Subsidiary in the
ordinary course of their business to support the payment of obligations
arising under insurance and reinsurance contracts;
(v) Indebtedness of Beechwood under the Loan Notes and in respect of
the Beechwood Escrow and Security Agreement and this Agreement;
(vi) Indebtedness of Xxxxxx under loan notes issued and outstanding
as of the Execution Date;
(vii) Indebtedness of any Subsidiary reflected (including the fact
and nature of any security for such Indebtedness) on the most recent
financial statements delivered to the Agent pursuant to Sections 6.11(a)
or (b);
(viii) Indebtedness set forth on Schedule 9.2; and
(ix) unsecured Indebtedness (other than Indebtedness specified in
clauses (i) through (viii) above and other than Indebtedness of the Parent
or Borrower) in an aggregate principal amount not exceeding $3,000,000 at
any time outstanding.
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9.3 Liens. The Borrower will not, and will not permit or cause any of its
Subsidiaries to, directly or indirectly, make, create, incur, assume or suffer
to exist, any Lien upon or with respect to any part of its property or assets,
whether now owned or hereafter acquired, or agree to do any of the foregoing,
other than the following (collectively, "Permitted Liens"):
(i) Liens created under the Security Documents;
(ii) Liens in existence on the Closing Date and set forth on
Schedule 9.3;
(iii) Liens imposed by law, such as Liens of carriers, warehousemen,
mechanics, materialmen and landlords, and other similar Liens incurred in
the ordinary course of business for sums not constituting borrowed money
that are not overdue for a period of more than thirty (30) days or that
are being contested in good faith by appropriate proceedings and for which
adequate reserves have been established in accordance with Generally
Accepted Accounting Principles;
(iv) Liens (other than any Lien imposed by ERISA, the creation or
incurrence of which would result in an Event of Default under Section
10.1(i)) incurred in the ordinary course of business in connection with
insurance and reinsurance agreements, worker's compensation, unemployment
insurance or other forms of governmental insurance or benefits, or to
secure the performance of letters of credit, bids, tenders, statutory
obligations, surety and appeal bonds, leases, government contracts and
other similar obligations (other than obligations for borrowed money)
entered into in the ordinary course of business;
(v) Liens for taxes, assessments or other governmental charges or
statutory obligations that are not delinquent or remain payable without
any penalty or that are being contested in good faith by appropriate
proceedings and for which adequate reserves have been established in
accordance with Generally Accepted Accounting Principles;
(vi) Purchase money Liens upon property used by the Borrower or any
of its Subsidiaries in the ordinary course of its business, securing
Indebtedness incurred solely to pay all or a portion of the purchase price
thereof (including in connection with capital leases); provided that the
aggregate principal amount at any time outstanding of all Indebtedness
secured by such Liens does not exceed $10,000,000; and provided further
that any such Lien (i) shall attach to such property concurrently with or
within ten (10) days after the acquisition thereof by the Borrower or such
Subsidiary, (ii) shall not exceed the lesser of (y) the fair market value
of such property or (z) the cost thereof to the Borrower or such
Subsidiary and (iii) shall not encumber any other property of the Borrower
or any of its Subsidiaries;
(vii) Any attachment or judgment Lien not constituting an Event of
Default under Section 10.1(h) that is being contested in good faith by
appropriate proceedings and for which adequate reserves have been
established in accordance with Generally Accepted Accounting Principles;
(viii) With respect to any real property occupied by the Borrower or
any of its Subsidiaries, all easements, rights of way, licenses and
similar encumbrances on title that do not materially impair the use of
such property for its intended purposes;
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(ix) Liens on assets acquired in an acquisition to the extent such
Liens were in existence on the date of such acquisition and were not
incurred in contemplation of the acquisition; and
(x) Liens on assets of any of the Wholly Owned Subsidiaries securing
Indebtedness between the Borrower and one or more Wholly Owned
Subsidiaries, or between two or more Wholly Owned Subsidiaries.
9.4 Disposition of Assets. The Borrower will not, and will not permit or
cause any of its Subsidiaries to, sell, assign, lease, convey, transfer or
otherwise dispose of (whether in one or a series of transactions) all or any
portion of its assets, business or properties (including, without limitation,
any capital stock of or other ownership interests in any Subsidiary), or enter
into any arrangement with any Person providing for the lease by the Borrower or
any Subsidiary as lessee of any asset that has been sold or transferred by the
Borrower or such Subsidiary to such Person, or agree to do any of the foregoing,
except for:
(i) sales of investment assets in the ordinary course of business;
(ii) the sale or exchange of used or obsolete equipment to the
extent (y) the proceeds of such sale are applied towards, or such
equipment is exchanged for, similar replacement equipment or (z) such
equipment is no longer necessary for the operations of the Borrower or its
applicable Subsidiary in the ordinary course of business;
(iii) the sale, lease or other disposition of assets by a Subsidiary
of the Borrower to the Borrower or to another Wholly Owned Subsidiary, to
the extent permitted by applicable Requirements of Law and each relevant
Insurance Regulatory Authority, provided that immediately after giving
effect thereto, no Default or Event of Default would exist; and
(iv) the sale or disposition of any assets other than the stock or
substantially all the assets of a Material Subsidiary or any Material
Asset, provided that, immediately after giving effect thereto, no Default
or Event of Default would exist; and
(v) the sale by Parent or Reinsurance of the stock of Beechwood;
provided that (i) the Parent and its Wholly Owned Subsidiaries shall at
all times own at least forty-five percent (45%) of the voting control and
value of Beechwood; (ii) no Person or group of Persons acting in concert
as a partnership or other groups shall be the "beneficial owner" (within
the meaning of such term under Rule 13d-3 under the Exchange Act) of
securities of Beechwood representing twenty-five percent (25%) or more of
the combined voting power of the then outstanding securities of Beechwood
having the right to vote in the election of directors; and (iii) prior to
any such sale, the Required Lenders, in their reasonable discretion, shall
be satisfied, the evidence of which shall be in writing, with the
Borrower's assurances that its positive cash flow will not be materially
adversely affected as a result of such sale.
9.5 Investments; Acquisitions. The Borrower will not, and will not permit
or cause any of its Subsidiaries to, directly or indirectly, purchase, own,
invest in or otherwise acquire any capital stock, evidence of indebtedness or
other obligation or security or any interest whatsoever in any other Person, or
make or permit to exist any loans, advances or extensions of credit to, or any
investment in cash or by delivery of property in, any other Person, or purchase
or otherwise acquire (whether in one or a series of related transactions) any
portion of the assets, business or properties of another Person, or create or
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acquire any Subsidiary, or become a partner or joint venturer in any partnership
or joint venture (collectively, "Investments"), or make a commitment or
otherwise agree to do any of the foregoing, if, as a result of any such
Investment, the amount of the Cash Equivalents and Investment Grade Securities
owned by the Parent and its Subsidiaries would be less than eighty-five percent
(85%) of the total Invested Assets of the Parent and its Subsidiaries determined
as of the end of the most recent fiscal quarter. For purposes of the
determination of total Invested Assets under this Section 9.5, for so long as
the financial statements of Beechwood and its Subsidiaries are not consolidated
with those of the Parent and its other Subsidiaries, then for each of the four
quarters ending on or prior to September 30, 1997, twenty-five percent (25%) of
Parent's and Reinsurance's combined investment in the equity and debt of
Beechwood, as reported on the financial statements of the Parent and its
Subsidiaries as of such quarter end, shall be disregarded.
9.6 Restricted Payments. For so long as an Event of Default shall have
occurred and be continuing: (a) the Borrower will not, and will not permit or
cause any of its Subsidiaries to, directly or indirectly, declare or make any
dividend payment, or make any other distribution of cash, property or assets, in
respect of any of its capital stock or any warrants, rights or options to
acquire its capital stock, or purchase, redeem, retire or otherwise acquire for
value any shares of its capital stock or any warrants, rights or options to
acquire its capital stock, or set aside funds for any of the foregoing, other
than dividends or distributions to the Borrower or any Wholly Owned Subsidiary
of the Borrower; and
(b) The Borrower will not, and will not permit or cause any of its
Subsidiaries to, make (or give any notice in respect of) any voluntary or
optional payment or prepayment of principal on, or directly or indirectly make
any voluntary or optional redemption (including pursuant to any change of
control provision), retirement, defeasance or other acquisition for value of,
any of the Senior Notes, or make any deposit or otherwise set aside funds for
any of the foregoing purposes.
9.7 Transactions with Affiliates. The Borrower will not, and will not
permit or cause any of its Material Subsidiaries to, enter into any transaction
(including, without limitation, any purchase, sale, lease or exchange of
property or the rendering of any service) with any officer, director, or other
Affiliate of the Borrower or any Subsidiary, except in the ordinary course of
its business and upon fair and reasonable terms that are no less favorable to it
than would obtain in a comparable arm's length transaction with a Person other
than an Affiliate of the Borrower or such Material Subsidiary; provided,
however, that nothing contained in this Section shall prohibit:
(i) transactions described on Schedule 9.7 or otherwise expressly
permitted under this Agreement;
(ii) the consummation of the Transactions;
(iii) transactions that are expressly contemplated by the
Acquisition Documents and that are not prohibited by any other provision
of this Agreement or any other Credit Document;
(iv) the payment by the Borrower, Parent or any of the Subsidiaries
of fees and compensation to, the entering into any employment agreements
or compensation arrangements with, or the adoption of any stock option and
similar plans and issuance of stock rights and options thereunder to, any
director or officer or the Borrower, Parent or Subsidiary thereof; and
(v) any transaction between or among any of the Borrower and its
Wholly Owned Subsidiaries, other than Subsidiaries that are not Material
Subsidiaries.
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9.8 Lines of Business. The Borrower will not, and will not permit or cause
any of its Material Subsidiaries to, engage in or conduct any business or other
activity other than the property and casualty insurance and reinsurance
businesses and other businesses and activities in which it is engaged or
licensed on the date hereof or a business reasonably incidental or related
thereto.
9.9 Certain Amendments. The Borrower will not, and will not permit or
cause any of its Subsidiaries to, (i) amend, modify or waive, or permit the
amendment, modification or waiver of, any provision of the Senior Indenture or
the Senior Notes, if such amendment, modification, waiver or amendment would
accelerate the principal or interest payment schedule or increase the interest
rate thereunder, create or grant any Liens or encumber any additional assets, or
have any adverse impact on the rights of the Lenders, or (ii) at any time after
the Acquisition Closing Date, amend, modify or waive, or permit the amendment,
modification or waiver of, (x) any provision of the Loan Notes Instrument, the
Loan Notes, or the Loan Notes Guaranty without the consent of the Issuing Bank,
Tranche B Lenders whose Tranche B Commitment Percentages in the aggregate equal
or exceed sixty- six and two-thirds percent (66 2/3%) and, if the Revolver
Guaranty Exposure is greater than zero, Revolving Lenders whose Revolving
Commitment Percentages in the aggregate equal or exceed sixty-six and two-thirds
percent (66 2/3%), and (y) any material provision of any other Acquisition
Document without the consent of the Required Lenders.
9.10 Limitation on Certain Restrictions. The Borrower will not, and will
not permit or cause any of its Subsidiaries to, directly or indirectly, create
or otherwise cause or suffer to exist or become effective any restriction or
encumbrance on (i) the ability of the Borrower and its Subsidiaries to perform
and comply with their respective obligations under the Credit Documents or (ii)
the ability of any Subsidiary of the Borrower to make any dividend payments or
other distributions in respect of its capital stock, except as set forth on
Schedule 6.3, to repay Indebtedness owed to the Borrower or any other
Subsidiary, to make loans or advances to the Borrower or any other Subsidiary,
or to transfer any of its assets or properties to the Borrower or any other
Subsidiary, in each case other than such restrictions or encumbrances existing
under or by reason of (i) the Credit Documents, (ii) the Senior Notes and Senior
Indenture, (iii) applicable Requirements of Law and (iv) customary
non-assignment provisions in any lease governing a leasehold interest.
9.11 No Other Negative Pledges. The Borrower will not, and will not permit
or cause any of its Subsidiaries to, directly or indirectly, enter into or
suffer to exist any agreement or restriction that prohibits or imposes any
conditions upon the creation, incurrence or assumption of any Lien upon or with
respect to any part of its property or assets, whether now owned or hereafter
acquired, or agree to do any of the foregoing, other than as set forth in (i)
this Agreement and the Security Documents and (ii) the Senior Notes, Senior Note
Indenture, the Contingent Interest Notes and the Contingent Interest Note
Indenture.
9.12 Fiscal Year. The Borrower will not, and will not permit or cause any
of its Subsidiaries to, change the ending date of its fiscal year to a date
other than December 31, except that the ending date of the fiscal year of Xxxxxx
and its Subsidiaries may be September 30.
9.13 Accounting Changes. The Borrower will not, and will not permit or
cause any of its Material Subsidiaries to, make or permit any material change in
its accounting policies or reporting practices, except as may be required by
Applicable Accounting Principles.
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ARTICLE X
EVENTS OF DEFAULT
10.1 Events of Default. The occurrence of any one or more of the following
events shall constitute an "Event of Default":
(a) The Borrower shall fail to pay when due any interest on any Loan, any
Reimbursement Obligation, any fee or any other Obligation , other than
principal, and such failure shall continue for three (3) or more Business Days,
or fail to pay any principal of any Loan when due;
(b) The Borrower shall fail (after any grace or notice periods provided
therein) to observe, perform or comply with any condition, covenant or agreement
contained in any of Sections 2.14, 7.3(e)(i), 7.4(i), 7.9, Article VIII or
Article IX, other than Sections 9.2, 9.3, or 9.5;
(c) The Borrower or any of its Material Subsidiaries, or the Parent, shall
fail to observe, perform or comply with any condition, covenant or agreement
contained in this Agreement or any of the other Credit Documents other than
those enumerated in subsections (a) and (b) above, and such failure shall
continue unremedied for any grace period specifically applicable thereto or, if
no such grace period is applicable, for a period of thirty (30) days after the
earlier of (i) the date on which the Borrower acquires knowledge thereof and
(ii) the date on which written notice thereof is delivered by the Agent or any
Lender to the Borrower;
(d) Any representation or warranty made or deemed made by or on behalf of
the Borrower, any of its Subsidiaries or the Parent in this Agreement, any of
the other Transaction Documents or in any certificate, instrument, report or
other document furnished in connection herewith or therewith or in connection
with the transactions contemplated hereby or thereby shall prove to have been
false or misleading in any material respect as of the time made, deemed made or
furnished;
(e) The Borrower or any of its Material Subsidiaries shall (i) fail to pay
when due (whether by scheduled maturity, acceleration or otherwise and after
giving effect to any applicable grace period) any principal of or interest on
any Indebtedness (other than the Indebtedness incurred pursuant to this
Agreement) having an aggregate principal amount of at least $1,000,000; or (ii)
fail to observe, perform or comply with any condition, covenant or agreement
contained in any agreement or instrument evidencing or relating to any such
Indebtedness having an aggregate principal amount of at least $1,000,000, or any
other event shall occur or condition exist in respect thereof, and the effect of
such failure, event or condition is to cause, or permit the holder or holders of
such Indebtedness (or a trustee or agent on its or their behalf) to cause (with
the giving of notice, lapse of time, or both), such Indebtedness to become due,
or to be prepaid, redeemed, purchased or defeased, prior to its stated maturity,
unless within the applicable cure period such default is waived or cured;
(f) The Borrower or any of its Material Subsidiaries shall (i) file a
voluntary petition or commence a voluntary case seeking liquidation, winding-up,
reorganization, dissolution, arrangement, readjustment of debts or any other
relief under the Bankruptcy Code or under any other applicable bankruptcy,
insolvency or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to controvert in a timely and appropriate manner, any
petition or case of the type described in subsection (g) below, (iii) apply for
or consent to the appointment of or taking possession by a custodian, trustee,
receiver or similar official for or of itself or all or a substantial part of
its properties or assets, (iv) fail generally, or
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admit in writing its inability, to pay its debts generally as they become due,
(v) make a general assignment for the benefit of creditors or (vi) take any
corporate action to authorize or approve any of the foregoing;
(g) Any involuntary petition or case shall be filed or commenced against
the Borrower or any of its Material Subsidiaries seeking liquidation,
winding-up, reorganization, dissolution, arrangement, readjustment of debts, the
appointment of a custodian, trustee, receiver or similar official for it or all
or a substantial part of its properties or any other relief under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, and such petition or case shall continue undismissed and
unstayed for a period of sixty (60) days; or an order, judgment or decree
approving or ordering any of the foregoing shall be entered in any such
proceeding;
(h) Any one or more money judgments, writs or warrants of attachment,
executions or similar processes involving an aggregate amount (exclusive of
amounts fully bonded or covered by insurance as to which the surety or insurer,
as the case may be, has acknowledged its liability in writing) in excess of
$5,000,000 shall be entered or filed against the Borrower or any of its
Subsidiaries or any of their respective properties and the same shall not be
dismissed, stayed or discharged for a period of thirty (30) days;
(i) Any ERISA Event shall occur or exist with respect to any Plan or
Multiemployer Plan, and such ERISA Event, together with all other ERISA Events
then existing, if any, would be reasonably likely to have a Material Adverse
Effect;
(j) Any Security Document to which the Borrower, any of its Subsidiaries
or the Parent is now or hereafter a party shall for any reason cease to be in
full force and effect or cease to be effective to give the Agent a valid and
perfected security interest in and Lien upon the collateral purported to be
covered thereby, subject to no Liens other than Permitted Liens, in each case
unless any such cessation occurs in accordance with the terms thereof or is due
to any act or failure to act on the part of the Agent or any Lender; or the
Borrower, any such Subsidiary or the Parent shall assert any of the foregoing;
or the Parent or any Person acting on its behalf shall deny or disaffirm the
Parent's obligations under the Guaranty; or
(k) Any of the following shall occur: (i) any Person or group of Persons
acting in concert as a partnership or other group shall, as a result of a tender
or exchange offer, open market purchases, privately negotiated purchases or
otherwise, have become, after the date hereof, the "beneficial owner" (within
the meaning of such term under Rule 13d-3 under the Exchange Act) of securities
of the Borrower or the Parent representing 20% or more of the combined voting
power of the then outstanding securities of the Borrower or the Parent
ordinarily (and apart from rights accruing under special circumstances) having
the right to vote in the election of directors; or (ii) the Board of Directors
of the Borrower shall cease to consist of a majority of the individuals who
constituted the Board of Directors of the Borrower as of the date hereof or who
shall have become a member thereof subsequent to the date hereof after having
been nominated, or otherwise approved in writing, by at least a majority of
individuals who constituted the Board of Directors of the Borrower as of the
date hereof (or their replacements approved as herein required);
10.2 Remedies: Termination of Commitments, Acceleration, etc. Upon and at
any time after the occurrence and during the continuance of any Event of
Default, the Agent shall at the direction, or may with the consent, of the
Required Lenders, take any or all of the following actions at the same or
different times:
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(a) Declare the Commitments and the Issuing Bank's obligation to issue
Letters of Credit, to be terminated, whereupon the same shall terminate
(provided that, upon the occurrence of an Event of Default pursuant to Section
10.1(f) or Section 10.1(g), the Commitments and the Issuing Bank's obligation to
issue Letters of Credit shall automatically be terminated);
(b) Declare all or any part of the outstanding principal amount of the
Loans to be immediately due and payable, whereupon the principal amount so
declared to be immediately due and payable, together with all interest accrued
thereon and all other amounts payable under this Agreement, the Notes and the
other Credit Documents, shall become immediately due and payable without
presentment, demand, protest, notice of intent to accelerate or other notice or
legal process of any kind, all of which are hereby knowingly and expressly
waived by the Borrower (provided that, upon the occurrence of an Event of
Default pursuant to Section 10.1(f) or Section 10.1(g), all of the outstanding
principal amount of the Loans and all other amounts described in this subsection
(b) shall automatically become immediately due and payable without presentment,
demand, protest, notice of intent to accelerate or other notice or legal process
of any kind, all of which are hereby knowingly and expressly waived by the
Borrower);
(c) Direct the Borrower to deposit (and the Borrower hereby agrees,
forthwith upon receipt of notice of such direction from the Agent, to deposit)
with the Agent from time to time such additional amount of cash as is equal to
the aggregate Stated Amount of the Loan Note Guaranty (less any amounts already
held in the Sinking Fund Account) and all Letters of Credit then outstanding
(less any amounts already held in the L/C Cash Collateral Account) (whether or
not any beneficiary under the Loan Note Guaranty or any Letter of Credit shall
have drawn or be entitled at such time to draw thereunder), such amount to be
held by the Agent in the Sinking Fund Account as security for the Loan Note
Reimbursement Obligation as described in Section 3.8 and in the L/C Cash
Collateral Account as security for the Letter of Credit Exposure as described in
Section 4.8; and
(d) Exercise all rights and remedies available to it under this Agreement,
the other Credit Documents and applicable law.
10.3 Remedies: Set-Off. In addition to all other rights and remedies
available under the Credit Documents or applicable law or otherwise, upon and at
any time after the occurrence and during the continuance of any Event of
Default, each Lender may, and each is hereby authorized by the Borrower, at any
such time and from time to time, to the fullest extent permitted by applicable
law, without presentment, demand, protest or other notice of any kind, all of
which are hereby knowingly and expressly waived by the Borrower, to set off and
to apply any and all deposits (general or special, time or demand, provisional
or final) and any other property at any time held (including at any branches or
agencies, wherever located), and any other indebtedness at any time owing, by
such Lender to or for the credit or the account of the Borrower against any or
all of the Obligations to such Lender now or hereafter existing, whether or not
such Obligations may be contingent or unmatured, the Borrower hereby granting to
each Lender a continuing security interest in and Lien upon all such deposits
and other property as security for such Obligations. Each Lender agrees to
notify the Borrower promptly after any such set-off and application; provided,
however, that the failure to give such notice shall not affect the validity of
such set-off and application.
ARTICLE XI
THE AGENT
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11.1 Appointment. Each Lender hereby irrevocably appoints and authorizes
First Union to act as Agent hereunder and under the other Credit Documents and,
to the extent and on the terms provided for in the Beechwood Escrow and Security
Agreement, its trustee, and to take such actions as agent on its behalf
hereunder and under the other Credit Documents, and to exercise such powers and
to perform such duties, as are specifically delegated to the Agent by the terms
hereof or thereof, together with such other powers and duties as are reasonably
incidental thereto.
11.2 Nature of Duties. The Agent shall have no duties or responsibilities
other than those expressly set forth in this Agreement and the other Credit
Documents. The Agent shall not have, by reason of this Agreement or any other
Credit Document, a fiduciary relationship in respect of any Lender; and nothing
in this Agreement or any other Credit Document, express or implied, is intended
to or shall be so construed as to impose upon the Agent any obligations or
liabilities in respect of this Agreement or any other Credit Document except as
expressly set forth herein or therein. The Agent may execute any of its duties
under this Agreement or any other Credit Document by or through agents or
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact that it selects with reasonable care. The
Agent shall be entitled to consult with legal counsel, independent public
accountants and other experts selected by it with respect to all matters
pertaining to this Agreement and the other Credit Documents and its duties
hereunder and thereunder 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. The Lenders hereby acknowledge that the Agent shall not
be under any duty to take any discretionary action permitted to be taken by it
pursuant to the provisions of this Agreement or any other Credit Document unless
it shall be requested in writing to do so by the Required Lenders (or, where a
higher percentage of the Lenders is expressly required hereunder, such Lenders).
11.3 Exculpatory Provisions. Neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates shall be (i)
liable for any action taken or omitted to be taken by it or such Person under or
in connection with the Credit Documents, except for its or such Person's own
gross negligence or willful misconduct, (ii) responsible in any manner to any
Lender for any recitals, statements, information, representations or warranties
herein or in any other Credit Document or in any document, instrument,
certificate, report or other writing delivered in connection herewith or
therewith, for the execution, effectiveness, genuineness, validity,
enforceability or sufficiency of this Agreement or any other Credit Document, or
for the financial condition of the Borrower, its Subsidiaries or any other
Person, or (iii) required to ascertain or make any inquiry concerning the
performance or observance of any of the terms, provisions or conditions of this
Agreement or any other Credit Document or the existence or possible existence of
any Default or Event of Default, or to inspect the properties, books or records
of the Borrower or any of its Subsidiaries.
11.4 Reliance by Agent. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any notice, statement, consent or other
communication (including, without limitation, any thereof by telephone,
telecopy, telex, telegram or cable) believed by it in good faith to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons. The Agent may deem and treat each Lender as the owner of its interest
hereunder for all purposes hereof unless and until a written notice of the
assignment, negotiation or transfer thereof shall have been given to the Agent
in accordance with the provisions of this Agreement. The Agent shall be entitled
to refrain from taking or omitting to take any action in connection with this
Agreement or any other Credit Document (i) if such action or omission would, in
the reasonable opinion of the Agent, violate any applicable law or any provision
of this Agreement or any other Credit Document or (ii) unless and until it shall
have received such advice or concurrence of the Required Lenders (or, where a
higher percentage of the Lenders is expressly required hereunder, such Lenders)
as it deems appropriate or it shall first have been indemnified to its
satisfaction
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by the Lenders against any and all liability and expense (other than liability
and expense arising from its own gross negligence or willful misconduct) that
may be incurred by it by reason of taking, continuing to take or omitting to
take any such action. Without limiting the foregoing, no Lender shall have any
right of action whatsoever against the Agent as a result of the Agent's acting
or refraining from acting hereunder or under any other Credit Document in
accordance with the instructions of the Required Lenders (or, where a higher
percentage of the Lenders is expressly required hereunder, such Lenders), and
such instructions and any action taken or failure to act pursuant thereto shall
be binding upon all of the Lenders (including all subsequent Lenders).
11.5 Non-Reliance on Agent and Other Lenders. Each Lender expressly
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representation
or warranty to it and that no act by the Agent or any such Person hereafter
taken, including any review of the affairs of the Borrower and its Subsidiaries,
shall be deemed to constitute any representation or warranty by the Agent to any
Lender. Each Lender represents to the Agent that (i) it has, independently and
without reliance upon the Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, properties, financial
and other condition and creditworthiness of the Borrower and its Subsidiaries
and made its own decision to enter into this Agreement and extend credit to the
Borrower hereunder, and (ii) 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 analysis,
appraisals and decisions in taking or not taking action hereunder and under the
other Credit Documents and to make such investigation as it deems necessary to
inform itself as to the business, prospects, operations, properties, financial
and other condition and creditworthiness of the Borrower and its Subsidiaries.
Except as expressly provided in this Agreement and the other Credit Documents,
the Agent shall have no duty or responsibility, either initially or on a
continuing basis, to provide any Lender with any credit or other information
concerning the business, prospects, operations, properties, financial or other
condition or creditworthiness of the Borrower, its Subsidiaries or any other
Person that may at any time come into the possession of the Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.
11.6 Notice of Default. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default unless the Agent
shall have received written notice from the Borrower or a Lender referring to
this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default." In the event that the Agent receives such
a notice, the Agent will give notice thereof to the Lenders as soon as
reasonably practicable; provided, however, that if any such notice has also been
furnished to the Lenders, the Agent shall have no obligation to notify the
Lenders with respect thereto. The Agent shall (subject to Sections 11.4 and
12.6) take such action with respect to such Default or Event of Default as shall
reasonably be directed by the Required Lenders; provided that, unless and until
the Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
11.7 Indemnification. To the extent the Agent is not reimbursed by or on
behalf of the Borrower, and without limiting the obligation of the Borrower to
do so, the Lenders agree (i) to indemnify the Agent and its officers, directors,
employees, agents, attorneys-in-fact and Affiliates, ratably in proportion to
their respective percentages as used in determining the Required Lenders as of
the date of determination, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including, without limitation, attorneys' fees and expenses) or
disbursements of any kind or nature whatsoever that may at any time (including,
without limitation, at any
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time following the repayment in full of the Loans and the termination of the
Commitments) be imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of this Agreement or any other Credit Document or any
documents contemplated by or referred to herein or the transactions contemplated
hereby or thereby or any action taken or omitted by the Agent under or in
connection with any of the foregoing, including any waivers, consents or other
actions made in connection with the conditions precedent in Article V, and (ii)
to reimburse the Agent upon demand, ratably in proportion to their respective
percentages as used in determining the Required Lenders as of the date of
determination, for any expenses incurred by the Agent in connection with the
preparation, negotiation, execution, delivery, administration, amendment,
modification, waiver or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement or any of the other Credit Documents
(including, without limitation, reasonable attorneys' fees and expenses and
compensation of agents and employees paid for services rendered on behalf of the
Lenders); provided, however, that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements to the extent resulting from the gross
negligence or willful misconduct of the party to be indemnified.
11.8 The Agent in its Individual Capacity. With respect to its Commitment,
the Loans made by it, the Letters of Credit issued or participated in by it and
the Note or Notes issued to it, the Agent in its individual capacity and not as
Agent shall have the same rights and powers under the Credit Documents as any
other Lender and may exercise the same as though it were not performing the
agency duties specified herein; and the terms "Lenders," "Required Lenders,"
"holders of Notes" and any similar terms shall, unless the context clearly
otherwise indicates, include the Agent in its individual capacity. The Agent and
its Affiliates may accept deposits from, lend money to, make investments in, and
generally engage in any kind of banking, trust, financial advisory or other
business with the Borrower, any of its Subsidiaries or any of their respective
Affiliates as if the Agent were not performing the agency duties specified
herein, and may accept fees and other consideration from any of them for
services in connection with this Agreement and otherwise without having to
account for the same to the Lenders.
11.9 Successor Agent. The Agent may resign at any time by giving ten (10)
days' prior written notice to the Borrower and the Lenders. Upon any such notice
of resignation, the Required Lenders will, with the prior written consent of the
Borrower (which consent shall not be unreasonably withheld), appoint from among
the Lenders a successor to the Agent; provided that the Borrower's consent shall
not be required in the event a Default or Event of Default shall have occurred
and be continuing. If no successor to the Agent shall have been so appointed by
the Required Lenders and shall have accepted such appointment within such
ten-day period, then the retiring Agent may, on behalf of the Lenders and after
consulting with the Lenders and the Borrower, appoint a successor Agent from
among the Lenders. Upon the acceptance of any appointment as Agent by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder and under the other Credit Documents. After any retiring Agent's
resignation as Agent, the provisions of this Article shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Agent. If no
successor to the Agent has accepted appointment as Agent by the thirtieth (30th)
day following a retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective, and the Lenders shall
thereafter perform all of the duties of the Agent hereunder and under the other
Credit Documents until such time, if any, as the Required Lenders appoint a
successor Agent as provided for hereinabove.
11.10 Collateral Matters. (a) The Agent is hereby authorized on behalf of
the Lenders, without the necessity of any notice to or further consent from the
Lenders, from time to time (but without
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any obligation) to take any action with respect to the Cash Collateral Accounts
and the Security Documents that may be necessary to perfect and maintain
perfected the Liens upon such collateral granted pursuant to the Security
Documents.
(b) The Lenders hereby irrevocably authorize the Agent, at its option and
in its discretion, to release any Lien granted to or held by the Agent upon any
collateral (i) upon termination of the Commitments, termination or expiration of
all outstanding Letters of Credit and the Loan Notes Guaranty and payment in
full of all of the Obligations, (ii) constituting property sold or to be sold or
disposed of as part of or in connection with any disposition expressly permitted
hereunder or under any other Credit Document or to which the Required Lenders
have consented or (iii) otherwise pursuant to and in accordance with the
provisions of any applicable Credit Document. Upon request by the Agent at any
time, the Lenders will confirm in writing the Agent's authority to release
collateral pursuant to this subsection (b).
11.11 Issuing Bank. The provisions of this Article XI (other than Section
11.9) shall apply to the Issuing Bank mutatis mutandis to the same extent as
such provisions apply to the Agent.
ARTICLE XII
MISCELLANEOUS
12.1 Fees and Expenses. The Borrower agrees (i) whether or not the
transactions contemplated by this Agreement shall be consummated, to pay upon
demand all reasonable out-of-pocket costs and expenses of the Agent (including,
without limitation, the reasonable fees and expenses of counsel to the Agent and
the allocated costs of internal counsel) in connection with the preparation,
negotiation, execution, delivery and syndication of this Agreement and the other
Credit Documents, and all reasonable out-of-pocket costs and expenses of the
Agent (including, without limitation, the reasonable fees and expenses of
counsel to the Agent, and the allocated costs of internal counsel) in connection
with any amendment, modification or waiver hereof or thereof or consent with
respect hereto or thereto, (ii) to pay upon demand all reasonable out-of-pocket
costs and expenses of the Agent and each Lender (including, without limitation,
the reasonable fees and expenses of counsel to the Agent or any Lender,
including the allocated costs of internal counsel) in connection with (y) any
refinancing or restructuring of the credit arrangement provided under this
Agreement, whether in the nature of a "work-out," in any insolvency or
bankruptcy proceeding or otherwise and whether or not consummated, and (z) the
enforcement, attempted enforcement or preservation of any rights or remedies
under this Agreement or any of the other Credit Documents, whether in any
action, suit or proceeding (including any bankruptcy or insolvency proceeding)
or otherwise, and (iii) to pay and hold harmless the Agent and each Lender from
and against all liability for any intangibles, documentary, stamp or other
similar taxes, fees and excises, if any, including any interest and penalties,
and any finder's or brokerage fees, commissions and expenses (other than any
fees, commissions or expenses of finders or brokers engaged by the Agent or any
Lender), that may be payable in connection with the transactions contemplated by
this Agreement and the other Credit Documents.
12.2 Indemnification. The Borrower agrees, whether or not the transactions
contemplated by this Agreement shall be consummated, to indemnify and hold
harmless the Agent and each Lender and each of their respective directors,
officers, employees, agents and Affiliates (each, an "Indemnified Person") from
and against any and all claims, losses, damages, obligations, liabilities,
penalties, costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) of any kind or nature whatsoever, whether direct,
indirect or consequential (collectively, "Indemnified Costs"), that may at any
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time be imposed on, incurred by or asserted against any such Indemnified Person
as a result of, arising from or in any way relating to the preparation,
execution, performance or enforcement of this Agreement, any of the other Credit
Documents or any of the other Transaction Documents, any of the transactions
contemplated herein or therein (including, without limitation, the Transactions)
or any transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of any Loans, Letters of Credit or the Loan Notes
Guaranty, or any action, suit or proceeding (including any inquiry or
investigation) by any Person, whether threatened or initiated, related to any of
the foregoing; provided, however, that no Indemnified Person shall have the
right to be indemnified hereunder for any Indemnified Costs to the extent
resulting from the gross negligence or willful misconduct of such Indemnified
Person. All of the foregoing Indemnified Costs of any Indemnified Person shall
be paid or reimbursed by the Borrower, as and when incurred and upon demand.
12.3 Governing Law; Consent to Jurisdiction. THIS AGREEMENT AND THE OTHER
CREDIT DOCUMENTS HAVE BEEN EXECUTED, DELIVERED AND ACCEPTED IN, AND SHALL BE
DEEMED TO HAVE BEEN MADE IN, NORTH CAROLINA AND SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH
CAROLINA (WITHOUT REGARD TO THE CONFLICTS OF LAW PROVISIONS THEREOF); PROVIDED
THAT EACH LETTER OF CREDIT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF CREDIT OR, IF NO
SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND PRACTICES FOR
DOCUMENTARY CREDITS, INTERNATIONAL CHAMBER OF COMMERCE, AS IN EFFECT FROM TIME
TO TIME (THE "UNIFORM CUSTOMS"), AND, AS TO MATTERS NOT GOVERNED BY THE UNIFORM
CUSTOMS, THE LAWS OF THE STATE OF NORTH CAROLINA (WITHOUT REGARD TO THE
CONFLICTS OF LAW PROVISIONS THEREOF). THE BORROWER HEREBY CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF ANY STATE COURT WITHIN MECKLENBURG COUNTY, NORTH
CAROLINA OR ANY FEDERAL COURT LOCATED WITHIN THE WESTERN DISTRICT OF THE STATE
OF NORTH CAROLINA FOR ANY PROCEEDING INSTITUTED HEREUNDER OR UNDER ANY OF THE
OTHER CREDIT DOCUMENTS, OR ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT
OR ANY OF THE OTHER CREDIT DOCUMENTS, OR ANY PROCEEDING TO WHICH THE AGENT OR
ANY LENDER OR THE BORROWER IS A PARTY, INCLUDING ANY ACTIONS BASED UPON, ARISING
OUT OF, OR IN CONNECTION WITH, ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENT (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENT OR ANY LENDER OR THE
BORROWER. THE BORROWER IRREVOCABLY AGREES TO BE BOUND (SUBJECT TO ANY AVAILABLE
RIGHT OF APPEAL) BY ANY JUDGMENT RENDERED OR RELIEF GRANTED THEREBY AND FURTHER
WAIVES ANY OBJECTION THAT IT MAY HAVE BASED ON LACK OF JURISDICTION OR IMPROPER
VENUE OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY SUCH PROCEEDING. THE
BORROWER CONSENTS THAT ALL SERVICE OF PROCESS BE MADE BY REGISTERED OR CERTIFIED
MAIL DIRECTED TO IT AT ITS ADDRESS SET FORTH HEREINBELOW, AND SERVICE SO MADE
SHALL BE DEEMED TO BE COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR
THREE (3) DAYS AFTER DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE PREPAID
AND PROPERLY ADDRESSED. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT TO SERVE
LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF ANY
PARTY TO BRING ANY ACTION OR PROCEEDING AGAINST ANY OTHER PARTY IN THE COURTS OF
ANY OTHER JURISDICTION.
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12.4 Arbitration; Preservation and Limitation of Remedies. (a) Upon demand
of any party hereto, whether made before or after institution of any judicial
proceeding, any dispute, claim or controversy arising out of, connected with or
relating to this Agreement or any other Credit Document ("Disputes") between or
among the Borrower, the Agent and the Lenders, or any of them, shall be resolved
by binding arbitration as provided herein. Institution of a judicial proceeding
by a party does not waive the right of that party to demand arbitration
hereunder. Disputes may include, without limitation, tort claims, counterclaims,
claims brought as class actions, claims arising from documents executed in the
future, or claims arising out of or connected with the transactions contemplated
by this Agreement and the other Credit Documents. Arbitration shall be conducted
under and governed by the Commercial Financial Disputes Arbitration Rules (the
"Arbitration Rules") of the American Arbitration Association (the "AAA"), as in
effect from time to time, and Title 9 of the U.S. Code, as amended. All
arbitration hearings shall be conducted in the city in which the principal
office of the Agent is located. The expedited procedures set forth in Rule 51 et
seq. of the Arbitration Rules shall be applicable to claims of less than
$1,000,000. All applicable statutes of limitation shall apply to any Dispute. A
judgment upon the award may be entered in any court having jurisdiction. The
panel from which all arbitrators are selected shall be comprised of licensed
attorneys. The single arbitrator selected for expedited procedure shall be a
retired judge from the highest court of general jurisdiction, state or federal,
of the state where the hearing will be conducted. Notwithstanding the foregoing,
this arbitration provision does not apply to Disputes under or related to Hedge
Agreements.
(b) Notwithstanding the preceding binding arbitration provisions, the
parties hereto agree to preserve, without diminution, certain remedies that any
party hereto may employ or exercise freely, either alone, in conjunction with or
during a Dispute. Any party hereto shall have the right to proceed in any court
of proper jurisdiction or by self-help to exercise or prosecute the following
remedies, as applicable: (i) all rights to foreclose against any Collateral by
exercising a power of sale granted pursuant to any of the Credit Documents or
under applicable law or by judicial foreclosure and sale, including a proceeding
to confirm the sale; (ii) all rights of self-help, including peaceful occupation
of real property and collection of rents, set-off, and peaceful possession of
personal property; (iii) obtaining provisional or ancillary remedies, including
injunctive relief, sequestration, garnishment, attachment, appointment of a
receiver and filing an involuntary bankruptcy proceeding; and (iv) when
applicable, a judgment by confession of judgment. Preservation of these remedies
does not limit the power of an arbitrator to grant similar remedies that may be
requested by a party in a Dispute. The parties hereto agree that no party shall
have a remedy of punitive or exemplary damages against any other party in any
Dispute, and each party hereby waives any right or claim to punitive or
exemplary damages that it has now or that may arise in the future in connection
with any Dispute, whether such Dispute is resolved by arbitration or judicially.
12.5 Notices. All notices and other communications provided for hereunder
shall be in writing (including telegraphic, telex, facsimile transmission or
cable communication) and mailed, telegraphed, telexed, telecopied, cabled or
delivered to the party to be notified at the following addresses (unless another
address is specifically required under this Agreement):
(a) if to the Borrower, to Chartwell Re Holdings Corporation, 4
Stamford Plaza, 000 Xxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000-0000,
Attention: Xx. Xxxxxxx X. Xxxxxx, Telecopy No. (000) 000-0000;
(b) if to the Agent, to its Notice Office;
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(c) if to the Issuing Bank in its capacity as issuer of the Loan
Notes Guaranty, to First Union National Bank (London Branch), 0-0
Xxxxxxxxxxx, Xxxxxx, XX0X 0XX, Attention: Mr. Xxx Xxxxxxx, Telephone
0000-000-0000, Facsimile 0000-000-0000;
(d) if to either Issuing Bank in its capacity as issuer of the
Letters of Credit (whether denominated in Dollars or Pounds Sterling), to
First Union National Bank of North Carolina, One First Union Center, 5th
Floor, 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000,
Attention: Xx. Xxx X. Xxxxxxx, Telephone (000) 000-0000, Facsimile (704)
383-7611, with a copy to the Agent; and
(e) if to any Lender, to it at the address for notices set forth on
its signature page hereto (or if to any Lender not a party hereto as of
the date hereof, at the address for notices set forth in its Assignment
and Acceptance);
or in each case, to such other address as any party may designate for itself by
like notice to all other parties hereto. All such notices and communications
shall be deemed to have been given (i) if mailed as provided above by any method
other than overnight delivery service, on the third Business Day after deposit
in the mails, (ii) if mailed by overnight delivery service, telegraphed,
telexed, telecopied or cabled, when delivered for overnight delivery, delivered
to the telegraph company, confirmed by telex answerback, transmitted by
telecopier or delivered to the cable company, respectively, or (iii) if
delivered by hand, upon delivery; provided that Notices of Revolving Borrowing,
Notices of Tranche B Borrowings, and Notices of Conversion/Continuation shall
not be effective until received by the Agent.
12.6 Amendments, Waivers, etc. No amendment, modification, waiver or
discharge or termination of, or consent to any departure by the Borrower from,
any provision of this Agreement or any other Credit Document, shall be effective
unless in a writing signed by the Borrower and the Required Lenders (or by the
Agent at the direction or with the consent of the Required Lenders), and then
the same shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such amendment,
modification, waiver, discharge, termination or consent shall:
(a) unless agreed to by each Lender holding or owed Obligations directly
affected thereby, (i) reduce or forgive the principal amount of any Loan, reduce
the rate of or forgive any interest thereon, or reduce or forgive any fees or
other Obligations (other than fees payable to the Agent for its own account), or
(ii) extend the Tranche A Maturity Date, the Tranche B Maturity Date, the
Revolving Credit Maturity Date or any other date fixed for the payment of any
principal of or interest on any Loan (other than additional interest payable
under Section 2.8(b) at the election of the Required Lenders, as provided
therein), any fees (other than fees payable to the Agent for its own account) or
any other Obligations;
(b) unless agreed to by all of the Lenders, (i) increase or extend any
Commitment of any Lender (it being understood that a waiver of any Event of
Default, if agreed to by the requisite Lenders hereunder, shall not constitute
such an increase or extension), (ii) change the percentage of the aggregate
Commitments or of the aggregate unpaid principal amount of the Loans, or the
number or percentage of Lenders, that shall be required for the Lenders or any
of them to take or approve, or direct the Agent to take or approve, any action
hereunder (including as set forth in the definition of "Required Lenders"),
(iii) except as may be otherwise specifically provided in this Agreement or in
any other Credit Document, release all or substantially all of the Collateral,
release the Parent from the Guaranty, or (iv) change any provision of Section
2.15 or this Section 12.6;
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(c) unless agreed to by Revolving Lenders having more than sixty-six and
two-thirds percent (66-2/3%) of the Revolving Credit Commitments (or, if the
Commitments have been terminated, Revolving Lenders holding more than sixty-six
and two-thirds percent (66-2/3%) of the aggregate outstanding principal amount
of the Revolving Loans), change any provision of Article III or Article IV or
reduce or forgive any Reimbursement Obligation;
(d) unless agreed to by Tranche B Lenders having more than sixty-six and
two-thirds percent (66-2/3%) of the Tranche B Commitments (or, if the
Commitments have been terminated, Tranche B Lenders holding more than sixty-six
and two-thirds percent (66-2/3%) of the aggregate outstanding principal amount
of the Revolving Loans), change any provision of Article III or reduce or
forgive any Loan Note Reimbursement Obligation; and
(e) unless agreed to by the Issuing Bank or the Agent in addition to the
Lenders required as provided hereinabove to take such action, affect the
respective rights or obligations of the Issuing Bank or the Agent, as
applicable, hereunder or under any of the other Credit Documents;
and provided further that (i) if any amendment, modification, waiver or consent
would adversely affect the Lenders of Loans of a particular Class (the "affected
Class") relative to Lenders of Loans of any other Class, then such amendment,
modification, waiver or consent shall require the consent of Lenders holding
more than sixty-six and two-thirds percent (66-2/3%) of the aggregate
outstanding principal amount of all Loans of the affected Class, and (ii) the
Fee Letter and any Hedge Agreement to which any Lender is a party may be amended
or modified, and any rights thereunder waived, in a writing signed by the
parties thereto.
12.7 Assignments, Participations. (a) Each Lender may assign to one or
more other Eligible Assignees (each, an "Assignee") all or a portion of its
rights and obligations under this Agreement (including, without limitation, all
or a portion of any of its Commitments, the outstanding Loans made by it, the
Note or Notes held by it and its participations in Letters of Credit and the
Loan Notes Guaranty); provided, however, that (i) any such assignment (other
than an assignment to a Lender or an Affiliate of a Lender) shall not be made
without the prior written consent of the Agent and the Borrower (to be evidenced
by their counterexecution of the relevant Assignment and Acceptance), which
consent shall not be unreasonably withheld, provided that the Borrower's consent
shall not be required in the event a Default or Event of Default shall have
occurred and be continuing, and provided further that in the case of an
assignment of a Revolving Credit Commitment or a Tranche B Loan, the Issuing
Bank must also give its prior written consent thereto (which consent shall not
be unreasonably withheld), (ii) each such assignment by a Lender of any of its
interests relating to Loans of a particular Class shall be made in such manner
so that the same portion of its Commitment, Loans, Note or Notes and other
interests under and with respect to such Class (including obligations to the
Issuing Banks under Sections 3.5 and 4.5) is assigned to the relevant Assignee,
(iii) except in the case of an assignment to a Lender or an Affiliate of a
Lender, no such assignment shall be in an aggregate principal amount (determined
as of the date of the Assignment and Acceptance with respect to such assignment)
less than $5,000,000 determined by combining the Dollar Amount of the assigning
Lender's outstanding Term Loans, Revolving Loans, Letter of Credit Exposure,
Tranche B Guaranty Exposure, Revolver Guaranty Exposure, and Unutilized
Revolving Credit Commitment ("Total Commitment") being assigned pursuant to such
assignment (or, if less, the Total Commitment of the assigning Lender), and (iv)
the parties to each such assignment will execute and deliver to the Agent, for
its acceptance and recording in the Register, an Assignment and Acceptance,
together with any Note or Notes subject to such assignment, and will pay a
nonrefundable processing fee of $3,000 to the Agent for its own account. Upon
such execution, delivery, acceptance and recording of the Assignment and
Acceptance, from and after the effective date specified therein, which effective
date
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shall be at least five Business Days after the execution thereof (unless the
Agent shall otherwise agree), (A) 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, shall have the rights
and obligations of the assigning Lender hereunder with respect thereto and (B)
the assigning Lender 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 rights under the provisions of this Agreement and the
other Credit Documents relating to indemnification or payment of fees, costs and
expenses, to the extent such rights relate to the time prior to the effective
date of such Assignment and Acceptance) and be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of such assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a party hereto). The terms
and provisions of each Assignment and Acceptance shall, upon the effectiveness
thereof, be incorporated into and made a part of this Agreement, and the
covenants, agreements and obligations of each Lender set forth therein shall be
deemed made to and for the benefit of the Agent and the other parties hereto as
if set forth at length herein.
(b) The Agent will maintain at its address for notices referred to herein
a copy of 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
Commitments of, and principal amount of the Loans 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 and each Lender at any reasonable time
and from time to time upon reasonable prior notice.
(c) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an Assignee and counterexecuted by the
Borrower and the Issuing Bank (if required), together with the Note or Notes
subject to such assignment and the processing fee referred to in subsection (a)
above, the Agent will (i) accept such Assignment and Acceptance, (ii) on the
effective date thereof, record the information contained therein in the Register
and (iii) give notice thereof to the Borrower and the Lenders. Within five (5)
Business Days after its receipt of such notice, the Borrower, at its own
expense, will execute and deliver to the Agent, in exchange for the surrendered
Note or Notes, a new Note or Notes to the order of the Assignee (and, if the
assigning Lender has retained any portion of its rights and obligations
hereunder, to the order of the assigning Lender), prepared in accordance with
the applicable provisions of Section 2.4 as necessary to reflect, after giving
effect to the assignment, the Commitments (or outstanding Term Loans, as the
case may be) of the Assignee and (to the extent of any retained interests) the
assigning Lender, dated the date of the replaced Note or Notes and otherwise in
substantially the form of Exhibits X-0, X-0, X-0 and A-4, as applicable. The
Agent will return cancelled Notes to the Borrower.
(d) Each Lender may, without the consent of the Borrower, the Agent or any
other Lender, sell to one or more other Persons (each, a "Participant")
participations in any portion comprising less than all of its rights and
obligations under this Agreement (including, without limitation, a portion of
its Commitments, the outstanding Loans made by it, the Note or Notes held by it
and its participations in Letters of Credit); provided, however, that (i) such
Lender's obligations under this Agreement shall remain unchanged and such Lender
shall remain solely responsible for the performance of such obligations, (ii) no
Lender shall sell any participation that, when taken together with all other
participations, if any, sold by such Lender, covers all of such Lender's rights
and obligations under this Agreement, (iii) 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, (iv)
no
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such participation shall be in an aggregate principal amount less than
$3,000,000, and (v) no Lender shall permit any Participant to have any voting
rights or any right to control the vote of such Lender with respect to any
amendment, modification, waiver, consent or other action hereunder or under any
other Credit Document (except that a Lender may grant voting or similar rights
to a Participant as to actions that would (x) reduce or forgive the principal
amount of any Loan, reduce the rate of or forgive any interest thereon, or
reduce or forgive any fees or other Obligations, (y) extend the Tranche A
Maturity Date, the Tranche B Maturity Date, the Revolving Credit Maturity Date
or any other date fixed for the payment of any principal of or interest on any
Loan, any fees or any other Obligations, or (z) increase or extend any
Commitment of any Lender, provided, however, that in no event shall any such
grant affect or require the Borrower, the Agent or the other Lenders to deal
with any such Participant), and (iv) no Participant shall have any rights under
this Agreement or any of the other Credit Documents, each Participant's rights
against the granting Lender in respect of any participation to be those set
forth in the participation agreement, and all amounts payable by the Borrower
hereunder shall be determined as if such Lender had not granted such
participation. Notwithstanding the foregoing, each Participant may be entitled,
pursuant to the terms of its participation agreement, to compensation calculated
in accordance with the provisions of Sections 2.16(a), 2.16(b), 2.17 and 2.18
and to rights of setoff in accordance with Section 10.3, in each case to the
extent that the Lender granting such participation would be entitled to such
benefits if the participation had not been made; provided that no Participant
shall be entitled to receive any greater amount pursuant to any of such Sections
than the Lender granting such participation would have been entitled to receive
in respect of the amount of the participation made by such Lender to such
Participant had such participation not been made; and provided, further, that
nothing contained herein shall cause the Participant to be deemed to be a Lender
or to otherwise be granted any rights under this Agreement.
(e) Nothing in this Agreement shall be construed to prohibit any Lender
from pledging or assigning all or any portion of its rights and interest
hereunder or under any Note to any Federal Reserve Bank as security for
borrowings therefrom; provided, however, that no such pledge or assignment shall
release a Lender from any of its obligations hereunder.
(f) Assignments and participations pursuant to this Section 12.7 need not
be pro rata as among the Facilities.
(g) Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section, disclose to the
Assignee or Participant or proposed Assignee or Participant any information
relating to the Borrower and its Subsidiaries furnished to it by or on behalf of
any other party hereto, provided that such Assignee or Participant or proposed
Assignee or Participant agrees in writing to keep such information confidential
to the same extent required of the Lenders under Section 12.13.
12.8 No Waiver. The rights and remedies of the Agent and the Lenders
expressly set forth in this Agreement and the other Credit Documents are
cumulative and in addition to, and not exclusive of, all other rights and
remedies available at law, in equity or otherwise. No failure or delay on the
part of the Agent or any Lender in exercising any right, power or privilege
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or privilege preclude any other or further exercise
thereof or the exercise of any other right, power or privilege or be construed
to be a waiver of any Default or Event of Default. No course of dealing between
any of the Borrower and the Agent or the Lenders or their agents or employees
shall be effective to amend, modify or discharge any provision of this Agreement
or any other Credit Document or to constitute a waiver of any Default or Event
of Default. No notice to or demand upon the Borrower in any case shall entitle
the Borrower to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the right of the Agent or any Lender
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to exercise any right or remedy or take any other or further action in any
circumstances without notice or demand.
12.9 Successors and Assigns. This Agreement shall be binding upon, inure
to the benefit of and be enforceable by the respective successors and assigns of
the parties hereto, and all references herein to any party shall be deemed to
include its successors and assigns; provided, however, that (i) the Borrower
shall not sell, assign or transfer any of its rights, interests, duties or
obligations under this Agreement or any other Credit Document without the prior
written consent of all of the Lenders and (ii) any Assignees shall have such
rights and obligations with respect to this Agreement and the other Credit
Documents as are provided for under and pursuant to the provisions of Section
12.7.
12.10 Survival. All representations, warranties and agreements made by or
on behalf of the Borrower or any of its Subsidiaries in this Agreement and in
the other Credit Documents shall survive the execution and delivery hereof or
thereof, the making and repayment of the Loans and the issuance and repayment of
the Letters of Credit. In addition, notwithstanding anything herein or under
applicable law to the contrary, the provisions of this Agreement and the other
Credit Documents relating to indemnification or payment of fees, costs and
expenses, including, without limitation, the provisions of Sections 2.16(a),
2.16(b), 2.17, 2.18, 11.7, 12.1 and 12.2, shall survive the payment in full of
all Loans and Letters of Credit, the termination of the Commitments, all Letters
of Credit and the Loan Notes Guaranty, and any termination of this Agreement or
any of the other Credit Documents.
12.11 Severability. To the extent any provision of this Agreement is
prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in such jurisdiction, without prohibiting or invalidating
such provision in any other jurisdiction or the remaining provisions of this
Agreement in any jurisdiction.
12.12 Construction. The headings of the various articles, sections and
subsections of this Agreement have been inserted for convenience only and shall
not in any way affect the meaning or construction of any of the provisions
hereof. Except as otherwise expressly provided herein and in the other Credit
Documents, in the event of any inconsistency or conflict between any provision
of this Agreement and any provision of any of the other Credit Documents, the
provision of this Agreement shall control.
12.13 Confidentiality. Each Lender agrees to keep confidential, pursuant
to its customary procedures for handling confidential information of a similar
nature and in accordance with safe and sound banking practices, all nonpublic
information provided to it by or on behalf of the Borrower or any of its
Subsidiaries in connection with this Agreement or any other Credit Document;
provided, however, that any Lender may disclose such information (i) to its
directors, employees and agents and to its auditors, counsel and other
professional advisors, (ii) at the demand or request of any bank regulatory
authority, court or other Governmental Authority having or asserting
jurisdiction over such Lender, as may be required pursuant to subpoena or other
legal process, or otherwise in order to comply with any applicable Requirement
of Law, (iii) in connection with any proceeding to enforce its rights hereunder
or under any other Credit Document or any other litigation or proceeding related
hereto or to which it is a party, (iv) to the Agent or any other Lender, (v) to
the extent the same has become publicly available other than as a result of a
breach of this Agreement and (vi) pursuant to and in accordance with the
provisions of Section 12.7(g).
12.14 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which when so executed and delivered shall be an
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original, but all of which shall together constitute one and the same
instrument. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by the Agent and
the Borrower of written or telephonic notification of such execution and
authorization of delivery thereof.
12.15 Entire Agreement. THIS AGREEMENT AND THE OTHER DOCUMENTS AND
INSTRUMENTS EXECUTED AND DELIVERED IN CONNECTION HEREWITH (A) EMBODY THE ENTIRE
AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES HERETO AND THERETO RELATING TO
THE SUBJECT MATTER HEREOF AND THEREOF, (B) SUPERSEDE ANY AND ALL PRIOR
AGREEMENTS AND UNDERSTANDINGS OF SUCH PERSONS, ORAL OR WRITTEN, RELATING TO THE
SUBJECT MATTER HEREOF AND THEREOF, INCLUDING THE COMMITMENT LETTER FROM FIRST
UNION TO THE BORROWER DATED OCTOBER 3, 1996, AND THE CREDIT AGREEMENT BETWEEN
THE BORROWER AND FIRST UNION DATED OCTOBER 13, 1996, BUT SPECIFICALLY EXCLUDING
THE FEE LETTER, AND (C) MAY NOT BE AMENDED, SUPPLEMENTED, CONTRADICTED OR
OTHERWISE MODIFIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
[The rest of this page is intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
CHARTWELL RE HOLDINGS CORPORATION
By: __________________________________
Title: _______________________________
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, as Agent, as an
Issuing Bank, and as a Lender
Tranche A Commitment: By: __________________________________
$30,000,000
Title: _________________________________
Tranche B Commitment:
(pound)12,850,000
Instructions for wire transfers to the Agent:
Revolving Credit
Commitment: Payment Office for Dollar Facilities:
$25,000,000
First Union National Bank of North Carolina
ABA Routing Xx. 000000000
Xxxxxxxxx, Xxxxx Xxxxxxxx
General Ledger No. 465906, RC No. 5007
Attention: Syndication Agency Services
Re: Chartwell Re Holdings Corporation
Payment Office for Sterling Facilities:
First Union National Bank of North Carolina
c/o First Union National Bank, N.A. (London Branch)
0-0 Xxxxxxxxxxx
Xxxxxx XX0X 0XX
Attention: Xxxxxxxx Xxxxx
Sort Code: 40-51-33
Re: Chartwell Re Holdings Corporation
Address for notices (as a Lender):
First Union National Bank of North Carolina
One First Union Center, 5th Floor
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Lending Office:
First Union National Bank of North Carolina
One First Union Center, 5th Floor
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
FIRST UNION NATIONAL BANK
(LONDON BRANCH), as an Issuing Bank
By: __________________________________
Name: _________________________________
Title: _________________________________
Address for Notices (as Issuing Bank)
First Union National Bank of North Carolina
c/o First Union National Bank, N.A. (London Branch)
0-0 Xxxxxxxxxxx
Xxxxxx XX0X 0XX
Attention: Mr. Xxx Xxxxxxx
Telephone: 0000-000-0000
Facsimile: 0000-000-0000
_________________________
Tranche A Commitment: By: __________________________________
$__________
Title: _______________________________
Tranche B Commitment:
(pound)__________
Address for notices:
Revolving Credit
Commitment:
____________________________
$__________
____________________________
Attention: _________________
Telephone: (___) ________
Telecopy: (___) ________
Lending Office for Dollar Facilities:
____________________________
____________________________
____________________________
Attention: _________________
Telephone: (___) ________
Telecopy: (___) ________
Lending Office for Sterling Facilities:
____________________________
____________________________
____________________________
Attention: _________________
Telephone: (___) ________
Telecopy: (___) ________
TABLE OF CONTENTS
Page
CREDIT AGREEMENT
RECITALS
ARTICLE I
DEFINITIONS
1.1 Defined Terms................................................2
1.2 Accounting Terms............................................23
1.3 Other Terms; Construction...................................24
ARTICLE II
AMOUNT AND TERMS OF THE LOANS
2.1 Commitments; Loans..........................................24
2.2 Borrowings..................................................25
2.3 Disbursements; Funding Reliance; Domicile of Loans..........27
2.4 Notes.......................................................27
2.5 Termination and Reduction of Commitments....................28
2.6 Mandatory Repayments and Prepayments........................29
2.7 Voluntary Prepayments.......................................31
2.8 Interest....................................................31
2.9 Fees........................................................33
2.10 Interest Periods............................................33
2.11 Conversions and Continuations...............................35
2.12 Method of Payments; Computations............................35
2.13 Recovery of Payments........................................37
2.14 Use of Proceeds.............................................37
2.15 Pro Rata Treatment; Sharing of Payments.....................37
2.16 Increased Costs; Change in Circumstances; Illegality; etc...38
2.17 Taxes.......................................................40
2.18 Compensation................................................42
2.19 Replacement of Lenders; Mitigation, Notice Requirements.....42
ARTICLE III
LOAN NOTES GUARANTY
3.1 Issuance....................................................43
3.2 Notices.....................................................43
3.3 Participations..............................................44
3.4 Reimbursement...............................................44
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3.5 Payment by Tranche B Term and Revolving Loans...............44
3.6 Payment to Lenders..........................................46
3.7 Obligations Absolute........................................46
3.8 Sinking Fund Account........................................47
3.9 Other Provisions Relating to Loan Notes.....................48
ARTICLE IV
LETTERS OF CREDIT
4.1 Issuance....................................................49
4.2 Notices.....................................................50
4.3 Participations..............................................50
4.4 Reimbursement...............................................50
4.5 Payment by Revolving Loans..................................50
4.6 Payment to Lenders..........................................51
4.7 Obligations Absolute........................................51
4.8 L/C Cash Collateral Accounts................................53
4.9 Effectiveness...............................................54
ARTICLE V
CONDITIONS OF BORROWING
5.1 Conditions of Initial Borrowing.............................54
5.2 Conditions to Borrowings Under the Xxxxxx Facilities........56
5.3 Conditions of All Borrowings................................58
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1 Corporate Organization and Power............................59
6.2 Authorization; Enforceability...............................59
6.3 No Violation................................................59
6.4 Governmental Authorization; Permits.........................60
6.5 Litigation..................................................60
6.6 Taxes.......................................................60
6.7 Subsidiaries................................................61
6.8 Full Disclosure.............................................61
6.9 Margin Regulations..........................................61
6.10 No Material Adverse Change..................................61
6.11 Financial Matters...........................................62
6.12 Ownership of Properties.....................................63
6.13 ERISA.......................................................64
6.14 Environmental Matters.......................................64
6.15 Compliance With Laws........................................65
6.16 Labor Relations.............................................65
6.17 Regulated Industries........................................65
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6.18 Insurance...................................................65
6.19 Certain Contracts...........................................65
6.20 Security Documents..........................................65
6.21 Transaction Documents.......................................66
ARTICLE VII
AFFIRMATIVE COVENANTS
7.1 Financial Statements........................................66
7.2 Statutory Financial Statements..............................67
7.3 Other Business and Financial Information....................68
7.4 Corporate Existence; Franchises; Maintenance of Properties..70
7.5 Compliance with Laws........................................70
7.6 Payment of Obligations......................................70
7.7 Insurance...................................................71
7.8 Maintenance of Books and Records; Inspection................71
7.9 Further Assurances..........................................71
ARTICLE VIII
FINANCIAL COVENANTS
8.1 Capitalization Ratio........................................71
8.2 Fixed Charge Coverage Ratio.................................72
8.3 Operating Leverage..........................................72
8.4 Statutory Surplus...........................................72
8.5 Risk-Based Capital..........................................72
ARTICLE IX
NEGATIVE COVENANTS
9.1 Merger; Consolidation.......................................72
9.2 Indebtedness................................................72
9.3 Liens.......................................................73
9.4 Disposition of Assets.......................................74
9.5 Investments; Acquisitions...................................75
9.6 Restricted Payments.........................................75
9.7 Transactions with Affiliates................................76
9.8 Lines of Business...........................................76
9.9 Certain Amendments..........................................76
9.10 Limitation on Certain Restrictions..........................77
9.11 No Other Negative Pledges...................................77
9.12 Fiscal Year.................................................77
9.13 Accounting Changes..........................................77
ARTICLE X
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EVENTS OF DEFAULT
10.1 Events of Default...........................................77
10.2 Remedies: Termination of Commitments, Acceleration, etc.....79
10.3 Remedies: Set-Off...........................................80
ARTICLE XI
THE AGENT
11.1 Appointment.................................................80
11.2 Nature of Duties............................................80
11.3 Exculpatory Provisions......................................81
11.4 Reliance by Agent...........................................81
11.5 Non-Reliance on Agent and Other Lenders.....................82
11.6 Notice of Default...........................................82
11.7 Indemnification.............................................82
11.8 The Agent in its Individual Capacity........................83
11.9 Successor Agent.............................................83
11.10 Collateral Matters..........................................83
11.11 Issuing Bank................................................84
ARTICLE XII
MISCELLANEOUS
12.1 Fees and Expenses...........................................84
12.2 Indemnification.............................................84
12.3 Governing Law; Consent to Jurisdiction......................85
12.4 Arbitration; Preservation and Limitation of Remedies........86
12.5 Notices.....................................................86
12.6 Amendments, Waivers, etc....................................87
12.7 Assignments, Participations.................................88
12.8 No Waiver...................................................90
12.9 Successors and Assigns......................................91
12.10 Survival....................................................91
12.11 Severability................................................91
12.12 Construction................................................91
12.13 Confidentiality.............................................91
12.14 Counterparts................................................92
12.15 Entire Agreement............................................92
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EXHIBITS
Exhibit A-1 Form of Tranche A-1 Term Note
Exhibit A-2 Form of Tranche A-2 Term Note
Exhibit A-3 Form of Tranche B Term Note
Exhibit A-4 Form of Revolving Credit Note
Exhibit B-1 Form of Notice of Revolving Borrowing
Exhibit B-2 Form of Notice of Conversion/Continuation
Exhibit B-3 Form of Letter of Credit Notice
Exhibit B-4 Form of Notice of Tranche B Borrowing
Exhibit C Form of Assignment and Acceptance
Exhibit D-1 Form of GAAP Compliance Certificate
Exhibit D-2 Form of SAP Compliance Certificate
Exhibit E-1 Form of Opinion of LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.
Exhibit E-2 Form of Opinion of Xxxxxxxx X. Xxxxxxx, Esq.
Exhibit E-3 Form of Opinion of X.X. Xxxxxxx
Exhibit F-1 Form of Beechwood Escrow and Security Agreement
Exhibit F-2 Form of Borrower Escrow and Security Agreement
Exhibit G Form of Parent Guaranty
Exhibit H Form of Revolving Commitment Worksheet
SCHEDULES
Schedule 6.3 Certain Restrictions
Schedule 6.4 Consents and Approvals
Schedule 6.7 Subsidiaries
Schedule 6.19 Certain Contracts
Schedule 9.2 Indebtedness
Schedule 9.3 Liens
Schedule 9.7 Transactions with Affiliates
-v-
======================================
FIRST AMENDED AND RESTATED
CREDIT AGREEMENT
among
CHARTWELL RE HOLDINGS CORPORATION,
THE LENDERS NAMED HEREIN,
FIRST UNION NATIONAL BANK
OF NORTH CAROLINA,
as Agent and as an Issuing Bank,
and
FIRST UNION NATIONAL BANK
(LONDON BRANCH),
as an Issuing Bank
$55,000,000 and (pound)12,850,000
Senior Credit Facilities
Arranged by
FIRST UNION CAPITAL MARKETS CORP.
Dated as of November 14, 1996
======================================
Exhibit A-1 to First Amended and
Restated Credit Agreement
First Union National Bank
of North Carolina, as
Agent
Chartwell Re Holdings Corporation
November 14, 1996 /
$55,000,000/(pound)12,850,000
---------------------------------
Borrower's Taxpayer Identification No. 00-0000000
FORM OF
TRANCHE A-1 TERM NOTE
$___________ ___________, 1996
Charlotte, North Carolina
FOR VALUE RECEIVED, CHARTWELL RE HOLDINGS CORPORATION, a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of
_______________________________________________ (the "Lender"), at the
offices of First Union National Bank of North Carolina (the "Agent") located at
One First Union Center, 301 South College Street, Charlotte, North Carolina (or
at such other place or places as the Agent may designate), at the times and in
the manner provided in the First Amended and Restated Credit Agreement, dated as
of November 14, 1996 (as amended, modified or supplemented from time to time,
the "Credit Agreement"), among the Borrower, the Lenders from time to time
parties thereto, First Union National Bank of North Carolina, as Agent and as an
Issuing Bank and First Union National Bank (London Branch), as an Issuing Bank,
the principal sum of
__________________________ DOLLARS ($___________), under the terms and
conditions of this promissory note (this "Tranche A-1 Term Note") and the Credit
Agreement. The defined terms in the Credit Agreement are used herein with the
same meaning. The Borrower also unconditionally promises to pay interest on the
aggregate unpaid principal amount of this Tranche A-1 Term Note at the rates
applicable thereto from time to time as provided in the Credit Agreement.
This Tranche A-1 Term Note is one of a series of Tranche A-1 Term Notes
referred to in the Credit Agreement and is issued to evidence the Tranche A-1
Term Loans made by the Lender pursuant to the Credit Agreement. All of the
terms, conditions and covenants of the Credit Agreement are expressly made a
part of this Tranche A-1 Term Note by reference in the same manner and with the
same effect as if set forth herein at length, and any holder of this Tranche A-1
Term Note is entitled to the benefits of and remedies provided in the Credit
Agreement and the other Credit Documents. Reference is made to the Credit
Agreement for provisions relating to the interest rate, maturity, payment,
prepayment and acceleration of this Tranche A-1 Term Note.
In the event of an acceleration of the maturity of this Tranche A-1 Term
Note, this Tranche A-1 Term Note shall become immediately due and payable,
without presentation, demand, protest or notice of any kind, all of which are
hereby waived by the Borrower.
In the event this Tranche A-1 Term Note is not paid when due at any stated
or accelerated maturity, the Borrower agrees to pay, in addition to the
principal and interest, all costs of collection, including reasonable attorneys'
fees.
This Tranche A-1 Term Note shall be governed by and construed in
accordance with the internal laws and judicial decisions of the State of North
Carolina. The Borrower hereby submits to the nonexclusive jurisdiction and venue
of the federal and state courts located in Mecklenburg County, North Carolina,
although the Lender shall not be limited to bringing an action in such courts.
IN WITNESS WHEREOF, the Borrower has caused this Tranche A-1 Term Note to
be executed under seal by its duly authorized corporate officer as of the day
and year first above written.
CHARTWELL RE HOLDINGS CORPORATION
By: _________________________________
Title: ________________________________
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Exhibit A-2 to First Amended and
Restated Credit Agreement
First Union National Bank
of North Carolina, as
Agent
Chartwell Re Holdings Corporation
November 14, 1996 /
$55,000,000/(pound)12,850,000
---------------------------------
Borrower's Taxpayer Identification No. 00-0000000
FORM OF
TRANCHE A-2 TERM NOTE
$___________ ____________, 1996
Charlotte, North Carolina
FOR VALUE RECEIVED, CHARTWELL RE HOLDINGS CORPORATION, a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of
_______________________________________________ (the "Lender"), at the
offices of First Union National Bank of North Carolina (the "Agent") located at
One First Union Center, 301 South College Street, Charlotte, North Carolina (or
at such other place or places as the Agent may designate), at the times and in
the manner provided in the First Amended and Restated Credit Agreement, dated as
of November 14, 1996 (as amended, modified or supplemented from time to time,
the "Credit Agreement"), among the Borrower, the Lenders from time to time
parties thereto, First Union National Bank of North Carolina, as Agent and as an
Issuing Bank and First Union National Bank (London Branch), as an Issuing Bank,
the principal sum of
__________________________ DOLLARS ($___________), under the terms and
conditions of this promissory note (this "Tranche A-2 Term Note") and the Credit
Agreement. The defined terms in the Credit Agreement are used herein with the
same meaning. The Borrower also unconditionally promises to pay interest on the
aggregate unpaid principal amount of this Tranche A-2 Term Note at the rates
applicable thereto from time to time as provided in the Credit Agreement.
This Tranche A-2 Term Note is one of a series of Tranche A-2 Term Notes
referred to in the Credit Agreement and is issued to evidence the Tranche A-2
Term Loans made by the Lender pursuant to the Credit Agreement. All of the
terms, conditions and covenants of the Credit Agreement are expressly made a
part of this Tranche A-2 Term Note by reference in the same manner and with the
same effect as if set forth herein at length, and any holder of this Tranche A-2
Term Note is entitled to the benefits of and remedies provided in the Credit
Agreement and the other Credit Documents. Reference is made to the Credit
Agreement for provisions relating to the interest rate, maturity, payment,
prepayment and acceleration of this Tranche A-2 Term Note.
In the event of an acceleration of the maturity of this Tranche A-2 Term
Note, this Tranche A-2 Term Note shall become immediately due and payable,
without presentation, demand, protest or notice of any kind, all of which are
hereby waived by the Borrower.
In the event this Tranche A-2 Term Note is not paid when due at any stated
or accelerated maturity, the Borrower agrees to pay, in addition to the
principal and interest, all costs of collection, including reasonable attorneys'
fees.
This Tranche A-2 Term Note shall be governed by and construed in
accordance with the internal laws and judicial decisions of the State of North
Carolina. The Borrower hereby submits to the nonexclusive jurisdiction and venue
of the federal and state courts located in Mecklenburg County, North Carolina,
although the Lender shall not be limited to bringing an action in such courts.
IN WITNESS WHEREOF, the Borrower has caused this Tranche A-2 Term Note to
be executed under seal by its duly authorized corporate officer as of the day
and year first above written.
CHARTWELL RE HOLDINGS CORPORATION
By: _________________________________
Title: ________________________________
-4-
Exhibit A-3 to First Amended and
Restated Credit Agreement
First Union National Bank
of North Carolina, as
Agent
Chartwell Re Holdings Corporation
November 14, 1996 /
$55,000,000/(pound)12,850,000
---------------------------------
Borrower's Taxpayer Identification No. 00-0000000
FORM OF
TRANCHE B TERM NOTE
$___________ ____________, 1996
Charlotte, North Carolina
FOR VALUE RECEIVED, CHARTWELL RE HOLDINGS CORPORATION, a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of
_______________________________________________ (the "Lender"), at the
offices of First Union National Bank of North Carolina (the "Agent") located at
One First Union Center, 301 South College Street, Charlotte, North Carolina (or
at such other place or places as the Administrative Agent may designate), at the
times and in the manner provided in the First Amended and Restated Credit
Agreement, dated as of November 14, 1996 (as amended, modified or supplemented
from time to time, the "Credit Agreement"), among the Borrower, the Lenders from
time to time parties thereto, First Union National Bank of North Carolina, as
Agent and as an Issuing Bank and First Union National Bank (London Branch), as
an Issuing Bank, the principal sum of
__________________________ POUNDS STERLING ((pound)___________), under the
terms and conditions of this promissory note (this "Tranche B Term Note") and
the Credit Agreement. The defined terms in the Credit Agreement are used herein
with the same meaning. The Borrower also unconditionally promises to pay
interest on the aggregate unpaid principal amount of this Tranche B Term Note at
the rates applicable thereto from time to time as provided in the Credit
Agreement.
This Tranche B Term Note is one of a series of Tranche B Term Notes
referred to in the Credit Agreement and is issued to evidence the Tranche B Term
Loans made by the Lender pursuant to the Credit Agreement. All of the terms,
conditions and covenants of the Credit Agreement are expressly made a part of
this Tranche B Term Note by reference in the same manner and with the same
effect as if set forth herein at length, and any holder of this Tranche B Term
Note is entitled to the benefits of and remedies provided in the Credit
Agreement and the other Credit Documents. Reference is made to the Credit
Agreement for provisions relating to the interest rate, maturity, payment,
prepayment and acceleration of this Tranche B Term Note.
In the event of an acceleration of the maturity of this Tranche B Term
Note, this Tranche B Term Note shall become immediately due and payable, without
presentation, demand, protest or notice of any kind, all of which are hereby
waived by the Borrower.
In the event this Tranche B Term Note is not paid when due at any stated
or accelerated maturity, the Borrower agrees to pay, in addition to the
principal and interest, all costs of collection, including reasonable attorneys'
fees.
This Tranche B Term Note shall be governed by and construed in accordance
with the internal laws and judicial decisions of the State of North Carolina.
The Borrower hereby submits to the nonexclusive jurisdiction and venue of the
federal and state courts located in Mecklenburg County, North Carolina, although
the Lender shall not be limited to bringing an action in such courts.
IN WITNESS WHEREOF, the Borrower has caused this Tranche B Term Note to be
executed under seal by its duly authorized corporate officer as of the day and
year first above written.
CHARTWELL RE HOLDINGS CORPORATION
By: _________________________________
Title: ________________________________
-2-
Exhibit A-4 to First Amended and
Restated Credit Agreement
First Union National Bank
of North Carolina, as
Agent
Chartwell Re Holdings Corporation
November 14, 1996 /
$55,000,000/(pound)12,850,000
---------------------------------
Borrower's Taxpayer Identification No. 00-0000000.
FORM OF
REVOLVING CREDIT NOTE
$___________ ____________, 1996
Charlotte, North Carolina
FOR VALUE RECEIVED, CHARTWELL RE HOLDINGS CORPORATION, a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of
_______________________________________________ (the "Lender"), at the
offices of First Union National Bank of North Carolina (the "Agent") located at
One First Union Center, 301 South College Street, Charlotte, North Carolina (or
at such other place or places as the Administrative Agent may designate), at the
times and in the manner provided in the First Amended and Restated Credit
Agreement, dated as of November 14, 1996 (as amended, modified or supplemented
from time to time, the "Credit Agreement"), among the Borrower, the Lenders from
time to time parties thereto, First Union National Bank of North Carolina, as
Agent and as an Issuing Bank and First Union National Bank (London Branch), as
an Issuing Bank, the principal sum of
__________________________ DOLLARS ($___________) (which amount the
Borrower may borrow in Dollars or Pounds Sterling, provided that all Revolving
Loans shall be repaid in the currency of the Borrowing pursuant to the terms of
the Credit Agreement) or such lesser amount as may constitute the unpaid
principal amount of the Revolving Loans made by the Lender, under the terms and
conditions of this promissory note (this "Revolving Credit Note") and the Credit
Agreement. The defined terms in the Credit Agreement are used herein with the
same meaning. The Borrower also unconditionally promises to pay interest on the
aggregate unpaid principal amount of this Revolving Credit Note in the
currencies and at the rates applicable thereto from time to time as provided in
the Credit Agreement.
This Revolving Credit Note is one of a series of Revolving Credit Notes
referred to in the Credit Agreement and is issued to evidence the Revolving
Loans made by the Lender from time to time pursuant to the Credit Agreement. All
of the terms, conditions and covenants of the Credit Agreement are expressly
made a part of this Revolving Credit Note by reference in the same manner and
with the same effect as if set forth herein at length, and any holder of this
Revolving Credit Note is entitled to the benefits of and remedies provided in
the Credit Agreement and the other Credit Documents. Reference is made to the
Credit Agreement for provisions relating to the interest rate, maturity,
payment, prepayment and acceleration of this Revolving Credit Note.
In the event of an acceleration of the maturity of this Revolving Credit
Note, this Revolving Credit Note shall become immediately due and payable,
without presentation, demand, protest or notice of any kind, all of which are
hereby waived by the Borrower.
In the event this Revolving Credit Note is not paid when due at any stated
or accelerated maturity, the Borrower agrees to pay, in addition to the
principal and interest, all costs of collection, including reasonable attorneys'
fees.
This Revolving Credit Note shall be governed by and construed in
accordance with the internal laws and judicial decisions of the State of North
Carolina. The Borrower hereby submits to the nonexclusive jurisdiction and venue
of the federal and state courts located in Mecklenburg County, North Carolina,
although the Lender shall not be limited to bringing an action in such courts.
IN WITNESS WHEREOF, the Borrower has caused this Revolving Credit Note to
be executed under seal by its duly authorized corporate officer as of the day
and year first above written.
CHARTWELL RE HOLDINGS CORPORATION
By: _________________________________
Title: ________________________________
-2-
Exhibit B-1 to First Amended and
Restated Credit Agreement
First Union National Bank
of North Carolina, as Agent
Chartwell Re Holdings Corporation
November 14, 1996 /
$55,000,000/(pound)12,850,000
---------------------------------
FORM OF
NOTICE OF REVOLVING BORROWING
[Date]
First Union National Bank of
North Carolina, as Administrative Agent
Xxx Xxxxx Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services
Ladies and Gentlemen:
The undersigned, Chartwell Re Holdings Corporation (the "Borrower"),
refers to the First Amended and Restated Credit Agreement, dated as of November
14, 1996, among the Borrower, certain banks and other financial institutions
from time to time parties thereto (the "Lenders"), First Union National Bank
(London Branch), as an Issuing Bank and you, as Agent and as an Issuing Bank for
the Lenders (as amended, modified or supplemented from time to time, the "Credit
Agreement," the terms defined therein being used herein as therein defined),
and, pursuant to Section 2.2(c) of the Credit Agreement, hereby gives you, as
Agent, irrevocable notice that the Borrower requests a Borrowing of Revolving
Loans under the Credit Agreement, and to that end sets forth below the
information relating to such Borrowing (the "Proposed Borrowing") as required by
Section 2.2(c) of the Credit Agreement:
(i) The Total Unutilized Revolving Credit Commitment immediately
before giving effect to the Borrowing requested hereunder is
$_______________.(1)
(ii) The aggregate principal amount of the Proposed Borrowing is
[$_______________] [(pound)_______________].(2)
(iii) The Revolving Loans comprising the Proposed Borrowing shall be
initially made as [Base Rate Loans] [LIBOR Loans].(3)
----------
(1) Attach Revolving Commitment Worksheet.
(2) Shall be an amount not less than $1,000,000 or (pound)1,000,000 or, if
greater, an integral multiple of $500,000 or (pound)500,000, respectively, in
excess thereof (in the case of Base Rate Loans), or $3,000,000 or
(pound)3,000,000 or, if greater, an integral multiple of $1,000,000 or
(pound)1,000,000, respectively, in excess thereof (in the case of LIBOR Loans).
(3) Select the applicable Type of Revolving Loans.
[(iv) The initial Interest Period for the LIBOR Loans comprising the
Proposed Borrowing shall be [one/two/three/six months].](4)
(v) The Proposed Borrowing is requested to be made on
__________________ (the "Borrowing Date").(5)
The Borrower hereby certifies that the following statements are true on
and as of the date hereof and will be true on and as of the Borrowing Date:
(A) Each of the representations and warranties contained in Article VI of the
Credit Agreement and in the other Credit Documents is and will be true and
correct in all material respects on and as of each such date the Borrowing Date,
with the same effect as if made on and as of each such date, both immediately
before and after giving effect to the Proposed Borrowing and to the application
of the proceeds therefrom (except to the extent any such representation or
warranty is expressly stated to have been made as of a specific date, in which
case such representation or warranty shall be true and correct in all material
respects as of such date);
(B) No Default or Event of Default has occurred and is continuing
or would result from the Proposed Borrowing or from the application of the
proceeds therefrom; and
(C) After giving effect to the Proposed Borrowing, the sum of (i)
the aggregate principal amount of Revolving Loans outstanding and (ii) the
aggregate Letter of Credit Exposure of all Revolving Lenders, and (iii)
the aggregate Revolver Guaranty Exposure of all Revolving Lenders will not
exceed the Total Revolving Credit Commitments.
Very truly yours,
CHARTWELL RE HOLDINGS CORPORATION
By: ______________________________
Title: _____________________________
----------
(4) Include this clause in the case of a Proposed Borrowing comprised of
LIBOR Loans, and select the applicable Interest Period.
(5) Shall be a Business Day at least one Business Day after the date
hereof in the case of Base Rate Loans denominated in Dollars, at least two
Business Days after the date hereof in the case of Base Rate Loans denominated
in Pounds Sterling, or at least three Business Days after the date hereof in the
case of LIBOR Loans denominated in Dollars, or at least four Business Days after
the date hereof in the case of LIBOR Loans denominated in Pounds Sterling.
2
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
CHARTWELL RE HOLDINGS CORPORATION
REVOLVING COMMITMENT WORKSHEET
(1) Total Revolving Credit Commitments(1) $________
(2) Revolving Loans outstanding (before giving
effect to the requested Borrowing)
(a) Dollar Revolving Loans Outstanding $________
(b) Pounds Sterling Revolving Loans
Outstanding (pound)_______
(c) Dollar Equivalent of (b)(2) $________(2)
(d) Total Revolving Loans Outstanding
(add lines (2)(a) and (c)) ($________)(2)
(3) Letter of Credit Exposure
(a) Dollar Denominated:
(i) Letters of Credit Outstanding $________
(ii) Reimbursement Obligations outstanding $________
(iii) Add lines (3)(a)(i) and (ii) ($________)
(b) Sterling Denominations
(i) Letters of Credit Outstanding (pound)________
(ii) Reimbursement Obligations outstanding (pound)________
(iii) Add lines 3(b)(i) and (ii) (pound)________
(iv) Dollar Equivalent of (iii)(2) ($________)(2)
(4) Revolver Guaranty Exposure (if any)
(a) Principal
(i) Aggregate Loan Notes Principal
Amount(3) (pound)________
(ii) Tranche B Guaranty Exposure(4) (pound)________
(iii) Line (4)(a)(i) minus 4(a)(ii) (pound)________
(worksheet continued)
----------
(1) Initially, $25,000,000.
(2) The Dollar Equivalent should be left blank to be completed by the
Agent.
(3) The amount of this line 4(a)(i) on immediately preceding worksheet
less (pound)_____ in principal amount of Loan Notes redeemed since submission of
immediately preceding worksheet.
(4) Calculation: (pound)12,850,000 less (pound)_______ in principal amount
repaid on Loan Notes designated by Borrower as repayments of Tranche B Loan
Notes.
(b) Interest to be due on next interest
payment date(5) (pound)________
(c) Loan Notes Reimbursement Obligations
outstanding (pound)________
(d) Add line 4(a)(iii), 4(b) and 4(c) (pound)________
(e) Dollar Equivalent of line 4(d)(1) $________(2)
(5) Total Unutilized Revolving Credit Commitment (subtract
lines (2)(d), 3(a)(iii), 3(b)(iv) and 4(e)
from line (1) $
=======
Prepared by: _______________________________
Name: ______________________________________
Title: _____________________________________
As of [Date]: ______________________________
----------
(5) June 30th or December 31st based on Loan Notes outstanding on such date.
4
Exhibit B-2to First Amended and
Restated Credit Agreement
First Union National Bank
of North Carolina, as Agent
Chartwell Re Holdings Corporation
November 14, 1996 /
$55,000,000/(pound)12,850,000
---------------------------------
FORM OF
NOTICE OF CONVERSION/CONTINUATION
[Date]
First Union National Bank of
North Carolina, as Agent
Xxx Xxxxx Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services
Ladies and Gentlemen:
The undersigned, Chartwell Re Holdings Corporation (the "Borrower"),
refers to the First Amended and Restated Credit Agreement, dated as of November
14, 1996, among the Borrower, certain banks and other financial institutions
from time to time parties thereto (the "Lenders"), First Union National Bank
(London Branch), as an Issuing Bank, and you, as Agent and as an Issuing Bank
for the Lenders (as amended, modified or supplemented from time to time, the
"Credit Agreement," the terms defined therein being used herein as therein
defined), and, pursuant to Section 2.11(b) of the Credit Agreement, hereby gives
you, as Agent, irrevocable notice that the Borrower requests a [conversion]
[continuation](1) of Loans under the Credit Agreement, and to that end sets
forth below the information relating to such [conversion] [continuation] (the
"Proposed [Conversion] [Continuation]") as required by Section 2.11(b) of the
Credit Agreement:
(i) The amount of the Total Unutilized Revolving Credit Commitment
as of the intended effective date of the conversion or continuation is
$______________.(2)
(ii) The Proposed [Conversion] [Continuation] is requested to be
made on _______________.(3)
----------
(1) Insert "conversion" or "continuation" throughout the notice, as
applicable.
(2) Applicable only in the case of a conversion or continuation of a
Revolving Loan; attach Revolving Commitment Worksheet.
(3) Shall be an amount not less than $1,000,000 or (pound)1,000,000 or, if
greater, an integral multiple of $500,000 or (pound)500,000 in excess thereof
(in the case of Base Rate Loans), or $3,000,000 or (pound)3,000,000 or, if
greater, an integral multiple of $1,000,000 or (pound)1,000,000 in excess
thereof (in the case of LIBOR Loans), and additionally, in the case of any
conversion of LIBOR Loans into Base Rate Loans, or continuation of LIBOR Loans,
shall be the last day of the Interest Period applicable to such LIBOR Loans.
(iii) The Proposed [Conversion] [Continuation] involves
$____________/(pound)_________(4) in aggregate principal amount of
[Tranche A Term] [Tranche B Term] [Revolving](5) Loans made pursuant to a
Borrowing on ________________,(6) which Loans are presently maintained as
[Base Rate] [LIBOR] Loans and are proposed hereby to be [converted into
Base Rate Loans] [converted into LIBOR Loans] [continued as LIBOR
Loans].(7)
[(iv) The initial Interest Period for the Loans being [converted
into] [continued as] LIBOR Loans pursuant to the Proposed [Conversion]
[Continuation] shall be [one/two/three/six months].](8)
The Borrower hereby certifies that the following statement is true both on
and as of the date hereof and on and as of the effective date of the Proposed
[Conversion] [Continuation]: no Default or Event of Default has or will have
occurred and is continuing or would result from the Proposed [Conversion]
[Continuation].
Very truly yours,
CHARTWELL RE HOLDINGS CORPORATION
By: ________________________________
Title: _____________________________
[IF CONVERSION OR CONTINUATION RELATES TO A REVOLVING LOAN,
ATTACH REVOLVING COMMITMENT WORKSHEET WITH RESPECT TO THE
REVOLVING LOANS BEING CONVERTED/CONTINUED]
----------
(4) Shall be an amount not less than $1,000,000 or (pound)1,000,000 or, if
greater, an integral multiple of $500,000 or (pound)500,000, respectively, in
excess thereof (in the case of any conversion of LIBOR Loans into Base Rate
Loans) or $3,000,000 or (pound)3,000,000 or, if greater, an integral multiple of
$1,000,000 or (pound)1,000,000, respectively, in excess thereof (in the case of
any conversion of Base Rate Loans into, or continuation of, LIBOR Loans).
(5) Select the applicable Class of Loans.
(6) Insert the applicable Borrowing Date for the Loans being converted or
continued.
(7) Complete with the applicable bracketed language.
(8) Include this clause in the case of a Proposed Conversion or
Continuation involving a conversion of Base Rate Loans into, or continuation of,
LIBOR Loans, and select the applicable Interest Period.
-2-
Exhibit B-4 to First Amended and
Restated Credit Agreement
First Union National Bank
of North Carolina, as Agent
Chartwell Re Holdings Corporation
November 14, 1996 /
$55,000,000/(pound)12,850,000
---------------------------------
FORM OF
NOTICE OF TRANCHE B BORROWING
[Date]
First Union National Bank of
North Carolina, as Administrative Agent
Xxx Xxxxx Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services
Ladies and Gentlemen:
The undersigned, Chartwell Re Holdings Corporation (the "Borrower"),
refers to the First Amended and Restated Credit Agreement, dated as of November
14, 1996, among the Borrower, certain banks and other financial institutions
from time to time parties thereto (the "Lenders"), First Union National Bank
(London Branch), as an Issuing Bank, and you, as Agent and as an Issuing Bank
for the Lenders (as amended, modified or supplemented from time to time, the
"Credit Agreement," the terms defined therein being used herein as therein
defined), and, pursuant to Section 2.2(d) of the Credit Agreement, hereby gives
you, as Agent, irrevocable notice that the Borrower requests a Borrowing of
Tranche B Term Loans under the Credit Agreement, and to that end sets forth
below the information relating to such Borrowing (the "Proposed Borrowing") as
required by Section 2.2(d) of the Credit Agreement:
(i) The aggregate principal amount of the Proposed Borrowing is
(pound)_______________.(1)
(ii) The Tranche B Term Loans comprising the Proposed Borrowing
shall be initially made as [Base Rate Loans] [LIBOR Loans].(2)
[(iii) The initial Interest Period for the LIBOR Loans comprising the
Proposed Borrowing shall be [one/two/three/six months].](3)
----------
(1) Shall be an amount not less than (pound)1,000,000 or, if greater, an
integral multiple of (pound)500,000 in excess thereof (in the case of Base Rate
Loans), or (pound)3,000,000 or, if greater, an integral multiple of
(pound)1,000,000 in excess thereof (in the case of LIBOR Loans).
(2) Select the applicable Type of Tranche B Term Loans.
(3) Include this clause in the case of a Proposed Borrowing comprised of
LIBOR Loans, and select the applicable Interest Period.
(iv) The Proposed Borrowing is requested to be made on
__________________ (the "Borrowing Date").(4)
The Borrower hereby certifies that the following statements are true on
and as of the date hereof and will be true on and as of the Borrowing Date:
(A) Each of the representations and warranties contained in Article VI of the
Credit Agreement and in the other Credit Documents is and will be true and
correct in all material respects on and as of each such date, with the same
effect as if made on and as of each such date, both immediately before and after
giving effect to the Proposed Borrowing and to the application of the proceeds
therefrom (except to the extent any such representation or warranty is expressly
stated to have been made as of a specific date, in which case such
representation or warranty shall be true and correct in all material respects as
of such date);
(B) No Default or Event of Default has occurred and is continuing
or would result from the Proposed Borrowing or from the application of the
proceeds therefrom; and
(C) After giving effect to the Proposed Borrowing, the sum of (i)
the aggregate principal amount of Tranche B Term Loans outstanding and
(ii) the aggregate Tranche B Guaranty Exposure of all Tranche B Lenders
will not exceed the Total Tranche B Commitments.
Very truly yours,
CHARTWELL RE HOLDINGS CORPORATION
By: ________________________________
Title: _____________________________
----------
(4) Shall be a Business Day at least two Business Days after the date
hereof (in the case of Base Rate Loans) or at least four Business Days after the
date hereof (in the case of LIBOR Loans).
-2-
Exhibit B-3 to First Amended and
Restated Credit Agreement
First Union National Bank
of North Carolina, as Agent
Chartwell Re Holdings Corporation
November 14, 1996 /
$55,000,000/(pound)12,850,000
---------------------------------
AMENDED
FORM OF
LETTER OF CREDIT NOTICE
[Date]
First Union National Bank of
North Carolina, as Agent
Xxx Xxxxx Xxxxx Xxxxxx, XX-0
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention:
Xxx X. Xxxxxxx,
Specialized Industries/Financial
Institutions Lending Group
Ladies and Gentlemen:
The undersigned, Chartwell Re Holdings Corporation (the "Borrower"),
refers to the First Amended and Restated Credit Agreement, dated as of November
14, 1996, among the Borrower, certain banks and other financial institutions
from time to time parties thereto (the "Lenders"), First Union National Bank
(London Branch), as an Issuing Bank, and you, as Agent and as an Issuing Bank
for the Lenders (as amended, modified or supplemented from time to time, the
"Credit Agreement," the terms defined therein being used herein as therein
defined), and, pursuant to Section 4.2 of the Credit Agreement, hereby gives
you, as Agent, irrevocable notice that the Borrower requests the issuance of a
Letter of Credit for its account under the Credit Agreement, and to that end
sets forth below the information relating to such Letter of Credit (the
"Requested Letter of Credit") as required by Section 4.2 of the Credit
Agreement:
(i) The Business Day on which the Requested Letter of Credit is
requested to be issued is _______________.(1)
(ii) The Stated Amount of the Requested Letter of Credit is
[$____________/(pound)__________](2).
----------
(1) Shall be at least three Business Days (or such shorter period as is
acceptable to the Issuing Lender in any given case) after the date hereof.
(2) Insert Applicable Currency.
(iii) The expiry date of the Requested Letter of Credit is
______________.
(iv) The name and address of the beneficiary of the Requested Letter
of Credit is ______________.
[The undersigned, CHARTWELL REINSURANCE COMPANY ("Reinsurance"), joins
this request for the purpose of requesting that the Requested Letter of Credit
be issued for the account of Reinsurance in accordance with Article IV of the
Credit Agreement. The Borrower and Reinsurance hereby agree to be jointly and
severally liable for the Reimbursement Obligations of either in respect of the
Requested Letter of Credit.](3)
The undersigned [agrees/agree] to complete all application procedures and
documents required by you in connection with the Requested Letter of Credit.
The Borrower hereby certifies that the following statements are true on
the date hereof and will be true on the date of issuance of the Requested Letter
of Credit:
(A) Each of the representations and warranties contained in Article VI of the
Credit Agreement and in the other Credit Documents is and will be true and
correct in all material respects on and as of each such date, with the same
effect as if made on and as of each such date, both immediately before and after
giving effect to the issuance of the Requested Letter of Credit (except to the
extent any such representation or warranty is expressly stated to have been made
as of a specific date, in which case such representation or warranty shall be
true and correct in all material respects as of such date);
(B) No Default or Event of Default has occurred and is continuing
or would result from the issuance of the Requested Letter of Credit; and
(C) After giving effect to the issuance of the Requested Letter of
Credit, the sum of (i) the aggregate principal amount of Revolving Loans
outstanding, (ii) the aggregate Letter of Credit Exposure of all Revolving
Lenders, and (iii) the aggregate Revolver Guaranty Exposure of all
Revolving Lenders, will not exceed the Total Revolving Credit Commitments.
----------
(3) Insert when Letter of Credit to be issued for the account of
Reinsurance.
-2-
Very truly yours,
CHARTWELL RE HOLDINGS CORPORATION
By: ______________________________________
Name: ______________________________________
Title: ______________________________________
[CHARTWELL REINSURANCE COMPANY
By: ______________________________________
Name: ______________________________________
Title: ____________________________________](3)
cc: First Union National Bank of
North Carolina, as Agent
Xxx Xxxxx Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services
[ATTACH REVOLVING COMMITMENT WORKSHEET]
----------
(3) Insert when Letter of Credit to be issued for the account of
Reinsurance.
-3-
Exhibit C to Credit Agreement
First Union National Bank
of North Carolina, as
Agent
Chartwell Re Holdings Corporation
November 14, 1996 /
$55,000,000/(pound)12,850,000
---------------------------------
FORM OF
ASSIGNMENT AND ACCEPTANCE
THIS ASSIGNMENT AND ACCEPTANCE (this "Assignment and Acceptance") is made
this _____ day of ____________, ____, by and between (the "Assignor") and
________________________ (the "Assignee"). Reference is made to the First
Amended and Restated Credit Agreement, dated as of November 14, 1996 (as
amended, modified or supplemented from time to time, the "Credit Agreement"),
among Chartwell Re Holdings Corporation (the "Borrower"), certain banks and
other financial institutions from time to time parties thereto (the "Lenders"),
First Union National Bank (London Branch), as an Issuing Bank and First Union
National Bank of North Carolina, as Agent and as an Issuing Bank for the Lenders
(the "Agent"). Unless otherwise defined herein, capitalized terms used herein
without definition shall have the meanings given to them in the Credit
Agreement.
The Assignor and the Assignee hereby agree as follows:
1. Assignment and Assumption. Subject to the terms and conditions hereof,
the Assignor hereby sells and assigns to the Assignee, and the Assignee hereby
purchases and assumes from the Assignor, without recourse to the Assignor and,
except as expressly provided herein, without representation or warranty by the
Assignor, the interest or interests as of the Effective Date (as hereinafter
defined) in and to all of the Assignor's rights and obligations under the Credit
Agreement and the other Credit Documents (in its capacity as a Lender
thereunder) with respect to each Class of Loans represented by the percentage
interest or interests specified with regard to such Class in Item 4 of Annex I
(each such assigned interest, an "Assigned Share"), including, without
limitation, (i) in the case of Tranche A Term Loans, the relevant Assigned Share
of all rights and obligations of the Assignor with respect to its Tranche A
Commitment (unless terminated), Tranche A-1 and A-2 Term Notes and Tranche A
Term Loans, (ii) in the case of Tranche B Term Loans, the relevant Assigned
Share of (y) all rights and obligations of the Assignor with respect to its
Tranche B Commitment (unless terminated), Tranche B Term Note and Tranche B Term
Loans, and (z) the Assignor's Loan Notes Guaranty Exposure, and (iii) in the
case of Revolving Loans, the relevant Assigned Share of (x) the Assignor's
Revolving Credit Commitment, (y) the Assignor's Letter of Credit Exposure, and
(z) all rights and obligations of the Assignor with respect to its Revolving
Credit Note and Revolving Loans.
2. The Assignor. The Assignor (i) represents and warrants that it is the
legal and beneficial owner of each interest being assigned by it hereunder, that
each such interest is free and clear of any adverse claim, that as of the date
hereof the amount of its Commitments and outstanding Loans of each Class with
regard to which an interest is being assigned hereunder (and Letter of Credit
Exposure and Loan Notes Guaranty Exposure, if applicable) is as set forth in
Item 4 of Annex I, and that after giving effect to the assignment provided for
herein the respective Commitments of the Assignor and the Assignee will be as
set forth in Item 4 of Annex I, (ii) except as set forth in clause (i) above,
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
the Credit Agreement, any other Credit Document or any other instrument or
document furnished pursuant thereto or the execution, legality, validity,
enforceability,
-1-
genuineness, sufficiency or value of the Credit Agreement, any other Credit
Document or any other instrument or document furnished pursuant thereto, and
(iii) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower or any of its Subsidiaries or
the performance or observance by the Borrower or any of its Subsidiaries of any
of their respective obligations under the Credit Agreement, any other Credit
Document or any other instrument or document furnished pursuant thereto.
3. The Assignee. The Assignee (i) represents and warrants that it is
legally authorized to enter into this Assignment and Acceptance, (ii) confirms
that it has received a copy of the Credit Agreement, together with copies of the
financial statements most recently required to have been delivered under Section
7.1 of the Credit Agreement and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance, (iii) agrees that it will, independently and
without reliance upon the Administrative Agent, the Assignor or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement, (iv) confirms that it is an Eligible
Assignee, (v) appoints and authorizes the Agent to take such actions as agent on
its behalf under the Credit Agreement and the other Credit Documents, and to
exercise such powers and to perform such duties, as are specifically delegated
to the Agent by the terms thereof, together with such other powers and duties as
are reasonably incidental thereto, and (vi) agrees that it will perform in
accordance with their respective terms all of the obligations that by the terms
of the Credit Agreement are required to be performed by it as a Lender. [To the
extent legally entitled to do so, the Assignee will deliver to the Agent, as and
when required to be delivered under the Credit Agreement, duly completed and
executed originals of the applicable tax withholding forms described in Section
2.17(d) of the Credit Agreement].(1)
4. Effective Date. Following the execution of this Assignment and
Acceptance by the Assignor and the Assignee, an executed original hereof,
together with all attachments hereto, shall be delivered to each of the Agent,
the Issuing Bank and the Borrower (and also to the Agent, the processing fee
referred to in Section 12.7(a) of the Credit Agreement). The effective date of
this Assignment and Acceptance (the "Effective Date") shall be the earlier of
(i) the date of acceptance hereof by the Agent, the Issuing Bank and the
Borrower or (ii) the date, if any, designated as the Effective Date in Item 5 of
Annex I (which date shall be not less than five (5) Business Days after the date
of execution hereof by the Assignor and the Assignee). As of the Effective Date,
(y) the Assignee shall be a party to the Credit Agreement and, to the extent
provided in this Assignment and Acceptance, shall have the rights and
obligations of a Lender thereunder and under the other Credit Documents, and (z)
the Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights (other than rights under the provisions of the Credit
Agreement and the other Credit Documents relating to indemnification or payment
of fees, costs and expenses, to the extent such rights relate to the time prior
to the Effective Date) and be released from its obligations under the Credit
Agreement and the other Credit Documents.
5. Payments; Settlement. On or prior to the Effective Date, in
consideration of the sale and assignment provided for herein and as a condition
to the effectiveness of this Assignment and Acceptance, the Assignee will pay to
the Assignor an amount (to be confirmed between the Assignor and the Assignee)
that represents the Assigned Share of the principal amount of the Loans of each
relevant Class made by the Assignor and outstanding on the Effective Date
(together, if and to the extent the Assignor and the
----------
(1) Insert if the Assignee is organized under the laws of a jurisdiction
outside the United States.
-2-
Assignee so elect, with the Assigned Share of any related accrued but unpaid
interest, fees and other amounts). From and after the Effective Date, the Agent
will make all payments required to be made by it under the Credit Agreement in
respect of each interest assigned hereunder (including, without limitation, all
payments of principal, interest and fees in respect of the Assigned Share of the
Assignor's Commitments and Loans assigned hereunder) directly to the Assignee.
The Assignor and the Assignee shall be responsible for making between themselves
all appropriate adjustments in payments due under the Credit Agreement in
respect of the period prior to the Effective Date. All payments required to be
made hereunder or in connection herewith shall be made in Dollars by wire
transfer of immediately available funds to the appropriate party at its address
for payments designated in Annex I.
6. Governing Law. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the internal laws of the State of North Carolina
(without regard to the conflicts of laws principles thereof).
7. Entire Agreement. This Assignment and Acceptance, together with the
Credit Agreement and the other Credit Documents, embody the entire agreement and
understanding between the parties hereto and supersede all prior agreements and
understandings of the parties, verbal or written, relating to the subject matter
hereof.
8. Successors and Assigns. This Assignment and Acceptance shall be binding
upon, inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns.
9. Counterparts. This Assignment and Acceptance may be executed in any
number of counterparts and by different parties hereto on separate counterparts,
each of which, when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.
-3-
IN WITNESS WHEREOF, the parties have caused this Assignment and Acceptance
to be executed by their duly authorized officers as of the date first above
written.
ASSIGNOR:
______________________________________
By: __________________________________
Title: _______________________________
ASSIGNEE:
______________________________________
By: __________________________________
Title: _______________________________
Accepted this _______ day of ______________, 19___:
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, as Agent and
as an Issuing Bank
By: __________________________________
Title: _______________________________
FIRST UNION NATIONAL BANK
(LONDON BRANCH), as an Issuing Bank
By: __________________________________
Title: _______________________________
-4-
Consented and agreed to:
CHARTWELL RE HOLDINGS CORPORATION
By: __________________________________
Title: _______________________________
-5-
ANNEX I TO ASSIGNMENT AND ACCEPTANCE
TO THE FIRST AMENDED AND RESTATED CREDIT AGREEMENT
1. Borrower: ________________________
2. Name and Date of Credit Agreement:
First Amended and Restated Credit Agreement, dated as of November 14,
1996, among Chartwell Re Holdings Corporation, certain Lenders from time
to time parties thereto, and First Union National Bank of North Carolina,
as Agent and as an Issuing Bank and First Union National Bank (London
Branch), as an Issuing Bank.
3. Date of Assignment and Acceptance: ________________, 19___.
4. Amounts:
Amount of
Aggregate for Assigned Assigned
Assignor Share(2) Share
----------- -------- ---------
(a) Tranche A Commitment $___________ _____% $___________
(b) Tranche A Loans $___________ _____% $___________
(c) Tranche B Commitment (pound)_____ _____% (pound)_____
(d) Tranche B Loans (pound)_____ _____% (pound)_____
(e) Tranche B Guaranty Exposure (pound)_____ _____% (pound)_____
(f) Revolver Guaranty Exposure (pound)_____ _____% (pound)_____
(g) Revolving Credit Commitment $___________ _____% $___________
(h) Revolving Loans(3) $___________ _____% $___________
(i) Letter of Credit Exposure $___________ _____% $___________
----------
(2) Percentage taken to up to ten decimal places, if necessary.
(3) Insert amounts outstanding as of the date of the Assignment and
Acceptance.
-6-
5. Effective Date: ________________________(4)
6. Addresses for Payments:
Assignor: _________________________________
_________________________________
Attention: __________________
Telephone: __________________
Telecopy: ___________________
Reference: __________________
Assignee: _________________________________
_________________________________
Attention: __________________
Telephone: __________________
Telecopy: ___________________
Reference: __________________
7. Addresses for Notices:
Assignor: _________________________________
_________________________________
Attention: __________________
Telephone: __________________
Telecopy: ___________________
Assignee: _________________________________
_________________________________
Attention: _________________
Telephone: _________________
Telecopy: __________________
8. Lending Office of Assignee for Dollar Facilities:
_________________________________
_________________________________
_________________________________
Attention: __________________
Telephone: ___________________
Telecopy: ____________________
----------
(4) Shall be a date not less than five Business Days after the date of
the Assignment and Acceptance.
-7-
9. Lending Office of Assignee for Sterling Facilities
_________________________________
_________________________________
_________________________________
Attention:_____________________
Telephone:______________________
Telecopy:_______________________
-8-
Exhibit D-1 to First Amended and Restated
Credit Agreement
First Union National Bank
of North Carolina, as Agent
Chartwell Re Holdings Corporation
November 14, 1996 /
$55,000,000/(pound)12,850,000
-----------------------------------------
FORM OF
COMPLIANCE CERTIFICATE
(GAAP Financial Statements)
THIS CERTIFICATE is given pursuant to Section 7.3(a) of the First Amended
and Restated Credit Agreement, dated as of November 14, 1996 (as amended,
modified or supplemented from time to time, the "Credit Agreement," the terms
defined therein being used herein as therein defined), among Chartwell Re
Holdings Corporation (the "Borrower"), certain banks and other financial
institutions from time to time parties thereto (the "Lenders"), First Union
National Bank (London Branch), as an Issuing Bank and First Union National Bank
of North Carolina, as Agent and as an Issuing Bank for the Lenders.
The undersigned hereby certifies that:(1)
1. He/she is [the duly appointed chief financial officer of the Borrower]
[a duly appointed treasurer of the Borrower having significant responsibility
for financial matters].
2. Enclosed with this Certificate are copies of the financial statements
of the Borrower and its Subsidiaries as of _____________, and for the
[________-month period] [year] then ended, required to be delivered under
Section [7.1(a)] [7.1(b)] of the Credit Agreement. Such financial statements
have been prepared in accordance with generally accepted accounting principles
[(subject to the absence of notes required by generally accepted accounting
principles and subject to normal year-end audit adjustments)](2) and present
fairly the financial condition of the Borrower and its Subsidiaries on a
consolidated basis as of the date indicated and the results of operations of the
Borrower and its Subsidiaries on a consolidated basis for the period covered
thereby, except that the consolidation of the Restricted Subsidiaries [(other
than for the audited financial statements)](3) is reported on the equity method
of accounting for investments.
3. The undersigned has reviewed the applicable terms of the Credit
Agreement and has made, or caused to be made under the supervision of the
undersigned, a review in reasonable detail of the activities of the Borrower and
its Subsidiaries during the accounting period covered by such financial
statements with a view to determining whether the Borrower has performed and
maintained all of its obligations under the Credit Agreement.
----------
(1) Insert applicable bracketed language throughout the Certificate.
(2) Insert in the case of quarterly financial statements.
(3) Insert in the case of annual financial statements.
4. Based upon the review described in paragraph 3 above, the undersigned
has no knowledge of the existence of any Default or Event of Default during or
at the end of the accounting period covered by such financial statements or as
of the date of this Certificate [, except as set forth herein].(4)
5. Attached to this Certificate as Attachment A is a Covenant Compliance
Worksheet reflecting the computation of the financial covenants set forth in
Sections 8.1 and 8.2 of the Credit Agreement, as of the last day of the period
covered by the financial statements enclosed herewith.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Certificate as of the _______ day of _____________, ____.
[signature]______________________
Name: _________________________________
Title: ________________________________
[ATTACH REVOLVING COMMITMENT WORKSHEET]
----------
(4) Insert if applicable and describe in the Certificate or in a separate
attachment any exceptions to paragraph 4 above by listing, in reasonable detail,
the nature of the Default or Event of Default, the period during which it
existed and the action that the Borrower has taken or proposes to take with
respect thereto.
-2-
ATTACHMENT A
TO
GAAP COMPLIANCE CERTIFICATE
COVENANT COMPLIANCE WORKSHEET
--------------------------------------------------------------------------------
Capitalization Ratio
(Section 8.1 of the Credit Agreement): Not greater than 0.375 to 1.0
--------------------------------------------------------------------------------
(1) Consolidated Indebtedness as of
the measurement date: $
==========
(2) Capitalization:
(a) Consolidated Indebtedness as of
the measurement date (from line 1) $
---------
(b) Consolidated Net Worth as of
the measurement date
---------
(c) Capitalization:
Add lines 2(a) and 2(b) $
==========
(3) Ratio of Indebtedness to Total Capitalization:
Divide line 1 by line 2(c) ___ to 1.0
--------------------------------------------------------------------------------
-i-
--------------------------------------------------------------------------------
Fixed Charge Coverage Ratio
(Section 8.2 of the Credit Agreement): Not less than 1.4 to 1.0
--------------------------------------------------------------------------------
(1) Cash Available:
(a) Aggregate Available Dividend Amount
for Reinsurance for the Measurement
Period(1) $
---------
(b) Net Tax Sharing Payments
for the Measurement Period
(i) Tax sharing payments received by Borrower $________
(ii) Tax sharing payments estimated to be
received by Borrower in respect of
Measurement Period ________
(iii) Taxes paid by Borrower (________)
(iv) Taxes estimated to be paid by Borrower
in respect of Measurement Period (________)
(v) Net Amount (lines (i) + (ii) minus
lines (iii) + (iv)) __________
(c) Payments from Beechwood
(i) Payment of principal received by Borrower
from Beechwood in respect of loans by Borrower to
Beechwood to effect the Acquisition ________
(ii) Payments of interest received by Borrower
from Beechwood in respect of loans by borrower to
Beechwood to effect the Acquisition ________
(iii) Total payments (add lines (c)(i) and (c)(ii) __________
(d) EBITDA
(e) Cash Available:
Add lines 1(a), 1(b)(v), 1(c)(iii) and 1(d) $
==========
(2) Fixed Charges:
(a) Projected Debt Service with respect to
the Loans during the Pro Forma Period(2) $_________
(b) Dividends paid by Parent during last
quarter of Measurement Period ________
(c) Multiply line 2(b) by 4 _________
(d) Fixed Charges:
Add lines 2(a) and 2(c) $__________
--------------------------------------------------------------------------------
----------
(1) Defined as the immediately preceding four quarters.
(2) For projected Debt Service attach calculations of components.
-ii-
--------------------------------------------------------------------------------
Fixed Charge Coverage Ratio (cont'd.)
(Section 8.2 of the Credit Agreement): Not less than 1.4 to 1.0
--------------------------------------------------------------------------------
(3) Fixed Charge Coverage Ratio:
Divide line 1(e) by line 2(d) ____ to 1.0
--------------------------------------------------------------------------------
-iii-
Exhibit D-2 to First Amended and
Restated Credit Agreement
First Union National Bank
of North Carolina, as Agent
Chartwell Re Holdings Corporation
November 14, 1996 /
$55,000,000/(pound)12,850,000
---------------------------------
FORM OF
COMPLIANCE CERTIFICATE
(Statutory Financial Statements)
THIS CERTIFICATE is given pursuant to Section 7.3(a) of the First Amended
and Restated Credit Agreement, dated as of November 14, 1996 (as amended,
modified or supplemented from time to time, the "Credit Agreement," the terms
defined therein being used herein as therein defined), among Chartwell Re
Holdings Corporation (the "Borrower"), certain banks and other financial
institutions from time to time parties thereto (the "Lenders"), First Union
National Bank (London Branch), as an Issuing Bank and First Union National Bank
of North Carolina, as Agent and as an Issuing Bank for the Lenders.
The undersigned hereby certifies that:(1)
1. He/she is [the duly appointed chief financial officer of the Borrower]
[a duly appointed treasurer of the Borrower having significant responsibility
for financial matters].
2. Enclosed with this Certificate are copies of the statutory financial
statements of the Insurance Subsidiaries as of _____________, and for the
[________-month period] [year] then ended, required to be delivered under
Section [7.2(a)] [7.2(c)] of the Credit Agreement. Such financial statements
have been prepared in accordance with Statutory Accounting Principles and
present fairly the financial condition of each Insurance Subsidiary as of the
date indicated and the results of operations of each Insurance Subsidiary for
the period covered thereby.
3. The undersigned has reviewed the applicable terms of the Credit
Agreement and has made, or caused to be made under the supervision of the
undersigned, a review in reasonable detail of the activities of the Borrower and
its Subsidiaries during the accounting period covered by such financial
statements with a view to determining whether the Borrower has performed and
maintained all of its obligations under the Credit Agreement.
4. Based upon the review described in paragraph 3 above, the undersigned
has no knowledge of the existence of any Default or Event of Default during or
at the end of the accounting period covered by such financial statements or as
of the date of this Certificate [, except as set forth herein].(2)
----------
(1) Insert applicable bracketed language throughout the Certificate.
(2) Insert if applicable and describe in the Certificate or in a separate
attachment any exceptions to paragraph 4 above by listing, in reasonable detail,
the nature of the Default or Event of Default, the period during which it
existed and the action that the Borrower has taken or proposed to take with
respect thereto.
5. Attached to this Certificate as Attachment A is a Covenant Compliance
Worksheet reflecting the computation of the financial covenants set forth in
Sections 8.3, 8.4 and 8.5 of the Credit Agreement as of the last day of the
period covered by the financial statements enclosed herewith.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Certificate as of the _______ day of _____________, ____.
[signature]__________________________________
Name: _______________________________________
Title: ______________________________________
-2-
ATTACHMENT A
TO
STATUTORY COMPLIANCE CERTIFICATE
COVENANT COMPLIANCE WORKSHEET
--------------------------------------------------------------------------------
Operating Leverage Ratios (1) Not greater than 2.0 to 1.0
(Section 8.3 of the Credit Agreement):
--------------------------------------------------------------------------------
(1) Sum of the Consolidated Net Written Premiums
of the Insurance Subsidiaries during four fiscal
quarters immediately preceding measurement date1 $
========
(2) Sum of Statutory Surplus of Reinsurance
as of the end of the prior fiscal quarter $
========
(3) Ratio of Consolidated Net Written
Premiums to Statutory Surplus:
Divide line 1 by line 2 ______ to 1.0
--------------------------------------------------------------------------------
----------
1Until completion of four full fiscal quarters following the Closing Date,
such amount shall be the annualized amounts for the full fiscal quarters
actually elapsed since the Closing Date.
-i-
--------------------------------------------------------------------------------
Statutory Surplus Line (2) to be not less than line (1)
(Section 8.4 of the Credit Agreement) or line (1)(b)(iv), as applicable
--------------------------------------------------------------------------------
(1) Required Consolidated Statutory Surplus as
of the measurement date: $180,000,000
(2) Statutory Surplus of Reinsurance as of end
of measurement date $
===========
--------------------------------------------------------------------------------
-ii-
--------------------------------------------------------------------------------
Risk-Based Capital Total adjusted capital of Reinsurance
(Section 8.5 of the Credit Agreement)1: to be not less than 150% of applicable
Company Action Level RBC
--------------------------------------------------------------------------------
(1) Required total adjusted capital as
of the measurement date:
(a) Company Action Level RBC2 as
of the measurement date $_______________
(b) Required total adjusted capital:
Multiply line 1(a) by 150% $
===============
(2) Total adjusted capital3 as of
the measurement date $
===============
--------------------------------------------------------------------------------
----------
1To be calculated and submitted annually.
2As defined by the Risk-Based Capital for Insurers Model Act of the NAIC.
-iii-
Exhibit E-1 to First Amended and
Restated Credit Agreement
First Union National Bank
of North Carolina, as Agent
Chartwell Re Holdings Corporation
November 14, 1996 / $55,000,000/
(pound)12,850,000
---------------------------------
November 14, 0000
Xxxxx Xxxxx Xxxxxxxx Xxxx xx Xxxxx Xxxxxxxx, as Agent
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Re: $55,000,000 and (pound)12,850,000 First Amended and Restated Credit
Agreement dated as of November 14, 1996 among Chartwell Re Holdings
Corporation, as Borrower, First Union National Bank (London Branch), as an
Issuing Bank, First Union National Bank of North Carolina, as Agent and as
an Issuing Bank, and the Lenders Named Therein
Gentlemen:
We have acted as special counsel to Chartwell Re Holdings Corporation, a
Delaware corporation ("Holdings"), and Chartwell Re Corporation, a Delaware
corporation ("Chartwell Corp."), in connection with the execution and delivery
of that certain First Amended and Restated Credit Agreement dated November 14,
1996 (the "Credit Agreement"), among Holdings, First Union National Bank (London
Branch), as an Issuing Bank, First Union National Bank of North Carolina, a
national banking association, as Agent and as an Issuing Bank (the "Agent"), and
the Lenders named therein (the "Lenders"). Capitalized terms used herein which
are not otherwise defined herein have the meanings attributed thereto in the
Credit Agreement.
In that connection, we have examined originals, or copies certified or
otherwise identified to our satisfaction, of the Credit Agreement, the Guaranty,
the Borrower Escrow and Security Agreement, the Notes (collectively, the "Credit
Documents"). We have also examined (a) the Articles of Incorporation of
Holdings, as amended to date, certified by the Secretary of State of the State
of Delaware and the Secretary of Holdings; (b) the By-Laws of Holdings, as
amended to date, certified by the Secretary of Holdings; (c) a certificate dated
October 11, 1996 of the Secretary of State of the State of Delaware, certifying
as to the legal existence and corporate good standing of Holdings; (d) a
certificate of the Secretary of Holdings as to, among other things, the
incumbency of certain of its officers and certain resolutions of its Board of
Directors relating to the Credit Documents and the Transaction Documents (as
hereinafter defined); (e) the Articles of Incorporation of Chartwell Corp., as
amended to date, certified by the Secretary of State of the State of Delaware
and the Secretary of Chartwell Corp.; (f) the By-Laws of Holdings, as amended to
date, certified by the Secretary of
First Union National Bank of North Carolina,
as Agent
November 14, 1996
Page 2
----------------------------------------------
Chartwell Corp.; (g) a certificate dated October 11, 1996 of the Secretary of
State of the State of Delaware, certifying as to the legal existence and
corporate good standing of Chartwell Corp.; (h) a certificate of the Secretary
of Chartwell Corp. as to, among other things, the incumbency of certain of its
officers and certain resolutions of its Board of Directors relating to the
Credit Documents and the Transaction Documents (as hereinafter defined); and (i)
such other records of corporate proceedings of Holdings and Chartwell Corp. as
we have deemed material to the opinions rendered herein.
In addition, we have examined such other instruments, certificates,
documents, agreements and written materials, and have considered such questions
of law (subject to the limitations set forth herein), as we have deemed
necessary or appropriate for the purpose of rendering this opinion. As to any
facts material to our opinion, we have, when relevant facts were not
independently established by us, relied upon the aforesaid instruments,
certificates, documents, agreements and written materials. Additionally, when
any opinion set forth herein relates to the existence, fact of qualification or
standing of Holdings and Chartwell Corp., such opinion is based entirely upon,
and is limited by, the certificates of public officials and officers of Holdings
and Chartwell Corp. referred to above.
In performing our examination, we have assumed, without inquiry, (i) the
authenticity of all documents submitted to us as originals, (ii) the conformity
to authentic original documents of all documents submitted to us as copies,
(iii) the genuineness of all signatures (other than those of officers of
Holdings and Chartwell Corp.), and (iv) the competency and/or legal existence of
all parties to the Credit Documents (other than Holdings and Chartwell Corp.).
We also have assumed (and relied entirely upon such assumption), without inquiry
or other investigation, (i) that the parties (other than Holdings and Chartwell
Corp.) to each of the Credit Documents have all requisite corporate power and
authority and have taken all necessary action to execute and deliver each such
agreement and to perform all other obligations and otherwise to effect the
transactions contemplated thereby, (ii) that each such Credit Document is a
valid, binding and enforceable obligation of each of the parties thereto (other
than Holdings and Chartwell Corp.), and (iii) the truth and accuracy of the
representations as to all matters of fact (including factual conclusions and
characterizations and descriptions of purpose, intention or other state of mind)
relating to Holdings and Chartwell Corp. set forth in the Credit Documents and
in the certificates of Holdings and Chartwell Corp. referred to above.
In rendering the opinions set forth below, we have relied, with your
express permission and without further inquiry, upon the opinions expressed in
the opinion letter of even date herewith rendered by Xxxxxxxx X. Xxxxxxx, Vice
President and General Counsel of Holdings and Chartwell Corp., other than the
opinions expressed in paragraph (e) of such opinion letter (the "Xxxxxxx
Opinions").
We call your attention to the fact that, although we have acted as counsel
to Holdings and Chartwell Corp., our representation has been limited to
individual matters referred to us by the management of Holdings and Chartwell
Corp., respectively. Except for examination of the documents enumerated above,
we have made no independent investigation as to the organization, existence or
affairs of Holdings and Chartwell Corp. Without limiting the generality of the
foregoing, we have made no examination of dockets or other public records,
except as expressly set forth above. Further, we have not represented Holdings
and Chartwell Corp.
First Union National Bank of North Carolina,
as Agent
November 14, 1996
Page 3
----------------------------------------------
in connection with the preparation or negotiation of the Announcement, the
Tender Offer, the Loan Notes, the Loan Notes Guaranty (collectively, the
"Transaction Documents") or any other documents or instruments executed in
connection therewith.
Whenever our opinion herein, with respect to the existence or absence of
facts or circumstances, indicates that it is based on our knowledge or
awareness, such indication signifies that, during the course of our
representation of Holdings and Chartwell Corp. in this matter and as herein
described, no information has come to the attention of the individual lawyers in
the firm who have participated directly in the transaction to which this opinion
relates which would give us current actual knowledge, other than as herein
described, and no special or additional investigation has been undertaken for
the purpose thereof.
The opinions set forth herein concerning the validity, binding effect and
enforceability of a particular agreement means that (x) such agreement
constitutes an effective contract under applicable law, (y) such agreement is
neither invalid in its entirety because of a specific statutory prohibition or
public policy nor is it subject in its entirety to a contractual defense and (z)
subject to the last sentence of this paragraph, a remedy is available upon a
material default under such agreement. This opinion does not mean that (a) any
particular remedy is available upon a material default or (b) every provision of
such agreement will be upheld or enforced in any or each circumstance by a
court. The opinions expressed below are further qualified to the extent that the
enforceability of any provision of any of the Credit Documents, or any rights
granted pursuant to the Credit Documents, or obligations incurred thereunder,
may be subject to and affected by:
(a) applicable bankruptcy, receivership, rehabilitation, insolvency,
reorganization, moratorium, or other laws affecting the enforcement
of the rights and remedies of creditors and secured parties
generally (including, without limitation, such laws as may deny
giving effect to waivers of rights of debtors or guarantors and
imposition of penalties); and such duties and standards as are, or
may be, imposed on creditors, including without limitation,
materiality, good faith, reasonableness and fair dealing, under the
Uniform Commercial Code or any other applicable law or judicial
decision;
(b) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law)
and the exercise of equitable powers by a court of competent
jurisdiction (and no opinion is expressed herein as to any specific
or equitable relief of any kind or as to the availability of
equitable remedies); and
(c) applicable state and federal laws relating to fraudulent
conveyances.
In addition, our opinions as to enforceability should not be construed to
provide any opinion regarding the validity, binding effect or enforceability of
(x) provisions to the effect that failure to exercise, or delay in exercising,
rights or remedies will not operate as a waiver of any such right or remedy or
(y) disclaimers, liability limitations with respect to third parties, releases,
legal or equitable discharge of defenses, liquidated damages provisions,
provisions purporting to waive the benefit of statutory or common law rights, or
First Union National Bank of North Carolina,
as Agent
November 14, 1996
Page 4
----------------------------------------------
provisions releasing a party from, or indemnifying a party against, liability
for its own wrongful or negligent acts.
Based upon and subject to the foregoing and to the qualifications set
forth below, we are of the opinion that:
1. Each of Holdings and Chartwell Corp. (each, a "Credit Party") is a
corporation validly existing and in good standing under the laws of the State of
Delaware.
2. Each Credit Party has the requisite corporate power and authority (i)
to execute and deliver the Credit Documents to which it is party, (ii) in the
case of Holdings only, to borrow money under the Credit Agreement and to pledge
and grant or convey the security interests contemplated in the Borrower Escrow
and Security Agreement, and (iii) to perform all of its obligations under the
Credit Documents to which it is party; it being understood that we express no
opinion as to any consents of, approvals of, authorizations from, filings with,
or notices to any governmental authority required or advisable under the laws of
England, the laws of the United Kingdom, or laws governing insurance (or
reinsurance) companies or insurance (or reinsurance) activities of any
jurisdiction, domestic or foreign.
3. To our knowledge, no consent or authorization or filing with any
governmental authority is required under Connecticut law or the General
Corporation Law of the State of Delaware in connection with the execution,
delivery and performance by Holdings or Chartwell Corp. of the Credit Documents
to which it is a party; it being understood that we express no opinion as to any
consents of, approvals of, authorizations from, filings with, or notices to any
governmental authority required or advisable under the laws of England, the laws
of the United Kingdom, or laws governing insurance (or reinsurance) companies or
insurance (or reinsurance) activities of any jurisdiction, domestic or foreign.
4. The execution and delivery by Holdings or Chartwell Corp. of the Credit
Documents to which it is a party (and each Credit Party's performance of its
obligations thereunder) do not and will not conflict with any provisions of (i)
in the case of Holdings only, the Certificate of Incorporation or By-Laws of
Holdings, (ii) in the case of Chartwell Corp. only, the Certificate of
Incorporation or ByLaws of Chartwell Corp., or (iii) any law, rule or regulation
of the State of Connecticut, the federal laws of the United States of America,
or the General Corporation Law of the State of Delaware.
5. Each of the Credit Agreements to which either Credit Party is a party
has been duly executed by one or more authorized officers of such Party.
6. Assuming that the choice of North Carolina law to govern the Credit
Agreement, the Notes, the Guaranty and the Borrower Escrow and Security
Agreement is appropriate and permissible under the laws of the State of North
Carolina, in an action or proceeding arising out of or relating to the Credit
Agreement, the Notes, the Guaranty and the Borrower Escrow and Security
Agreement in any Connecticut court, such
First Union National Bank of North Carolina,
as Agent
November 14, 1996
Page 5
----------------------------------------------
court, if properly presented with the question, would recognize and give effect
to the choice of law provisions contained in the Credit Agreement, the Notes and
the Guaranty, which by their terms are governed by the laws of the State of
North Carolina, and would accordingly, apply North Carolina law thereto.
Assuming nevertheless that the choice of law provisions contained in the Credit
Agreement, the Notes and the Guaranty were not respected by a Connecticut court
and that therefore, the Credit Agreement, the Notes and the Guaranty in their
entirety were governed by the laws of the State of Connecticut, then the Credit
Agreement, the Notes and the Guaranty would be valid and binding obligations of
such Credit Party, enforceable against such Credit Party in accordance with its
respective terms. With respect to the validity and binding effect of the
Guaranty and its enforceability against Chartwell Corp., the foregoing opinion
is based upon (i) the indirect benefits to Chartwell Corp. arising out of the
transactions contemplated by the Credit Documents and the Transaction Documents,
(ii) the authority of Holdings to borrow funds pursuant to the Credit Agreement,
(iii) the right of subrogation contemplated by the Guaranty, (iv) the benefit to
the operations and goodwill of Holdings, Chartwell and their Affiliates arising
out of the transactions contemplated by the Credit Documents and the Transaction
Documents, and (v) your reliance on the Guaranty in entering into the Credit
Agreement.
7. Assuming in each respective case that the Agent or each Lender (i)
makes no other loans to Persons in Connecticut, (ii) has no other lending,
banking or trust activities in Connecticut, and (iii) is not otherwise engaged
in a banking, trust or other business under Connecticut law, the Agent and each
such Lender is not required to comply with the requirement of any foreign lender
statute in the State of Connecticut in order to carry out the transactions
contemplated by the Credit Documents or to avail itself of the remedies provided
for thereby.
8. If the Credit Agreement, the Notes and the other Credit Documents were
governed by the laws of the State of Connecticut, so long as the Loans and/or
the Lenders and the Agent meet the applicable criteria set forth in Section
3.7-9 of Chapter 673, Title 37 of the Connecticut General Statutes, the
interest, fees and other charges provided for in the Credit Documents would not
violate usury provisions set forth in Section 37-4, 37-5 or 37-6 of Chapter 673,
Title 37 of the Connecticut General Statutes.
9. The execution and delivery of the Credit Agreement and the performance
of the obligations thereunder, taken by themselves without regard to any other
activities or potential activities of the Agent within or without the State of
Connecticut, will not cause any federal or Connecticut state taxes to be owing
in connection with such execution, delivery or performance or as a precondition
to the enforcement by the Agent of its rights and remedies under the Credit
Documents.
10. Based solely on the Xxxxxxx Opinions and the certifications and
representations of Holdings and Chartwell Corp. regarding their business
activities, neither Credit Party is an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
11. Based solely on the certifications and representations of Holdings as
to the use of the proceeds of the Term Loans to be made pursuant to the Credit
Agreement, the consummation of the transactions contemplated by the Term Loans
under the Credit Agreement and the Credit Documents will not violate or
First Union National Bank of North Carolina,
as Agent
November 14, 1996
Page 6
----------------------------------------------
result in a violation of Regulation G, T, U or X or any other regulation of the
Board of Governors of the Federal Reserve System.
We are admitted to the practice of law in the State of Connecticut and we
express no opinion herein as to the laws of any jurisdictions other than the
General Corporation Law of the State of Delaware, the law of the State of
Connecticut and the Federal law of the United States of America. The opinions
rendered herein are being delivered solely to you, the Lenders and the Assignees
pursuant to Section 12.7(a) of the Credit Agreement, and for your and their sole
benefit in connection with the Credit Agreement and may not be relied upon by
any other party or in any other transaction. This opinion relates solely to
matters existing as of the date hereof and we disclaim any obligation to update
this opinion for events occurring after such date.
Very truly yours,
Exhibit E-2 to First Amended and
Restated Credit Agreement
First Union National Bank
of North Carolina, as
Agent
Chartwell Re Holdings Corporation
November 14, 1996 /
$55,000,000/(pound)12,850,000
---------------------------------
November 14, 0000
Xxxxx Xxxxx Xxxxxxxx Xxxx xx Xxxxx Xxxxxxxx, as Agent
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Re: $55,000,000 and (pound)12,850,000 First Amended and Restated Credit
Agreement (the "Credit Agreement") dated as of November 14, 1996
among Chartwell Re Holdings Corporation, as Borrower, First Union
National Bank of North Carolina, as Agent, and the Lenders Named
Therein
Ladies and Gentlemen:
I have acted as General Counsel to Chartwell Re Corporation ("Parent"), a
Delaware corporation, and Chartwell Re Holdings Corporation ("Borrower"), also a
Delaware corporation, in connection with the execution and delivery of that
certain First Amended and Restated Credit Agreement dated November 14, 1996 (the
"Credit Agreement"), among Holdings, First Union National Bank of North
Carolina, a national banking association, as Agent (the "Agent"), and the
Lenders named therein (the "Lenders"). Capitalized terms used herein which are
not otherwise defined herein have the meanings attributed thereto in the Credit
Agreement.
In connection with rendering this opinion, I have examined or am familiar with
originals (or copies, certified or otherwise identified to my satisfaction) of
such agreements, instruments, documents, certificates and records as I have
deemed necessary or appropriate for the purposes of the opinions rendered below.
In my examination, I have assumed the genuineness of all signatures, the legal
capacity of all natural persons, the authenticity of all original documents, and
the conformity to original documents of all copies of documents.
In addition, I have assumed (and relied entirely upon such assumption) without
inquiry of investigation, that (i) the parties to the Credit Documents (other
than Borrower and Parent) have taken all necessary action to execute and deliver
each such document and to perform all other obligations and otherwise to effect
the transactions contemplated thereby, and (ii) each such document is a valid,
binding and enforceable obligation of each of the parties thereto (other than
Borrower and Parent).
The opinions set forth herein concerning the validity, binding effect and
enforceability of a particular agreement means that (x) such agreement
constitutes an effective contract under applicable law, (y) such agreement is
neither invalid in its entirety because of a specific statutory prohibition or
public policy nor is it subject in its entirety to a contractual defense and (z)
subject to the last sentence of this paragraph, a remedy is available upon a
material default under such agreement. This opinion does not mean that (a) any
particular remedy is available upon a material default or (b) every provision of
such agreement will be upheld or enforced in any or each circumstance by a
court. The opinions expressed below are further qualified to the extent that the
enforceability of any provision of any of the Credit Documents, or any rights
granted pursuant to the Credit Documents, or obligations incurred thereunder,
may be subject to and affected by:
a. applicable bankruptcy, receivership, rehabilitation, insolvency,
reorganization, moratorium, or other laws affecting the enforcement
of the rights and remedies of creditors and secured parties
generally (including, without limitation, such laws as may deny
giving effect to waivers of rights of debtors or guarantors and
imposition of penalties); and such duties and standards as are, or
may be, imposed on creditors, including without limitation,
materiality, good faith, reasonableness and fair dealing, under the
Uniform Commercial Code or any other applicable law or judicial
decision;
b. general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law)
and the exercise of equitable powers by a court of competent
jurisdiction (and no opinion is expressed herein as to any specific
or equitable relief of any kind or as to the availability of
equitable remedies); and
c. applicable state and federal laws relating to fraudulent
conveyances.
In addition, our opinions as to enforceability should not be construed to
provide any opinion regarding the validity, binding effect or enforceability of
(x) provisions to the effect that failure to exercise, or delay in exercising,
rights or remedies will not operate as a waiver of any such right or remedy or
(y) disclaimers, liability limitations with respect to third parties, releases,
legal or equitable discharge of defenses, liquidated damages provisions,
provisions purporting to waive the benefit of statutory or common law rights, or
provisions releasing a party from, or indemnifying a party against, liability
for its own wrongful or negligent acts.
Based upon and subject to the foregoing and to the qualifications set forth
below, we are of the opinion that:
a. Each of the Borrower and Parent (each, a "Credit Party") is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and is duly qualified to
transact business and is in good standing in each foreign
jurisdiction in which the nature of its business requires it to be
qualified.
b. Each Credit Party has the full corporate power and authority to
execute and deliver the Transaction Documents to which it is party,
to borrow money under the Credit Agreement (in the case of the
Borrower), to pledge and grant or convey security interests in and
liens upon its assets as collateral as required under the Credit
Agreement and under the other Credit Documents, and to perform all
of its obligations under the Transaction Documents to which it is
party.
c. All corporate action by each Credit Party and all consents and
approvals of any Persons, including but not limited to Connecticut
and Minnesota governmental agencies or authorities, necessary to the
validity of each of the Transaction Documents have been duly taken
or obtained, and the execution and delivery of the Transaction
Documents by the Credit Parties (and each Credit Party's performance
thereunder) do not and will not conflict with any provisions of the
certificate of incorporation, articles of organization or bylaws of
any Credit Party, or of any applicable laws or of any agreements or
contracts binding on any Credit Party or its properties, or, to my
knowledge, result in the creation or imposition of any Lien (other
than the Liens created pursuant to the Credit Documents) upon any
property or assets of the Borrower or any of its Subsidiaries.
d. Each Transaction Document to which any Credit Party is a party has
been duly executed by authorized officers of such Credit Party.
e. Assuming that the choice of North Carolina law to govern the Credit
Agreement, the Notes, the Guaranty and the Borrower Escrow and
Security Agreement is appropriate and permissible under
the laws of the State of North Carolina, in an action or proceeding
arising out of or relating to the Credit Agreement, the Notes, the
Guaranty or the Borrower Escrow and Security Agreement in any
Connecticut court, such court, if properly presented with the
question, would recognize and give effect to the choice of law
provisions contained in the Credit Agreement, the Notes, the
Guaranty and the
Borrower Escrow and Security Agreement, which by their terms are
governed by the laws of the State of North Carolina, and would
accordingly, apply North Carolina law thereto. Assuming nevertheless
that the choice of law provisions contained in the Credit Agreement,
the Notes and the Guaranty were not respected by a Connecticut court
and that therefore, the Credit Agreement, the Notes and the Guaranty
in their entirety were governed by the laws of the State of
Connecticut, then the Credit Agreement, the Notes and the Guaranty
would be valid and binding obligations of such Credit Party,
enforceable against such Credit Party in accordance with its
respective terms. With respect to the validity and binding effect of
the Guaranty and its enforceability against Parent, the foregoing
opinion is based upon (i) the indirect benefits to Parent arising
out of the transactions contemplated by the Credit Documents and the
Transaction Documents, (ii) the authority of Borrower to borrow
funds pursuant to the Credit Agreement, (iii) the right of
subrogation contemplated by the Guaranty, (iv) the benefit to the
operations and goodwill of Borrower, Parent and their Affiliates
arising out of the transactions contemplated by the Credit Documents
and the Transaction Documents, and (v) your reliance on the Guaranty
in entering into the Credit Agreement.
f. To the best of my knowledge, there are no actions, suits or
proceedings pending or threatened against or affecting any Credit
Party or any Material Subsidiary or any properties of any Credit
Party or any Material Subsidiary at law or in equity, before any
court or administrative officer or agency, that might result in a
Material Adverse Change, that question the validity of the Credit
Agreement or any other Credit Document, or that might impair the
ability of any Credit Party that is party to any such agreement to
perform its obligations thereunder.
g. No Credit Party is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
This opinion is limited to the express matters set forth herein as of this date.
This opinion is being furnished only to you, the Issuing Banks, the Lenders, and
Assignees pursuant to Section 12.7(a) of the Credit Agreement and is solely for
your and their benefit in connection with the extension of credit pursuant to
the Credit Agreement. It may not be delivered to, or relied upon by, any other
person without my prior written consent, except that it may be relied upon by
the law firm of LeBoeuf, Lamb, Xxxxxx & XxxXxx in the preparation of XxXxxxx'x
opinion to be delivered to the Bank in connection with the Credit Agreement and
the transactions contemplated thereby.
Very truly yours,
Xxxxxxxx X. Xxxxxxx
Vice President, General Counsel
and Secretary
Exhibit E-3 to First Amended and Restated
Credit Agreement
First Union National Bank
of North Carolina, as Agent
Chartwell Re Holdings Corporation
November 14, 1996 / $55,000,000/
(pound)12,850,000
-----------------------------------------
[LETTERHEAD OF XX XXXXXXX]
First Union National Bank of
North Carolina
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx XX-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
The Lenders under the First Amended and
Restated Credit Agreement among
Chartwell Re Holdings Corporation, the
Lenders named therein, First Union
National Bank of North Carolina, as
Agent and an Issuing Bank, and First
Union National Bank (London Branch) as
an Issuing Bank ("Credit Agreement")
dated November 14, 1996, and their
Assignees as therein defined
Dear Sirs:
This Opinion is supplied to you in connection with the Charge over Cash Deposit
(the "Beechwood Escrow and Security Agreement") dated November 22, 1996 between
First Union National Bank of North Carolina, as Agent, and Chartwell Holdings
Limited (the "Chargor").
For the purposes of this Opinion, we have examined the following documents:
1. the Beechwood Escrow and Security Agreement;
2. the Memorandum and Articles of Association of the Chargor;
3. the register of Directors of the Chargor;
4. the Acquisition Documents as defined in the Credit Agreement;
5. Board Minutes of the Chargor dated 22 November 1996.
First Union National Bank
of North Carolina
Page 2
---------------------------
We commissioned company searches at the Registry of Companies of England and
Wales and at Companies Court on 22 November 1996 in respect of the Chargor. We
have not conducted any further searches since such date and we assume that
further searches would not reveal any circumstances which would require an
amendment to this Opinion.
Except for the documents and register referred to above, we have not for the
purpose of rendering this Opinion examined any contracts instruments or other
documents entered into by or affecting the Chargor or any other party to the
Beechwood Escrow and Security Agreement or any corporate records of the Chargor
or any other such party and have not made any other enquiries concerning the
Chargor or any other such parties.
For the purposes of the opinions hereinafter expressed, we have relied on the
following assumptions which we have not independently verified: (i) the
genuineness of all signatures on the documents we have reviewed; (ii) the
conformity with the draft identified as "Form of Execution Copy" examined by us
of the Beechwood Escrow and Security Agreement; (iii) the conformity with the
drafts examined by us of the Acquisition Documents; (iv) the conformity with the
execution copy of the Credit Agreement (as blacklined against the original
draft) examined by us with the Credit Agreement; and (v) the authenticity of all
documents submitted to us as originals and the conformity with their originals
of all documents submitted to us as copies.
With respect to the opinion expressed in paragraph d(ii), we have relied on
paragraph number 9 of the minutes of the board of directors of the Chargor dated
November 22, 1996 stating the board's conclusion that the Chargor will receive a
commercial benefit by reason of the Charge.
In rendering this Opinion, we do not express any opinion as to the laws of any
jurisdiction other than the laws of England, as at the date hereof. We can
therefore express no Opinion upon the interpretation which any court outside
England and Wales might place on any term which is meaningful in English law nor
upon any interpretation which the Courts of England and Wales might place upon
any term which is not so meaningful.
For the purposes of this opinion we assume that: (i) insofar as any matters
contained herein would be interpreted by the courts of the State of North
Carolina, such courts would interpret English law in the same manner as would an
English court; (ii) the Beechwood Escrow and Security Agreement will, within the
prescribed period, be delivered, together with the relative form duly completed,
to the Registrar of Companies for registration; and (iii) First Union National
Bank of North Carolina and First Union National Bank (London Branch) are
separate legal entities.
Based upon and subject to the foregoing and subject to any matters not disclosed
to us and the qualifications set out below, it is our opinion that:
a. the Chargor is duly incorporated with limited liability under the laws of
England and Wales.
b. the Chargor has all requisite corporate power and authority to execute and
deliver the Beechwood Escrow and Security Agreement and to assign by way
of security to the Agent all of its right, title, benefit and interest in
the Account (as defined in the Beechwood Escrow and Security Agreement)
and the other Charged Property (as defined in the Beechwood Escrow and
Security Agreement) as
First Union National Bank
of North Carolina
Page 3
---------------------------
required under the Beechwood Escrow and Security Agreement and to perform
all of its obligations under the Beechwood Escrow and Security Agreement.
c. All corporate action by the Chargor (other than delivery of the Beechwood
Escrow and Security Agreement with the relative form to the Registrar of
Companies for registration) and all consents and approvals of any Persons
in the United Kingdom, including but not limited to governmental agencies
or authorities, necessary to the validity of the Beechwood Escrow and
Security Agreement have been duly taken or obtained and the execution and
delivery of the Beechwood Escrow and Security Agreement by the Chargor and
the Chargor's performance thereunder do not, as of the date hereof,
conflict with any provisions of the Memorandum and Articles of Association
of the Chargor or any of the applicable laws or result in the creation or
imposition of any Lien (other than the Liens created pursuant to the
Beechwood Escrow and Security Agreement) upon any property or assets of
the Chargor.
d. The Beechwood Escrow and Security Agreement (i) has been duly executed by
authorised officers of the Chargor and (ii) is a valid and binding
obligation of the Chargor, enforceable against the Chargor in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganisation, moratorium or other similar laws affecting
creditors' rights generally or by general equitable principles, including
without limitation, concepts of materiality, reasonableness, good faith
and fair dealing (regardless of proceedings in equity or at law) or by
issues of jurisdiction or reciprocal enforcement of judgments.
e. No stamp duty or registration or similar taxes or charges are payable in
England in respect to the Beechwood Escrow and Security Agreement.
f. The Beechwood Escrow and Security Agreement creates a charge on the
Charged Property as security for the Secured Obligations (as defined in
the Beechwood Escrow and Security Agreement).
g. All consents and approvals of any Persons including but not limited to
governmental agencies or authorities, necessary under English law to the
validity of each of the Acquisition Documents, to which the Parent or any
of its Subsidiaries is a party, have been duly taken or obtained and the
execution and delivery of such Acquisition Documents by the Parent or any
of its Subsidiaries (and such party's performance thereunder) do not and
will not conflict with any applicable laws of England.
h. Under English law the Chargor can validly submit to the jurisdiction of
the State Courts of North Carolina or any Federal Court located within the
State of North Carolina.
Nothing in this Opinion is to be taken as indicating that the remedy of specific
performance or the issue of an injunction would be available in an English Court
in respect of any obligations of the parties thereto under the Beechwood Escrow
and Security Agreement in that such remedies are available only at the
discretion of the court. Specific performance is not usually granted and an
injunction is not usually issued where damages would be an adequate alternative.
First Union National Bank
of North Carolina
Page 4
---------------------------
This Opinion is governed by and construed in accordance with the Laws of
England. Words and expressions used herein are, unless otherwise indicated, as
defined in the Credit Agreement.
This Opinion is solely for the benefit of the persons to whom it is addressed
and it is not to be relied upon by any other or for any other purpose, nor,
unless and to such extent as may be required by law, is it to be quoted or to be
made public in any way without our prior written consent.
Yours faithfully
Exhibit F-1 to Credit Agreement
First Union National Bank
of North Carolina, as Agent
Chartwell Re Holdings Corporation
November 14, 1996 /
$55,000,000/(pound)12,850,000
---------------------------------
Dated November 22 1996
Chartwell Holdings Limited (1)
and
First Union National Bank of North Carolina (2)
as trustee and agent for each of the Banks
----------------------------------------------------------
Charge over Cash Deposit
----------------------------------------------------------
XxXXXXX & Co
TABLE OF CONTENTS
Clause Page
------ ----
1. Definitions and Interpretation....................................... 1
2. Security and Rights of Set Off....................................... 3
3. Secured Liabilities.................................................. 3
4. Covenants, Representations and Warranties by the Chargor............. 4
5. Non-Competition...................................................... 5
6. Non-Exoneration...................................................... 5
7. Further Assurance.................................................... 6
8. Powers of Mortgagees................................................. 6
9. Power of Attorney.................................................... 7
10. Continuing Security.................................................. 8
11. [NOT USED]........................................................... 8
12. Currency Clauses..................................................... 8
13. Remedies, Waivers and Consents....................................... 9
14. Notices.............................................................. 9
15. The Agent as Trustee and Indemnity................................... 10
16. Payments free of Deduction........................................... 11
17. Avoidance of Payments................................................ 11
18. Miscellaneous........................................................ 12
19. Governing Law........................................................ 12
Schedule 1.................................................................. 14
Part 1 ............................................................. 14
Part 2 ............................................................. 15
THIS CHARGE is made the 22nd day of November 1996
BETWEEN:-
(1) CHARTWELL HOLDINGS LIMITED (No. 3261531) whose registered office is at
12th Floor, Fountain House, 000 Xxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX (the
"Chargor"); and
(2) FIRST UNION NATIONAL BANK OF NORTH CAROLINA a national banking
association with offices in Charlotte, North Carolina, U.S.A., as trustee
and agent for the Banks (as hereinafter defined) (in such capacity the
"Agent").
WHEREAS:-
(A) By an agreement dated 14 November 1996 and made between Chartwell Re
Holdings Corporation, a Delaware corporation with its principal offices
in Stamford, Connecticut, USA (the "Borrower") (1), the Lenders (as
therein defined) (2) First Union National Bank of North Carolina as agent
for the Lenders (as therein defined) (in such capacity "First Union") (3)
and First Union National Bank (London Branch) as an Issuing Bank (4) (the
"Credit Agreement") the Lenders (as therein defined) have agreed to make
available to the Borrower certain facilities in connection with the
Tender Offer (as such term is defined in the Credit Agreement) made on
behalf of the Chargor for the issued share capital of Xxxxxx Group
Holdings plc.
(B) In accordance with the provisions of the Credit Agreement, the Chargor
has opened a deposit account (account number 00000000) with First Union
National Bank (London Branch) ("First Union (London)") at 0 Xxxxxxxxxxx,
Xxxxxx XX0X 0XX and may in accordance with the provisions of the Credit
Agreement deposit free from any lien whatsoever such sums as the parties
shall agree.
(C) This Charge is given by the Chargor in favour of the Agent as trustee and
agent for the Banks as a continuing security for the monies, obligations
and liabilities hereinafter referred to.
(D) The Board of Directors of the Chargor is satisfied that the giving of the
security herein contained is in the interests of the Chargor and has
passed a resolution to that effect.
NOW THIS DEED WITNESSES as follows:-
1. Definitions and Interpretation
1.1 In this Deed the following words and expressions shall have the following
meanings:-
"Account" means the account referred to in Recital (B) above together
with all sums from time to time deposited therein or standing to the
credit thereof (including any renewed or substituted deposits) in
whatever currency denominated and all interest and other accruals,
accrued and accruing thereon;
"Account Bank" means First Union National Bank (London Branch);
"Banks" means the Agent, First Union and the Tranche B Lenders; provided,
however, that "Banks" shall not include the First Union (London) in its
capacity as Issuing Bank as defined in the Credit Agreement;
- 1 -
"Deed" means this Charge as the same may from time to time be varied,
amended, supplemented, substituted, novated or assigned;
"Lien" has the meaning set out in the Credit Agreement;
"Loan Note Guaranty" has the meaning set out in the Credit Agreement;
"Secured Obligations" means all monies, obligations and liabilities
referred to in Clause 3.1(i), (ii) and (iii);
"Tranche B Lenders" has the meaning set out in the Credit Agreement; and
"Tranche B Term Loans" has the meaning set out in the Credit Agreement.
1.2 The expressions "Agent", "First Union", " First Union (London)", "Tranche
B Lender", "Account Xxxx", "Xxxx", "Xxxxxxxx" and "Chargor" where the
context admits include their respective transferees, substitutes,
successors and assigns whether immediate or derivative.
1.3 In this Deed:
(i) references to Clauses and Schedule are unless otherwise stated to
Clauses of and Schedule to this Deed;
(ii) any liability or power which may be exercised or any determination
which may be made hereunder by the Agent may (save as otherwise
provided herein) be exercised or made in its absolute and
unfettered discretion and it shall not be obliged to give reasons
therefor;
(iii) references to statutes and/or statutory provisions shall be
construed as references to such statutes or statutory provisions
as respectively replaced, amended, extended, consolidated or
re-enacted from time to time and shall include any order,
regulation, instrument or other subordinate legislation made under
the relevant statute or statutory provision;
(iv) the contents page and headings to Clauses and Schedule are for
convenience only and have no legal effect;
(v) statements referring to the Agent's capacity as trustee for the
Banks are by way of clarification and explanation only and shall
not prejudice the meaning of the "Agent" elsewhere in this Deed
where such statements are not made and any statement referring to
monies, obligations or liabilities owing to, or other rights,
benefits or discretions granted to or created hereunder for, or
covenants, undertakings, or other agreements made in favour of,
the Agent and/or the Banks, as the case may be, are similarly by
way of clarification and explanation only and shall not prejudice
the meaning of "Banks" elsewhere in this Deed where such
statements are not made;
(vi) references herein to this Deed or any agreement or document shall
be construed as references to this Deed or such agreement or
document as the same may have been, or may from time to time be
varied, amended, supplemented, substituted, novated or assigned
whether by virtue of any increase or decrease in any facility(ies)
made available pursuant to the same, the provision of any
additional, further or substituted facility(ies) to or for such
facility(ies), the increase or decrease in any rate of
-2-
interest or in the amount of any fees payable or chargeable
pursuant thereto or in connection therewith or otherwise howsoever
and whether or not the same shall result in any increased or
additional liability on the part of any person under this Deed or
the Credit Agreement;
(vii) the expression "person" shall be construed to include reference to
any person, firm, company, partnership, corporation or
unincorporated body of persons or any state or government of any
agency thereof; and
(viii) unless the context otherwise requires, words denoting the singular
number only shall include the plural and vice versa.
1.4 The parties to this document intend it to be a deed and agree to execute
and deliver it as a deed.
2. Security and Rights of Set Off
2.1 In consideration, inter alia, of the Lenders making the Tranche B Term
Loans available to the Borrower under the Credit Agreement the Chargor
with full title guarantee and without the benefit of Section 6(2) of the
Law of Property (Miscellaneous Provisions) Xxx 0000 and to the intent
that the security hereby created shall rank as a continuing security
hereby assigns to the Agent absolutely (but subject to redemption upon
payment of all monies and the discharge of all obligations and
liabilities hereby secured and further subject to the rights of
withdrawal contained in the Credit Agreement) all its right, title,
benefit and interest in the Account whatsoever, present and future, and
all credit balances relating thereto (together the "Charged Property").
3. Secured Liabilities
3.1 The security created pursuant to Clause 2.1 shall stand as continuing
security for the payment to the Agent and the discharge when due of the
following:-
(i) all indebtedness and monies and all liabilities whatsoever, in
whatever currency denominated, whether actual or contingent,
present or future, of the Borrower to the Banks, or any of them,
under the Credit Agreement in connection with: (x) the Tranche B
Term Loans; and (y) its obligations to indemnify the Tranche B
Lenders in respect of their obligations and liabilities to
reimburse the Issuing Bank in respect of payments made and/or
obligations and liabilities incurred by the Issuing Bank pursuant
to or in connection with the Loan Notes Guaranty;
(ii) all reasonable costs (including legal costs), charges and expenses
properly incurred by the Banks, or any of them, in connection with
the enforcement, defence or protection of the security constituted
by this Deed or the pursuit of any rights herein contained or
under or in connection with the amounts referred to in sub-clause
3.1(i) above, this Deed and/or the Charged Property in each case
on a full indemnity basis; and
(iii) interest on and in respect of any amounts due under the foregoing
subclauses 3.1(i) and (ii) from day to day until full discharge
(whether before or after judgment, liquidation, winding-up or
administration (or the equivalent of any of the same) of the
Chargor or the Borrower at such rate or rates as may from time to
time be payable or deemed to be payable by the Borrower and
compounded (whether before or after demand or judgment) in
accordance with Section 2.8(b) of the
-3-
Credit Agreement or, if appropriate, in the case of any sum
payable under sub-clause 3.1 (ii) above, at the rate of two per
cent per annum over the Sterling Base Rate as defined in the
Credit Agreement.
4. Covenants, Representations and Warranties by the Chargor
4.1 The Chargor hereby covenants with the Agent that during the continuance
of this security the Chargor shall, save as provided in the Credit
Agreement or in this Deed:
(i) not withdraw any sums from time to time standing to the credit of
or comprising the Account or any other amounts for the time being
subject to the security constituted by this Deed and shall not
sell, assign, transfer or otherwise deal with the whole or any
part of the Charged Property or purport or attempt so to do or
create or permit to subsist any Lien (other than in favour of the
Agent) on or over the Charged Property or any part thereof or
interest therein or right in respect thereof or enter into any
agreement to grant or create any such Lien;
(ii) not release, grant time or indulgence or compound with any third
party or suffer to arise any set-off or other adverse rights
against the whole or any part of the Charged Property nor do or
omit to do anything which may delay or prejudice the right of the
Agent to receive payment of any sums from time to time standing to
the credit of or comprising the Account;
(iii) forthwith inform the Agent of any claim or notice relating to the
whole or any part of the Charged Property received from any other
person and of all other matters relevant thereto;
(iv) maintain at all times such sums standing to the credit of or
comprising the Account as are required by the terms of the Credit
Agreement (including without limitation maintaining all such sums
in cash in pounds sterling); and
(v) not do or cause or permit to be done anything which may in any way
depreciate, jeopardise or otherwise prejudice the value to the
Banks of the security granted hereby.
4.2 The Chargor represents and warrants that it solely owns the entire legal
and beneficial interest in all of the rights, property and assets now
subject to, or which at any time after this date may become subject to,
the security constituted by this Deed and that the rights of the Chargor
in respect of the Charged Property are free from any Liens of any kind.
4.3 The Chargor hereby covenants and agrees that it will immediately after
the execution hereof give notice to the Account Bank of the assignment of
the Account provided for herein in the form set out in Part 1 of Schedule
1 (the "Notice") and obtain from the Account Bank an acknowledgement
thereof in the form set out in Part 2 of Schedule 1.
4.4 The Chargor further covenants and agrees that it will not vary, revoke or
rescind in any way the Notice without the prior written consent of the
Agent.
4.5 The Chargor may provide written demand to the Agent to, and upon such
demand the Agent shall, pursuant to the written instructions set forth in
such demand, withdraw funds from the Account for payment as provided in
and subject to the terms and conditions of Section 3.8(b) of the Credit
Agreement.
-4-
5. Non-Competition
5.1 The Chargor warrants to the Banks that it has not taken or received and
undertakes to procure that it will not take or receive the benefit of any
security from the Borrower or any other person extending or relating to
its rights against the Borrower following any enforcement of the security
created by this Deed. If any such security is taken or the Chargor
receives the benefit of the same the Chargor hereby declares that such
security and all moneys at any time received in respect thereof shall be
held on trust for the Agent and the Banks as a continuing security for
the liabilities secured hereby.
5.2 Until all moneys, obligations and liabilities referred to in Clause 3 of
this Deed have been paid, discharged or satisfied in full (which
eventuality shall not be met by payment of a dividend in any liquidation
or under any compromise or arrangement) or unless otherwise required by
the Agent the Chargor waives all rights of subrogation and indemnity
against the Borrower and agrees not to demand or accept or to negotiate,
assign, charge or otherwise dispose of any moneys, obligations or
liabilities now or hereafter due to the Chargor from the Borrower or any
co-surety or any promissory note, xxxx of exchange, guarantee, indemnity,
mortgage, charge or other security from the same or to take any step to
enforce any right against the Borrower or any co-surety or to claim any
set-off or counterclaim against the same or to claim or prove in
competition with the Agent or any of the Banks in the liquidation (or
similar) of the Borrower or any co-surety or have the benefit of or share
in any payment or composition from the same or in any other guarantee,
indemnity or security now or hereafter held by the Agent or any of the
Banks for the moneys, obligations or liabilities or liabilities owed to
the same by the Borrower. If the Chargor is required by the Agent to do
any of the foregoing or otherwise receives any payment, promissory note,
xxxx of exchange, guarantee, indemnity, mortgage, charge or other
security or other benefit or exercises any set-off or counterclaim or
otherwise acts in breach of this Clause anything so received and any
benefit derived directly or indirectly by the Chargor shall be held on
trust for the Agent and the Banks as a continuing security for the
liabilities of the Borrower secured hereby.
6. Non-Exoneration
6.1 If any purported obligation or liability of the Borrower to the Agent or
the Banks which if valid would have been secured by this Deed is not or
ceases to be valid or enforceable against the Borrower on any ground
whatsoever whether or not known to the Agent and/or the Banks including
but not limited to any defect in or want of powers of the Borrower or
irregular exercise thereof or lack of authority by any person purporting
to act on behalf of the Borrower or any legal or other limitation
(whether under the Limitation Xxx 0000 or otherwise), disability,
incapacity or any change in the constitution, name or style of or any
amalgamation, reconstruction or liquidation or administration or similar
of the Borrower, the security constituted by this Deed shall nevertheless
be enforceable.
6.2 The liability of the Chargor shall not be affected nor shall this Deed be
discharged or dismissed by reason of:-
(i) any present or future xxxx, note, guarantee, indemnity, mortgage,
charge, pledge, lien or other security or right or remedy held by
or available to the Agent and/or the Banks being or becoming
wholly or in part void, voidable or unenforceable on any ground
whatsoever or by the Agent or any of the Banks from time to time
dealing with, exchanging, varying, realising, releasing or failing
to perfect or enforce any of the same; or
-5-
(ii) the Agent or any of the Banks compounding with, discharging,
releasing or varying the liability of or granting any time,
indulgence or concession to the Borrower or any other person or
renewing, determining, varying or increasing any xxxx, promissory
note or other negotiable instrument or the Credit Agreement or any
accommodation, facility or transaction in any manner whatsoever or
concurring in, accepting or varying any compromise, arrangement or
settlement or omitting to claim or enforce payment from the
Borrower or any other person; or
(iii) any act or omission which would not have discharged or affected
the liability of the Chargor had it been principal debtor instead
of surety or by anything done or omitted which but for this
provision might operate to exonerate the Chargor.
7. Further Assurance
7.1 The Chargor shall at any time if and when required by the Agent execute
such further legal or other mortgages, charges, assignments or releases
in favour of the Agent and/or the Banks as the Agent shall from time to
time require over all or any of the Charged Property and all rights
relating thereto both present and future and any other transfers or
documents the Agent may from time to time require for perfecting its
title to the same or for obtaining the benefit of or vesting or enabling
it to obtain the benefit of or vest the same in itself or its nominees or
in any purchaser, to secure all moneys, obligations and liabilities
hereby secured or to facilitate the realisation of the Charged Property
or the exercise of the powers conferred on the Agent, such further
mortgages, charges, assignments or releases to be prepared by or on
behalf of the Agent at the cost of the Chargor and to contain such
clauses for the benefit of the Banks as the Agent may reasonably require,
and shall be supplemental hereto, subject to the like rights and powers
as are hereby conferred upon the Agent and in addition to and not in
substitution for the security hereby created.
8. Powers of Mortgagees
8.1 At any time after the occurrence of a Default under the Credit Agreement
or if requested by the Chargor the Agent may without further notice and
without prejudice to any other rights it may have under the general law
and without the restrictions contained in s.103 of the Law of Property
Xxx 0000 in respect of all or any part of the Charged Property exercise
all the powers or rights which may be conferred on mortgagees by the Law
of Property Xxx 0000 as hereby varied or extended with full power to call
in and collect all or any part of the Charged Property at such times and
in such manner and generally on such terms and conditions as the Agent
sees fit with power to give effectual receipts and do all other acts and
things necessary or desirable in connection therewith.
8.2 Section 93 of the Law of Property Act 1925 shall not apply to this
security or to any security given to the Agent pursuant hereto.
8.3 All money received by the Agent in the exercise of any powers conferred
by this Deed shall be applied after the discharge of all liabilities
having priority thereto in or towards satisfaction of such of the moneys,
obligations and liabilities hereby secured and, subject to the terms and
conditions of the Credit Agreement, in such order as the Agent in its
absolute discretion may from time to time conclusively determine (save
that the Agent may credit the same to a suspense account for so long and
in such manner as the Agent may from time to time determine).
-6-
8.4 The Agent shall not in any circumstances (either by reason of calling in
the Account or any part thereof or for any other reason whatsoever and
whether as mortgagee in possession or on any other basis whatsoever) be
liable to account to the Chargor for anything except its own actual
receipts or be liable to the Chargor for any loss or damage arising from
any realisation by the Agent of the Charged Property or any part thereof
or from any act, default or omission of the Agent (other than as a result
of gross negligence or wilful default of the Agent), in relation to the
Charged Property or any part thereof (including without limitation, any
neglect or failure to present any interest coupon) or in relation to any
such realisation or from any exercise or non-exercise by the Agent of any
power, authority or discretion conferred upon it in relation to the
Charged Property or any part thereof by or pursuant to this Deed or by
the Law of Property Xxx 0000 or for any negligence or default by its
nominees, correspondents or agents (provided the Agent was not grossly
negligent in selecting such nominee, correspondent or agent) or for any
other loss of any nature whatsoever in connection with the Charged
Property.
8.5 The rights and powers of the Agent herein contained shall apply
notwithstanding that all or any part of the monies from time to time
standing to the credit of or comprising the Account may have been or may
be deposited with the Account Bank for a fixed period or that any
interest thereon is calculated by reference to a fixed period and that
any such period may or may not have elapsed.
8.6 The Chargor hereby irrevocably authorises the Agent after the occurrence
of a Default under the Credit Agreement to renew all or any of the monies
standing to the credit of the Account for such fixed periods as the Agent
in its absolute discretion may from time to time think fit, provided
that, prior to the occurrence of such a Default the Chargor shall select
(and failing which the Agent may select) such fixed periods as it thinks
fit.
9. Power of Attorney
9.1 The Chargor by way of security hereby irrevocably appoints the Agent and
the persons deriving title under it severally to be its attorney in the
name and on behalf and as the act and deed of the Chargor or otherwise
excercisable upon the occurrence of a Default under the Credit Agreement
or upon any breach of the terms of this Deed to execute and complete any
transfers or other documents which the Agent may require for perfecting
its title to or for taking the benefit of or for vesting the Charged
Property in the Agent or its nominees or in any purchaser and to make any
alteration or addition to the Charged Property comprised therein or any
other alteration or addition thereto and to re-deliver the same
thereafter and otherwise generally to sign, seal and deliver and
otherwise perfect any such transfers or other documents and any such
legal or other mortgages, charges or assignments over the Charged
Property required by the Agent and all such deeds and documents and do
all such acts and things as may be required for the full exercise of the
powers hereby conferred including any sale or other disposition,
realisation or getting in by the Agent or its nominees of the Charged
Property.
9.2 The Chargor hereby covenants with the Agent to ratify and confirm any
deed, document, act and thing and all transactions which any such
attorney may lawfully execute or do.
10. Continuing Security
10.1 This security shall be an irrevocable continuing security and shall
remain in full force and effect until all moneys, obligations and
liabilities referred to in Clause 3 of this Deed have been paid,
discharged or satisfied in full notwithstanding any settlement of account
or other matter whatsoever and is in addition to
-7-
and shall not merge with or otherwise prejudice or affect any contractual
or other right or remedy or any guarantee, lien, pledge, xxxx, note,
mortgage or other lien now or hereafter held by or available to the Agent
and/or any Bank.
10.2 If any Bank receives or is deemed to be affected by notice, whether
actual or constructive, of any subsequent mortgage, assignment, charge or
other interest in favour of any third party affecting any part of the
Charged Property or the proceeds of sale thereof or in the event that the
continuing nature of this security shall be determined such Bank (if it
has any running or revolving account with the Debtor) may open a new
account or accounts with the Debtor. If any of the Banks (being in a
position so to do) does not open a new account or accounts it shall
nevertheless be treated as if it had done so at the time when it received
or was deemed to have received notice or on the happening of such event,
as the case may be, and as from that time all payments made to any such
Bank(s) shall be credited or be treated as having been credited to such
new account(s) and shall not operate to reduce the amount for which this
Deed is security.
11. [NOT USED]
12. Currency Clauses
12.1 All moneys received or held by the Agent or any Bank under this Deed may
from time to time be converted into such other currency as the Agent or
such Bank reasonably considers necessary or desirable to cover the
obligations and liabilities, actual or contingent, of the Borrower in
that currency at the then prevailing spot rate of exchange of the Agent
or such Bank, as the case may be, (as conclusively determined by the
Agent or such Bank) for purchasing that other currency with the existing
currency.
12.2 If and to the extent that the Borrower fails to pay the amount due on
demand the Agent may in its absolute discretion, without notice to the
Chargor, purchase at any time thereafter so much of any currency as the
Agent reasonably considers necessary or desirable to cover the
obligations and liabilities, actual or contingent, of the Borrower in
such currency hereby secured at the then prevailing spot rate of exchange
of the Agent (as conclusively determined by the Agent) for purchasing
such currency with pounds sterling and the Chargor hereby agrees the
amount of sterling used by the Agent for such purchase together with any
related costs or expenses necessary to effect such conversion shall be an
additional charge on the Charged Property.
12.3 No payment to the Agent (whether under any judgment or court order or
otherwise) shall discharge any obligation or liability in respect of
which it was made unless and until the Agent shall have received payment
in full in the currency in which such obligation or liability was
incurred and to the extent that the amount of any such payment shall on
actual conversion into such currency fall short of such obligation or
liability, actual or contingent, expressed in that currency the Agent and
the Banks shall be entitled to enforce the charge hereby created to
recover the amount of the shortfall.
13. Remedies, Waivers and Consents
13.1 No failure on the part of the Agent or any Bank to exercise, and no delay
on its part in exercising, any right or remedy under this Deed will
operate as a waiver thereof, nor will any single or partial exercise of
any right or remedy preclude any other or further exercise thereof or the
exercise of any other right or remedy. The rights and remedies provided
in this Deed are cumulative and not exclusive of any rights or remedies
provided by law.
-8-
13.2 Any waiver and any consent by the Agent under this Deed must be in
writing and may be given subject to any conditions thought fit by the
Agent. Any waiver or consent shall be effective only in the instance and
for the purpose for which it is given.
14. Notices
14.1 Every notice, request, demand or other communication hereunder shall be
in writing delivered personally or by overnight courier service or
facsimile transmission to the address or facsimile number of the
addressee set out below and marked for the attention of the persons set
out below:-
(i) in the case of the Agent if by letter to it at Xxx Xxxxx Xxxxx
Xxxxxx, XX-00, 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx
00000-0000, and if by facsimile to it at 000-000-0000, in each
case marked for the attention of Syndication Agency Services; and
(ii) in the case of the Chargor if by letter to it at its registered
office stated above marked for the attention of the General
Counsel, with a copy to 0 Xxxxxxxx Xxxxx, 000 Xxx Xxxxxx,
Xxxxxxxx, Xxxxxxxxxxx 00000-0000 marked for the attention of
Xxxxxxx X. Xxxxxx, and if by facsimile to it at 00-000-000-0000
marked for the attention of the General Counsel, with a copy to
fax number 000-000-0000 marked for the attention of Xxxxxxx X.
Xxxxxx,
or at such other addresses or numbers, or for the attention of such other
persons, as the parties hereto may from time to time notify to each
other.
14.2 Any notice, request, demand or other communication to be given or made
under this Deed shall be deemed to have been delivered, in the case of
any notice, request, demand or other communication given or made by
personal delivery or facsimile when despatched or delivered unless
despatched or delivered outside normal business hours when it shall be
deemed to have been delivered on the next normal business day following
the date on which it was despatched or, in the case of any notice,
request, demand or other communication given or made by letter, two
normal business days after having been delivered to a representative of
the overnight courier service, provided that any notice, request, demand
or other communication to be made or delivered by the Chargor any other
person to the Agent shall only be effective when received by the Agent
and that each notice, request, demand or other communication given or
made by facsimile shall, without prejudice to the validity or
effectiveness of the same, be confirmed by letter.
14.3 Any such notice or demand or any certificate as to the amount at any time
secured hereby shall, save in the case of manifest error, be conclusive
and binding upon the Chargor if signed by an officer of the Agent.
15. The Agent as Trustee and Indemnity
15.1 The Agent hereby declares itself trustee of the security and other rights
(including but not limited to the benefit of the covenants contained
herein), titles and interests constituted by this Deed and of all monies,
property and assets paid to the Agent or to its order or held by the
Agent or its nominee or received or recovered by the Agent or its nominee
pursuant to or in connection with this Deed with effect from the date
hereof to hold the same on trust for itself and each of the Banks
absolutely pro rata to the monies, obligations and liabilities of the
Borrower to all the Banks (including the Agent) from time to time secured
hereby; provided, however, that notwithstanding any provision herein, the
legal relationship between the Agent and
-9-
the Banks shall be governed solely by the terms of the Credit Agreement,
including the choice of law provision therein.
15.2 All moneys received by the Agent shall be held by it upon trust for
itself and the Banks according to their respective interests to apply the
same first, in discharging any expenses of the Agent incurred in
enforcing the security or otherwise in accordance with this Deed and
secondly in or towards satisfaction of the moneys, obligations and
liabilities secured by this Deed.
15.3 The trusts herein shall remain in force until whichever is the earlier
of:
(i) the expiration of a period of 80 years from the date hereof; or
(ii) receipt by the Agent of confirmation in writing from all of the
Banks that there are no longer outstanding any monies, obligations
and liabilities secured hereby.
15.4 Without prejudice to any right to indemnity by law given to trustees
generally, the Agent and any other person appointed by it in its capacity
as trustee under this Deed and any nominee, correspondent, manager,
agent, officer or employee for whose liability, act or omission any of
them may be answerable shall be entitled to be indemnified and kept
indemnified by the Chargor, including, without limitation, out of the
Charged Property, from and against all costs, charges, losses, claims,
expenses, demands and liabilities whether in contract, tort or otherwise
incurred or suffered by them or any of them in the execution or the
purported execution of the trusts created by this Deed or of any powers,
authorities or discretions vested in them or any of them pursuant to this
Deed and against all actions, proceedings, claims and demands in respect
of any matter or thing done or omitted or in any way relating to the
Charged Property or the provisions of this Deed or occasioned by any
breach by the Chargor of any of its covenants or other obligations to the
Agent or any Bank hereunder or under the Credit Agreement and all sums
necessary to effect and maintain such indemnity shall be an additional
charge on the Charged Property and shall be satisfied before any payment
is made thereout to any Bank; provided that this indemnity shall not
apply to any cost, charge, loss, claim, expense, demand or liability
arising from any grossly negligent act or any wilful omission or default
of the Agent or any other such person appointed by it.
15.5 As trustee the Agent shall (without prejudice to any contractual
arrangements between the Banks with which neither the Chargor nor any
purchaser or other third party dealing with the Chargor and/or the Agent
shall be concerned):-
(i) have all the powers of an absolute owner of the security
constituted by this Deed;
(ii) have the power of appointing new trustees; and
(iii) have all the powers and discretions conferred upon trustees by the
Trustee Xxx 0000 (to the extent not inconsistent with these
presents) and upon the Agent by these presents.
16. Payments free of Deduction
16.1 All payments to be made under this Deed shall be made in full without any
set-off or counter-claim by the Chargor and free and clear of and without
any deduction or withholding for or on account of any present or future
income or other taxes, levies, imposts, duties, charges, fees or
withholdings of any nature
-10-
whatsoever. In the event that any such deduction or withholding from any
payment to be made by the Chargor hereunder shall be required or in the
event that any payment on or in relation to any amount received by the
Agent on account of tax or otherwise shall be required to be made, in
each case under any present or future law or regulation or practice, then
the Chargor shall forthwith pay to the Agent such additional amounts as
will result in the receipt or retention by the Agent of the same amount
which would otherwise have been received or retained by it pursuant to
this Deed had no such deduction, withholding or payment been made.
17. Avoidance of Payments
17.1 Any settlement, discharge or release between the Chargor and the Agent
shall be conditional upon no security or payment to the Agent by the
Chargor, the Borrower or any other person in respect of the Secured
Obligations being avoided or reduced or ordered to be refunded by virtue
of any provisions of any enactments relating to bankruptcy, liquidation
or insolvency for the time being in force and notwithstanding any
settlement, discharge or release:-
(i) the Agent or the nominee of the Agent shall be at liberty to
retain the security created by or pursuant to this Deed including
the certificates and documents relating to all or any part of the
Charged Property for such period as the Agent shall deem necessary
to provide it with security against any such avoidance or
reduction after the payment and discharge in full of all
liabilities herein secured provided such period shall not exceed
the period of three months after the discharge of all liabilities
herein secured; and
(ii) the Agent shall be entitled to recover the value or amount of such
security or payment from the Chargor subsequently as if such
settlement, discharge or release had not occurred and the Chargor
agrees with the Agent accordingly and charges the Charged Property
and the proceeds thereof with any liability under this Clause,
whether actual and/or contingent.
18. Miscellaneous
18.1 Each of the provisions of this Deed is severable and distinct from the
others and if at any time one or more of such provisions is or becomes
invalid, illegal or unenforceable with respect to the Chargor the
validity, legality and enforceability of the remaining provisions hereof
shall not in any way be affected or impaired thereby.
18.2 This Deed shall remain in effect and binding on the Chargor
notwithstanding any amalgamation or merger that may be effected by any
Bank with any other corporation or company, and notwithstanding any
reconstruction by any Bank involved in the formation of and transfer of
the whole or any part of any Bank's undertaking and assets to a new
company, and notwithstanding the sale or transfer of all or any part of
such Bank's undertaking and assets to another company (whether the
company with which such Bank amalgamates or merges or the company to
which such Bank transfers all or any part of its undertaking and assets
either on a reconstruction or sale or transfer as aforesaid shall or
shall not differ from such Bank in its objects, character or
constitution), it being the intent of the Chargor that the security
hereby constituted and the provisions herein contained shall remain valid
and effectual in all respects in favour of, against and with reference
to, such Bank and that the benefit thereof and all rights conferred upon
such Bank thereby, may be assigned to and enforced by any such company,
and proceeded on in the same manner, to all intents and purposes, as if
such company had been named herein instead of or in addition to such
Bank.
-11-
18.3 The Agent shall be entitled to retain this Deed after as well as before
the payment, discharge or satisfaction of all moneys, obligations and
liabilities secured hereby for such period as the Agent may reasonably
determine.
18.4 The Agent shall not be under any duty to make any enquiry as to the
nature or sufficiency of any payment received by it or to make any claim
or take any other action to do any act or thing for the purpose of
collecting any moneys hereby charged or assigned to it.
18.5 This Deed may be executed in any number of counterparts and all of such
counterparts taken together shall be deemed to constitute one and the
same instrument.
19. Governing Law
19.1 This Deed shall be governed by and interpreted and construed in
accordance with the law of England and Wales; provided, however, that the
relationship between the Agent and the Banks shall be governed by the
terms of the Credit Agreement and interpreted and construed in accordance
with the law of the State of North Carolina.
19.2 The Chargor hereby submits to the jurisdiction of the Mecklenburg County
Superior Court and the United States District Court for the Western
District of North Carolina. Either of these courts shall be proper venue
for any lawsuit or judicial proceeding relating to or arising from this
Charge, and the parties hereto waive any objection to such venue. The
parties hereto consent to and agree to submit to the jurisdiction of any
of the courts specified herein and agree to accept service of process to
vest personal jurisdiction over them in any of these courts. To the
fullest extent permitted by law, the Chargor waives trial by jury and
waives any objection which it may have based on lack of jurisdiction or
improper venue or forum non conveniens to the conduct of any proceeding
instituted hereunder or any proceeding to which the Agent is a party,
including any actions based upon, arising out of, or in connection with
any course of conduct, course of dealing, statement (whether oral or
written), or actions of the Agent or any of the Banks. Nothing in this
section shall affect the right of Agent to serve legal process in any
other manner permitted by law or affect the right of Agent to bring any
action or proceeding against the Chargor or its properties in the courts
of any other jurisdiction that has jurisdiction of the Chargor or its
properties.
IN WITNESS whereof this Deed has been duly executed and is intended to be and is
delivered on the day and year first above written.
-12-
Schedule 1
Part 1
To: First Union National Bank
London Branch
0 Xxxxxxxxxxx
Xxxxxx
XX0X 0XX
Dated: November 22, 1996
Dear Sirs
We refer to our account number 00000000 maintained by you at your branch at the
above address (the "Account" which expression shall include all and any monies
standing to the credit of the same from time to time).
We hereby give you notice that we have assigned absolutely all our rights, title
and interest in and to the Account to First Union National Bank of North
Carolina as agent on behalf of a syndicate of banks (the "Agent") pursuant to a
charge dated November 22, 1996 (the "Charge") and made between ourselves and the
Agent.
You are hereby irrevocably authorised and instructed to accept any demand or
other communication to you from the Agent relating to the Account as if such
demand or other communication had been made by us and to pay any amounts
standing to the credit of the Account to such account at such bank as the Agent
may from time to time specify and otherwise comply with the directions of the
Agent in relation to the Account and, in particular, no monies standing to the
credit of the Account may be withdrawn or otherwise dealt with in any manner
whatsoever without the prior approval of the Agent.
This notice is irrevocable and may not be amended, varied, terminated or
withdrawn without the Agent's express prior written consent and you shall not
accept any further instructions from us in relation to the Account unless
countersigned by the Agent or until the Agent has confirmed to you that the
Account has been released from the security constituted by the Charge.
Would you please acknowledge receipt of this notice to the Agent on the enclosed
duplicate of this notice.
Yours faithfully,
duly authorised
for and on behalf of
Chartwell Holdings Limited
Part 2
To: First Union National Bank of North Carolina
For the attention of: Xxx X. Xxxxxxx
We hereby acknowledge and confirm our agreement to the terms of a letter of
which the above is a copy.
........................................
duly authorised for and on behalf of
First Union National Bank Date November 22, 1996
London Branch
EXECUTED AS A DEED by ) .....................
CHARTWELL HOLDINGS LIMITED ) Director
and signed by .................... )
and )
.................................. ) .....................
pursuant to a resolution ) Director/Secretary
of the Board )
EXECUTED AS A DEED by ) .....................
FIRST UNION NATIONAL BANK ) .....................
OF NORTH CAROLINA )
and signed by .................... )
and .............................., ) .....................
acting with authority of ) .....................
FIRST UNION NATIONAL BANK )
OF NORTH CAROLINA )
Exhibit F-2 to First Amended and
Restated Credit Agreement
First Union National Bank
of North Carolina, as Agent
Chartwell Re Holdings Corporation
November 14, 1996/$55,000,000/
(pound)12,850,000
-----------------------------------------
BORROWER ESCROW AND SECURITY AGREEMENT
THIS ESCROW AND SECURITY AGREEMENT, dated as of the 14th day of November,
1996 (this "Agreement"), is made between FIRST UNION NATIONAL BANK OF NORTH
CAROLINA, a national banking association, as Agent (in such capacity, the
"Agent") under the Credit Agreement referred to below, CHARTWELL RE HOLDINGS
CORPORATION, a Delaware corporation (the "Borrower"), and FIRST UNION NATIONAL
BANK OF NORTH CAROLINA, a national banking association, as escrow agent
hereunder (in such capacity, the "Escrow Agent"). Capitalized terms used herein
and not defined elsewhere herein shall have the meanings given to them in the
Credit Agreement referred to below.
RECITALS
A. The Borrower, the Agent, certain Issuing Banks (the "Issuing Banks")
and certain lenders (the "Lenders") are parties to a First Amended and Restated
Credit Agreement, dated as of November 14, 1996 (as amended, modified,
supplemented or restated from time to time, the "Credit Agreement"), pursuant to
which the Lenders have agreed to make Term Loans and Revolving Loans to the
Borrower, and the Issuing Banks have agreed to issue Letters of Credit for the
benefit of the Borrower, upon the terms and conditions set forth therein.
B. The Credit Agreement provides that under certain circumstances
payments in Dollars relating to the Letters of Credit issued in Dollar face
amounts may be deposited in a cash collateral account (the "Dollars Cash
Collateral Account") and payments in Pounds Sterling relating to the Letters of
Credit issued in Pound Sterling face amounts may be deposited in a cash
collateral account (the "Pounds Sterling Cash Collateral Account"; the Dollar
Cash Collateral Account and the Pounds Sterling Cash Collateral Account being
hereinafter referred to collectively as the "L/C Cash Collateral Accounts"), in
each case to secure payment of the Reimbursement Obligations and the other
Letter of Credit Exposure under the Credit Agreement.
C. It is a condition to the making of the Loans and the issuance of the
Letters of Credit under the Credit Agreement that the Borrower shall have
agreed, by executing and delivering this Agreement, to establish the L/C Cash
Collateral Accounts and to grant and assign to the Agent a security interest in
such accounts and in the funds at any time held therein pursuant to the terms
hereof.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, the payment by the
Borrower to the Escrow Agent of $1.00 and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and to induce the
Agent, the Issuing Banks and the Revolving Lenders to enter into the Credit
Agreement and to issue the Letters of Credit or make the Revolving Loans to the
Borrower thereunder, the parties hereby agree as follows:
1. Appointment of Escrow Agent. The Borrower and the Agent hereby appoint
the Escrow Agent to serve as escrow agent hereunder. The Escrow Agent accepts
such appointment and agrees to hold, invest and disburse the funds maintained in
the L/C Cash Collateral Accounts (collectively, the "Escrow Funds") in
accordance with this Agreement and as agent for the benefit of the Agent and the
Revolving Lenders so that the Agent shall have, pursuant to Section 4, a valid
and perfected first priority security interest in and Lien upon all funds
maintained and held in the L/C Cash Collateral Accounts.
2. Creation of L/C Cash Collateral Account; Withdrawals; Disbursements.
The Borrower and the Agent hereby establish the Dollars Cash Collateral Account
and the Pounds Sterling Cash Collateral Account, in each case to be maintained
from and after the date hereof by and in the name of the Escrow Agent. With
respect to the Dollars Cash Collateral Account, such account shall be designated
the "Chartwell Re Holdings L/C Dollars Cash Collateral Account", Account
#1072636956, and with respect to the Pounds Sterling Cash Collateral Account,
such account shall be designated the "Chartwell Re Holdings L/C Pounds Sterling
Cash Collateral Account", Account No. 1072636965. All deposits of funds into,
investment of funds held in, and disbursements of funds from each L/C Cash
Collateral Account shall be made on the terms and conditions set forth herein.
(a) Except for distributions and disbursements by Escrow Agent pursuant
to Section 3 or as directed by joint direction of the Borrower and the Agent
pursuant to Section 2(g) or as directed by the Agent pursuant to Section 2(c)
and (d), the Borrower shall not be permitted to withdraw any funds from either
L/C Cash Collateral Account for any purpose.
(b) In the event of a drawing on any Letter of Credit and subsequent
payment by either Issuing Bank at any time during which any amounts are held in
the applicable L/C Cash Collateral Account, the Agent shall have the right
immediately to instruct the Escrow Agent to disburse to the Agent, and the
Escrow Agent will disburse to the Agent upon receipt of such instructions, funds
held in the applicable L/C Cash Collateral Account (including any undisbursed
interest and income) in an amount sufficient to pay in full the amount of any
Reimbursement Obligation arising therefrom (it being understood that, pursuant
to Section 4.4 of the Credit Agreement, disbursements to the Agent for
Reimbursement Obligations in Dollars will be made from the Dollars Cash
Collateral Account and disbursements to the Agent for Reimbursement Obligations
in Pounds Sterling will be made from the Pounds Sterling Cash Collateral
Account); provided that, in the event such funds in the applicable L/C Cash
Collateral Account shall be insufficient to pay in full the Reimbursement
Obligation then due and owing, the Agent may instruct the Escrow Agent to
disburse to the Agent, and the Escrow Agent will so disburse to the Agent, all
of the funds then held in the applicable L/C Cash Collateral Account, provided
further, however, that each of the Agent and Escrow Agent shall give notice to
the Borrower promptly, and in any event not more than two (2) Business Days)
after, the delivery of any such instruction.
(c) If the Borrower has made a deposit to either of the L/C Cash
Collateral Accounts pursuant to Section 4.8(b) of the Credit Agreement, the
Agent shall, upon request of the Borrower, instruct the Escrow Agent to disburse
to the Borrower, and the Escrow Agent will so disburse to the Borrower, all or a
part of the amount of funds so deposited.
(d) If the Borrower has made a deposit to either of the L/C Cash
Collateral Accounts pursuant to Section 4.8(a) of the Credit Agreement, and if
the amounts deposited pursuant to Section 4.8(a) are at any
-2-
time thereafter not required to be maintained in the L/C Cash Collateral
Accounts, the Agent shall instruct the Escrow Agent to disburse to the Borrower,
and the Escrow Agent will so disburse to the Borrower, the appropriate amount of
such funds.
(e) Until disbursed in accordance with Section 3, all undisbursed
interest and income on the Escrow Funds shall be deemed part of, as and when
accrued, the principal balance of such funds whereupon the same shall be deemed
temporarily part of such principal balance and shall constitute Collateral
secured under Section 4 hereof until so disbursed.
(f) Funds held in the applicable L/C Cash Collateral Account shall be
disbursed in same day available funds by the Escrow Agent in the Applicable
Currency on the Business Day next following its receipt of instructions therefor
as provided herein; provided, however, that if such instructions are received by
the Escrow Agent on a day that is not a Business Day or after 1:00 p.m.,
Charlotte time, on a Business Day, such funds shall be disbursed on the second
Business Day following receipt of such notice.
(g) In addition to disbursements permitted or required under subsections
(b), (c), (d) and (e) above and Section 3, the Escrow Agent will disburse funds
held in each L/C Cash Collateral Account at any time and from time to time in
accordance with the joint written directions of the Borrower and the Agent.
3. Interest and Income. All interest and income earned during any
calendar quarter on funds maintained in each L/C Cash Collateral Account shall
be disbursed by the Escrow Agent to the Borrower within ten (10) days after the
end of such quarter, beginning with the quarter ending December 31, 1996.
4. L/C Cash Collateral Account Security Interest. As security for the
payment and performance of the Reimbursement Obligations and the other Letter of
Credit Exposure of the Revolving Lenders under the Credit Agreement, the
Borrower hereby pledges, grants and assigns to the Agent, for the benefit of the
Issuing Banks and the Revolving Lenders, a security interest in, and all right,
title and interest in, to and under, each L/C Cash Collateral Account and in the
funds now or hereafter existing in each L/C Cash Collateral Account (the
"Collateral").
5. Investment of Funds. (a) The Escrow Agent shall invest and reinvest
the funds held in the Dollars Cash Collateral Account as the Borrower shall
direct in writing or pursuant to telephone instruction confirmed promptly in
writing; provided, however, that no investment or reinvestment may be made
except in the following:
(i) securities issued or unconditionally guaranteed by the United
States of America or any agency or instrumentality thereof, backed by the
full faith and credit of the United States of America and maturing within
90 days from the date of acquisition;
(ii) commercial paper issued by any Person organized under the
laws of the United States of America, maturing within 90 days from the
date of acquisition and, at the time of acquisition, having a rating of
at least A-1 or the equivalent thereof by Standard & Poor's or at least
P-1 or the equivalent thereof by Moody's;
(iii) time deposits and certificates of deposit maturing within 90
days from the date of issuance and issued by a bank or trust company
organized under the laws of the United States of America or any state
thereof that has combined capital and surplus of at least $500,000,000
and that has (or is a subsidiary of a bank holding company that has) a
long-term unsecured debt rating of at
-3-
least A or the equivalent thereof by Standard & Poor's or at least A2 or
the equivalent thereof by Moody's;
(iv) repurchase obligations with a term not exceeding seven (7)
days with respect to underlying securities of the types described in
clause (i) above entered into with any bank or trust company meeting the
qualifications specified in clause (iii) above; or
(v) money market funds substantially all of whose assets are
comprised of securities of the types described in clauses (i) through
(iv) above.
(b) The Escrow Agent shall invest and reinvest the funds held in the
Pounds Cash Collateral Account as the Borrower shall direct in writing or
pursuant to telephone instruction confirmed promptly in writing; provided,
however, that no investment or reinvestment may be made except in the following:
(i) time deposits and certificates of deposit maturing within 90
days from the date of issuance and issued by a bank or trust company
organized under the laws of England and Wales that has (or is a
subsidiary of a bank holding company that has) a long-term unsecured debt
rating of at least A or the equivalent thereof by Standard & Poor's or at
least A2 or the equivalent thereof by Moody's or equivalent ratings from
an English rating agency; or
(ii) money market funds substantially all of whose assets are
comprised of securities of the types described in clause (i) above or the
equivalent in Pounds to securities of the types described in (a)(i)
through (iv) above.
(c) Each of the foregoing investments shall be made in the name of the
Escrow Agent. If the Escrow Agent has not received investment direction from the
Borrower at any time at which an investment decision must be made, the Escrow
Agent shall invest the funds held in the Dollar Cash Collateral Account, or such
portion thereof as to which no direction has been received, in investments
described in clause (a)(v) above, and the funds held in the Pounds Sterling Cash
Collateral Account, or such portion thereof as to which no direction has been
received, in investments described in clause (b)(ii) above. Notwithstanding
anything to the contrary contained herein, the Escrow Agent may, without notice
to the Borrower, sell or liquidate any of the foregoing investments at any time,
in accordance with standard commercial practices, endeavoring to mitigate costs
to the extent reasonably possible, if the proceeds thereof are required for any
release of funds permitted or required hereunder, and the Escrow Agent shall not
be liable or responsible for any loss, expense or penalty resulting from any
such sale or liquidation.
6. Escrow Agent to Maintain Records. The Escrow Agent will maintain
adequate records of all deposits to the L/C Cash Collateral Accounts and
investments of Escrow Funds and will make such records available to Borrower
upon reasonable notice.
7. Resignation of Escrow Agent. The Escrow Agent may resign from the
performance of its duties hereunder at any time by giving thirty (30) days'
prior written notice to the Borrower and the Agent. Such resignation shall take
effect upon the appointment of a successor Escrow Agent as provided hereinbelow.
Upon any such notice of resignation, the Agent shall, with the consent of the
Borrower (which consent shall not be unreasonably withheld), appoint a successor
Escrow Agent hereunder, which shall be a commercial bank, trust company or other
financial institution with a combined capital and surplus in excess of
$100,000,000. Upon the acceptance of any appointment as Escrow Agent hereunder
by a successor Escrow Agent, such successor Escrow Agent shall thereupon succeed
to and become vested with all the rights, powers,
-4-
privileges and duties of the retiring Escrow Agent, and the retiring Escrow
Agent shall be discharged from its duties and obligations under this Agreement.
After any retiring Escrow Agent's resignation hereunder as Escrow Agent, the
provisions of this Agreement shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Escrow Agent under this Agreement.
8. Liability of Escrow Agent. The Escrow Agent shall have no liability or
obligation with respect to either L/C Cash Collateral Account except for the
Escrow Agent's willful misconduct or gross negligence. The Escrow Agent's sole
responsibility shall be for the safekeeping, investment and disbursement of the
funds maintained in each L/C Cash Collateral Account in accordance with the
terms of this Agreement. The Escrow Agent shall treat the Escrow Funds with the
same care as it treats its own property. The Escrow Agent shall have no implied
duties or obligations and shall not be charged with knowledge or notice of any
fact or circumstance not specifically set forth herein. The Escrow Agent may
rely upon any instrument, not only as to its due execution, validity and
effectiveness, but also as to the truth and accuracy of any information
contained therein, that the Escrow Agent shall in good faith believe to be
genuine, to have been signed or presented by the person or parties purporting to
sign the same and to conform to the provisions of this Agreement. The Escrow
Agent shall be responsible for actual losses (defined as and limited to any
decline in principal value of an investment between the time of purchase and
time of sale) from investments in other than investments permitted under Section
5 hereof. In no event shall the Escrow Agent be liable for incidental, indirect,
special, consequential or punitive damages. The Escrow Agent shall not be
obligated to take any legal action or commence any proceeding in connection with
either L/C Cash Collateral Account or the funds therein, this Agreement or any
other Credit Document, or to appear in, prosecute or defend any such legal
action or proceeding. The Escrow Agent may consult legal counsel selected by it
in the event of any dispute or question as to the construction of any of the
provisions hereof or of any other agreement or of its duties hereunder, and
shall incur no liability and shall be fully protected in acting in accordance
with the opinion or instruction of such counsel.
9. Indemnification. From and at all times after the date of this
Agreement, and in addition to the fees, costs and expenses payable under Section
9, the Borrower agrees to indemnify and hold harmless the Escrow Agent and each
of its directors, officers, employees, agents and Affiliates (each, an
"Indemnified Person") against any and all claims, losses, damages, liabilities,
costs and expenses of any kind or nature whatsoever, including, without
limitation, reasonable attorneys' fees and expenses (collectively, "Indemnified
Costs"), incurred by or asserted against any such Indemnified Person from and
after the date hereof, whether direct, indirect or consequential, as a result of
or arising from or in any way relating to any action, suit or proceeding
(including any inquiry or investigation) by any Person, whether threatened or
initiated, arising from or in connection with the negotiation, preparation,
execution, performance or enforcement of this Agreement or any of the
transactions contemplated herein, in any case whether or not any such
Indemnified Person is a party to any such action, suit or proceeding or a
subject of any such inquiry or investigation if such Indemnified Person
reasonably determines that it may become a party to any such action; provided,
however, that no Indemnified Person shall have the right to be indemnified
hereunder for any Indemnified Costs to the extent resulting from the gross
negligence or willful misconduct of such Indemnified Person as finally
determined by a court of competent jurisdiction and not subject to any appeal.
If any such action or claim shall be brought or asserted against any Indemnified
Party, such Indemnified Party shall promptly notify the Borrower in writing, and
the Borrower shall assume the defense thereof, including the employment of
counsel and the payment of all expenses. Such Indemnified Party shall, in its
sole discretion, have the right to employ separate counsel (who may be selected
by such Indemnified Party in its sole discretion) in any such action and to
participate in the defense thereof, and the fees and expenses of such counsel
shall be paid by such Indemnified Party unless (a) the Borrower agrees to pay
such fees and expenses, (b) the Borrower shall fail to assume the defense of
such action or proceeding or shall fail, in the reasonable discretion of such
-5-
Indemnified Party, to employ counsel satisfactory to the Indemnified Party in
any such action or proceeding, or (c) the named parties to any such action or
proceeding (including any impleaded parties) include both such Indemnified Party
and the Borrower or any other Indemnified Party, and such Indemnified Party
shall have been advised by counsel that there may be one or more non-frivolous
legal defenses available to it that are different from or additional to those
available to the Borrower or such other Indemnified Party. All of the foregoing
Indemnified Costs of any Indemnified Person shall be paid or reimbursed by the
Borrower as and when incurred and upon demand.
10. Fees and Expenses of Escrow Agent. The Borrower will pay to the
Escrow Agent an annual escrow fee of $2,000, payable in advance on the Closing
Date and on each anniversary of the Closing Date, will pay the Escrow Agent a
handling fee of $50 per transaction associated with investments and $25 per
transaction associated with deposits and disbursements, for which handling fees
the Borrower shall be billed monthly with payment due within ten (10) days of
such invoice, and will promptly reimburse the Escrow Agent upon demand for all
reasonable out-of-pocket costs and expenses incurred by the Escrow Agent.
11. Termination of Escrow. Upon the indefeasible payment in full of the
Obligations and receipt by the Escrow Agent of notice thereof from the Agent
(which notice the Agent agrees to give promptly thereupon), this Agreement shall
terminate, and the Escrow Agent shall forthwith disburse all funds held in each
L/C Cash Collateral Account to the Borrower; provided, however, that the
provisions of Sections 7, 8 and 9 shall survive such termination.
12. Disbursement Into Court. If, at any time, there shall exist any
dispute between the Borrower and the Agent with respect to the holding or
disposition of any portion of the funds held in the L/C Cash Collateral Accounts
or any other obligations of the Escrow Agent hereunder, or if at any time the
Escrow Agent is unable to determine, to its sole satisfaction, the proper
disposition of any portion of such funds or Escrow Agent's proper actions with
respect to its obligations hereunder, or if the Agent has not, within thirty
(30) days of the furnishing by the Escrow Agent of a notice of resignation
pursuant to Section 6, appointed a successor Escrow Agent to act hereunder, then
the Escrow Agent may, in its sole discretion, take either or both of the
following actions:
(i) suspend the performance of any of its obligations under this
Agreement until such dispute or uncertainty shall be resolved to the sole
satisfaction of the Escrow Agent or until a successor Escrow Agent shall
have been appointed (as the case may be); provided, however, that the
Escrow Agent shall continue to invest the Escrow Funds in accordance with
Section 5; and/or
(ii) petition (by means of an interpleader action or any other
appropriate method) any court of competent jurisdiction in Charlotte,
North Carolina, for instructions with respect to such dispute or
uncertainty, and pay into such court all or part of the Escrow Funds for
holding and disposition in accordance with the instructions of such
court.
The Escrow Agent shall have no liability to the Borrower or any other Person
with respect to any such suspension of performance or disbursement into court,
specifically including any liability or claimed liability that may arise, or be
alleged to have arisen, out of or as a result of any delay in the disbursement
of funds held in each L/C Cash Collateral Account or any delay in or with
respect to any other action required or requested of the Escrow Agent.
13. Tax Reporting. The Escrow Agent will provide to the Borrower a
statement of investment income and such other statements with respect to each
L/C Cash Collateral Account as the Borrower may
-6-
reasonably request from time to time. The Borrower shall be responsible for all
tax reporting with respect to each L/C Cash Collateral Account and the income
therefrom.
14. Notices. All notices and other communications provided for hereunder
shall be in writing (including telegraphic, telex, facsimile transmission or
cable communication) and mailed, telegraphed, telexed, telecopied, cabled or
delivered to the party to be notified at the following addresses:
If to the Borrower: Chartwell Re Holdings Corporation
0 Xxxxxxxx Xxxxx
000 Xxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Xx. Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Agent: First Union National Bank
of North Carolina
Xxx Xxxxx Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Escrow
Agent: First Union National Bank
of North Carolina
000 Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 28288-1179
Attention: Bond Administration
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
or to such other address as any party may designate for itself by like notice to
all other parties hereto. All such notices and communications shall be deemed to
have been given (i) if mailed as provided above by any method other than
overnight delivery service, on the fifth Business Day after deposit in the
mails, (ii) if mailed by overnight delivery service, telegraphed, telexed or
telecopied, when delivered for overnight delivery, delivered to the telegraph
company, confirmed by telex answerback or transmitted by telecopier,
respectively, or (iii) if delivered by hand, upon delivery.
15. Amendments, Waivers, etc. No amendment, modification, waiver,
discharge or termination of, or consent to any departure by any party hereto
from, any provision of this Agreement, shall be effective unless in a writing
signed by the Agent (and, in the event the same shall affect the rights or
obligations of the Escrow Agent under Sections 7, 8 or 9, the Escrow Agent) and
the Borrower, and then the same shall be effective only in the specific instance
and for the specific purpose for which given.
-7-
16. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of North Carolina (without
regard to the conflicts of law provisions thereof).
17. Severability To the extent any provision of this Agreement is
prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in any such jurisdiction, without prohibiting or
invalidating such provision in any other jurisdiction or the remaining
provisions of this Agreement in any jurisdiction.
18. Construction. The headings of the various sections and subsections of
this Agreement have been inserted for convenience only and shall not in any way
affect the meaning or construction of any of the provisions hereof. Unless the
context otherwise requires, words in the singular include the plural and words
in the plural include the singular.
19. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
20. Entire Agreement. This Agreement and the other documents and
instruments executed contemporaneously herewith constitute the entire agreement
between the parties hereto relating to the subject matter hereof.
21. Successors and Assigns. The provisions of this Agreement shall be
binding upon, inure to the benefit of and be enforceable by the respective
successors and assigns of the Borrower, the Escrow Agent and the Agent.
-8-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized corporate officers as of the date first above
written.
CHARTWELL RE HOLDINGS CORPORATION
By: _____________________________________
ATTEST: Title: __________________________________
______________________________
____________ Secretary
[CORPORATE SEAL]
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, as Agent
By: _____________________________________
Title: __________________________________
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, as Escrow Agent
By: _____________________________________
Title: __________________________________
Exhibit G to First Amended and
Restated Credit Agreement
First Union National Bank
of North Carolina, as Agent
Chartwell Re Holdings Corporation
November 14, 1996 /
$55,000,000/(pound)12,850,000
-----------------------------------------
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT (this "Guaranty"), dated as of the 14th day of
November, 1996 (this "Guaranty"), is made between CHARTWELL RE CORPORATION, a
Delaware corporation (the "Guarantor"), FIRST UNION NATIONAL BANK (LONDON
BRANCH), as an Issuing Bank and FIRST UNION NATIONAL BANK OF NORTH CAROLINA, as
Agent and as an Issuing Bank for the banks and other financial institutions
(collectively, the "Lenders") party to the Credit Agreement referred to below
(in such capacity, the "Agent"), for the benefit of the Guaranteed Parties (as
hereinafter defined). Capitalized terms used herein without definition shall
have the meanings given to them in the Credit Agreement referred to below.
RECITALS
A. Chartwell Re Holdings Corporation, a Delaware corporation (the
"Borrower"), the Lenders, First Union National Bank (London Branch), as an
Issuing Bank, and First Union National Bank of North Carolina, as Agent and as
an Issuing Bank, are parties to a First Amended and Restated Credit Agreement,
dated as of November 14, 1996 (as amended, modified or supplemented from time to
time, the "Credit Agreement"), providing for the availability of certain credit
facilities to the Borrower upon the terms and subject to the conditions set
forth therein. The Guarantor owns all of the outstanding stock of the Borrower.
B. It is a condition to the extension of credit to the Borrower under the
Credit Agreement that the Guarantor shall have agreed, by executing and
delivering this Guaranty, to guarantee to the Guaranteed Parties the payment in
full of the Guaranteed Obligations (as hereinafter defined). The Guaranteed
Parties are relying on this Guaranty in their decision to extend credit to the
Borrower under the Credit Agreement, and would not enter into the Credit
Agreement without this Guaranty.
C. The Guarantor will obtain benefits as a result of the extension of
credit to the Borrower under the Credit Agreement, which benefits are hereby
acknowledged, and, accordingly, desires to execute and deliver this Guaranty.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, to induce the Guaranteed Parties to enter into the Credit
Agreement and to induce the Lenders to extend credit to the Borrower thereunder,
the Guarantor hereby agrees as follows:
1. Guaranty. (a) The Guarantor hereby irrevocably, absolutely and
unconditionally:
(i) guarantees to the Lenders (including the Issuing Banks in
their capacity as such, and including any Lender in its capacity as a
counterparty to any Hedge Agreement with the Borrower), and the Agent
(collectively, the "Guaranteed Parties") the full and prompt payment, at
any time and from time to time as and when due (whether at the stated
maturity, by acceleration or otherwise), of all Obligations of the
Borrower under the Credit Agreement and the other Credit Documents,
including, without limitation, all principal of and interest on the
Loans, all Reimbursement Obligations in respect of Letters of Credit, all
fees, expenses, indemnities and other amounts payable by the Borrower
under the Credit Agreement or any other Credit Document (including
interest accruing after the filing of a petition or commencement of a
case by or with respect to the Borrower seeking relief under any
applicable federal and state laws pertaining to bankruptcy,
reorganization, arrangement, moratorium, readjustment of debts,
dissolution, liquidation or other debtor relief, specifically including,
without limitation, the Bankruptcy Code and any fraudulent transfer and
fraudulent conveyance laws (collectively, "Insolvency Laws"), whether or
not the claim for such interest is allowed in such proceeding), all
obligations of the Borrower to any Lender under any Hedge Agreement, and
all Obligations that, but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due, in each case
whether now existing or hereafter created or arising and whether direct
or indirect, absolute or contingent, due or to become due (all
liabilities and obligations described in this clause (i), collectively,
the "Guaranteed Obligations"); and
(ii) agrees to pay or reimburse upon demand all reasonable costs
and expenses (including, without limitation, reasonable attorneys' fees
and expenses) incurred or paid by (y) any Guaranteed Party in connection
with any suit, action or proceeding to enforce or protect any rights of
the Guaranteed Parties hereunder against the Borrower and (z) the Agent
in connection with any amendment, modification or waiver hereof or
consent pursuant hereto (all liabilities and obligations described in
this clause (ii), collectively, the "Other Obligations"; and the Other
Obligations, together with the Guaranteed Obligations, the "Total
Obligations").
(b) The guaranty set forth in this Section 1 is a guaranty of payment as
a primary obligor, and not a guaranty of collection.
2. Guaranty Absolute. The Guarantor agrees that its obligations hereunder
are irrevocable, absolute and unconditional, are independent of the Guaranteed
Obligations and any Collateral or other security therefor or other guaranty or
liability in respect thereof, whether given by the Guarantor or any other
Person, and (to the full extent permitted by applicable law) shall not be
discharged, limited or otherwise affected by reason of any of the following,
whether or not the Guarantor has notice or knowledge thereof:
(i) any change in the time, manner or place of payment of, or in
any other term of, any Guaranteed Obligations or any guaranty or other
liability in respect thereof, or any amendment, modification or
supplement to, restatement of, or consent to any rescission or waiver of
or departure from, any provisions of the Credit Agreement, any other
Credit Document or any agreement or instrument delivered pursuant to any
of the foregoing;
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(ii) the invalidity or unenforceability of any Guaranteed
Obligations, any guaranty or other liability in respect thereof or any
provisions of the Credit Agreement, any other Credit Document or any
agreement or instrument delivered pursuant to any of the foregoing;
(iii) the taking, acceptance or release of other guarantees of any
Guaranteed Obligations or additional collateral or other security for any
Guaranteed Obligations or for any guaranty or other liability in respect
thereof;
(iv) any renewal, extension, increase, decrease, release,
discharge, modification, settlement, compromise or other action or
inaction in respect of any Guaranteed Obligations or any guaranty or
other liability in respect thereof (other than satisfaction of the
Termination Requirements (as hereinafter defined)), including any
acceptance or refusal of any offer or performance with respect to the
same or the subordination of the same to the payment of any other
obligations;
(v) any agreement not to pursue or enforce or any failure to
pursue or enforce (whether voluntarily or involuntarily as a result of
operation of law, court order or otherwise) any right or remedy in
respect of any Guaranteed Obligations, any guaranty or other liability in
respect thereof or any collateral or other security for any of the
foregoing; any sale, exchange, release, substitution, compromise or other
action in respect of any such collateral or other security; or any
failure to create, protect, perfect, secure, insure, continue or maintain
any Liens in any such collateral or other security;
(vi) the exercise of any right or remedy available under the
Credit Documents, at law, in equity or otherwise in respect of any
collateral or other security for any Guaranteed Obligations or for any
guaranty or other liability in respect thereof, in any order and by any
manner thereby permitted, including, without limitation, foreclosure on
any such collateral or other security by any manner of sale thereby
permitted, whether or not every aspect of such sale is commercially
reasonable;
(vii) any bankruptcy, reorganization, arrangement, liquidation,
insolvency, dissolution, termination, reorganization or like change in
the corporate structure or existence of the Borrower or any other Person
directly or indirectly liable for any Guaranteed Obligations (it being
understood and agreed that, as between the Guarantor, on the one hand,
and the Guaranteed Parties, on the other hand, (a) the maturity of the
Guaranteed Obligations may be accelerated as provided in the Credit
Agreement for the purposes of the Guarantor's guaranty herein,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed hereby, and (b) in
the event of any declaration of acceleration of such Obligations as
provided in the Credit Agreement, such Obligations (whether or not due
and payable) shall forthwith become due and payable in full by the
Guarantor for purposes of this Guaranty);
(viii) any manner of application of any payments by or amounts
received or collected from any Person, by whomsoever paid and howsoever
realized, whether in reduction of any Guaranteed Obligations or any other
obligations of the Borrower or any other Person directly or indirectly
liable for any Guaranteed Obligations, regardless of what Guaranteed
Obligations may remain unpaid after any such application; or
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(ix) any other circumstance that might otherwise constitute a
legal or equitable discharge of, or a defense, set-off or counterclaim
available to, the Borrower, the Guarantor or a surety or guarantor
generally, other than the occurrence of all of the following: (x) the
payment in full of the Total Obligations (other than indemnity
obligations not then due and payable and that survive termination of the
Credit Documents), (y) the termination or expiration of all Letters of
Credit under the Credit Agreement and (z) the termination of the
Commitments under the Credit Agreement (the events in clauses (x), (y)
and (z) above, collectively, the "Termination Requirements").
3. Waivers. The Guarantor hereby knowingly, voluntarily and expressly
waives to the full extent permitted by applicable law:
(i) presentment, demand for payment, demand for performance,
protest and notice of any other kind, including, without limitation,
notice of nonpayment or other nonperformance (including notice of default
under any Credit Document with respect to any Guaranteed Obligations),
protest, dishonor, acceptance hereof, extension of additional credit to
the Borrower and of any of the matters referred to in Section 2 and of
any rights to consent thereto;
(ii) any right to require the Guaranteed Parties or any of them,
as a condition of payment or performance by the Guarantor hereunder, to
proceed against, or to exhaust or have resort to any Collateral or other
security from or any deposit balance or other credit in favor of, the
Borrower or any other Person directly or indirectly liable for any
Guaranteed Obligations, or to pursue any other remedy or enforce any
other right; and any other defense based on an election of remedies with
respect to any Collateral or other security for any Guaranteed
Obligations or for any guaranty or other liability in respect thereof,
notwithstanding that any such election (including any failure to pursue
or enforce any rights or remedies) may impair or extinguish any right of
indemnification, contribution, reimbursement or subrogation or other
right or remedy of the Guarantor against the Borrower or any other Person
directly or indirectly liable for any Guaranteed Obligations or any such
Collateral or other security; and, without limiting the generality of the
foregoing, the Guarantor hereby specifically waives the benefits of
Sections 26-7 through 26-9, inclusive, of the General Statutes of North
Carolina, as amended from time to time, and any similar statute or law of
any other jurisdiction, as the same may be amended from time to time;
(iii) any right or defense based on or arising by reason of any
right or defense of the Borrower or any other Person, including, without
limitation, any defense based on or arising from a lack of authority or
other disability of the Borrower or any other Person, the invalidity or
unenforceability of any Guaranteed Obligations, any Collateral or other
security therefor or any Credit Document or other agreement or instrument
delivered pursuant thereto, or the cessation of the liability of the
Borrower for any reason other than the satisfaction of the Termination
Requirements;
(iv) any defense based on the acts or omissions of any Guaranteed
Party in the administration of the Guaranteed Obligations, any guaranty
or other liability in respect thereof or any Collateral or other security
for any of the foregoing, and promptness, diligence or any requirement
that any Guaranteed Party create, protect, perfect, secure, insure,
continue or maintain any Liens in any such Collateral or other security;
-4-
(v) any right to assert against any Guaranteed Party, as a
defense, counterclaim, crossclaim or set-off, any defense, counterclaim,
claim, right of recoupment or set-off that it may at any time have
against any Guaranteed Party (including, without limitation, failure of
consideration, statute of limitations, payment, accord and satisfaction
and usury), other than compulsory counterclaims; and
(vi) any defense based on or afforded by any applicable law that
limits the liability of or exonerates guarantors or sureties or that may
in any other way conflict with the terms of this Guaranty.
4. Waiver of Subrogation; Subordination. The Guarantor hereby knowingly,
voluntarily and expressly waives, until satisfaction of the Termination
Requirements, all claims and rights that it may have against the Borrower at any
time as a result of any payment made under or in connection with this Guaranty
or the performance or enforcement hereof, including all rights of subrogation to
the rights of any Guaranteed Party against the Borrower, all rights of
indemnity, contribution or reimbursement against the Borrower, all rights to
enforce any remedies of any Guaranteed Party against the Borrower, and any
benefit of, and any right to participate in, any Collateral or other security
held by any Guaranteed Party to secure payment of the Guaranteed Obligations, in
each case whether such claims or rights arise by contract, statute (including,
without limitation, the Bankruptcy Code), common law or otherwise. The Guarantor
agrees that all indebtedness and other obligations, whether now or hereafter
existing, of the Borrower to the Guarantor, including, without limitation, any
such indebtedness in any proceeding under the Bankruptcy Code and any
intercompany receivables, together with any interest thereon, shall be, and
hereby are, subordinated and made junior in right of payment to the Total
Obligations; provided, however, that the Borrower may make payments of principal
and interest on such indebtedness so long as no Event of Default shall have
occurred. The Guarantor agrees further that if any amount shall be paid to or
any distribution received by the Guarantor (i) on account of any such
indebtedness at any time after the occurrence and during the continuance of an
Event of Default, or (ii) on account of any such rights of subrogation,
indemnity, contribution or reimbursement at any time prior to the satisfaction
of the Termination Requirements, such amount or distribution shall be deemed to
have been received and to be held in trust for the benefit of the Guaranteed
Parties, and shall forthwith be delivered to the Agent in the form received
(with any necessary endorsements in the case of written instruments), to be
applied against the Guaranteed Obligations, whether or not matured, in
accordance with the terms of the applicable Credit Documents and without in any
way discharging, limiting or otherwise affecting the liability of the Guarantor
under any other provision of this Guaranty.
5. Representations and Warranties. The Guarantor represents and warrants
to the Guaranteed Parties as follows:
(a) The Guarantor (i) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization,
(ii) has the full corporate power and authority to execute, deliver and perform
this Guaranty and the other Transaction Documents to which it is or will be a
party, to own and hold its property and to engage in its business as presently
conducted, and (iii) is duly qualified to do business as a foreign corporation
and is in good standing in each jurisdiction where the nature of its business or
the ownership of its properties requires it to be so qualified, except where the
failure to be so qualified could not, individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect.
-5-
(b) The Guarantor has taken, or on the Closing Date will have taken, all
necessary corporate action to execute, deliver and perform this Guaranty and
each of the other Transaction Documents to which it is or will be a party, and
has, or on the Closing Date (or any later date of execution and delivery) will
have, validly executed and delivered this Guaranty and each of the other
Transaction Documents to which it is or will be a party. This Guaranty
constitutes, and upon execution and delivery thereof each of such other
Transaction Documents will constitute, the legal, valid and binding obligation
of the Guarantor, enforceable against it in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally or by
general equitable principles or principles of good faith and fair dealing.
(c) The execution, delivery and performance by the Guarantor of this
Guaranty and each of the other Transaction Documents to which it is or will be a
party, compliance by it with the terms hereof and thereof, and the consummation
of the Transactions, do not and will not (i) violate any provision of its
certificate of incorporation or bylaws or contravene any other Requirement of
Law applicable to it, (ii) conflict with, result in a material breach of or
constitute (with notice, lapse of time or both) a material default under any
material indenture, material agreement or other material instrument to which it
is a party, by which it or any of its properties is bound or to which it is
subject, (iii) require any approval of its stockholders or any approval or
consent of any Person under any material agreement to which it is a party,
except for such approvals or consents which will be obtained on or before the
Closing Date and disclosed in writing to the Lenders or such approvals or
consents the failure of which to obtain could not reasonably be expected, singly
or in the aggregate, to have a Material Adverse Effect, or (iv) except for the
Liens granted pursuant to the Security Documents, result in or require the
creation or imposition of any Lien upon any of its properties or assets.
(d) No consent, approval, authorization or other action by, notice to, or
registration or filing with, any Governmental Authority or other Person is or
will be required as a condition to or otherwise in connection with the due
execution, delivery and performance by the Guarantor of this Guaranty or any of
the other Transaction Documents to which it is or will be a party or the
legality, validity or enforceability hereof or thereof, other than consents,
authorizations and filings in connection with the Acquisition that have been (or
on or prior to the Closing Date will have been) made or obtained and that are
(or on the Closing Date will be) in full force and effect, which consents,
authorizations and filings are listed on Schedule 5.4 to the Credit Agreement.
(e) There are no actions, investigations, suits or proceedings pending
or, to the knowledge of the Guarantor (after due investigation) threatened, at
law, in equity or in arbitration, before any court, other Governmental Authority
or other Person, (i) against or affecting the Guarantor or any of its properties
that would, if adversely determined, be reasonably expected to have a Material
Adverse Effect, or (ii) with respect to this Guaranty, any of the other
Transaction Documents or any of the Transactions.
(f) All representations and warranties contained in the Credit Agreement
or any of the other Credit Documents that relate to the Guarantor are true and
correct in all material respects.
(g) The Guarantor has been provided with a true and complete copy of the
executed Credit Agreement, as in effect as of the date hereof, and its principal
officers are familiar with the contents thereof, particularly insofar as the
contents thereof relate or apply to the Guarantor.
-6-
6. Financial Condition of the Borrower. The Guarantor represents that it
has knowledge of the Borrower's financial condition and affairs and that it has
adequate means to obtain from the Borrower on an ongoing basis information
relating thereto and to the Borrower's ability to pay and perform the Guaranteed
Obligations, and agrees to assume the responsibility for keeping, and to keep,
so informed for so long as this Guaranty is in effect with respect to the
Guarantor. The Guarantor agrees that the Guaranteed Parties shall have no
obligation to investigate the financial condition or affairs of the Borrower for
the benefit of the Guarantor nor to advise the Guarantor of any fact respecting,
or any change in, the financial condition or affairs of the Borrower that might
become known to any Guaranteed Party at any time, whether or not such Guaranteed
Party knows or believes or has reason to know or believe that any such fact or
change is unknown to the Guarantor, or might (or does) materially increase the
risk of the Guarantor as guarantor, or might (or would) affect the willingness
of the Guarantor to continue as a guarantor of the Guaranteed Obligations.
7. Covenants. The Guarantor covenants and agrees that, until the
termination of the Commitments and all Letters of Credit and the payment in full
of all principal and interest with respect to the Loans and all Reimbursement
Obligations together with all other amounts then due and owing under the Credit
Agreement:
(a) it will (i) maintain and preserve in full force and effect its
corporate existence, and (ii) comply in all respects with all Requirements of
Law applicable in respect of the conduct of its business and the ownership and
operation of its properties, except to the extent the failure so to comply would
not be reasonably expected to have a Material Adverse Effect;
(b) it will deliver to the Lenders, promptly upon the sending, filing or
receipt thereof, all reports and other information sent, filed or received by it
of the types described in Sections 7.3(c) and 7.3(d) of the Credit Agreement;
and
(c) it shall not take or omit to take any action if such action or
omission would result in a violation of any of the covenants of the Borrower
contained in Article VII, Article VIII or Article IX of the Credit Agreement.
8. Payments; Application; Set-Off. (a) The Guarantor agrees that, upon
the failure of the Borrower to pay any Guaranteed Obligations when and as the
same shall become due (whether at the stated maturity, by acceleration or
otherwise), and without limitation of any other right or remedy that any
Guaranteed Party may have at law, in equity or otherwise against the Guarantor,
the Guarantor will forthwith pay or cause to be paid to the Agent, for the
benefit of the Guaranteed Parties, an amount equal to the amount of the
Guaranteed Obligations then due and owing as aforesaid.
(b) All payments made by the Guarantor hereunder will be made in the
Applicable Currency to the Agent, without set-off, counterclaim or other defense
and, in accordance with Section 2.17 of the Credit Agreement, free and clear of
and without deduction for any Taxes, the Guarantor hereby agreeing to comply
with and be bound by the provisions of Section 2.17 of the Credit Agreement in
respect of all payments made by it hereunder and the provisions of which Section
are hereby incorporated into and made a part of this Guaranty by this reference
as if set forth herein at length.
(c) All payments made hereunder shall be applied upon receipt as follows:
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(i) first, to the payment of all Other Obligations owing to the
Agent;
(ii) second, after payment in full of the amounts specified in
clause (i) above, to the ratable payment of all other Total Obligations
owing to the Guaranteed Parties; and
(iii) third, after payment in full of the amounts specified in
clauses (i) and (ii) above, and following the termination of this
Guaranty, to the Guarantor or any other Person lawfully entitled to
receive such surplus.
(d) For purposes of applying amounts in accordance with this Section, the
Agent shall be entitled to rely upon any Guaranteed Party that has entered into
a Hedge Agreement with the Borrower for a determination (which such Guaranteed
Party agrees to provide or cause to be provided upon request of the
Administrative Agent) of the outstanding Guaranteed Obligations owed to such
Guaranteed Party under any such Hedge Agreement. Unless it has actual knowledge
(including by way of written notice from any such Guaranteed Party) to the
contrary, the Agent, in acting hereunder, shall be entitled to assume that no
Hedge Agreements or Obligations in respect thereof are in existence between any
Guaranteed Party and the Borrower.
(e) The Guarantor shall remain liable to the extent of any deficiency
between the amount of all payments made hereunder and the aggregate amount of
the sums referred to in clauses (i) and (ii) of subsection (c) above.
(f) In addition to all other rights and remedies available under the
Credit Documents or applicable law or otherwise, upon and at any time after the
occurrence and during the continuance of any Event of Default, each Guaranteed
Party may, and is hereby authorized by the Guarantor, at any such time and from
time to time, to the fullest extent permitted by applicable law, without
presentment, demand, protest or other notice of any kind, all of which are
hereby knowingly and expressly waived by the Guarantor, to set off and to apply
any and all deposits (general or special, time or demand, provisional or final)
and any other property at any time held (including at any branches or agencies,
wherever located), and any other indebtedness at any time owing, by such
Guaranteed Party to or for the credit or the account of the Guarantor against
any or all of the obligations of the Guarantor to such Guaranteed Party
hereunder now or hereafter existing, whether or not such obligations may be
contingent or unmatured, the Guarantor hereby granting to each Guaranteed Party
a continuing security interest in and Lien upon all such deposits and other
property as security for such obligations. Each Guaranteed Party agrees to
notify the Guarantor promptly after any such set-off and application; provided,
however, that the failure to give such notice shall not affect the validity of
such set-off and application.
9. Enforcement. The Guaranteed Parties agree that, except as provided in
Section 8(f), this Guaranty may be enforced only by the Agent, acting upon the
instructions or with the consent of the Required Lenders as provided for in the
Credit Agreement, and that no Guaranteed Party shall have any right individually
to enforce or seek to enforce this Guaranty or to realize upon any collateral or
other security given to secure the payment and performance of the Guarantor's
obligations hereunder. The obligations of the Guarantor hereunder are
independent of the Guaranteed Obligations, and a separate action or actions may
be brought against the Guarantor whether or not action is brought against the
Borrower and whether or not the Borrower is joined in any such action. The
Guarantor agrees that to the extent all or part of any payment of the Guaranteed
Obligations made by any Person is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid by or on behalf
of
-8-
any Guaranteed Party to a trustee, receiver or any other party under any
Insolvency Laws (the amount of any such payment, a "Reclaimed Amount"), then, to
the extent of such Reclaimed Amount, this Guaranty shall continue in full force
and effect or be revived and reinstated, as the case may be, as to the
Guaranteed Obligations intended to be satisfied as if such payment had not been
received; and the Guarantor acknowledges that the term "Guaranteed Obligations"
includes all Reclaimed Amounts that may arise from time to time. Notwithstanding
any other provisions contained herein or in any other Credit Document, no
provision of this Guaranty shall require or permit the collection from the
Guarantor of interest in excess of the maximum rate or amount that the Guarantor
may be required or permitted to pay pursuant to applicable law.
10. Amendments, Waivers, etc. No amendment, modification, waiver,
discharge or termination of, or consent to any departure by the Guarantor from,
any provision of this Guaranty, shall be effective unless in a writing executed
and delivered in accordance with Section 12.6 of the Credit Agreement, and then
the same shall be effective only in the specific instance and for the specific
purpose for which given.
11. Continuing Guaranty; Term; Successors and Assigns; Assignment;
Survival. This Guaranty is a continuing guaranty and covers all of the
Guaranteed Obligations as the same may arise and be outstanding at any time and
from time to time from and after the date hereof, and shall (i) remain in full
force and effect until satisfaction of all of the Termination Requirements, (ii)
be binding upon and enforceable against the Guarantor and its successors and
assigns (provided, however, that the Guarantor may not sell, assign or transfer
any of its rights, interests, duties or obligations hereunder without the prior
written consent of all of the Lenders) and (iii) inure to the benefit of and be
enforceable by each Guaranteed Party and its successors and assigns. All
representations, warranties, covenants and agreements herein shall survive the
execution and delivery of this Guaranty.
12. Governing Law; Consent to Jurisdiction. THIS GUARANTY SHALL BE
INTERPRETED, AND THE RIGHTS AND LIABILITIES OF THE GUARANTEED PARTIES AND THE
GUARANTOR DETERMINED, IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO
CONFLICTS OF LAW PROVISIONS) OF THE STATE OF NORTH CAROLINA. AS PART OF THE
CONSIDERATION FOR NEW VALUE THIS DAY RECEIVED, THE GUARANTOR HEREBY CONSENTS TO
THE JURISDICTION OF ANY STATE COURT WITHIN MECKLENBURG COUNTY, NORTH CAROLINA OR
ANY FEDERAL COURT LOCATED WITHIN THE WESTERN DISTRICT OF THE STATE OF NORTH
CAROLINA FOR ANY PROCEEDING INSTITUTED HEREUNDER OR UNDER ANY OF THE OTHER
CREDIT DOCUMENTS, OR ARISING OUT OF OR IN CONNECTION WITH THIS GUARANTY OR ANY
OF THE OTHER CREDIT DOCUMENTS, OR ANY PROCEEDING TO WHICH ANY GUARANTEED PARTY
OR SUCH GUARANTOR IS A PARTY, INCLUDING ANY ACTIONS BASED UPON, ARISING OUT OF,
OR IN CONNECTION WITH ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY GUARANTEED PARTY OR THE GUARANTOR.
THE GUARANTOR IRREVOCABLY AGREES TO BE BOUND (SUBJECT TO ANY AVAILABLE RIGHT OF
APPEAL) BY ANY JUDGMENT RENDERED OR RELIEF GRANTED THEREBY AND FURTHER WAIVES
ANY OBJECTION THAT IT MAY HAVE BASED ON LACK OF JURISDICTION OR IMPROPER VENUE
OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY SUCH PROCEEDING. THE GUARANTOR
CONSENTS THAT ALL SERVICE OF PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
DIRECTED TO IT AT ITS ADDRESS SET FORTH
-9-
HEREINBELOW, AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON THE
EARLIER OF ACTUAL RECEIPT THEREOF OR THREE (3) BUSINESS DAYS AFTER DEPOSIT IN
THE UNITED STATES MAILS, PROPER POSTAGE PREPAID AND PROPERLY ADDRESSED. NOTHING
IN THIS SECTION SHALL AFFECT THE RIGHT TO SERVE LEGAL PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF ANY GUARANTEED PARTY TO BRING ANY
ACTION OR PROCEEDING AGAINST THE GUARANTOR IN THE COURTS OF ANY OTHER
JURISDICTION.
13. Arbitration; Preservation and Limitation of Remedies. (a) Upon demand
of any party hereto, whether made before or after institution of any judicial
proceeding, any dispute, claim or controversy arising out of, connected with or
relating to this Guaranty or any other Credit Document ("Disputes") between or
among the Guarantor and the Guaranteed Parties, or any of them, shall be
resolved by binding arbitration as provided herein. Institution of a judicial
proceeding by a party does not waive the right of that party to demand
arbitration hereunder. Disputes may include, without limitation, tort claims,
counterclaims, claims brought as class actions, claims arising from documents
executed in the future, or claims arising out of or connected with the
transactions contemplated by this Guaranty, the Credit Agreement and the other
Credit Documents. Arbitration shall be conducted under and governed by the
Commercial Financial Disputes Arbitration Rules (the "Arbitration Rules") of the
American Arbitration Association (the "AAA"), as in effect from time to time,
and Title 9 of the U.S. Code, as amended. All arbitration hearings shall be
conducted in the city in which the principal office of the Agent is located. The
expedited procedures set forth in Rule 51 et seq. of the Arbitration Rules shall
be applicable to claims of less than $1,000,000. All applicable statutes of
limitation shall apply to any Dispute. A judgment upon the award may be entered
in any court having jurisdiction. The panel from which all arbitrators are
selected shall be comprised of licensed attorneys. The single arbitrator
selected for expedited procedure shall be a retired judge from the highest court
of general jurisdiction, state or federal, of the state where the hearing will
be conducted or, if such person is not available to serve, the single arbitrator
may be a licensed attorney. Notwithstanding the foregoing, this arbitration
provision does not apply to Disputes under or related to Hedge Agreements.
(b) Notwithstanding the preceding binding arbitration provisions, the
parties hereto agree to preserve, without diminution, certain remedies that any
party hereto may employ or exercise freely, independently or in connection with
an arbitration proceeding or after an arbitration action is brought. Any party
hereto shall have the right to proceed in any court of proper jurisdiction or by
self-help to exercise or prosecute the following remedies, as applicable: (i)
all rights to foreclose against any collateral by exercising a power of sale
granted pursuant to any of the Credit Documents or under applicable law or by
judicial foreclosure and sale, including a proceeding to confirm the sale; (ii)
all rights of self-help, including peaceful occupation of real property and
collection of rents, set-off, and peaceful possession of personal property;
(iii) obtaining provisional or ancillary remedies, including injunctive relief,
sequestration, garnishment, attachment, appointment of a receiver and filing an
involuntary bankruptcy proceeding; and (iv) when applicable, a judgment by
confession of judgment. Preservation of these remedies does not limit the power
of an arbitrator to grant similar remedies that may be requested by a party in a
Dispute. The parties hereto agree that no party shall have a remedy of punitive
or exemplary damages against any other party in any Dispute, and each party
hereby waives any right or claim to punitive or exemplary damages that it has
now or that may arise in the future in connection with any Dispute, whether such
Dispute is resolved by arbitration or judicially.
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14. Notices. All notices and other communications provided for hereunder
shall be given in the manner set forth in and subject to the provisions of
Section 12.5 of the Credit Agreement and shall be addressed (a) if to the
Guarantor, in care of the Borrower and at the Borrower's address for notices set
forth in Section 12.5 of the Credit Agreement, and (b) if to any Guaranteed
Party, at its address for notices set forth in Section 12.5 of the Credit
Agreement; or to such other address as any of the Persons listed above may
designate for itself by like notice to the other Persons listed above; and in
each case, with copies to such other Persons as may be specified under the
provisions of the Credit Agreement.
15. No Waiver. The rights and remedies of the Guaranteed Parties
expressly set forth in this Guaranty and the other Credit Documents are
cumulative and in addition to, and not exclusive of, all other rights and
remedies available at law, in equity or otherwise. No failure or delay on the
part of any Guaranteed Party in exercising any right, power or privilege shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right, power or privilege preclude any other or further exercise thereof or
the exercise of any other right, power or privilege or be construed to be a
waiver of any Default or Event of Default. No course of dealing between the
Guarantor and any Guaranteed Party or their agents or employees shall be
effective to amend, modify or discharge any provision of this Guaranty or any
other Credit Document or to constitute a waiver of any Default or Event of
Default. No notice to or demand upon the Guarantor in any case shall entitle the
Guarantor to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the right of any Guaranteed Party to
exercise any right or remedy or take any other or further action in any
circumstances without notice or demand.
16. Severability. To the extent any provision of this Guaranty is
prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in such jurisdiction, without prohibiting or invalidating
such provision in any other jurisdiction or the remaining provisions of this
Guaranty in any jurisdiction.
17. Construction. The headings of the various sections and subsections of
this Guaranty have been inserted for convenience only and shall not in any way
affect the meaning or construction of any of the provisions hereof. Unless the
context otherwise requires, words in the singular include the plural and words
in the plural include the singular.
18. Counterparts. This Guaranty may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Guaranty to be
executed by their duly authorized officers as of the date first above written.
CHARTWELL RE CORPORATION
By: _____________________________
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
Accepted and agreed to:
FIRST UNION NATIONAL BANK
OF NORTH CAROLINA, as
Agent
By: _______________________________
Name:_______________________
Title: __________________________
Exhibit H to Credit Agreement
First Union National Bank
of North Carolina, as Agent
Chartwell Re Holdings Corporation
November 14, 1996 /
$55,000,000/(pound)12,850,000
---------------------------------
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
CHARTWELL RE HOLDINGS CORPORATION
REVOLVING COMMITMENT WORKSHEET
(1) Total Revolving Credit Commitments(1) $________
(2) Revolving Loans outstanding (before giving
effect to the requested Borrowing)
(a) Dollar Revolving Loans Outstanding $________
(b) Pounds Sterling Revolving Loans
Outstanding (pound)________
(c) Dollar Equivalent of (b)(2) $________(2)
(d) Total Revolving Loans Outstanding
(add lines (2)(a) and (c)) ($________)(2)
(3) Letter of Credit Exposure
(a) Dollar Denominated:
(i) Letters of Credit Outstanding $________
(ii) Reimbursement Obligations oustanding $________
(iii) Add lines (3)(a)(i) and (ii) ($________)
(b) Sterling Denominations
(i) Letters of Credit Outstanding (pound)________
(ii) Reimbursement Obligations outstanding (pound)________
(iii) Add lines 3(b)(i) and (ii) (pound)________
(iv) Dollar Equivalent of (iii)(2) ($________(2))
(worksheet continued)
----------
(1) Initially, $25,000,000.
(2) The Dollar Equivalent should be left blank to be completed by the
Agent.
(4) Revolver Guaranty Exposure (if any)
(a) Principal
(i) Aggregate Loan Notes Principal
Amount(3) (pound)________
(ii) Tranche B Guaranty Exposure(4) (pound)________
(iii) Line (4)(a)(i) minus 4(a)(ii) (pound)________
(b) Interest to be due on next interest
payment date(5) (pound)________
(c) Loan Notes Reimbursement Obligations
outstanding (pound)________
(d) Add line 4(a)(iii), 4(b) and 4(c) (pound)________
(e) Dollar Equivalent of line 4(d)(1) $________(2)
(5) Total Unutilized Revolving Credit Commitment (subtract
lines (2)(d), 3(a)(iii), 3(b)(iv) and 4(e)
from line (1) $
========
Prepared by: ______________________________
Name: _____________________________________
Title: _____________________________________
As of [Date]: ______________________________
----------
(3) The amount of this line 4(a)(i) on immediately preceding worksheet
less (pound)_____ in principal amount of Loan Notes redeemed since submission of
immediately preceding worksheet.
(4) Calculation: (pound)12,850,000 less (pound)_______ in principal
amount repaid on Loan Notes designated by Borrower as repayments of Tranche B
Loan Notes.
(5) June 30th or December 31st based on Loan Notes outstanding on such
date.
FIRST AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT,
dated as of January 24, 1997 (this "First Amendment"), is made in respect of the
First Amended and Restated Credit Agreement dated November 14, 1996 (as amended
hereby, the "Credit Agreement"), by and between CHARTWELL RE HOLDINGS
CORPORATION, a Delaware corporation (the "Borrower"), the financial institutions
listed on the signature pages thereof or that become parties thereto after the
date thereof (collectively the "Lenders"), FIRST UNION NATIONAL BANK OF NORTH
CAROLINA, as agent for the Lenders (in such capacity, the "Agent") and as an
Issuing Bank, and FIRST UNION NATIONAL BANK (LONDON BRANCH), as an Issuing Bank.
Capitalized terms used but not defined herein shall have the meanings given to
such terms in the Credit Agreement.
RECITALS
A. Section 2.9(b) of the Credit Agreement requires the payment of the
Revolving Credit Commitment Fee calculated on "the average daily aggregate
Unutilized Revolving Credit Commitments." Because all or a portion of Revolving
Loans are and will be issued in Pounds Sterling, such calculation would require
the Agent to determine the spot exchange rate and calculate such amount on a
daily basis. To reduce the administrative burden of the foregoing, the parties
hereto agree to amend the Credit Agreement to require the determination of the
spot rate only on Determination Dates.
B. The parties realize that Letters of Credit to be issued to Lloyd's of
London must have a maturity date longer than one year and agree to amend Section
4.1(c) to permit same.
C. The Borrower desires the ability for Reinsurance to request the
issuance of Letters of Credit under the Credit Agreement for use in the ordinary
course of its business to support the payment of obligations arising under
insurance and reinsurance contracts and for the purpose of supporting the
relationship between certain Subsidiaries of Xxxxxx and the Society and Council
of Lloyd's of London ("Lloyd's"). The Agent, Issuing Banks, and Lenders agree to
amend Article IV of the Credit Agreement to permit the foregoing, subject to
certain limitations on the Letters of Credit in favor of Lloyd's and provided
that the Borrower and Reinsurance are jointly and severally liable to the
Issuing Banks and Lenders for the Reimbursement Obligations in respect of such
Letters of Credit. The Agent, Issuing Banks, and the Lenders also recognize that
the Reimbursement Obligations in respect of such Letters of Credit should be
excluded from the prohibition against Indebtedness of Subsidiaries in Section
9.2 of the Credit Agreement.
D. The Borrower has requested that, with respect to any Letter of Credit
the reimbursement obligation for which is secured by a letter of credit issued
by another financial institution in favor of the Issuing Bank, the applicable
Letter of Credit Fee be the fee set forth in Section 2.9(d)(x) of the Credit
Agreement to the extent of the stated amount of such letter of credit. The
Agent, Issuing Banks and Lenders agree to such request subject to certain
requirements with respect to such letters of credit.
E. The Borrower has requested that reimbursement obligations with respect
to letters of credit issued to secure the reinsurance obligations of any
Insurance Subsidiary incurred in the ordinary course of its business be excluded
from Consolidated Indebtedness for purposes of the Capitalization Ratio to the
extent of cash, Cash Equivalents and, in the case of Letters of Credit issued by
either Issuing Bank, Approved L/C
Collateral (as hereinafter defined) provided by the Borrower or any of its
Subsidiaries to the issuers of such letters of credit as security for such
reimbursement obligations. The Agent, Issuing Banks, and Lenders agree to grant
such request. The parties hereto also agree, in light of the inclusion of the
Contingent Interest Notes in the definition of Consolidated Net Worth, to
clarify the definition of Consolidated Indebtedness to explicitly exclude
Contingent Interest Notes therefrom.
F. The Borrower desires, and the Agent, Lenders, and Issuing Banks are
willing, to increase the Total Revolving Credit Commitments from Twenty-Five
Million Dollars ($25,000,000) to Thirty-Five Million Dollars ($35,000,000),
subject to the terms and conditions of this Amendment and the Credit Agreement
and provided that the primary syndication of the Loans is completed as herein
required.
STATEMENT OF AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower, the Agent, the
Issuing Banks and the Lenders, for themselves and their successors and assigns,
agree as follows:
ARTICLE I
AMENDMENTS TO CREDIT AGREEMENT
1.1. Amendment to Section 1.1. (a) Section 1.1 of the Credit Agreement
shall be amended by adding the following definitions thereto:
"Approved L/C Collateral" shall mean any letter of credit that is
issued to secure the Reimbursement Obligations of the Borrower or, in the
case of a Letter of Credit issued for the accounts of the Borrower and
Reinsurance jointly, the joint and several Reimbursement Obligations of
the Borrower and Reinsurance, in respect of a Letter of Credit issued
pursuant to Article IV (the "Secured Letter of Credit"), provided that
such letter of credit is issued in the same currency as the Secured
Letter of Credit and that the following requirements are met to the
reasonable satisfaction of the Agent and the relevant Issuing Bank:
(i) such letter of credit shall (x) in the case of a letter
of credit denominated in Dollars, be issued by a bank or trust
company organized under the laws of the United States of America
or any state thereof that has combined capital and surplus of at
least $500,000,000 and that has (or is a subsidiary of a bank
holding company that has) at all times during which such letter of
credit secures a Letter of Credit issued pursuant to Article IV a
long-term unsecured debt rating of at least A or the equivalent
thereof by Standard & Poor's or at least A2 or the equivalent
thereof by Xxxxx'x and (y) in the case of a letter of credit
denominated in Pounds Sterling, be issued by a bank or trust
company that either (I) is the London branch of a United States
bank or trust company that satisfies the requirements of clause
(x) of this definition or (II) is domiciled in the United Kingdom
or is the London or United States branch of a bank or trust
company not domiciled in the United States or the United Kingdom,
is acceptable to the Agent and the relevant Issuing Bank, and has,
at all times during which such letter of credit is to secure a
Letter of Credit issued pursuant to Article IV, a long-term
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unsecured debt rating of at least A or the equivalent thereof by
Standard & Poor's or at least A2 or the equivalent thereof by
Xxxxx'x,
provided further that, for the avoidance of any doubt, if an
issuer of any letter of credit which otherwise constitutes
Approved L/C Collateral hereunder ceases to maintain the minimum
required rating specified above, then all such letters of credit
issued by such issuer shall immediately cease to be Approved L/C
Collateral for the purposes of this Credit Agreement;
(ii) such letter of credit shall be issued in favor of the
Issuing Bank issuing the Secured Letter of Credit; and
(iii) the terms and conditions of such letter of credit
shall be satisfactory to the Agent and the relevant Issuing Bank
in their sole discretion, which shall include provisions for (x)
the expiration of such letter of credit not sooner than thirty
(30) days after the expiration of the Secured Letter of Credit,
(y) advance notice of renewal of such letter of credit not later
than thirty (30) days prior to the advance notice requirement for
the Secured Letter of Credit, and (z) the immediately exercisable
and unconditional right of the Issuing Bank to require payment on
such letter of credit by the bank issuing such letter of credit at
any time.
"Lloyd's" shall mean the Society of Lloyd's of London, the Council of
Lloyd's of London, or any other Person similarly associated with Lloyd's of
London.
"Unassigned Surplus" shall mean, with respect to any Insurance Subsidiary
at any time, the amount shown on line 24(c) (designated "Unassigned funds
(surplus)"), page 3, column 1 of the Annual Statement of such Insurance
Subsidiary, or the amount determined in a consistent manner for any date other
than a date as of which an Annual Statement of such Insurance Subsidiary is
prepared.
(b) The definition of "Consolidated Indebtedness" in Section 1.1 of the
Credit Agreement shall be amended by inserting the following immediately before
the period at the end thereof:
, excluding (y) the amount of the Contingent Interest Notes as reported on the
Parent's most recent balance sheet and (z) reimbursement obligations with
respect to letters of credit (other than letters of credit, including Letters of
Credit under Article IV, issued in favor of Lloyd's) issued to secure the
reinsurance obligations of one or more Insurance Subsidiaries under reinsurance
agreements entered into in the ordinary course of such Insurance Subsidiaries'
business but only in each case to the extent of cash and Cash Equivalents
provided to the issuer of such letter of credit by the Borrower or any
Subsidiary as collateral for such reimbursement obligations, and, in the case of
Letters of Credit issued by either Issuing Bank, the amount of Approved L/C
Collateral available to be drawn upon to satisfy such reimbursement obligations
(c) The definition of "Stated Amount" in Section 1.1 of the Credit
Agreement shall be deleted and the following definition substituted therefor:
"Stated Amount" shall mean, with respect to any letter of credit,
including any Letter of Credit issued under Article IV, or the Loan Notes
Guaranty at any time, the aggregate amount available to be drawn thereunder at
such time (regardless of whether any conditions for drawing could then be met
and regardless of any cash or Cash Equivalents in the Cash Collateral Accounts
or any Approved Letter of Credit Collateral) and, with respect to Loan Notes at
any time, the principal amount outstanding thereunder at such time.
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1.2. Amendment to Section 2.9(b). Section 2.9(b) of the Credit Agreement
shall be deleted in its entirety and the following substituted therefor:
(b) To the Agent, for the account of each Revolving Lender, a
commitment fee (the "Revolving Credit Commitment Fee") for the period
from the Execution Date to the Revolving Credit Termination Date, at a
per annum rate equal to 0.25%, on such Lender's Revolving Commitment
Percentage of the aggregate Unutilized Revolving Credit Commitments, as
such amount may change from time to time on any Determination Date,
payable in arrears (i) on the last Business Day of each calendar quarter,
beginning with the first such day to occur after the Closing Date, and
(ii) on the Revolving Credit Termination Date;
1.3. Amendment to Section 2.9(d). Section 2.9(d) of the Credit Agreement
shall be amended by deleting clause (x) thereof and substituting the following
clause (x) therefor:
(x) at a per annum rate equal to 0.375% on such Lender's Letter of Credit
Exposure to the extent of such Lender's Revolving Commitment Percentage
of (i) the cash or Cash Equivalents deposited in the respective L/C Cash
Collateral Accounts pursuant to Section 4.8(b), and (ii) the Stated
Amount of Approved L/C Collateral, calculated as the Letter of Credit
Exposure and as such amounts described in clauses (i) and (ii) may change
from time to time during such quarter, in each case to secure the
Borrower's or the Borrower's and Reinsurance's Reimbursement Obligations
in respect of such Lender's Letter of Credit Exposure, and
1.4. Amendment to Article IV. Article IV of the Credit Agreement shall be
deleted in its entirety and the following Article IV substituted therefor:
ARTICLE IV
LETTERS OF CREDIT
4.1 Issuance. Subject to and upon the terms and conditions herein
set forth, so long as no Default or Event of Default has occurred and is
continuing, the Issuing Bank will, at any time and from time to time on
and after the Closing Date and prior to the earlier of (i) the seventh
day prior to the Revolving Credit Maturity Date and (ii) the Revolving
Credit Termination Date, and upon receipt of a Letter of Credit Notice in
accordance with the provisions of Section 4.2, issue for the account of
the Borrower or Reinsurance, as requested in such Letter of Credit
Notice, one or more irrevocable standby letters of credit denominated in
Dollars or Pounds and in a form customarily used or otherwise approved by
the Issuing Bank (together with all amendments, modifications and
supplements thereto, substitutions therefor and renewals and restatements
thereof, collectively, the "Letters of Credit"). Notwithstanding the
foregoing:
(a) No Letter of Credit shall be issued the Stated Amount
upon issuance of which, when added to the sum of (i) the aggregate
Letter of Credit Exposure and Revolver Guaranty Exposure of all
Revolving Lenders at such time and (ii) the aggregate principal
amount of all Revolving Loans then outstanding, would exceed the
Total Revolving Credit Commitments at such time;
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(b) The Stated Amount of each Letter of Credit, when
issued, shall not be less than $500,000 or, in the case of a
Sterling denominated Letter of Credit, (pound)500,000;
(c) No Letter of Credit shall be issued that by its terms
expires later than the seventh day prior to the Revolving Credit
Maturity Date or, in any event, more than one (1) year after its
date of issuance; provided, however, that a Letter of Credit may,
if requested by the Borrower, provide by its terms, and on terms
acceptable to the Issuing Bank, for renewal for successive periods
of one year or less (but not beyond the seventh day prior to the
Revolving Credit Maturity Date), unless and until the Issuing Bank
shall have delivered a notice of nonrenewal to the beneficiary of
such Letter of Credit; provided, further, that Letters of Credit
may be issued in favor of the Society of Lloyd's or the Council of
Lloyd's, or both, to support the membership of one or more of the
Subsidiaries of the Borrower in the Society of Lloyd's for terms
longer than one (1) year (but not beyond the seventh day prior to
the Revolving Credit Maturity Date) so long as the terms of each
such Letter of Credit otherwise comply with the requirements of
this Agreement;
(d) The Issuing Bank shall be under no obligation to issue
any Letter of Credit if, at the time of such proposed issuance,
(i) any order, judgment or decree of any Governmental Authority or
arbitrator shall purport by its terms to enjoin or restrain the
Issuing Bank from issuing such Letter of Credit, or any
Requirement of Law applicable to the Issuing Bank or any request
or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the Issuing Bank
shall prohibit, or request that the Issuing Bank refrain from, the
issuance of letters of credit generally or such Letter of Credit
in particular or shall impose upon the Issuing Bank with respect
to such Letter of Credit any restriction or reserve or capital
requirement (for which the Issuing Bank is not otherwise
compensated) not in effect on the Closing Date, or any
unreimbursed loss, cost or expense that was not applicable, in
effect or known to the Issuing Bank as of the Closing Date and
that the Issuing Bank in good xxxxx xxxxx material to it, or (ii)
the Issuing Bank shall have actual knowledge, or shall have
received notice from any Lender, prior to the issuance of such
Letter of Credit that one or more of the conditions specified in
Sections 5.1 (if applicable) or 4.2 are not then satisfied (or
have not been waived in writing as required herein) or that the
issuance of such Letter of Credit would violate the provisions of
subsection (a) above;
(e) No Letter of Credit shall be issued or renewed in favor
of Lloyd's if, immediately after the issuance or renewal of such
Letter of Credit, the Dollar Amount of the aggregate Stated Amount
of all Letters of Credit outstanding and issued in favor of
Lloyd's, whether or not secured and whether or not issued pursuant
to this Agreement, would exceed $25,000,000; and
(f) All Letters of Credit issued upon the request of
Reinsurance (or the Borrower and Reinsurance jointly) shall be for
use by Reinsurance solely in the ordinary course of its business
to support the payment of obligations arising under insurance and
reinsurance contracts (it being understood that Letters of Credit
issued in favor of Lloyd's are not issued "in the ordinary course
of its business"); provided, however, that any Letter of Credit
may be issued or renewed for the account of
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Reinsurance in favor of the Society of Lloyd's or the Council of
Lloyd's if, taking into account the issuance or renewal of each
such Letter of Credit, no Default, including a Default under
Section 9.2(iv), shall have occurred and be continuing.
4.2 Notices. Whenever the Borrower or Reinsurance desires the
issuance of a Letter of Credit, the Borrower, either alone, in the case
of a Letter of Credit to be issued for its own account, or jointly with
Reinsurance, in the case of a Letter of Credit issued for the account of
Reinsurance (a "Joint Notice"), will give the Agent written notice not
later than 11:00 a.m., Charlotte time, three (3) Business Days (or such
shorter period as is acceptable to the Issuing Bank in any given case)
prior to the requested date of issuance thereof. Each such notice (each,
a "Letter of Credit Notice") shall be irrevocable, shall be given in the
form of Exhibit B-3 (with a duly completed Revolving Commitment Worksheet
attached) and shall specify (i) the requested date of issuance, which
shall be a Business Day, (ii) the requested Stated Amount and expiry date
of the Letter of Credit, (iii) the name and address of the requested
beneficiary or beneficiaries of the Letter of Credit, and (iv) whether
the Letter of Credit should be issued for the account of the Borrower or
Reinsurance. The Borrower, or the Borrower and Reinsurance in the case of
a Joint Notice, will also complete any application procedures and
documents required by the Issuing Bank in connection with the issuance of
any Letter of Credit. Upon its issuance of any Letter of Credit, the
Issuing Bank will promptly notify the Agent of such issuance, and the
Agent will give prompt notice thereof to each Lender.
4.3 Participations. Immediately upon the issuance of any Letter of
Credit, the Issuing Bank shall be deemed to have sold and transferred to
each Lender, and each Revolving Lender shall be deemed irrevocably and
unconditionally to have purchased and received from the Issuing Bank,
without recourse or warranty, an undivided interest and participation,
pro rata (based on the percentage of the aggregate Revolving Credit
Commitments represented by such Lender's Revolving Credit Commitment), in
such Letter of Credit, each drawing made thereunder and the obligations
of the Borrower, or of the Borrower and Reinsurance, under this Agreement
with respect thereto and any Collateral or other security therefor or
guaranty pertaining thereto; provided, however, that the fee relating to
Letters of Credit described in Section 2.9(e) shall be payable directly
to the Issuing Bank as provided therein, and the Revolving Lenders shall
have no right to receive any portion thereof. Upon any change in the
Revolving Credit Commitments of any of the Lenders pursuant to Section
12.7(a), with respect to all outstanding Letters of Credit and
Reimbursement Obligations there shall be an automatic adjustment to the
participations pursuant to this Section to reflect the new pro rata
shares of the assigning Lender and the Assignee.
4.4 Reimbursement. The Borrower hereby agrees, and, in the case of
a Letter of Credit issued for the account of Reinsurance or for the
accounts of the Borrower and Reinsurance jointly, the Borrower and
Reinsurance hereby jointly and severally agree, to reimburse the Issuing
Bank by making payment to the Agent, for the account of the Issuing Bank,
in immediately available funds, in each case in the Applicable Currency
(based on the currency denomination of the relevant Letter of Credit),
for any payment made by the Issuing Bank under any Letter of Credit (each
such amount so paid until reimbursed, together with interest thereon
payable as provided hereinbelow, a "Reimbursement Obligation")
immediately after, and in any event within one (1) Business Day after its
receipt of notice of,
-6-
such payment, together with interest on the amount so paid by the Issuing
Bank, to the extent not reimbursed prior to 1:00 p.m., Local Time, on the
date of such payment or disbursement, for the period from the date of the
respective payment to the date the Reimbursement Obligation created
thereby is satisfied, the Base Rate applicable to Dollar Revolving Loans
and the Sterling Base Rate applicable to Pounds Sterling Revolving Loans,
as the case may be, as in effect from time to time during such period,
such interest also to be payable on demand. The Issuing Bank will provide
the Agent and the Borrower with prompt notice of any payment or
disbursement made under any Letter of Credit, although the failure to
give, or any delay in giving, any such notice shall not release, diminish
or otherwise affect the Borrower's or Reinsurance's obligations under
this Section or any other provision of this Agreement. The Agent will
promptly pay to the Issuing Bank any such amounts received by it under
this Section.
4.5 Payment by Revolving Loans. In the event that the Issuing Bank
makes any payment under any Letter of Credit and the Borrower or
Reinsurance shall not have timely satisfied in full its Reimbursement
Obligation to the Issuing Bank pursuant to Section 4.4, and to the extent
that the sum of the amounts then held in the L/C Cash Collateral Accounts
established pursuant to Section 4.8 and the aggregate amounts available
to be drawn on the Approved L/C Collateral pursuant to Section 4.8(e)
shall be insufficient to satisfy such Reimbursement Obligation in full,
the Issuing Bank will promptly notify the Agent, and the Agent will
promptly notify each Revolving Lender, of such failure. If the Agent
gives such notice prior to 11:00 a.m., Charlotte time, on any Business
Day, each Revolving Lender will make available to the Agent, for the
account of the Issuing Bank, its pro rata share (based on the percentage
of the aggregate Revolving Credit Commitments represented by such
Lender's Revolving Credit Commitment) of the amount of such payment on
such Business Day in immediately available funds. If the Agent gives such
notice after 11:00 a.m., Charlotte time, on any Business Day, each such
Lender shall make its pro rata share of such amount available to the
Agent on the next succeeding Business Day. If and to the extent any
Revolving Lender shall not have so made its pro rata share of the amount
of such payment available to the Agent, such Lender agrees to pay to the
Agent, for the account of the Issuing Bank, forthwith on demand such
amount, together with interest thereon at the Federal Funds Rate for each
day from such date until the date such amount is paid to the Agent. The
failure of any Revolving Lender to make available to the Agent its pro
rata share of any payment under any Letter of Credit shall not relieve
any other Revolving Lender of its obligation hereunder to make available
to the Agent its pro rata share of any payment under any Letter of Credit
on the date required, as specified above, but no Revolving Lender shall
be responsible for the failure of any other Revolving Lender to make
available to the Agent such other Lender's pro rata share of any such
payment. Each such payment by a Revolving Lender under this Section 4.5
of its pro rata share of an amount paid by the Issuing Bank shall
constitute a Revolving Loan by such Revolving Lender (the Borrower being
deemed to have given a timely Notice of Revolving Borrowing therefor) and
shall be treated as such for all purposes of this Agreement; provided
that for purposes of determining the aggregate Unutilized Revolving
Credit Commitments immediately prior to giving effect to the application
of the proceeds of such Revolving Loans, the Reimbursement Obligation
being satisfied thereby shall be deemed not to be outstanding at such
time.
4.6 Payment to Lenders. Whenever the Issuing Bank receives a
payment in respect of a Reimbursement Obligation as to which the Agent
has received, for the account of the Issuing Bank, any payments from the
Revolving Lenders pursuant to Section 4.5, the
-7-
Issuing Bank will promptly pay to the Agent, and the Agent will promptly
pay to each Revolving Lender that has paid its pro rata share thereof, in
immediately available funds, an amount equal to such Lender's ratable
share (based on the proportionate amount funded by such Lender to the
aggregate amount funded by all Revolving Lenders) of such Reimbursement
Obligation.
4.7 Obligations Absolute. The Reimbursement Obligations of the
Borrower and Reinsurance, and the obligations of the Revolving Lenders
under Section 4.5 to make payments to the Agent, for the account of the
Issuing Bank, with respect to Letters of Credit, shall be irrevocable,
shall remain in effect until the Issuing Bank shall have no further
obligations to make any payments or disbursements under any circumstances
with respect to any Letter of Credit, and, except to the extent resulting
from any gross negligence or willful misconduct on the part of the
Issuing Bank, shall be absolute and unconditional, shall not be subject
to counterclaim, setoff or other defense or any other qualification or
exception whatsoever and shall be made in accordance with the terms and
conditions of this Agreement under all circumstances, including, without
limitation, any of the following circumstances:
(a) Any lack of validity or enforceability of this
Agreement, any of the other Credit Documents or any documents or
instruments relating to any Letter of Credit or the Approved L/C
Collateral;
(b) Any change in the time, manner or place of payment of,
or in any other term of, all or any of the Obligations in respect
of any Letter of Credit or any other amendment, modification or
waiver of or any consent to departure from any Letter of Credit or
any documents or instruments relating thereto, including any
Approved L/C Collateral, in each case whether or not the Borrower
or Reinsurance has notice or knowledge thereof;
(c) The existence of any claim, setoff, defense or other
right that the Borrower or Reinsurance may have at any time
against a beneficiary named in a Letter of Credit, any transferee
of any Letter of Credit (or any Person for whom any such
transferee may be acting), the Agent, the Issuing Bank, any Lender
or other Person, whether in connection with this Agreement, any
Letter of Credit, any Approved L/C Collateral, the transactions
contemplated hereby or any unrelated transactions (including any
underlying transaction between the Borrower or Reinsurance and the
beneficiary named in any such Letter of Credit);
(d) Any draft, certificate or any other document presented
under the Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect, any errors, omissions,
interruptions or delays in transmission or delivery of any
messages, by mail, telecopier or otherwise, or any errors in
translation or in interpretation of technical terms;
(e) Any defense based upon the failure of any drawing under
a Letter of Credit to conform to the terms of the Letter of
Credit, any nonapplication or misapplication by the beneficiary or
any transferee of the proceeds of such drawing or any other act or
omission of such beneficiary or transferee in connection with such
Letter of Credit;
-8-
(f) The exchange, release, surrender or impairment of any
Collateral or other security for the Obligations, including
without limitation the deposits in the L/C Cash Collateral
Accounts and the Approved L/C Collateral;
(g) The occurrence of any Default or Event of Default; or
(h) Any other circumstance or event whatsoever, including
without limitation any other circumstance that might otherwise
constitute a defense available to, or a discharge of, the
Borrower, Reinsurance or a guarantor.
Any action taken or omitted to be taken by the Issuing Bank under
or in connection with any Letter of Credit, if taken or omitted in the
absence of gross negligence or willful misconduct, shall be binding upon
the Borrower, Reinsurance and each Lender and shall not create or result
in any liability of the Issuing Bank to the Borrower, Reinsurance or any
Lender. It is expressly understood and agreed that, for purposes of
determining whether a wrongful payment under a Letter of Credit resulted
from the Issuing Bank's gross negligence or willful misconduct, (i) the
Issuing Bank's acceptance of documents that appear on their face to
comply with the terms of such Letter of Credit, without responsibility
for further investigation, regardless of any notice or information to the
contrary, (ii) the Issuing Bank's exclusive reliance on the documents
presented to it under such Letter of Credit as to any and all matters set
forth therein, including the amount of any draft presented under such
Letter of Credit, whether or not the amount due to the beneficiary
thereunder equals the amount of such draft and whether or not any
document presented pursuant to such Letter of Credit proves to be
insufficient in any respect (so long as such document appears on its face
to comply with the terms of such Letter of Credit), and whether or not
any other statement or any other document presented pursuant to such
Letter of Credit proves to be forged or invalid or any statement therein
proves to be inaccurate or untrue in any respect whatsoever, and (iii)
any noncompliance in any immaterial respect of the documents presented
under such Letter of Credit with the terms thereof shall, in each case,
be deemed not to constitute gross negligence or willful misconduct of the
Issuing Bank.
4.8 L/C Cash Collateral Accounts; Approved L/C Collateral. (a) At
any time and from time to time (i) after the occurrence and during the
continuance of a Default, the Agent, at the direction or with the consent
of Revolving Lenders whose Revolving Commitment Percentages in the
aggregate equal or exceed sixty-six and two-thirds percent (66 2/3%), may
require the Borrower to deliver to the Agent such additional amount of
cash (in Dollars), and may require the Issuing Banks to demand payment
from the issuers of Approved L/C Collateral (and the Issuing Banks shall
hereby be entitled to make such demand) and deliver same (in Dollars) to
the Agent, as is equal to the Dollar Amount of the aggregate Stated
Amount of all Letters of Credit at any time outstanding (whether or not
any beneficiary under any Letter of Credit shall have drawn or be
entitled at such time to draw thereunder) and (ii) to the extent any
amount of a required prepayment under Section 2.6(e) remains after
prepayment of all outstanding Revolving Loans and Reimbursement
Obligations, the Borrower shall deliver to the Agent such additional
amount of cash (in Dollars) required under Section 2.6(e), and the Agent
will retain such amount as may then be required to be retained, such
amounts in each case under clauses (i) and (ii) above to be held by the
Agent in a cash collateral account pursuant to the Borrower Escrow and
Security Agreement.
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(b) At any time and from time to time, the Borrower or Reinsurance
may deliver to the Agent cash or Cash Equivalents, in the Applicable
Currency of the Letters of Credit secured thereby, to be deposited in the
cash collateral accounts maintained by the Agent pursuant to the Borrower
Escrow and Security Agreement as security for the Borrower's and
Reinsurance's Reimbursement Obligations under Section 4.4. Separate
accounts shall be maintained by the Agent in Dollars and Pounds Sterling,
respectively. Additionally, deposits made to secure Reimbursement
Obligations under Letters of Credit issued for the account of Reinsurance
or of Reinsurance and the Borrower jointly shall be maintained by the
Agent in accounts referencing Reinsurance and the Borrower jointly, and
all other deposits shall be maintained in accounts referencing solely the
Borrower. The cash collateral accounts described in Section 4.8(a) and
this Section 4.8(b) shall be collectively referred to as the "L/C Cash
Collateral Accounts."
(c) The Borrower and Reinsurance hereby grant to the Agent, for
the benefit of the Revolving Lenders, a Lien upon and security interest
in the L/C Cash Collateral Accounts and all amounts held therein from
time to time as security for the Borrower's Obligations in respect of the
Revolving Lenders, and, to the extent not otherwise paid by or on behalf
of the Borrower or Reinsurance, as the case may be, for application to
the Reimbursement Obligations as and when the same shall arise. At all
times with respect to amounts required to be deposited in accordance with
Section 4.8(a) and, with respect to any amounts deposited in accordance
with Section 4.8(b) after the occurrence and during the continuance of a
Default, the Agent shall have exclusive dominion and control, including
the exclusive right of withdrawal, over such accounts. Other than any
interest on the investment of such amounts in Cash Equivalents, which
investments shall be made at the direction of the Borrower (unless a
Default or Event of Default shall have occurred and be continuing, in
which case the determination as to investments shall be made at the
option and in the discretion of the Agent), amounts in the L/C Cash
Collateral Accounts shall not bear interest. Interest and profits, if
any, on such investments shall accumulate in such account. All amounts in
the L/C Cash Collateral Account securing potential Reimbursement
Obligations under Letters of Credit denominated in Dollars shall consist
of cash in Dollars or Cash Equivalents denominated in Dollars. All
amounts in the L/C Cash Collateral Account securing potential
Reimbursement Obligations under Letters of Credit denominated in Pounds
Sterling shall consist of cash in Pounds Sterling.
(d) In the event of a drawing, and subsequent payment by the
Issuing Bank, under any Letter of Credit at any time during which any
amounts are held in the L/C Cash Collateral Account securing such Letter
of Credit, the Agent will deliver to the relevant Issuing Bank, out of
such L/C Cash Collateral Account (based on the currency of the subject
Letter of Credit), an amount equal to the Reimbursement Obligation
created as a result of such payment (or, if the amounts so held are less
than such Reimbursement Obligation, all of such amounts) to reimburse the
Issuing Bank therefor; provided, however, that no amounts deposited by
Reinsurance shall be used to reimburse the Issuing Bank for payments made
on Letters of Credit issued solely for the account, and upon the sole
request, of the Borrower. Any amounts remaining in the L/C Cash
Collateral Accounts after the expiration of all Letters of Credit and
reimbursement in full of the Issuing Banks for all outstanding
Reimbursement Obligations shall be returned to the Borrower, provided
that no Default shall have occurred and be continuing at such time. If
(i) all Letters of Credit issued hereunder and the Issuing Banks'
obligation to issue further Letters of Credit hereunder shall have
expired or terminated, (ii) no Default shall have occurred and be
continuing, and (iii) the sum of (x) the
-10-
aggregate principal amount of all Revolving Loans outstanding at such
time, and (y) the aggregate Letter of Credit Exposure and Revolver
Guaranty Exposure of all Revolving Lenders at such time would not exceed
the Total Revolving Credit Commitments at such time, then the L/C Cash
Collateral Accounts shall thereupon terminate and the Borrower Escrow and
Security Agreement shall expire and be of no further force or effect.
(e) At any time and from time to time, the Borrower or Reinsurance
may cause to be issued and delivered to the relevant Issuing Bank
Approved L/C Collateral, in the Applicable Currency of the Letter of
Credit secured thereby, to be held by the Issuing Bank as security for
the Borrower's and Reinsurance's Reimbursement Obligations under Section
4.4. In the event of a drawing under any Letter of Credit issued pursuant
to this Article IV, and subsequent payment by the Issuing Bank, at any
time during which any Approved L/C Collateral is held by the Issuing
Bank, the Issuing Bank shall be immediately and unconditionally entitled
to require payment first from the issuer of the Approved L/C Collateral
securing the Reimbursement Obligations under the Letter of Credit drawn
upon and then from the issuers of any other Approved L/C Collateral, to
the extent of the Borrower's or Reinsurance's Reimbursement Obligations
in respect of such drawing. Any Approved L/C Collateral held by either
Issuing Bank after the expiration of all Letters of Credit and
reimbursement in full of the Issuing Banks for all outstanding
Reimbursement Obligations shall be returned to the Borrower, provided
that no Default shall have occurred and be continuing at such time.
4.9 Effectiveness. Notwithstanding any termination of the
Revolving Credit Commitments or repayment of the Loans, or both, the
obligations of the Borrower under this Article IV shall remain in full
force and effect until the Issuing Bank and the Lenders shall have no
further obligations to make any payments or disbursements under any
circumstances with respect to any Letter of Credit.
1.5. Amendment to Section 9.2(iv). Section 9.2(iv) of the Credit
Agreement shall be deleted in its entirety and the following substituted
therefor:
(iv) Indebtedness under reimbursement obligations in respect of
(x) letters of credit issued for the benefit of one or more Insurance
Subsidiaries in the ordinary course of their business to support the
payment by such Insurance Subsidiaries of obligations arising under
insurance and reinsurance contracts, (y) Letters of Credit issued for the
account of Reinsurance in favor of the Society of Lloyd's or the Council
of Lloyd's in accordance with Article IV, and (z) other letters of credit
issued for the account of Reinsurance in favor of the Society of Lloyd's
or the Council of Lloyd's; provided, however, that at no time shall the
Dollar Amount of the aggregate Stated Amount of Letters of Credit and
other letters of credit described in clauses (y) and (z) of this
subsection (iv) outstanding exceed fifty percent (50%) of the Unassigned
Surplus of Reinsurance as of the fiscal quarter end immediately preceding
the issuance of each Letter of Credit or other letter of credit;
1.6. Amendment to First Union's Revolving Credit Commitment. Subject to
satisfaction of the conditions of Section 2.2 hereof, the Dollar Amount of the
Revolving Credit Commitment set forth on First Union's signature page to the
Credit Agreement shall be amended by deleting "$25,000,000" and substituting
"$35,000,000" therefor, and the Revolving Credit Commitment set forth in the
Register maintained by the Agent pursuant to Section 12.7(b) shall be amended to
reflect such increase.
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1.7. Amendment to Add Reinsurance as a Party. The Credit Agreement shall
be hereby amended to add Reinsurance as a party thereto for purposes of Article
IV of the Credit Agreement, as if Reinsurance had been a party thereto since the
Execution Date.
1.8. Amendment to Exhibit B-3. The Form of Letter of Credit Notice set
forth in the Exhibit B-3 to the Credit Agreement as in effect prior to this
First Amendment shall be eliminated and the Form of Letter of Credit Notice set
forth in the Exhibit B-3 attached to this First Amendment shall be substituted
therefor.
ARTICLE II
REPRESENTATIONS AND WARRANTIES; CONDITIONS
2.1. Representations and Warranties. The Borrower hereby certifies and
warrants to the Agent, Issuing Banks and Lenders (a) that each of the
representations and warranties contained in Article VI of the Credit Agreement
and in the other Credit Documents are true and correct in all material respects
on the date hereof with the same effect as though made on the date hereof, both
immediately before and after giving effect to this Amendment (except to the
extent any such representation or warranty is expressly stated to have been made
as of a specific date, in which case such representation or warranty
shall be true and correct as of such specified date), and (b) no Default or
Event of Default shall have occurred and be continuing on the date hereof, after
giving effect to this Amendment.
2.2. Conditions to Amendments. The amendments set forth in Section 1.4,
1.5 and 1.6 hereof shall not be effective and in force and effect until the
following conditions have been satisfied to the reasonable satisfaction of the
Agent and the Issuing Banks:
(a) the Borrower and Reinsurance shall have jointly provided the Agent
and the Issuing Bank an amended Letter of Credit Notice in the form of Exhibit
B-3 attached hereto, as modified to the Agent's reasonable satisfaction, in
respect of the Letter of Credit number S230470;
(b) the Agent shall have received the following, each dated as of the
date hereof (unless otherwise specified):
(i) Notes, in substantially the form of Exhibits A-1 through A-4
to the Credit Agreement, payable to the order of the Lenders and in the
amounts set forth on Schedule 2.2 attached hereto, duly completed in
accordance with the relevant provisions of Section 2.4 of the Credit
Agreement and executed by the Borrower;
(ii) an acknowledgement and confirmation duly executed by the
Parent, as guarantor under the Guaranty, in form and substance
satisfactory to the Agent, reflecting the increase in the Total Revolving
Credit Commitments and the other amendments herein to the Credit
Agreement and confirming the Parent's obligations under the Guaranty in
respect of the Credit Agreement, as amended by this First Amendment;
(iii) an amended and restated Borrower Escrow and Security
Agreement reasonably satisfactory to the Agent to reflect the ability of
Reinsurance set forth in Article IV of the Credit Agreement, as amended
hereby, to provide cash collateral for Letters of Credit issued on its
account pursuant to the Credit Agreement;
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(iv) the favorable opinions of LeBoeuf, Lamb, Xxxxxx & XxxXxx,
L.L.P., special counsel to the Parent, the Borrower and Reinsurance, and
of Xxxxxxxx X. Xxxxxxx, Vice President, General Counsel and Secretary of
Borrower, Reinsurance and Parent, in substantially the form of Exhibits
E-1 and E-2 of the Credit Agreement, respectively, except limited to
matters relating to the execution, delivery and performance of this First
Amendment and the documents, instruments, and transactions contemplated
hereby, addressed to the Agent and the Lenders;
(v) certificates of the secretary or an assistant secretary of the
Borrower, the Parent, and Reinsurance, in form and substance satisfactory
to the Agent, certifying (i) that attached thereto is a true and complete
copy of the certificate of incorporation and all amendments thereto of
Reinsurance, and that the same has not been amended since the date of
such certification, (ii) that attached thereto is a true and complete
copy of the bylaws of Reinsurance, as then in effect and as in effect at
all times from the date on which the resolutions referred to in clause
(iii) below were adopted to and including the date of such certificate,
(iii) that attached thereto is a true and complete copy of resolutions
adopted by the boards of directors of the Borrower, the Parent and
Reinsurance authorizing the execution, delivery and performance of this
First Amendment and the other Credit Documents required to be executed in
connection herewith and to which it is a party, and (iv) as to the
incumbency and genuineness of the signature of each officer of the
Borrower, the Parent and Reinsurance executing this First Amendment or
any of the other Credit Documents required to be executed in connection
herewith, and attaching all such copies of the documents described above;
and
(vi) revised UCC-1 financing statements executed by the Borrower
and Reinsurance and in form and substance satisfactory to the Agent.
(c) the Agent shall have completed the primary syndication of the Loans,
reflecting the increase in the Total Revolving Credit Commitments, to its
reasonable satisfaction including the full execution of Assignment and
Acceptance agreements effecting the assignments the results of which are as set
forth in Schedule 2.2 attached hereto; and
(d) the Borrower shall have complied with the requirements of the
amendment fee letter dated as of the date hereof between the Borrower and the
Agent.
ARTICLE III
GENERAL
3.1. Full Force and Effect. Except as expressly amended hereby, the
Credit Agreement shall continue in full force and effect in accordance with the
provisions thereof on the date hereof. As used in the Credit Agreement,
"hereinafter," "hereto," "hereof," and words of similar import shall, unless the
context otherwise requires, mean the Credit Agreement after amendment by this
First Amendment. Any reference to the Credit Agreement or any of the other
Credit Documents herein or in any such documents shall refer to the Credit
Agreement and Credit Documents as amended hereby.
3.2. Applicable Law. This First Amendment shall be governed by and
construed in accordance with the internal laws and judicial decisions of the
State of North Carolina.
3.3. Counterparts. This First Amendment may be executed in two or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute but one instrument.
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3.4. Headings. The headings of this First Amendment are for the purposes
of reference only and shall not affect the construction of this First Amendment.
3.5. Effectiveness. This First Amendment shall be deemed fully executed
when executed by the Borrower, First Union, as Agent and sole Lender, and the
Issuing Banks. Upon such full execution, the Amendments set forth in Sections
1.1, 1.2, 1.7 and 1.8 hereof shall be effective as of November 14, 1996 as if
made a part of the First Amended and Restated Credit Agreement on such date.
Upon full execution hereof and satisfaction of the conditions of Section 2.2
hereof, (x) the amendments set forth in Sections 1.3, 1.4 and 1.5 hereof shall
be effective as of November 14, 1996, as if made a part of the First Amended and
Restated Credit Agreement on such date, and (y) the amendment set forth in
Section 1.6 hereof shall be effective as of the Effective Date defined and set
forth in the Assignment and Acceptance agreements required under Section 2.2(c)
hereof.
[Signatures Appear on the Following Page]
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IN WITNESS WHEREOF, the Borrower, the Agent, the Issuing Banks, and the
Lenders have caused this First Amendment to be executed by their duly authorized
officers all as of the day and year first above written.
CHARTWELL RE HOLDINGS CORPORATION
By: ______________________________
Name: ____________________________
Title: _________________________
CHARTWELL REINSURANCE COMPANY
By: ______________________________
Name: ____________________________
Title: _________________________
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, as Agent, as an
Issuing Bank, and as a sole Lender
By: _________________________________
Name: _______________________________
Title: ____________________________
FIRST UNION NATIONAL BANK (LONDON
BRANCH), as an Issuing Bank
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By: _________________________________
Name: _______________________________
Title: ____________________________
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Schedule 2.2 to First Amendment to
First Amended and Restated
Credit Agreement
First Union National Bank of North
Carolina, as Agent
January 24, 1997
----------------------------------
Schedule 2.2
Post-Primary Syndication Allocations
=================================================================================================================================
Tranche A-1 Term Tranche A-2 Term Tranche B Term
Revolver Loan Loan Loan
---------------------------------------------------------------------------------------------------------------------------------
First Union $ 9,470,588.24 $ 5,411,764.70 $2,705,882.36 (pound) 3,477,058.82
---------------------------------------------------------------------------------------------------------------------------------
Fleet Bank 8,235,294.12 4,705,882.35 2,352,941.18 (pound) 3,023,529.41
---------------------------------------------------------------------------------------------------------------------------------
Royal Bank of Scotland 5,764,705.88 3,294,117.65 1,647,058.82 (pound) 2,116,470.59
---------------------------------------------------------------------------------------------------------------------------------
CIBC/Wood Gundy 5,764,705.88 3,294,117.65 1,647,058.82 (pound) 2,116,470.59
---------------------------------------------------------------------------------------------------------------------------------
Credit Lyonnais 5,764,705.88 3,294,117.65 1,647,058.82 (pound) 2,116,470.59
---------------------------------------------------------------------------------------------------------------------------------
Total $35,000,000.00 $20,000,000.00 $ 10,000.00 (pound)12,850,000.00
=================================================================================================================================
